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After good sales during the 618 Shopping Festival, JD.com and Alibaba stocks closed up yesterday but declined at the opening today.
On June 18, the Chinese largest shopping event took place. Known as the 618 Shopping Festival, it was started by retail e-commerce site JD.com to celebrate its founding and has since then become popular with additional retailers. This year, the festival drew special attention. It was a kind of evidence that the world’s second-largest economy is recovering from the coronavirus pandemic. China’s two biggest e-commerce giants Alibaba Group Holding (NYSE: BABA) and JD.com (NASDAQ: JD) that handled record sales of $136.51 billion showed that consumer spending in the country is rehabilitating.
Big Day for JD and Alibaba
JD.com first arranged the event back in 2014. Its name refers to the date June 18 (6 in Chinese means June). 618 Shopping Festival usually starts in late May with presales campaigns, and the promotion starts in early June. All major e-commerce platforms and retailers, even beyond China, launch their own campaigns.
This year, the festival is extremely important for JD.com. It is not only an opportunity to prove its role in China’s economic recovery but also a chance to show that it has moved on from a 2018 scandal that involved its CEO.
Ling Chenkai, vice president of JD Retail, commented:
“This moment is pretty important. This is the first nationwide sales event during the recovery of the virus.”
Last year, JD.com reported sales of RMB 201.5 ($31.53 billion). This year, JD.com said its transaction volume made up $37.99 billion.
Bernstein analyst David Dai stated:
“Without a doubt, JD is the biggest winner of the pandemic.”
According to Dai, during the pandemic, JD benefited from the growing demand for online shopping. Even in the worst days of the pandemic, its logistics network was running at near full capacity, which allowed JD to be far ahead of other e-commerce platforms. For example, platforms like Alibaba and Pinduoduo admitted they faced delivery issues because of delays and limits in delivery capacity.
Davon Dai added:
“As a result, [JD has] won users, they have won orders and the tailwind is helping them not only during the pandemic, but also … after the pandemic.”