The state of the Chinese economy has fluctuated in the past few years due to the pandemic. Lockdown restrictions impacted sales both in person and online. In 2022, it was estimated that over 700 beauty brand doors were closed temporarily in China's shopping districts, from Maybelline to Innisfree. While this resulted from consumers being unable to shop in person, online sales were also impacted as shipping companies were restricted in their travel, prolonging the turnaround time of deliveries, which led to many cutting down on their shopping habits. According to Alibaba, the uncertainty of restrictions and changes encouraged consumers to take a step back from overconsumption and focus on what they already owned.

This was reflected in 2022's month-long 618 e-commerce shopping festival, which only saw a 10.3% rise in sales from 2021, a significant decrease from the 27.7% sales growth from 2020 to 2021. The 6.18 festival was created by JD.com and takes place each year. The festival was named 6.18 to celebrate the day the shopping site was founded by Liu Qiangdong on June 18,1998. During the shopping festival, which usually rakes in impressive revenue, sought-after goods become discounted for a limited time. During last year's 6.18 shopping festival, skincare sales, which are often one of the highest performers, were down 18.9% year over year due to consumers simplifying their skincare routines “as a result of not seeing others face-to-face during strict lockdowns” and attempting to save money in uncertain economic times. Come the Singles' Day shopping festival in November 2022, sales began to pick up, as "the consumer appetite for shopping recovered somewhat,"with most brands meeting their November 11, 2022 targets or coming close enough to doing so, leaving them "feeling positive about leaning into 2023." As the pre-sale section of 6.18 2023 closes up, the prediction of sales increases has materialized, with Alibaba reporting a sales surge.

The General Beauty Numbers

• L'Oréal, Alibaba's largest leader in cosmetics, saw sales of RMB100 million ($14 million) within the first hour of 6.18, as did China's Proya Cosmetics, Lancôme, and Estée Lauder. 
• In the space of an hour, Hourglass surpassed last year's 6.18 first day sales.
• La Prairie's sales topped RMB1 million ($140,453) within the first ten minutes of checkout opening.
• Between 8:00 pm and midnight of May 31 (the day checkout opened), Chanel's skincare, makeup, and fragrance sales grew over 70% compared to this time frame during 6.18 2022.
• According to Franklin Chu, Managing Director at Azoya, base makeup had the highest sales volume during 6.18, accounting for 89.22% of the entire makeup sales of 21.06 billion Yuan ($2.95 billion). The sale of other categories like eyeshadow palettes and lipsticks has rebounded.
• The fragrance market volume is still growing with an over 60% increase rate. The fragrance manager of Tmall explained that there is an influx of niche brands entering China’s market because fragrance has become a lifestyle for the youth to express individuality and differentiation.
• Dior's sales of beauty products jumped by over 50% year over year.
• Givenchy surged past last year's first-day sales within 70 minutes of the checkout window opening.
• Diptyque surpassed its sales number from the entirety of 6.18 2022 within the first 90 minutes of the checkout window opening.
• Of the 2,500 best-selling products, new products accounted for 30%. Among them, the number of new products with sales exceeding RMB10 million ($1.4 million) increased by 35% year over year.

Skincare

• New products, such as Estee Lauder's Micro Essence Lotion, YSL Clarinet Lip Glaze 610, and 943 Lightweight Sunscreen, sold over 10,000 pieces during the first hour.
• High-tech skincare products targeting firming and wrinkles saw sales leap by over half within four hours, and nourishing skincare products, including essential oils, more than doubled year over year.
• China's sensitive skincare brand Winona received over RMB100 million ($14 million) in sales shortly after the checkout window opened.
• Chinese skincare brands Collgene and Comfy exceeded RMB100 million ($14 million) within 28 minutes.

Beauty Devices

• Beauty device sales nearly doubled from last year within the first hour of the checkout window. 
• Seayeo saw its LED facial beauty light sell out in 20 seconds, with a sales figures of RMB100 million ($14 million).
• Jmoon, a Chinese beauty device brand, became the best-selling brand on Tmall only a year after its flagship store opened.

