JD.Com 618 Shopping Festival Reaches New Record – Proving E-Commerce

Publication date: 20 Jul 2020 Author: Zaker Li Senior Analyst, Smartphone & Mobile

JD.com 618 shopping festival reaches new record – proving e- commerce sales events stay hot in China

Brought to you by Informa Tech JD.com 618 shopping festival reaches new 1 record – proving e-commerce sales events stay hot in China Table of Figures: michellewhitcombinformacom_2020_7_20_17_26_29_capturejpg1 ...... 2 michellewhitcombinformacom_2020_7_20_17_27_39_capturejpg2 ...... 2 michellewhitcombinformacom_2020_7_20_17_29_8_capturejpg3 ...... 3 michellewhitcombinformacom_2020_7_20_17_30_32_capturejpg4 ...... 4

JD.com 618 shopping festival reaches new record – proving e-commerce sales events stay hot in China JD.com 6.18 again is using the month of June as a key sales driver for e-commerce. Just like in years’ past, June 18th is the date for the biggest sales promotions to go live. “JD.com 618” is another national online shopping besides "double 11,” which is held by Alibaba. From June 1st to 18th 2020, total orders for the JD.com 618 shopping festival reached about $38.4 billion USD, a new record again. The result shows continued growth for JD.com as a platform, but also show the overall recovery of China's consumer market after the first COVID-19 outbreak at the beginning of the year. michellewhitcombinformacom_2020_7_20_17_26_29_capturejpg1

T-mall, one of other major players in Chinese e-commerce, also achieved good results during this shopping festival, with $97.7 billion USD of cumulative sales revenue of total merchandise turnover from June 1st to 18th June. Sales revenue from consumer electronics exceeded JD.com for the first time in this category. Smartphones are still one of the favorite product categories during this shopping festival for JD.com and T- mall. Many brands introduced attractive promotional discounts. Apple participated in T-mall’s event officially for the first time. iPhone 11 series devices were discounted by around $21.4 USD via coupon. The iPhone 11 series prices dropped by as much as $260.8 USD. Buyers can also spread the purchase over 12 interest-free payments. Surprisingly iPhone SE2, which was released in the first half of the year, was also discounted. Apple officially announced a price cut of $28.5USD. Although the iPhone is still selling all 4G models, iPhone's sales on every platform have grown a lot because of the massive price cuts. iPhone retains its brand appeal to Chinese consumers. According to the Omdia Smartphone Active Installed Base report, there is still a large proportion of users in China using old iPhones. Although the market share of iPhone has been declining in China, whenever iPhones receive discount promotions, sales increase in response. michellewhitcombinformacom_2020_7_20_17_27_39_capturejpg2

has not changed a lot on JD.com and T-mall. Honor and Xiaomi continued to occupy the first and second place on JD.com, based on sales volume during the event. Huawei took third place from Apple on JD.com in 2020. On T-mall, Huawei and Apple dominate the first and second place, Honor and Xiaomi are in the third and fourth place. michellewhitcombinformacom_2020_7_20_17_29_8_capturejpg3

5G smartphones were included in this shopping festival. Chinese smartphone brands have adopted a very aggressive pricing strategy for the domestic 5G smartphone market. In the second quarter of this year, several 5G smartphone models costing $250 were launched. The penetration rate of 5G smartphones is rising rapidly in the Chinese market. While Android models have brought 5G to users for the first time,

Apple's first 5G phone, expected to launch later this year, will further fuel the penetration of 5G devices – not just in China. The Redmi K30 Pro and Xiaomi Mi 10 ranked first and second in 5G smartphone sales on JD.com. Huawei 5G smartphones were more in-demand on T-mall. The Huawei P40 Pro and Nova 7 SE 5G were the first and second most popular 5G smartphone model during the 618shopping festival. michellewhitcombinformacom_2020_7_20_17_30_32_capturejpg4

COVID-19 broke out in China in the first quarter, which affected the shipment of smartphones. In the first quarter, there are only 64.3 million smartphones shipped in China, down 22% year on year. However, with the effective control of the pandemic in China so far, China's smartphone market is warming up. JD.com’s 618 event is an important indicator to show that the consumers have regained the confidence to spend money – leading to the smartphone market already recovering almost a normal mode of operation. 5G connectivity is the most important selling point for the Chinese market this year. The market will see a continuous reduction of prices for 5G smartphones, fueling the penetration rate of 5G in China in the second half of this year.

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