This year’s 618 shopping festival has been nothing short of intense. Over the years, 618 has evolved from being an exclusive event for a single platform or brand to a major mid-year shopping extravaganza scrutinized by various stakeholders. This has made it a critical period for observing brand performance, platform strategies, and consumer behavior.
Unlike previous years, traditional e-commerce platforms canceled the presale mechanism, which had been in place for over a decade. Major promotional activities were moved to May 20, thereby extending the shopping period.
As the festival concluded, the usual buzz about gross merchandise volume (GMV) was noticeably absent. Instead, platforms revealed more about their actual commercial ecosystems, moving away from focusing solely on numbers.
For instance, Kuaishou E-commerce reported a 25% year-on-year increase in the number of active merchants from May 20 to June 30. New small- and medium-sized merchants saw a 47% increase, while the number of active product categories grew by 39%. Across different business domains, the platform’s shelf-based GMV grew by 75%, search GMV increased by 110%, and short video GMV rose by 69%.
In an industry where platforms are generally anxious about growth, how has Kuaishou E-commerce managed to deliver such results?
Serving the needs of both buyers and sellers
The crux of e-commerce as a business model is to provide opportunities for online transactions between buyers and sellers. Hence, balancing and fulfilling the needs of both buyers and sellers is crucial for e-commerce platforms.
Unlike traditional shelf-based e-commerce, Kuaishou integrates quality content with quality products, continually raising the bar for e-commerce ecosystems. This approach not only meets the consumption needs of users but also enhances their shopping experience. The deep integration of content- and shelf-based operations helps merchants operate efficiently across all domains, creating more business opportunities.
From Kuaishou’s key activities during the 618 period, its strategy to address these needs can be discerned.
On the user side, Kuaishou’s 618 promotion featured a theme that translates to “Every Day is 618, with Bigger Discounts than Anywhere Else,” demonstrating a strong commitment to user benefits. It provided substantial subsidies to spur billions in traffic while distributing billions in cash rebates. Cross-store discounts and other incentives were also introduced to stimulate consumer enthusiasm.
Additionally, Kuaishou E-commerce focused on enhancing user experience by offering low-cost quality goods, canceling presales, providing immediate shipping, refunding shipping fees for returns, and offering interest-free installments. It partnered with logistics companies like ZTO Express, J&T Express, Yunda Express, and JD.com to ensure smooth service during peak transaction periods.
On the merchant side, Kuaishou E-commerce’s support enabled significant growth. The platform leveraged its content ecosystem, encompassing live streaming, short videos, digital mall, and search features. This diverse ecosystem allowed for the internal circulation of user demand and met the needs of omnichannel operations.
Kuaishou’s Q1 2024 financial report showed that the platform’s shelf-based GMV accounted for about 25% of the total, with daily active merchants increasing by over 50% and daily active buyers growing by more than 60%. Additionally, short video GMV nearly doubled year-on-year.
User browsing behavior also reflected significant growth, with a more than 80% year-on-year increase in product views on the platform’s mall and over 25% of users placing their first orders through search. The platform’s search GMV increased by 128%, with search-to-order conversion rates doubling and nighttime search orders growing by over 90%.
To lower business barriers and increase certainty, Kuaishou E-commerce introduced a managed sales model using traffic testing, automated product selection, and omnichannel recommendations to help merchants quickly start selling products. Public data shows that this model includes commission-based management for branded products and pricing management for white-label products.
Kuaishou also launched a plan for new and small merchants, earmarking 100 billion in platform traffic throughout the year to support them from entry to growth.
Kuaishou’s omnichannel strategy boosts merchant growth
Kuaishou’s 618 event boosted active merchants and product categories, leading to a significant increase in e-commerce GMV across various channels. These results demonstrate its ability to support users and empower merchants. The platform’s digital shelves, including the digital mall and search, have become new growth areas for Kuaishou E-commerce. The integration of short video content complements merchant operations, integrating e-commerce with content seamlessly.
Brands at different development stages found new growth opportunities through Kuaishou E-commerce. For instance, Kuka Home identified Kuaishou as a valuable channel in the “new media era.” Traditionally, brands faced challenges in engaging deeply with user groups. However, with the rise of short video platforms and the maturation of trust-based e-commerce, Kuka Home recognized the platform’s value and began focusing on it from June 2023.
During this year’s 618 event, Kuka Home achieved a GMV of over RMB 36 million (USD 4.9 million), a 206% increase, with over 16,000 orders. Its core product alone achieved a GMV of over RMB 24 million (USD 3.3 million), and its account ranked first in the furniture industry.
The managed sales model introduced by Kuaishou E-commerce has shown results, in particular meeting the needs of industrial merchants by lowering entry barriers. For example, Jiaxing-based brand Xiaoyingzhai, a longstanding manufacturer of rice dumplings, found a significant new market through Kuaishou. During the 618 event, Xiaoyingzhai’s “king-sized pork dumpling” achieved a GMV of over RMB 10 million (USD 1.3 million), a 200% increase, thanks to the managed sales model.
