June 18 shopping festival a consumption test
China's consumption suffered considerable decline in the first half of this year as a result of the novel coronavirus outbreak. Now that work and industrial production have resumed, how to promote consumption is not only a priority for e-business platforms and bricks and mortar outlets, but also a much-needed national macroeconomic policy to revive consumption and help enterprises dispose of their inventory and get out of their economic troubles.
Therefore, the June 18 shopping festival is likely to see increased activity by the government, e-commerce platforms, manufacturers and consumers to revitalize the market.
The increasingly fierce competition in the e-commerce domain is behind the increased promotion efforts among e-commerce platforms for the shopping day. Even before the end of May, several e-commerce giants had started rolling out promotionals for the "June 18" event.
In the past, the competition among e-commerce platforms was mainly between Jingdong and Alibaba, but the pattern has changed dramatically as new e-business platforms such as Pinduoduo have risen as social e-commerce service providers to seize markets in third－and lower-tier cities.
At the same time, Meituan has begun extending business to offline fresh retail, financial payment, food and beverage supply chain, real-time logistics and other areas to start citywide retail business. Pinduoduo grabbing the bottom market and Meituan marching toward offline market will give Alibaba and Jingdong some competition.
Considering that Pinduoduo has a market value of up to $93 billion, and Meituan of more than $129 billion, their emergence as big e-commerce players will pose a substantial threat to Alibaba and Jingdong's core businesses. In addition, Douyin has ended its cooperation with Taobao and will launch its own e-commerce business from July 1.
For Jingdong and Alibaba, the biggest change is the rise of livestreaming sales by public figures, which, among others, means the market has entered a stage of building a new model. Therefore, despite the existence of established e-commerce giants, or new ones, how to roll out promotion tactics to gain a bigger market share remains a key task.
China's economy has been severely impacted by the epidemic, but a series of activities such as livestreaming sales and increased promotional activities by major e-commerce giants on June 18 show that it is still full of vitality. Enterprises' self-help activities through various means and their active participation in market competition will not only stimulate consumption suppressed by the epidemic, but also force them to continuously improve their competitiveness and survival ability.
Increasing consumption requires resumption of economic growth, a virtuous cycle of production and consumption, and higher incomes. What we now need more is vitality and confidence, and a variety of promotional activities will help increase market vitality and enhance the confidence of enterprises and individuals.