The news: China’s 618 shopping festival delivered just tepid growth for ecommerce retailers this year, a worrying sign as the world’s second-largest economy grapples with persistently weak consumer sentiment.

Ecommerce gross merchandise value (GMV) rose just 0.9% YoY to RMB 863.6 billion ($119.8 billion), according to a Syntun report. That’s a sharp slowdown from the 15.2% growth in 2025—although much of that rise was the result of a longer shopping festival rather than increased demand.

The big picture: Retailers entered this year’s festival facing growing scrutiny from Beijing into misleading marketing tactics. Where in previous years Alibaba, Pinduoduo, and JD were able to draw interest with “billion yuan” subsidies, the government’s decision to crack down on those promotions has made it more difficult for retailers to entice cautious consumers to spend. Retail sales in China fell in May for the first time since the country emerged out of COVID-19 lockdowns, pushing local retailers to look for growth in international markets as their domestic prospects dim.

Implications for retailers: Slowing growth during one of China’s most important shopping festivals bodes poorly for retailers’ domestic prospects in the second half of the year. Consumers remain highly price-sensitive and disinclined to spend freely, forcing companies to ramp up discounting or risk declining growth. Further geopolitical pressures—including conflict in the Middle East and rising trade tensions with the US and other key partners—could further erode consumer confidence and corporate profits.