China’s annual 618 Festival – an e-commerce-led shopping frenzy that takes place on June 18 and runs until June 18 – saw sales decline this year for the first time in at least eight years.

JD.com created the shopping holiday in 2010, and the name and date of the festival match the day the company started: June 18, 1998. The 618 festival was originally a way for JD.com to compete against competitor Alibaba, which started another event the main Chinese shopping holiday – Singles Day, also known as Double 11 – in 2009.

More from Sourcing Journal

Since then, both Singles Day and the 618 festival have grown astronomically, with shoppers planning holiday shopping the same way other markets might plan around Amazon Prime Days, Black Friday or Cyber ​​Monday. Despite the beginnings of the two shopping events with just two companies, all major Chinese e-commerce players are participating in the unofficial festivities now.

According to estimates by data analysis firm Syntun, which annually tracks 618 performances, the festival’s gross merchandise volume (GMV), which tracks the value of items sold on e-commerce platforms, reached 742.8 billion yuan (102.3 billion dollars) this year. That’s down from 798.7 billion yuan ($110 billion) in 2023, marking a drop of nearly 7 percent.

Syntun told CNBC that, since it started tracking 618 metrics in 2016, this was the lowest sales had fallen.

Despite Syntun’s gloomy estimates, JD was quick to boast that this year, 618 had delivered a “new record for both transaction volume and orders.” The company launched its 618 promotions at the end of May this year, opting for a longer promotional window in favor of allowing consumers to place deposits on certain products and complete their purchase during the festival days.

Rival Alibaba did the same for its Tmall and Taobao platforms.

Although JD considered its performance on its holiday strong, Syntun’s data shows that Alibaba’s Tmall grabbed a larger volume of GMV, leaving JD in the secondary slot. Pinduoduo of PDD Holdings came in third. Syntun considers those three platforms, as well as several others, “traditional” e-commerce platforms, which it said accounted for 571.7 billion yuan ($78.7 billion) of total GMV this year. Last year, the same group of traditional platforms saw a GMV of 614.3 billion yuan ($84.6 billion), Syntun said.

Meanwhile, live streaming platforms such as TikTok, Kuai Shou and Dian Tao came in with a GMV of 206.8 billion yuan ($28.5 billion). TikTok led the way in terms of direct purchase market share at 618.

The story continues

Syntun called the live streaming sector’s performance “excellent,” which could be attributed to the fact that live streaming was the only e-commerce subcategory that saw any notable growth during 618. Last year, streaming direct GMV reached 184.4 billion yuan ($25.4 billion).

Despite an increase in live streaming, the sheer drop for this year’s 618 festival may be cause for concern. Even during the Covid-19 pandemic, GMV rose for the 618 festival, so seeing that decline could spell trouble for a market already struggling against a less-than-desirable long-term economic forecast.

In late May, the International Monetary Fund said that while it expects China’s economy to grow at a rate of 5 percent this year, by 2029 that growth could have slowed to just over 3 percent, a byproduct of an aging population and housing. and the troubled property sector.

Even if Chinese consumers begin to lose interest in e-commerce giants like JD and Alibaba, other markets are showing a certain thirst for low-cost goods in the face of inflationary pressures. Some Western shoppers, on the other hand, are starting to buy more from e-commerce platforms like Temu, Shein, Alibaba and more. Salesforce predicted that these platforms, and others, could command 21 percent of Western holiday spending this year.

Singles’ Day, celebrated annually on November 11, could be an indicator of whether Chinese consumers will regain an obsession with ultra-low offers from e-commerce providers as Western consumers increase their consumption of value items.