Mark Tanner
22 June 2022 0 Comments

That ‘other big shopping festival’ on China’s calendar, 618, wrapped up over the weekend providing many lessons for brands in China. It also acts as a barometer to gauge Chinese consumers’ appetite for spending following the recent spate of lockdowns in Chinese cities.

JD.com’s sales result will be pleasing to many with Gross Merchandise Value (GMV) growing 10.3% on last year. Pinduoduo said sales of home appliances, cosmetics, and personal care and household cleaning items had more than doubled, but didn’t reveal their overall 618 results. Like previous years, Alibaba hasn’t published its 618 results, but Syntun analysis of the big three ecommerce platforms saw sales grow marginally from last year’s festival.

Alibaba would have also missed their two super-star livestreamers, Austin Li and Viya, who contributed ¥18.9 billion ($2.8 billion) on one day of livestreaming during the last big festival, 11-11. This 618 festival, Viya was absent following her tax evasion charges late last year, and Austin Li’s contribution was cut short following a ‘politically insensitive’ livestream with an iconic Viennetta ice cream resembling a tank.

Despite the absence of China’s livestreaming A-Listers, the livestreaming format continues as strong as ever, given another charge by the recent lockdowns. Alibaba and Pinduoduo will have seen some 618 market share eroded by the video platforms: Kuaishou partnered with JD, and Douyin’s 618 presales grew 183% on last year. WeChat also bet big on livestreaming commerce for the festival, following 15-fold growth last year.

The trend of brands hosting their own livestreaming channels saw interesting innovations – from brands not traditionally associated with livestreaming. With less people flying at present, China Southern and Hainan Airlines used livestreaming to sell “fly happy” deals, airline ticket “blind boxes” and other aviation-themed products, in addition to flight attendants selling cosmetics. On their Douyin livestream, China Southern sold 23,000 bottles of an eye cream. New Oriental, struck by Beijing’s education crackdowns, attracted livestream audiences, not just with products, but to learn some English as well.

Whilst the continued evolution of livestreaming commerce is one the big stories of this shopping festival, there are other valuable lessons that apply to brands selling in China.

Mass disruptions to supply chains resulting from the recent lockdowns created a lot of consumer uncertainty around receiving goods. This saw JD double-down on its supply chain advantage, promoting this year’s 618 under the ‘Responsible Supply Chain’ banner. The theme contributed to JD’s success, reinforcing that, even in China where most things are made, certainty around receiving goods on time is paramount. Products on the “Hour Platform” that could be delivered swiftly from local stores grew 77% from last year.

Chinese consumers’ love for the new held true, with novel technologies, designs and functions among some of the best selling products. Consumers were also discerning over the quality of service, with products covered by guarantees of replacement and repair over long periods proving popular. Omni-channel continued to accelerate with Wal-Mart, China Resources and Yonghui increasing 6.6 times from last year. Green consumption is on the rise and farmers’ produce gained in popularity.

Although many of the lessons from 618 were pertinent for brands participating in the festival, much of it applies to everyday business in China. Contact China Skinny to learn how we can help you better understand both the important fundamentals and the emerging trends in China to help you succeed during these unique times.

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