The annual 618 shopping festival has once again come to a close. Although each mid-year promotion faces varying degrees of challenges, this year's shopping festival was particularly challenging:

1) The current weakness of domestic demand is an indisputable fact. It's difficult to stimulate consumers who are tightening their belts to spend;

2) The fierce competition in the industry is also evident. In an environment where overall demand is still very weak, the level of competition between merchants and platforms will intensify;

3) This year's 618, major platforms not only canceled the previously controversial pre-sale mechanism, but also under the consumption experience of "what you buy is what you get," the shopping festival lasted for more than a month, which naturally overdrew the consumption potential of the next few months. To seize this crucial opportunity, merchants had to lower prices to maintain scale, and the problem of "increasing revenue but not profits" emerged.

In the current complex environment, previous 618 festivals have to some extent completed the task of industry education and attracting incremental users. Many people also believe that the shopping festival has lost its value and can even exit the historical stage.

Is that really the case? The core points of this article are:

Firstly, the current consumer market is in the dark before dawn, and some categories are showing turning points, but they are not yet obvious;

Secondly, this year's 618 is not cold, on the contrary, it is a bit hot under the above trends, and consumers hold a positive attitude towards the shopping festival;

Thirdly, Douyin may not be friendly to white-label merchants in the future, and this part of the business will flow back to Pinduoduo and the reformed Taobao.

Consumption Turning Points Are Emerging, This Year's 618 Is Particularly Complex

Many people privately complain about the low visibility of this year's 618, but if we use tools like Baidu Search Index and WeChat Index to count, we will find that the online popularity of this year's 618 is higher than the previous three years. The following figure shows Baidu Search Index data, and WeChat Index is the same (higher than last year), but due to space limitations, they will not be listed one by one.

This makes people confused. Isn't everyone lying flat, with no desire or consumption? Why are people still so concerned about the promotion in the network? Are people really saying one thing but doing another?

The sluggish domestic demand has become a consensus in society, and every time CPI data is announced, there will inevitably be heated discussions on domestic demand.

But when will the turning point of sluggish domestic demand arrive? Everyone has different opinions and cannot reach a consensus. In simple terms, if 618 faces "headwinds" (a sharp decline in domestic demand potential), then both Taobao and JD.com will suffer losses. Conversely, if 618 is in a "favorable wind," everything will go smoothly. The evaluation of 618 will be based on this.

Inventory is an important "procyclical" indicator in macroeconomic analysis. Over the past decade, this indicator has maintained a high degree of consistency with the core CPI trend: when economic supply exceeds demand (CPI falls), producers will actively reduce inventory to reduce risks.