China 618 GMV growth slows to 1% as consumer spending weakens

China's 618 shopping festival posted its weakest growth on record, pointing to deepening consumer caution in the world's second-largest economy.

China's 618 shopping festival generated RMB836.6 billion in gross merchandise value, up just 1% from a year earlier — a sharp deceleration from last year's 15% growth — as consumer spending momentum faded across the country's largest e-commerce platforms.

"The sales environment was challenging across the board, with only Douyin and PDD Holdings managing to sustain meaningful growth," CLSA said in a research report citing data from third-party monitor Syntun.

Douyin and PDD posted GMV gains of 20% to 30% year over year, driven by aggressive merchant support and category expansion. Taobao and Tmall recorded positive growth, while JD.com may have posted a year-over-year GMV decline because of a high comparison base and reduced subsidies, CLSA said. New retail — instant delivery services — surged 112% to RMB62.8 billion.

The slowdown threatens revenue growth for Alibaba and JD.com heading into the second half, while the divergence between discount platforms and premium marketplaces widens. CLSA maintained a cautious view on China's e-commerce sector, naming Alibaba as its preferred pick on the back of upside potential in its AI cloud business.

Discount Platforms Outperform as Consumers Trade Down

The 20% to 30% GMV growth at PDD and Douyin contrasts sharply with the single-digit or negative performance at Alibaba's Taobao and Tmall and JD.com, reflecting a structural shift toward value-oriented shopping. PDD's Pinduoduo platform and Douyin's live-streaming commerce have captured budget-conscious consumers who prioritize discounts over brand loyalty. The divergence echoes trends seen in other consumer markets globally, where economic uncertainty has pushed shoppers toward lower-priced alternatives. For JD.com, the high base from last year's aggressive subsidy campaign compounded the challenge, leaving the company with limited room to repeat the same promotional intensity. The 1% overall growth rate marks a dramatic slowdown from the roughly 15% expansion in 2025 and the 14% growth recorded in 2024, according to Syntun's historical data, highlighting the persistent weakness in Chinese consumer confidence despite government stimulus efforts.

AI Cloud Emerges as Key Differentiator

CLSA's preference for Alibaba hinges on its AI cloud business, which the brokerage sees as a growth driver independent of the e-commerce slowdown. Alibaba's cloud division has been expanding its AI infrastructure offerings, competing with domestic rivals such as Huawei and Tencent while positioning itself to capture demand from China's growing AI startup ecosystem. The AI cloud thesis provides a potential hedge against the structural headwinds facing Alibaba's core commerce business, though the segment still represents a fraction of total revenue. The brokerage's call suggests that investors may need to look beyond near-term e-commerce weakness to longer-term technology bets when evaluating China's internet giants.

Broader Market Implications

The 618 data adds to a growing body of evidence that China's consumption-led recovery remains elusive. Retail sales growth has averaged roughly 4% over the past three months, below the pre-pandemic trend of 8%, while the CSI 300 Index has struggled to hold gains above 4,000 points. For global investors, the divergence between discount platforms and traditional e-commerce leaders mirrors the broader two-speed economy — where budget segments thrive while mainstream consumption stagnates. The offshore yuan weakened past 7.25 per dollar in recent sessions as the data reinforced concerns about domestic demand, though the PBoC's steady hand on the daily fixing has limited the move.

This article is for informational purposes only and does not constitute investment advice.