Many of China's leading online retailers have started their own sales events in the middle of the year to boost sales.
JD.com Inc is no exception.
Since 2014, it has held an annual sale around the anniversary of its founding, June 18. This year, the online retailing giant has been offering discounts on a range of products for the annual sale, which started June 1 and ends Saturday.
JD's goal for its "6/18" sale is to give its customers a more convenient shopping experience, a PR representative surnamed Zhu told the Global Times on June 5.
The online retailer is following in the footsteps of its rival, Alibaba, which has been running its annual "Double 11" sale on November 11 each year since 2009.
Other e-commerce platforms such as Suning Commerce Group and Yihaodian have also created their own annual sales to attract customers and attention.
"The online retailers have created these shopping festivals to boost sales," said Cao Lei, director of the Hangzhou-based China e-Business Research Center. "They use dates like June 18, November 11 or December 12 to make them easy for customers to remember."
Manufacturing sales
With customers embracing sales events for holidays like May Day and Mother's Day, online retailers have begun the new round of sales in the middle of the year.
It's also very important to choose suitable timing for sales, Zhang Xiang-li, a senior e-commerce analyst from iResearch, told the Global Times on June 10. Retailers normally choose to hold their special sales around specific holidays or their own birthdays as an excuse to attract consumers.
JD chose the anniversary of its founding to launch an annual sales event covering products like books, food and electronics.
The retailers create shopping events to reduce prices for consumers as well as boost sales for themselves, said Jing Linbo, executive deputy director of the Chinese Evaluation Center for Humanities and Social Sciences at the China Academy of Social Sciences.
"Retailers need to choose their dates for these sales carefully," Jing said. "They need to consider consumer spending habits and pick a date that is easy to remember."
They also need to focus their discounts on products appropriate for the time of year.
"For instance, refrigerators and air conditioners typically sell best in the summer," Zhang told the Global Times on June 6.
Copying success
Since Alibaba began its "Double 11" sale, November 11 has turned into China's equivalent of "Black Friday" - once the biggest shopping day of the year in the U.S.
Alibaba reported 57.1 billion yuan ($9.21 billion) in sales revenue from its "Double 11" sale in 2014, up 63 percent year-on-year, Alibaba announced on November 12, 2014.
For JD, which also ran a special sale on November 11, sales doubled from the previous year to 8.2 billion yuan on that day. Other e-commerce businesses also reported that sales improved from the previous year.
Still, these sales can take a while to catch on with consumers.
"It took time for Alibaba to get such good results on 'Double 11,'" Zhang said. "It's a gradual process to get more consumers to know about the event. In fact, sales were limited when Alibaba first launched the sale."
Although the online retailers held similar events on December 12 and January 1, they weren't as successful as Alibaba's "Double 11" sale.
"Personally I agree with this kind of annual sale model, which gives discounts to consumers and increased sales to retailers. But the most important thing for the retailer is to attract as many customers as possible," Zhang said.
Retailers cannot succeed by simply copying a competitor's sale, Jing said. Every sale should take advantage of the retailer's core competency.
Since 2011, Alibaba has participated in big sales in the middle of the year. This year is the first time its Tmall marketplace carried out the "6/18" sale, with its vendors offering discounts on more than 100 overseas brands, a PR representative surnamed Pan told the Global Times Wednesday. The Tmall sale started on May 25 and will finish Thursday.
Shanghai-based online retailer Yihaodian will focus its sale, which will run from Tuesday until Thursday, on household appliances, computers and cell phones, according to the company.
Common complaints
More sales inevitably lead to more problems.
Return rates for some top brands were higher during the "Double 11" sale than during other times, according to a report release by online news provider China Internet Watch in January.
For instance, the refund rate for clothing brands Handu and Jack Jones, which are third-party sellers on Tmall, increased to 64.09 percent and 38.25 percent respectively during the sale, the report said.
Some of Tmall's retailers also got caught raising prices in advance of the event just so they could claim they were offering bigger discounts during the sale.
Alibaba was fined 500,000 yuan for matters related to pricing by third-party vendors on its Tmall marketplace during its "Double 11" sale in 2013 and 2014, the Global Times reported in April, citing an Alibaba statement.
"Refunds are one of the major kinds of consumer complaints, but Alibaba has created a special channel to provide customers with quick refunds," an employee surnamed Yang, who is responsible for dealing with consumers' complaints, told the Global Times Tuesday.
It has been a common phenomenon that consumer complaints rise on sale days due to the huge pressure from shopping websites, delivery and logistics, Zhang said.
If consumer complaints increase with promotions, it only indicates online retailers haven't fully prepared for the sales.
In order to reduce complaints, retailers need to make a well-organized plan at the beginning, coordinate resources within the company to support the sales in a timely manner, and handle consumer complaints promptly, Jing said.
