China’s answer to Black Friday comes early. Spring Festival is a time of heavy spending and is seen as setting the tone for the year’s consumption. Ominously, retail and catering sales last week recorded their slowest pace of growth since records began, up 8.5 per cent year-on-year. The trade war and flat property prices unnerved shoppers.
Despite the 1.7 percentage point drop in sales growth, it was the first time revenues during the holiday surpassed Rmb1tn ($148bn). Consumers made hefty online purchases. JD.com’s sales during the week increased an impressive 42.7 per cent year-on-year, according to an update from China’s second-biggest ecommerce group. Shoppers spent most on smartphones and household electronics.
JD.com handles its own logistics, which shortens delivery times. Automated warehouses help keep shipments flowing through the holidays. Drones and delivery robots are also busy. The group operates in 50 Chinese cities and is expanding at home and abroad. All this investment makes JD.com more capital intensive than some big rivals.