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China's 618 shopping festival: Alibaba touts early sales after withholding data last year, a sign of brighter outlook

Alibaba Group Holding and other e-commerce operators have released encouraging early sales data from their midyear 618 promotions - China's biggest shopping season after Singles' Day, and a bellwether of consumer sentiment in the world's second-largest economy.

Four hours after Alibaba's Taobao and Tmall shopping platforms launched their sales event at 8pm on Monday, 59 brands each saw their gross merchandise value (GMV) - the value of goods sold - surpass 100 million yuan (US$13.8 million), while 376 products saw GMV exceed 10 million yuan, Alibaba's domestic e-commerce unit said on Tuesday.

Apple, which is offering a fresh round of steep discounts for its iPhone 15 models in mainland China, sold more than 1.5 billion yuan worth of products on the Alibaba platforms an hour after the event began, outcompeting its Chinese rivals, according to Taobao and Tmall.

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Around 370,000 small businesses more than doubled their GMV on the first day of sales from last year, the platforms said. Alibaba is the owner of the South China Morning Post.

An advertisement for Alibaba's 618 shopping event. Photo: Bloomberg alt=An advertisement for Alibaba's 618 shopping event. Photo: Bloomberg>

The positive sales figures posted by the e-commerce giant, which last week reported better-than-expected quarterly revenue, come despite signs of sluggish consumer spending in China.

National retail sales, a key gauge of consumption, rose just 2.3 per cent year on year in April, weaker than the 3.1 per cent seen in March and 5.5 per cent in the combined period of January and February.

Still, global investment banks and brokers have dialled down their scepticism about China's growth prospects in recent months. The e-commerce market, in particular, has the potential to further expand in the coming years even if the country's offline retail activity remains tepid, a senior JPMorgan analyst told the Post last week.

After a relatively quiet 618 event last year, when major e-commerce players withheld GMV numbers amid a challenging economy, companies are pulling out all the stops this year to attract shoppers.

Tech giants Alibaba and JD.com, as well as smaller players like Kuaishou, have skipped the presales period this time around, which in previous years allowed consumers to make a deposit on goods they wanted to buy to guarantee a low price during the actual sales period.

Instead, platforms are already showering shoppers with steep discounts in the weeks leading up to June 18, the big sales day that gives the shopping event its name.

Xiaohongshu, an Instagram-like social media platform in China that began its second-ever 618 shopping festival on Tuesday, said it saw GMV from its live-streaming sessions surge six-fold on the first day compared to last year, while the number of orders jumped more than eight-fold.

The platform, also known as Little Red Book and allows users to post content related to topics such as fashion and travel, is betting on live-streaming by merchants and online influencers to gain a foothold in the Chinese e-commerce market.

Pinduoduo, the bargain e-commerce platform run by PDD Holdings, kicked off its 618 sales on Sunday, but has yet to release any sales figures. JD.com is set to begin sales on May 31.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2024. South China Morning Post Publishers Ltd. All rights reserved.