Great Potential Behind Chinese 618 Shopping Festival

June 17, 2021

In addition to China’s biggest shopping festival, Double Eleven, the upcoming 618 Shopping Festival on June 18th is a great showcase of the world-leading development of the e-commerce industry in China, with trillions of dollars of merchandise sold in a very short time and delivered with extremely short delivery times to the homes of consumers.

 

China 618 shopping festival

 

In recent years, with the growing popularity of online shopping and the emergence of many e-commerce platforms, E-Commerce is becoming a dominant form of retail in many categories. As the second largest shopping event in the country, 618 Shopping Festival, which has been held annually in since it was initiated by the E-commerce giant Jingdong (JD.com) in June 2010, has been generating huge sales through providing attractive promotions. According to Chinese online payment clearing house – Nets Union Clearing Corporation (NUCC), the total GMV (Gross Merchandise Value) during China’s 618 Shopping Festival in 2020 reached 16.91 trillion yuan (2.52 trillion USD), an increase of 42% comparing to that of 2019.

In the latest 618 Shopping Festival, Tmall and JD.com, two major e-commerce platforms in China, both broke their transaction records. JD.com experienced a huge GMV growth of over 33% (YoY).

Graph showing 618 festival growth

To prepare for the frenzied shopping during the 618 Shopping Festival, many e-commerce platforms need to restructure their logistics network to fulfill the surging customers’ demand. Third-party logistics enterprises such as YTO Express and BEST Supply Chain have also been investing in automatic sorting equipment. After placing an order on the e-commerce platform, the operation center will get the order information immediately. Through the automated line, the average outbound processing time of each package is only 3 minutes, and the accuracy rate of picking goods can reach nearly 100%.

For some categories, such as electronics and cosmetics, JD has shown the capabilities to optimize for extremely short delivery times, under an hour, by AI-enabled demand prediction and omni-channel models. Another enabler for JD is a working with an open supply chain platform that can enable efficient resource usage, fewer touchpoints and more direct routes from manufacturer to consumer.

In conclusion, China’s e-commerce industry will continue to grow in the coming years and will be a driver for investments in logistics, and open opportunities for more western brands to quickly reach large markets in China.


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    Marcus Sohlberg, Business Development Director

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