“Despite the increase mentioned above, the sale of makeup in Tmall does not meet expectations,” comments Franklin Chu, Managing Director of Azoya International. “Overall, the sales of the beauty category have not fully recovered to pre-pandemic levels, but consumers’ awareness of brands and trademark reputations have increased with the rise of the middle class and consumption level in China; consumers focus more on product quality, innovation, and individuation.”

Behind The Shopping Boom 

Although figures have not bounced back to pre-COVID times, the increase of sales is still significant. Alibaba warrants the success of 2023's 6.18 shopping festival so far to its sales initiatives and shipping performance. "We will make maximum effort to scale up our investments in driving user growth and in building a prosperous ecosystem," Taobao and Tmall Group CEO Trudy Dai said before 6.18's sales window opened.

These efforts were presented across Taobao and Tmall, where discounts were offered on over 60 million products during 6.18's pre-sales. Between May 31 and June 3, every time a customer shopping on Tmall spent RMB300 ($42.19) or over, RMB50 ($7.85) was discounted from their bill. On Taobao, consumers had the opportunity to save RMB30 ($4.22) for every RMB200 ($28.13) or over spent. These deals entice consumers, contributing to significant sales figures and bringing back the once-familiar hype for the shopping festival. “Discounting is driving 6.18. The consumer isn’t showing up with conviction so platforms are trying to juice sales with promotions to lure shoppers,” adds Elizabeth Kopelman, Global Beauty Brand Strategist.

On top of discounts, 6.18 focused on ensuring that consumers received their orders on a fast-paced turnaround, signaling yet another move towards normality after the ongoing impact of lockdowns on China's e-commerce. For pre-sale purchases on Tmall, shipping company Cainiao delivered more than half of orders within the first 12 hours of the May 31 checkout period, with 70% of the rest delivered within 16 hours. To speed up the process, pre-sale orders were packaged once placed and sent out for delivery once the payment was completed.

Livestream shopping events have also been attributed for the success of 6.18's pre-sale period, creating immersive shopping experiences to reach new customers. Companies, including Apple, showcased their SKUs through live streams embedded in the Taobao and Tmall apps. Over 1.3 million people tuned into the first hour of Apple's live stream, which focused on how to make the most of its products. During 6.18, Taobao is set to host over 10,000 live streaming sessions in 11 Chinese cities as part of an effort with local governments to incubate 3,000 live streaming hosts and launch 1,000 streaming channels. Contests are also taking place across the 6.18 shopping period, with one winner taking home up to a RMB1 million ($140,453) cash prize.

Chu believes that video-based selling such as livestreaming is behind the rise of sales figures, having success not only on Tmall, but among several other platforms.

“Xiaohongshu (Little Red Book) has become a quiet-selling platform having successful live stream experiences of Dong Jie, Zhang Hui. and Dong Xuan. This shows that consumers are transferring focus from prices of products to their quality. Douyin has also influenced this, creating its own ecosystem of beauty influencers, which is quite different from Tmall—making them more controllable and flexible for marketing.”

Future Growth

The success of 6.18's pre-sale period solidifies growth for China's ecommerce market even if numbers are not yet what they once were. These figures are only set to grow as 6.18 pans out before ending on June 20. Tmall is continuing discounts until this date, dropping prices for each category of products at a time, beginning with skincare, followed by fashion, household appliances, and imported goods. Skincare, clothing, and home appliances will each be given a 72-hour sales window, followed by a 24-hour window for imported goods. Through the use of discounts and live streams, the festival is sure to continue to appeal to audiences all across China. As the shopping festival heads back to its old ways of high sales and fast turnarounds, it is clear that China is finally making economic progress after a slippery slope of a few years of up-and-down economic uncertainty. It seems the only way from here is up.