China’s e-commerce giant JD.com has reported the slowest growth in sales in the country’s mid-year shopping festival amid a recent Covid-19 outbreak.
JD.com reported a total transaction volume of 379.3 billion yuan ($56.47 billion) during the June 18 shopping festival this year, increasing by 10.3 percent from last year.
This year’s growth rate is largely decrease from the 27% of last year, as consumer appetite in China has been hit by lockdowns to halt the Omicron variant of coronavirus.
Data from JD.com showed Beijing and Shanghai, the two largest Chinese cities in terms of economy and purchasing power, have picked up momentum for recovery after Omicron hit.
“Apart from first tier cities, we are further improving delivery services in urban and rural areas," JD said in a statement, referring to its efforts during build up its supply chain infrastructure and digital intelligence technology.
JD has added three more automated logistics parks in Langfang, Hebei province, Dezhou, Shandong province and Zhengzhou, Henan province to increase its coverage of same or next day delivery for lower-tier cities ahead of China’s 618 shopping festival.
Known as 618 because the shopping festival falls on June 18, 618 was first conceived by JD.com to rival Alibaba’s November 11 Singles’ Day Festival. It is being closely watched as a sign of Chinese consumer appetites for spending given pressure from the pandemic, as China looks to recover from the coronavirus pandemic.
Shopping festivals have traditionally been popular in China, with many buyers making a large chunk of purchases to benefit from the massive discounts brands offer to lure shoppers.
But there were already signs last year of low consumer demand at such events, when rival Alibaba reported sales growth of just 8.5% during its Singles Day bonanza, which is its slowest growth rate ever.