Is China’s consumer confidence recovering or continuing to slump? That is the reason why the recent 618 shopping festival was very closely watched. Analysts, investors and media were examining any available data, trying to pick up signs.
Syntun – slump
The controversy started from a set of numbers from Syntun, a major ecommerce data tracking service provider.
Syntun numbers suggested that the 6.18 GMV across ecommerce platforms in China dropped 7% Year on Year to CNY742.8 billion (US$102.3 billion). In particular, marketplaces Taobao/Tmall, Kuaishou, and Pinduoduo saw a combined GMV of CNY571.7 billion (US$78.7 billion), down 6.9% YoY; whilst live commerce platforms Douyin, Kuaishou, Taobao Live saw a combined GMV of CNY206.8 billion (US$28.5 billion), a 12% increase YoY.
The numbers were quickly picked up by the press in China as well as abroad, as it would signify the first ever drop in 6.18 GMV since 2016, when Syntun started tracking the data.
Platforms – “I won’t tell you”
Some platforms only gave glimpses of their 618 performance. JD announced that 2024 618 GMV and order volume achieved a new record, live commerce order volume grew by 200%, while more than 500 million users placed orders. Tmall, on the other hand, revealed that 365 brands had GMV of CNY100 million (US$13.8 million) or above, while more than 36k brands had doubled GMV.
The platforms however, as in the past two years, were mute about total GMV – we had explained the reason for this back in 2021.
Challenges to Syntun numbers
Syntun’s numbers, however, were very quickly challenged. First came the analysts from banks.
In an update issued by Citibank on 19 June, Citibank analysts said “We would question the data collection methodology and estimates’ validity as the period Syntun references varies among different platforms”.
HSBC, at the same time, tried to explain what caused Syntun’s data to show a slump. They wrote that “we think the decline may be attributable to: 1) changing of promotional periods across platforms; and 2) poor data collection and hence the accuracy given new promotional approaches and app functions introduced by platforms like BABA …”
HSBC also mentioned another data player, Yiguan, which had mentioned that the ‘1st phase’ of 618 showed a ‘mid teen’ growth.
Yiguan’s analysis for the full period (20 May to 18 June) showed a 13.6% YoY GMV growth across platforms, while Douyin was the fastest with 26.2% growth.
So the question:
Who has the truth?
The 6.18 promotions are complicated to account for due to a number of reasons.
First, different platforms used different dates. For example, Taobao/Tmall 6.18 promotions lasted from 20 May to 20 June; while Douyin’s shopping festival lasted from 25 May to 18 June. Data providers (like Yiguan) standardised the dates while accounting for the YoY change – does that capture the full picture?
Second, there are some major shifts in this year’s shopping festivals, especially Taobao/Tmall focused a lot more on small/medium sellers as compared to larger brands. This could impact Syntun’s data accuracy, as it tracks mainly 100,000+ brands’ sales data according to its web site.
Third, marketplaces this year have greatly simplified campaign mechanics, often telling consumers directly the price they would get, rather than forcing them to play complex voucher stacking games. How has this impacted consumer behaviour, as well as brands’/sellers’ willingness to offer good discounts for the shopping festival?
No matter what, we could feel that people are watching 6.18 numbers not only for gauges of consumer confidence, but also for the dynamics between marketplaces and video/live commerce.
The latter, in our opinion, could greatly affect how players inside and outside China allocate their investment focus, and hence possibly become self-fulfilling. (e.g. if we do not believe live commerce will work, we will not invest, therefore it will never work; vice versa).
Additional data points
Perhaps in addition to the murky platform statistics, some other data points might give a glimpse of what might have been happening:
- Data from State Post Bureau, which regulates the express delivery industry, showed a 20% YoY parcel volume growth between 20 May and 16 June, to a total of 13.77 billion parcels collected and 13.53 billion delivered. The busiest day during this period saw more than 580 million parcels processed.
- Data from the National Bureau of Statistics showed that online retail growth from Jan to May this year grew by 11.5% YoY. Total online retail value (GMV) reached RMB1.092 trillion (US$150 billion) in the month of May, which covers ⅓ of the 6.18 promotions period.
Considering that overall consumption in China is still growing and ecommerce typically grows faster than traditional retail, there is a strong counter argument against Syntun’s data which showed a slump.
Nonetheless, the competition between various platforms and business models remains fierce. Whether video/live commerce platforms will eventually overtake traditional marketplaces, or their momentum will fizzle out, remains to be seen.
One thing is for sure, though, facing the slowing and increasingly competitive domestic market, global expansion would be high on the agenda of every single Chinese ecommerce platform, live or not.
Although for some of these players, how fierce the battle at their home market is will impact how many leadership attention they could really spare for the global market.
