China’s biggest online shopping event since COVID-19 put fear into the Asian economy netted $136.5 billion for two of the nation’s eCommerce giants.
Alibaba Group Holding Ltd., the global technology company specializing in retail, and JD.com Inc., the Beijing-based online shopping site, collected record sales during the annual 618 sale, named for the date it ends, June 18 (Thursday), CNBC reported.
The 18-day event delivered $136.5 billion, better numbers than last year as the companies rebounded from the coronavirus. Alibaba said it handled 698.2 billion yuan ($98.52 billion) during the sale, while JD.com said volume reached 269.2 billion yuan ($38 billion), up from 201.5 billion yuan in 2019.
While the growth was propelled by lots of discounting, the super sales suggest China’s nascent consumer spending recovery has legs, the network reported.
The country features two separate shopping extravaganzas. The first, 618, was launched by JD.com. Alibaba created the second, known as Singles Day, on Nov. 11. Today, both companies collaborate in the events, given competition in the country’s online sector.
“The strong GMV (gross merchandise volume) at 6.18 will help to dispel market anxiety about virus-related disruptions,” Bloomberg Intelligence analyst Vey-Sern Ling said. “Chinese eCommerce platforms will probably deliver strong 2Q sales and profit recovery due to pent-up consumer demand and an accelerated shift to digital consumption channels driven by the virus.”
The solid sales on 618 is good news for the Chinese economy. While CNBC reported retail sales were off by nearly 3 percent in May compared to May of last year, online sales swelled by more than 15 percent. JD.com and Alibaba appear to be the beneficiaries of the surge in China’s eCommerce.
“The result is good as far as growth is concerned, but in terms of margins, all the players will see the consequences,” Steven Zhu, analyst at Pacific Epoch, told Bloomberg. “It’s just what I call paid-GMV for all the platforms. It’s the time that people have to have a good number after the coronavirus, so they just do it at whatever the cost.”
JD’s Retail Chief Executive Officer Xu Lei told Bloomberg there’s been a recovery in consumer goods.
“Chinese and foreign brands had sluggish sales due to the pandemic, and 618 has become their most important opportunity in the first half.”