JD.com has become the latest Chinese tech giant to announce plans for a ChatGPT-style product, joining the hype around chatbot technology.
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Chinese consumers bought billions of items during China’s first major online shopping festival after emerging from the pandemic as merchants slashed prices, but analysts say consumer confidence remains low.
Chinese merchants offered deep discounts to customers during the 618 shopping festival, which took place across major Chinese shopping platforms from late May to June 18, in hopes of supporting sales amid recovery consumption lower than expected.
Major shopping festivals, like e-commerce retailers JD.com’s 618 and Alibaba singles dayare generally barometers of consumption in China, and Chinese e-commerce platforms often participate in them by offering discounts and incentives to consumers.
Analysts say consumption remains weak this year as China emerges from the pandemic, even though platforms such as JD.com, Tmall, Taobao and Pinduoduo have offered billions in subsidies.
“Chinese consumer confidence remains low due to a mix of geopolitics, continued weakness from Covid-19 and Chinese domestic politics,” said Shaun Rein, founder and managing director of China Market Research Group in Shanghai.
Rein said consumers were less likely to spend more on 618 because merchants had already discounted heavily for years due to the pandemic, and deals weren’t much better than in previous months.
In March, JD.com launched a “10 billion yuan subsidy” program to compete with rival Pinduoduo, known for its low-cost products. The CEO of Alibaba’s e-commerce business unit, Trudy Dai, also pledged to make “huge and historic” investments to attract users to its platforms.
“For months, Chinese consumers have been price-conscious, searching for deals and bargaining across most product categories,” Rein said.
This year, for the first time, JD.com did not reveal its total sales figures for the 618 event, although it said in a blog post that the 2023 shopping extravaganza “exceeded expectations. , setting a new record.”
Last year, neither Ali Baba nor JD.com released final Singles Day numbers in November, amid muted festivities during Covid-19 and an expected slowdown in growth.
JD.com said in a blog post that during the 618 shopping festival, consumers purchased 10 times more eligible products under its “10 billion yuan subsidy” program, compared to March.
Despite weak consumption overall, categories like cosmetics and luxury goods saw stronger increases in sales compared to the previous quarter, according to Jacob Cooke, CEO of e-commerce consultancy WPIC.
For this year’s 618 event, more luxury brands participated as they seek to boost sales in China after the sector in 2022 shrank for the first time in five years under strict “zero -Covid” and China’s lockdowns that have hammered retail spending.
Brands like Moncler and Lemaire participated in 618 on Tmall for the first time.
Many luxury brands have also taken the opportunity to launch new products online, with some offering rare discounts and other incentives such as interest-free installments over 12 months.
Sales of brands like Burberry, Chloe and Miu Miu in the first 30 minutes of the 618 festival in late May had surpassed its total sales at the shopping festival a year ago, according to data from Tmall.
“The return of luxury online is a big trend, as it’s the category that’s been hit very hard by Covid-19,” Cooke said. “Some brands could see their sales increase 10 times compared to last year.”