Last week saw the conclusion of 618, one of the biggest shopping events worldwide, which runs from 1-18 June each year in China. Featuring deep discounts and special offers, the event is a major part of China’s retail calendar, providing an insight into the state of ecommerce in the world’s second largest economy as well as (to a lesser extent) its prospects globally. However, this year has been characterised by far slower growth than seen previously, amid ongoing Covid lockdowns and the wider economic downturn.
Key takeaways from 618 about the state of Chinese ecommerce
JD.com is the only one of the big three, which also includes Alibaba Group and Pinduoduo, to consistently publish hard sales figures. This makes its 10.3% growth to 379.3bn yuan ($56.5bn), which is much weaker than previous years, a key measure for the event. However, some industry estimates put the total sales of the three companies at around $87.1bn, only a very slight increase over 2021’s estimated $86.5bn that suggests that JD.com saw growth significantly above its rivals.
While the country’s Covid outbreak has clearly played a role in this growth drop, the wide global economic downturn is also a contributor. 618 sales were strong in both 2020 and 2021 despite the pandemic, suggesting that lockdowns alone are not the cause.
A drop in cross-border purchases may also be playing a role. While JD.com has not provided a breakdown of its sales, the international drop in ecommerce is likely to have also impacted China, which traditionally has been a leading source of cross-border retail sources.
Despite the downturn, the event did show promise for China’s central bank digital currency (CBDC), the digital yuan (e-CNY). It was first piloted in late 2020 and rolled out over the following year, making this one of its biggest applications to date.
Over the course of 618, the e-CNY recorded around 400 million yuan ($60m) in sales at JD.com. While this is only a small fraction of the company’s sales overall – about 0.1% – it is more than the amount spent in e-CNY on the platform between December 2020 and May 2022, indicating that the CBDC is seeing significant growth.