Staff members work at an express delivery sorting center in Taizhou, East China’s Jiangsu province, on June 17, 2026. [Photo/Xinhua]
One of the country’s largest midyear e-commerce events, the June 18 shopping festival, or “618” as it is commonly known, highlighted this year a structural shift in the country’s retail landscape, moving decisively away from price-driven competition toward margin protection, product innovation and artificial intelligence-enabled consumer engagement, according to industry insights.
Kathy Jiang, a partner expert at consulting firm Roland Berger, said across major e-commerce platforms, the long-running “lowest price guarantee” era appears to be fading. Platforms have increasingly deprioritized aggressive discounting strategies, while brands are recalibrating toward profitability, elevating net margin as a core KPI.
This marks a notable departure from previous 618 cycles, where promotional intensity and traffic acquisition costs dominated strategy. Instead, the focus is shifting toward sustainable growth and healthier unit economics.
On the demand side, consumer behavior during the shopping festival period is increasingly disciplined. Industry observations suggest that roughly 70 percent of shoppers now have pre-prepared shopping lists ready for the festival, significantly reducing impulse purchases and bundling-driven upselling.
“Rather than browsing for deals, consumers are prioritizing genuine need, product quality and post-purchase service,” said Jiang. The result is a more selective and efficiency-driven consumption pattern, with higher expectations placed on both product performance and brand experience.
Another structural change is the shift in growth drivers. Instead of functioning primarily as a channel for inventory clearance, 618 is increasingly powered by new product launches and emerging categories, said Jiang.
On platforms such as Tmall, about one-third of the top 100 bestselling products are now new launches. Innovative products with differentiated features are increasingly able to command pricing power, signaling a stronger role for product originality in driving conversion.
Brands are also expanding into emotional and experiential value creation, shifting from pure transactional e-commerce toward long-term “user asset” management and positioning strategies.
A major structural transformation is the reconfiguration of the “People–Product–Place” model, with generative AI emerging as a critical new traffic gateway.
Platforms across China are embedding AI into core shopping journeys, including the Qwen app within the Alibaba ecosystem, JD’s AI shopping assistant, and Douyin-integrated recommendations and discovery tools. ByteDance’s Doubao is also part of this broader shift toward AI-mediated commerce.
These systems are increasingly responsible for product discovery, user matching and decision support — reshaping how consumers enter and navigate digital marketplaces.
Jiang said industry consensus suggests that brands are responding to these shifts by returning to fundamentals: stronger products and improved customer experience.
“Brands are accelerating investment in original product development and targeting high-growth niche segments,” Jiang said. Emotional value, functional differentiation and brand equity are becoming central to pricing power, she added.
At the same time, data-driven reverse customization is gaining traction, allowing brands to reduce product testing costs and better align supply with real demand.
On the channel side, brands are increasingly focused on long-term user asset accumulation rather than short-term traffic spikes. This includes deeper engagement through content seeding, membership lifecycle management and loyalty ecosystems.
Optimizing visibility within AI-driven search and recommendation systems is also becoming a new competitive priority. For categories requiring higher consumer trust, brands are working to bridge online and offline channels into integrated online-to-offline experiences.
For global beauty groups such as The Estee Lauder Companies, this year’s 618 underscores how AI is transforming not just marketing efficiency, but the entire consumer journey.
According to the company, AI tools are now deployed across four key areas: visual content creation, advertising optimization, beauty advisory services and operational management.
Product imagery and short videos are increasingly generated in seconds using AI models, enabling rapid multi-scenario content production for different consumer segments.
On the marketing side, automated bidding systems use behavioral data to match products with consumers in a “products find people” model, significantly improving targeting precision.
In customer service, AI-powered assistants embedded in flagship stores now respond instantly to skincare queries, compare product specifications and summarize review insights — compressing the consumer decision process.
Behind the scenes, AI is also streamlining operations, from data analysis to inventory and after-sales alerts, allowing teams to focus more on strategy and creativity rather than repetitive tasks.
Estee Lauder also found a broader psychological shift among consumers, with e-commerce no longer viewed purely as a transactional channel, but increasingly as a platform for brand storytelling and experiential consumption.
As seasonal marketing expands beyond the 618 shopping festival into year-round gifting occasions — such as Chinese New Year and Mother’s Day — consumers are showing greater willingness to pay for emotional value and ritualized experiences.
In response, brands are expanding personalized gifting services, including engraving, custom packaging and occasion-specific design adaptations. For example, products such as fragrances and lipsticks are being repositioned as “emotional gifts”, said the company.
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