According to Xiaoyingzhai, the managed sales model contributed to nearly 80% of its total sales during the 618 event. The combination of platform subsidies and low prices made its products highly competitive, attracting influencers to help distribute and increase the reach of products.
In Cixi’s small appliance industry, Kulinan Dianzi specializes in electric fans and heaters. According to the company’s CEO, Gao Dongdong, Kulinan partnered with local factories to launch a high-value air circulation fan priced under RMB 85 (USD 11.7). This fan boasts multiple functions, including eight wind speed options, antibacterial fan blades, a 12-hour timer, and artificial intelligence-based smart control.
During the 618 event, Kulinan promoted this fan through the managed sales model, selling 20,000 units with a total GMV of over RMB 1.5 million (USD 206,150). “Merchants only need to provide a purchase price to the platform, which then handles traffic, subsidies, and distribution. We only need to focus on shipping, customer service, and after-sales,” Gao said.
The effectiveness of Kuaishou’s support for small- and medium-sized merchants was evident during the 618 promotion. The number of active new small- and medium-sized merchants increased by 47%, with average revenue per store up by 37% and GMV up by 31%.
Whether it’s incremental growth for established brands or stable growth for industrial and small merchants, it seems that all types of merchants are finding success on Kuaishou E-commerce, validating the platform’s business value.
What’s next for Kuaishou?
Despite Kuaishou’s performance during the 618 shopping festival, the e-commerce industry’s transformation is still in progress. What is clear from Kuaishou E-commerce’s success, however, is that promotional mechanisms are becoming the norm. Consumers increasingly seek affordable, high-quality goods year-round, while brands strive for sustainable, long-term growth. For Kuaishou E-commerce, this marks a new phase of opportunity and challenge.
According to Kuaishou’s latest financial report, the platform’s GMV reached RMB 288.1 billion (USD 39.6 billion) in Q1 2024, a year-on-year increase of 28.2%. Shelf-based GMV accounted for 25%, and short video GMV nearly doubled. These figures highlight how a rich supply and accelerated flow of low-cost quality goods across domains drive the platform’s overall growth, enabling merchants to operate efficiently across all channels.
Beyond improving infrastructure and innovating business models, Kuaishou is exploring future solutions through AI technology. Current AI applications in Kuaishou E-commerce, such as AI video generation, digital humans (as live streamers), and AI-powered customer service, lower entry barriers for merchants seeking future growth breakthroughs.
As the platform evolves, merchants are also adapting. Understanding and responding to new consumer demands is essential for merchants to grow in a competitive environment. Data from Kuaishou’s 618 event reveals diverse consumer demand trends: strong demand for household goods, such as umbrellas (sales up by 794%), coreless toilet paper (GMV up by 585%), and bamboo mats (sales up by 321%).
Concurrently, there is a growing pursuit of quality living, with GMV of eye care serums up 711%, essential oils up 264%, exercise bikes up 680%, student tablets up 340%, and fresh durians up 113%.
The reality is that the number of price-sensitive consumers is increasing, and the return of rational consumption places different demands on merchants’ supply chain operations, digital capabilities, and channel construction. Finding the right growth model in different platforms is a challenge every company faces. Kuaishou E-commerce’s value lies in the combined benefits of its content and commercial ecosystems, providing a clear path for brands to transform and grow.
For instance, the mom-and-baby brand Goodbaby, with over 13,000 registered patents and eight global R&D centers in Asia, America, and Europe, chose Kuaishou E-commerce for its digital operations. Since delving into influencer collaborations on Kuaishou in 2021, Goodbaby has continuously increased its efforts and recently intensified its content e-commerce operations on the platform.
“We want to deliver high-quality children’s products to families at affordable prices through Kuaishou,” said Cecilia Miao, Goodbaby’s Kuaishou operations manager. Goodbaby’s main customers on Kuaishou are primarily mothers from the north and northeastern parts of China, as well as Guangdong, complementing user bases on other e-commerce platforms.
Responding to market demands for cost-effectiveness, Goodbaby leverages its strong supply chain, production management, and channel capabilities to reduce costs, allowing consumers to benefit from lower prices through high-volume product sales. Moving toward omnichannel operations, Goodbaby tried new approaches during this year’s 618 event. The brand launched new products in tandem with influencers, ran various campaigns, and used live streams to capture and convert traffic, achieving steady sales growth. Goodbaby’s 618 performance included over RMB 10 million in GMV, nearly ten million-RMB single products, and a 300% growth target reached ahead of schedule.
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While the recent 618 shopping festival highlights a fresh phase in e-commerce, the primary principle of prioritizing users remains unchanged.
E-commerce platforms ultimately need to serve both consumers and merchants, and the new status quo demands a focus on effectively linking these parties to ensure consumers get affordable, high-quality goods while merchants achieve efficient business growth.
This is the collective challenge all platforms face, and Kuaishou E-commerce provides a valuable reference model that underscores this imperative.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Xiao Xi for 36Kr.