THE country is set to get a picture of how its zero-Covid-19 policy and slowing economy have impacted shoppers’ urge to splurge, as e-commerce platforms gear up to report takings from the mid-year “618” shopping festival this weekend.
Held in the run-up to June 18, the 618 festival is China’s second-largest shopping event by sales after Nov 11’s Singles Day, with bargain-hunters holding off purchases in anticipation of discounts spanning a range of brands.
Last year, Alibaba Group Holding Ltd’s Tmall, JD.com Inc and Pinduoduo Inc hit a combined 578.4 billion yuan (RM378bil) worth of 618 sales, up 26.5% from the year earlier, data from Syntun showed.
But in the last three months, the world’s second-largest economy has been hobbled by government efforts to combat repeated waves of Covid-19 that have seen dozens of cities impose lockdown measures of varying intensity, in turn curtailing spending, impacting livelihoods and disrupting supply chains.
Many cities eased curbs this month and have said they want to stimulate consumption to revive the economy with incentives including vouchers, subsidies for car buyers and digital yuan payments.
Acknowledging that brands have been hit hard, Alibaba and JD.com are offering merchant support measures such as pledging to speed up transfers of pre-sale deposits to help merchants’ liquidity.
They are also encouraging brands to offer their biggest-ever discounts in hope of spurring spending, with JD.com stipulating that shoppers can get 50 yuan (RM30) off for every 299 yuan (RM195) they spend. Alibaba has a similar offer. Vendors foot the bill for these discounts.
But some companies and agents said they planned to participate less in discounting this year as they or their clients could not afford it.
Fang Jianhua, founder and chairman of IDG Capital and Alibaba-backed clothing brand Inman Apparel, penned an article on WeChat last month lamenting how retailers, especially in Shanghai, were suffering in the current environment from lost sales and that he planned to “lie flat” for 618 – a Chinese expression of inaction.
Rather than discounts, Fang planned to “concentrate on how to use our products and services to build up emotional connections with millions of customers,” he said without elaborating. — Reuters
