6/18
China’s 6/18 shopping holiday started as a celebration of the founding of JD.com (JD). The company, founded on June 18, 1998 decided to celebrate another year in business with discounts on what was then primarily consumer electronics products. However, by 2010 the online retailer had expanded to appliances and groceries and the discounting grew as the company rebranded the celebration into a shopping festival that began to challenge Alibaba’s (BABA) 11/11 shopping festival. Other retailers joined around 2015, and livestreaming became the go-to promotional venue, with same-day shipping adding to consumer enthusiasm for the holiday.
As with most highly promoted events, 6/18 seems to have peaked, in terms of growth, during the COVID pandemic and has seen slower growth over the last few years. JD.com is no longer reporting GMV and the holiday seems to get extended each year in order to make sure that the ‘total’ for holiday sales is higher each year. This year the holiday ran from 5/21 to 6/20 while last year from 5/25 to 6/20. While actual numbers are getting harder to come by, on an average daily spend basis, this year’s holiday sales are lower than last year according to early accounts, even though it has been reported that the total GMV was higher than last year due to the additional days.
From the retailer side, it seems that this year’s biggest selling categories were home appliances and CE products generally, along with beauty aids, fashion, sports, and pet supplies, but the overall trend this year seems to be a more cautious attitude toward spending, a shift from impulse buying to spending on more necessary items. Some expressed ‘subsidy fatigue’, as the current government sponsored program designed to stimulate the Chinese retail economy is now over 15 month old, and other’s complained of a ‘panel lottery’ concerning the quality of the displays for low priced TV models, but TVs were still among the best sellers in the CE space.
That said, a bit more granularity reveals that while 65” and 75” are still the most popular sizes, growth slowed in that popular size segment this year, and 85”+ sizes were weaker than expected due to their relatively high prices. Premium brands ($850+) like Samsung (005930.KS), LG (066570.KS), and Sony (SNE) saw weaker sales while local Chinese brands like Hisense (600060.CH), TCL (000100.CH), Xiaomi (1810.HK), and Skyworth (751.HK), particularly in the value segment (<$450) saw stronger sales. Mini-LED sets sold well while OLED was weak, again because of the disparity in pricing, as value was the key to TV set sales this year.
All in, it seems Chinese consumers are a bit more cautious this year, despite May Chinese retail sales being a bit encouraging, and brands seem willing to try to move inventory at discounted prices, so the holiday seems destined to continue but at a slower growth pace than in previous years. We expect Chinese online retailers will do whatever is necessary to make whatever numbers that become available look as good as possible, but eventually the novelty of the shopping holiday has to wear off. Some said last year saw negative GMV growth, while others disagree, but we expect that it will get harder to make the case for 6/18 being something other than a highly promoted shopping event like our Black Friday or Prime Day events.
As with most highly promoted events, 6/18 seems to have peaked, in terms of growth, during the COVID pandemic and has seen slower growth over the last few years. JD.com is no longer reporting GMV and the holiday seems to get extended each year in order to make sure that the ‘total’ for holiday sales is higher each year. This year the holiday ran from 5/21 to 6/20 while last year from 5/25 to 6/20. While actual numbers are getting harder to come by, on an average daily spend basis, this year’s holiday sales are lower than last year according to early accounts, even though it has been reported that the total GMV was higher than last year due to the additional days.
From the retailer side, it seems that this year’s biggest selling categories were home appliances and CE products generally, along with beauty aids, fashion, sports, and pet supplies, but the overall trend this year seems to be a more cautious attitude toward spending, a shift from impulse buying to spending on more necessary items. Some expressed ‘subsidy fatigue’, as the current government sponsored program designed to stimulate the Chinese retail economy is now over 15 month old, and other’s complained of a ‘panel lottery’ concerning the quality of the displays for low priced TV models, but TVs were still among the best sellers in the CE space.
That said, a bit more granularity reveals that while 65” and 75” are still the most popular sizes, growth slowed in that popular size segment this year, and 85”+ sizes were weaker than expected due to their relatively high prices. Premium brands ($850+) like Samsung (005930.KS), LG (066570.KS), and Sony (SNE) saw weaker sales while local Chinese brands like Hisense (600060.CH), TCL (000100.CH), Xiaomi (1810.HK), and Skyworth (751.HK), particularly in the value segment (<$450) saw stronger sales. Mini-LED sets sold well while OLED was weak, again because of the disparity in pricing, as value was the key to TV set sales this year.
All in, it seems Chinese consumers are a bit more cautious this year, despite May Chinese retail sales being a bit encouraging, and brands seem willing to try to move inventory at discounted prices, so the holiday seems destined to continue but at a slower growth pace than in previous years. We expect Chinese online retailers will do whatever is necessary to make whatever numbers that become available look as good as possible, but eventually the novelty of the shopping holiday has to wear off. Some said last year saw negative GMV growth, while others disagree, but we expect that it will get harder to make the case for 6/18 being something other than a highly promoted shopping event like our Black Friday or Prime Day events.
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