Chinese mega-retailer JD.com says the Covid-19 pandemic hasn’t broken its stride, reporting today that its annual “618” e-commerce sale recorded $38.05 billion in transaction volume, an increase of 33.6% over last year’s results.
The numbers don’t compare exactly to the firm’s 2019 results, since JD.com says it extended the sale from a single day on June 18—rendered in digits as 618—to nearly three weeks in a nod to coronavirus conditions, running the event from June 1-18 to give users more time online to make their purchasing decisions. That accounting wrinkle didn’t stop the firm from crowing about its success, declaring: “As the first major shopping event in the midst of the global COVID-19 pandemic, JD’s 618 performance has demonstrated the resilience of the Chinese economy and the opportunity that remains for international brands, even under uncertainty.”
JD.com did not disclose the profit or loss it made on the sale, but in its most recent earnings report, the retail giant declared net revenues for the first quarter of 2020 of $120.6 billion, an increase of 20.7% from the first quarter of 2019. In comparison, amazon.com reported just $75.45 billion in revenue for its 2020 first quarter. And JD.com has its foot on the accelerator, announcing in June that it planned to raise an estimated $3 billion through a stock offering in order to finance improvements to “key supply chain based technology initiatives” and slow the growth of its fulfillment expenses.
This year’s 618 sale was the 17th annual such event for JD.com and joins a growing number of dates on the global calendar of “peak” events that used to feature primarily the winter holiday shopping season that stretches from Thanksgiving to Christmas. Today, retailers plan for sales surges on many other dates, such as amazon.com's Prime Day on July 15—now postponed until September by the pandemic—and Chinese online retailer Alibaba’s “Singles Day” on November 11.
Pandemic drives demand for food, medical equipment
For the 2020 edition of the 618 sale, JD.com attributed much of the increased trade volume to spikes in demand driven by online shoppers working from home during the coronavirus crisis, saying that from June 1 to 18, fresh food sold online and offline increased 100% year over year. That total included increases in sales of vegetables of 160% and sales of meat of 174%; led by pork up 229%, chicken up 115%, and mutton up 202%. “Many consumers, including those who were more accustomed to shopping for their groceries offline, turned to JD during COVID-19 and have continued to do so,” JD.com said.
Health concerns also drove demand for medical and healthcare products, which increased 173% year over year for the period from June 1018, while sales of drugs for chronic diseases sold from JD Pharmacy increased by 270%, cross-border drug sales increased by 20 times, and sales of omnichannel medicine delivery service by JD Pharmacy was 492 times its level last year.
The purchases were not all domestic, but overseas consumers have also turned to JD’s outbound e-commerce platform during the ongoing pandemic, the company said. JD Global Sales, which runs the outbound business, witnessed 271% growth in transaction volume during the 18-day campaign, with the top five best-selling markets being Hong Kong SAR, Chinese Taipei, the United States, Japan, and Singapore. The five most popular products are computers, smartphones, books, electronics products and small home appliances.
Part of the revenue increase was also due to JD’s external logistics business, which handles contract inventory for external retailers and saw revenue increase 80% over the span of the special sale. According to the company, that increase is a testament to the success of the company’s strategy to open up its resources to partners both in and outside of the JD ecosystem. Likewise, JD’s parcel delivery service, bulky supply chain, service+, and cold chain warehouse outbound inventory increased 311, 230, 309 and 110% respectively.