China’s mid-year shopping festival, 618, has traditionally played second fiddle to the much-hyped Singles’ Day, which falls annually on 11 November. This years’ 618, being the first major online shopping festival post-Covid, plays second fiddle no more.
Several leading Kiwi exporters are seeking first-hand insights into the actual consumer confidence of Chinese families as well as an uptick in much needed sales revenues.
The 618 festival was created by JD.com to compete with Alibaba’s Singles Day and is held on June 18th, the date that JD.com was founded back in 1998. Last year, JD.com generated US$29.3 billion GMV. The festival is now celebrated across all e-commerce platforms and lasts 18 days, with endless live streaming, games and promotions. Short-format video platforms, such as Douyin (TikTok) and Kuaishou, have also evolved to offer in-app e-commerce sales for their users, such that they never have to leave the platform.
According to market surveys, close to 60 percent of Chinese consumers believe that the economy will rebound within just two to three months and perhaps come back even stronger than before Covid-19. Covid-19 itself has only accelerated consumption via e-commerce channels, with live streaming and Key Opinion Leaders (KOLs) delivering higher sales returns than ever before.
A leading KOL, Viya, who visited New Zealand in August 2019, has morphed into a phenomenal tour de force. Leading e-commerce categories continue to include skincare and cosmetics, mum and baby, healthcare, and general food. In addition to these categories, heroic New Zealand exports in sectors such as mānuka honey, pet food, and household cleaning, are all expected to perform well on 618.
“Chinese media has favourably portrayed New Zealand’s ‘team of five million’ that collectively eliminated Covid-19. In doing so, this has further underscored the trust that is afforded by consumers across a range of categories, including food and beverage.”
Chinese media has favourably portrayed New Zealand’s ‘team of five million’ that collectively eliminated Covid-19. In doing so, this has further underscored the trust that is afforded by consumers across a range of categories, including food and beverage. Logistics solutions in China have rapidly advanced to provide even better consumer experiences for fresh food, which bodes well for those Kiwi exporters playing in heroic categories such as horticulture, seafood, and meat.
Easy cross-border path to market
Since 2015, countless Kiwi exporters have taken advantage of the cross-border e-commerce (CBEC) path to market, which affords simplified market access and favourable import duties. Most exporters drop-ship inventory to bonded warehouses located in eastern and coastal regions. In May of this year, Beijing announced yet a further expansion to the list of pilot zones, which notably now includes central and western regions. This is particularly good news, as provincial capitals, and leading Tier 2 and 3 cities are widely regarded to be experiencing higher levels of economic growth than the more mature Tier 1 cities. By value, approximately eight percent of New Zealand’s total exports to China are thought to enter via CBEC.
Business planning for online shopping festivals remains as challenging as ever, with spikes in demand, expectations for next-day delivery, and various forms of promotions and price discounts activated to win over consumers. Customs clearance at the border and last-mile delivery are back operating at pre-outbreak levels. However, one nagging headwind is international airfreight, where the cost per kilogram remains two to three times higher, due to ongoing air cargo supply constraints.
All going to plan the upcoming 618 will set a positive scene for Singles’ Day in November when Kiwi exporters can aspire towards achieving even greater engagement and economic returns from the Chinese market.
Article by Guangzhou Ruoyuchen Technology Co., Ltd, (RYC) – which manages over RMB6 billion of annual GMV across all major e-commerce and social network platforms in China, employing over 800 people. RYC represents several iconic New Zealand brands online in China, including Comvita, Ecostore, Red Seal, and Royal Nectar.