Small-town folks spend big in 618 festival

The 618 mid-year shopping festival which kicked off at the beginning of the month wrapped up this week, and all the evidence indicates that consumption remains strong.

JD.com’s transactions between June 1 and June 18 were 27 percent up on last year at 202 billion yuan (US$ 29 billion). Home appliance sales hit the 1 billion yuan mark in just 2 minutes and 36 seconds on June 18, last day of the festival and the ultimate price-slashing day.

Alibaba Group said its 18-day campaign helped more than 100 brands turnover more than 100 million yuan each. During last year’s Singles’ Day, more than 230 brands on Tmall made more than 100 million yuan in 24 hours.

A Bocom International research note suggested that overall online performance in the second quarter will improve due to enthusiasm for the mid-year campaign.

New marketing strategies are also driving sales, with live-streaming on Taobao allowing consumers get to know merchants. The merchants involved sold more than 13 billion yuan of their wares.

JD came up with the idea of a mid-year sale more than ten years ago and it has since become the second biggest shopping frenzy after Singles Day in November.

On-demand delivery platform Dada-JD Daojia, which sells groceries and fresh food for supermarkets including Walmart, Carrefour and Yonghui, said sales between June 15 and June 18 were double those of a year ago, with lower tier cities generating a lot of that increase. Pinduoduo’s orders hit 1.1 billion with 70 percent coming from lower tier cities.

As many as 48 percent of new products on Tmall during the event were purchased by customers outside first- and second-tier cities. Tmall’s Luxury Pavilion more than doubled its sales from last year.

Offline sales were also significant with JD’s experimental physical stores doing better than many online platforms.