LONDON — A V-shape rebound in post-COVID-19 China?
Alibaba’s Tmall is trying to push that into reality. It announced on Tuesday that during the upcoming 618 shopping festival, Tmall will, together with local governments and brands, release a stimulus plan worth more than 10 billion renminbi, or $1.41 billion, the largest amount this year, with cash consumption coupons and subsidies, starting next Monday.
Tmall is treating June 18 as the midyear Singles’ Day this year. More than 100,000 brands have signed up for the event, double that of last year, and more than 10 million products will offer discounts to attract buyers.
This move ties in with Chinese cities’ efforts to stimulate spending as lockdown measures began to be eased since April. For example, Shanghai’s municipal government united retailers across the city and e-commerce players to host the inaugural Double Five Shopping Festival, running from May 5 to June 30, and luxury brands are playing a key role in the initiatives.
Brands used to see the midyear shopping event, originated by JD.com, as a new source of growth, but now, it may well be a life-saving battle for them to bring in revenue.
According to a memo seen by WWD, more than 400,000 transactions were made on the 618 shopping festival’s prologue, the May 20, Chinese Valentine’s Day event on Tmall’s Luxury Pavillion, with average spending on each order up 61 percent.
Some 150 luxury brands unveiled more than 5,000 items for the special occasion, while Balenciaga and Chloé joined Luxury Pavilion during the event to further bolster their presence in the country.
Luxury beauty is the fastest-growing category on Luxury Pavilion. Brands saw an average of 200 percent growth since the beginning of May. Yves Saint Laurent sold over 100,000 lipsticks in two weeks, and sales of La Mer grew eightfold.
Alibaba also announced today that it will invest 10 billion renminbi this year to strengthen its AIoT (AI and IoT) ecosystem centered around its smart speaker, Tmall Genie, the best-selling smart speaker in China, according to IDC and Euromonitor. The gadget has connected more than 1,100 brands with 270 million devices in China.