(Yicai Global) June 17 -- JD.Com, Tmall and other online retailers in China have dished out CNY10 million (USD1.4 million) in subsidies and are offering big discounts and coupons to lure in buyers ahead of the June 18 e-commerce shopping festival, known colloquially as 618.

Consumption in China has much lower than usual in the first half because of Covid-19 and e-commerce platforms are urgently looking to push sales back to normal levels now production is back in full swing, according to industry analysts. The festival will be an opportunity for online and offline businesses to shift excess inventory and make space for more production, they said.

Competition in the e-commerce sector is becoming more intense in China, with Pinduoduo poaching market share from industry titans JD.Com and Alibaba Group Holding in smaller cities and Meituan Dianping looking to join the New Retail trend in fresh food sales and entering the payments sector, an area largely dominated by Alibaba and Tencent Holdings.

Short video platform Douyin, the local version of TikTok, has also severed ties with Alibaba’s Taobao and plans to open its own e-commerce platform on July 1.

Companies running promotions ahead of 618 are desperate to sell their stock and bring in some cash, according to the analysts. Consumers reduced spending during the 2020 Chinese New Year because of Covid-19, and logistics issues put the brakes on online shopping and left companies with hordes of inventory.

The coupons handed out by local governments to spur the restaurant, hotel and tourism sectors via JD.Com, Alibaba and other platforms will also drive consumption and result in greater sales during tomorrow’s event, market analysts said.

Editor: James Boynton