China's 618 Fiesta Sees Spending Surge But Momentum in Doubt

Analysts say govt support, not organic consumer optimism, behind sales spike

- Michelle Ng

BEIJING - China's 618 mid-year shopping festival closed on June 18, following more than a month of promotional events beginning in mid-May, with major e-commerce giants boasting about strong sales in home appliances and electronics during this period.

Yet much of 2025's surge in demand came not from renewed consumer confidence, which has in recent years been shaken by a sluggish economy, a weak job market and a property downturn.

Instead, it came from the government-funded goods trade-in programme and national subsidies, raising questions about how sustainable the consumer spending rebound is.

Policy support is clearly the core driver in 2025's 618 shopping festival, as reflected in sales data, said Mr Xu Tianchen, senior economist at the Economist Intelligence Unit (EIU).

"Every category targeted by subsidies — except cars — posted over 20 per cent sales growth from January to May, while non-subsidised categories, such as apparel and food and beverage, saw much slower growth," said Mr Xu, referencing data released by China's National Bureau of Statistics on June 16.

Smartphones, washing machines and air-conditioners are among the consumer goods that have seen strong sales, as they are covered under a central policy that gives consumers up to 2,000 yuan (S$358) in discounts per item.

Started in early 2024, the initiative was expanded in 2025 to cover a wider range of products and is slated to run throughout the year.

To further entice customers to buy, e-commerce platforms stacked discounts on top of the government subsidies. Some products ended up 40 per cent to 50 per cent cheaper than their original price tag, while other high-priced products came with a hefty discount.

For instance, a Chinese consumer could buy an Apple iPhone 16 Pro, which was included in the national subsidy programme for the first time in 2025, for 2,500 yuan off its original price on e-commerce platforms after subsidies and discounts.