China is in the middle of a shopping festival where the country's e-commerce giants try to lure shoppers with huge discounts.
This year's edition comes against a tough backdrop as China grapples with the economic repercussions from a resurgence of Covid-19, which has led to the lock down of major cities. Economists have reduced their economic growth outlook for China.
Due to a combination of a slowing economy and intense regulation on the domestic technology sector, China's two largest e- commerce companies posted their slowest revenue growth on record.
During the festival last year, the transaction volume across major e- commerce platforms increased by 26.5%.
This year's growth is expected to be slower. The increase in sales is expected to be 20% slower than in 2021. As e- commerce companies look to lure customers in with big discounts, Sharry Wu expects consumers to spend.
The appetite for consumption in China remains strong, but we expect consumption to be less diversified with a heavier focus on organic food items, home appliances, personal care, etc.
We should expect a big boost in online consumption as cities reopen. Although we are seeing a clear trend of downward growth rates for major shopping festivals, every e- commerce platform is presenting its largest promotion scheme ever to attract consumers back online this summer.
The two companies are competing to get consumers. Shoppers can get a 50 yuan discount on qualified purchases.
The price of 19 million products was frozen until July 5, according to Tmall. There are a million items on offer on the platform.
Some analysts don't have a good outlook. The CEO of WPIC, an e- commerce tech and marketing firm that helps foreign brands sell in China, said that this year is unlikely to be setting records in sales.
This will be the first year that sales will go down.
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