JD.com Shopping Festival

JD.com Shopping Festival
June 20, 2018 No Comments Blog Richard Kochersperger

JD.com’s 618 Shopping Festival Wrap-Up: Record-Breaking Sales at ¥159.2 Billion, Strong Threat from Tmall

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KEY POINTS

  • JD.com registered a record-breaking ¥159.2 billion (US$24.6 billion) in sales during its 618 Shopping Festival held June 1‒18, an increase of 37% year over year. On June 18, sales of mobile phones on JD.com reached 10,000 units in eight seconds and ¥100 million (US$15.5 million) in 30 seconds.

  • During the 18-day sale period of June 1‒18, JD.com utilized 27 unmanned warehouses and daily order-processing power increased by 1,415% year over year. Over 90% of orders on JD.com-operated stores achieved same-day or two-day delivery during the 618 sale period.

  • Although the 618 Shopping Festival was initially launched to commemorate the foundation of JD.com, it has since evolved to become a popular mid-year shopping festival, one that Alibaba’s Tmall has also started to participate in, posing a large threat to JD.com

JD.com registered a record-breaking ¥159.2 billion (US$24.6 billion) in sales during its annual 618 Shopping Festival held over an 18 days, June 1‒18, an increase of 37% year over year. The top-selling categories this year were mobile phones, PCs, air conditioners, digital products and food & beverages.

JD.com partners with over 500,000 brick-and-mortar retail stores to implement its “boundaryless retail” initiative. The sales of brick-and-mortar stores experienced a huge leap in sales growth on June 18, with JD Daojia—an online-to-offline service JD.com offers to bring groceries and fresh food to consumers. Walmart participated in the shopping festival again this year and saw its sales grow fourfold. However, this paled in comparison to some of the Chinese retailers’ sales growth—Yonghui Supermarket’s sales were five times last year’s sales and Century Lianhua’s sales were seven times last year’s sales.

Smartphones were the top-selling category. On June 18, sales of mobile phones on JD.com reached 10,000 units in eight seconds and ¥100 million (US$15.5 million) in 30 seconds. Smartphone brands including OnePlus, Lenovo and Vivo all saw more than a 100% increase in sales year over year. Notably, OnePlus sales grew 24 times last year’s figure. Meitu, Oppo and Huawei were the favorite brands among female shoppers.

During the 18-day 618 Shopping Festival, loans made by JD Finance—the financial technology arm of JD.com—to business partners and users increased by 348% year over year. Active users of JD Baitiao—one of JD Finance’s products that provides credit to consumers so they can pay by installment—increased by 167% year over year.

Showcasing Advances in the Supply Chain

In our previous report on JD.com’s 618 Shopping Festival, we pointed out that the festival is no longer just about incredible shopping discounts, but also showcases JD.com’s advances, especially with regards to the supply chain. During the 18-day shopping event, JD.com utilized 27 unmanned warehouses, and daily order-processing power increased by 1,415% year over year. Over 90% of orders on JD.com-operated stores achieved same-day or two-day delivery during the 618 sale period.

JD.com also launched its automated cold-chain supply-chain center, which improved its capacity to 2.5 times. “In 10 years, our success in the supply-chain service in China will be a model to expand overseas, realizing low costs and high efficiency globally,” says JD.com Chairman and CEO Richard Liu.

The Threat Posed by Tmall

Although the 618 Shopping Festival was initially launched to commemorate the foundation of JD.com, it has since evolved to become a popular mid-year shopping festival, one that even Alibaba’s Tmall has also started to participate in. On June 18, 70 million people flocked to brick-and-mortar stores participating in Tmall’s 618 event, such as Intime Department Stores, Hema Supermarket, RT-Mart and over 100,000 stores partnered with Alibaba.

During the 18-day 618 sale period, Tmall sold over 200 million units of beauty facial sheet masks, 140 million pairs of sunglasses and sale of sunscreen doubled. Over 20 million men’s T-shirts were sold, sales of women’s jeans increased by 70% and sales of luxury brand jewelry including Chow Seng Seng, Luk Fook and Pandora increased by 300% year over year. In just the first 60 seconds of June 18, Yoseido, a Chinese beauty company, sold over 100,000 units of beauty facial sheet masks.

Tmall also saw strong sales of consumer electronics products, with over 10,000 units of mobile phones sold in just five seconds on June 18, and over 100,000 units of PCs and digital products in just 22 seconds. Sales of Apple, Huawei, Vivo also doubled during the event.

Key Takeaways

Despite the strong advances JD.com has made in the supply chain, Tmall’s active participation in this year’s 618 Shopping Festival is something that cannot be ignored. While it is too early to say whether Tmall has taken the spotlight away from JD.com, it is certainly posing a threat. Mobile phones and consumer electronics are among JD.com’s strongest product category, but Tmall’s sales of 10,000 mobile-phone units in just five seconds, slightly faster than JD.com, could be an indication of things to come.

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