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Alibaba and JD.com Stocks Jumped as Retailers Handled $136.51B in Sales at 618 Shopping Event

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.

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.”

Due to the pandemic, the company saw a sales growth in medical supplies, fresh produce, and daily necessities.

For JD’s rival Alibaba, 618 Shopping Festival went great as well. The giant reported an incredible gross merchandise value of just over $98 billion during the event. As Alibaba spokesman said, the retailer saw a boost in demand for categories like pet snacks, beauty tools, and health check devices. They were showing “high triple-digit growth this year” so far.

Together, Alibaba and JD.com handled a record of $136.51 billion in sales during the 618 event.

Following the news, both Alibaba and JD stocks jumped.

Alibaba stock closed at $224.25 on June 18 but went slightly down today. BABA stock has opened at $223.74 and is trading at $223.74 per share at the moment of writing. The market cap totals $603.113 billion, the year-to-date change is positive 5.4%.

As for JD stock, it ended at $60.79 yesterday but slightly declined at the opening today. At the press moment, JD shares are trading at $58.99. JD market cap is $11.301 billion.

Alibaba and JD.com Stocks Jumped as Retailers Handled $136.51B in Sales at 618 Shopping Event

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