China’s mid-year shopping festival highlights weak demand, rising role of AI

[SHANGHAI] China’s second-biggest shopping festival is drawing to a subdued close, underscoring weak consumer confidence and government pressure on e-commerce platforms to disengage from excessive discounting.

Marking the founding of e-commerce platform JD.com on Jun 18, the 618 mid-year shopping festival once showcased booming online shopping that in turn drove economic growth.

It has evolved from a one-day event to a weeks-long stretch of discounted offerings from all major e-commerce platforms.

That has made consumer excitement hard to sustain, particularly as China continues to wrestle with a years-long property sector crisis and ever-simmering trade tensions with the US that have helped undermine job security.

Yu Yang, an internet company engineer in Beijing, said she barely bought anything this year.

“I bought some laundry detergent, but not because it was discounted, it’s just I ran out of it,” she said.

A healthy shift away from discounting

This year’s event on platforms such as JD.com and Alibaba’s Tmall began in mid-May and will run until Jun 20 or 21 – about 40 days long, and three to four shopping days longer than 2025, depending on the platform.

Last year’s 618 festival, which was about a week longer than the 2024 event, saw combined gross merchandise value (GMV) climb 15 per cent to 855.6 billion yuan (S$163.1 billion), said retail data provider Syntun.

GMV is a business metric commonly used in e-commerce.

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Daily spending amounts, however, fell.

This year, analysts expect overall revenue to rise by a single-digit percentage point due to the longer shopping period. Data for this year’s event is expected in the week of Jun 22.

As Chinese authorities seek to clamp down on cut-throat competitive practices, Alibaba said this year’s festival demonstrated a “decisive shift”, with “brands prioritising healthy margins over headline sales figures”.

JD.com, PDD and ByteDance-owned Douyin, the Chinese version of TikTok, did not immediately respond to requests for comment on this year’s 618 sales.

“This time around, we feel that it is quite quiet. I believe this is a good thing for the market. This shows that people’s consumption patterns are normalised, people don’t just stock up during shopping carnivals,” said Derek Deng, Bain and Co’s head of consumer products in Greater China.

Retail sales fell 0.6 per cent year on year in May, the first decline since December 2022, when the world’s second-largest economy was still under strict Covid-era restrictions.

Sharp drops in purchases of cars, home appliances, furniture, jewellery and building materials were evident in the data released on Tuesday (Jun 16), despite government subsidies to support big-ticket purchases.

The adoption of AI tools by e-commerce companies broadened in the first half of 2026, and analysts will be looking for clues as to how extensively consumers are using such tools.

Alibaba has, for example, integrated its artificial intelligence model Qwen across the full product range on its Taobao platform.

This allows consumers to browse, compare and purchase items via the Qwen app by chatting with the AI agent, rather than manually navigating listings via e-commerce apps.

Jason Yu, general manager at CTR Market Research, said that all the big e-commerce firms were using 618 to test their AI tools.

“So it’s not just a battleground for e-commerce, but also more of a technology battleground for all these big platforms,” he said. REUTERS