Profit Has Become the Make-or-Break Line for This Year's 618 Shopping Festival

Brands tighten belts as GMV gives way to margins

This 618, profit trumps headline Gross Merchandise Value (GMV). It has been reported that an e‑commerce head at a multinational beauty group told colleagues the brief was simple: “protect margins.” Rising logistics and packaging costs make that easier said than done. So marketing budgets—gift boxes, platform points, ad spend—are now being treated like a tight accounting exercise: if you spend more on paid traffic, you must cut elsewhere. What used to be a race for eyeballs is turning into a battle for return on ad spend.

Earnings pain is forcing a course correction

Recent 2025 annual reports have put pressure on the whole sector. Three Squirrels (三只松鼠) reported revenue of RMB 10.189 billion with adjusted net profit plunging 84.5% to about RMB 49.4 million; sales and promotion fees rose, eating into every yuan of revenue. It has been reported that Fushijia (敷尔佳) and Marubi (丸美生物) also posted sharp profit contractions while sales expense ratios ballooned—evidence that pouring money into influencers and platform promotion no longer guarantees profitable growth. When every RMB 100 in sales returns only a few jiao of profit, the math forces strategic change.

Repeat customers and “shelf” economics come to the fore

So how are brands responding? By shifting from high‑commission influencer-driven spikes to more controllable, repeatable channels: search, store live (brand self‑broadcast), and membership. It has been reported that some brands now treat net margin as their primary KPI and are reallocating budget from costly “da‑bo” influencer livestreams toward store broadcasts and shelf merchandising that build owned audiences and lift repeat purchase rates. Platforms are helping—Tmall (天猫), Douyin (抖音) and Kuaishou (快手) have all been reported to support brand self‑broadcast and “货架” (shelf) formats—and are reportedly issuing more coupons to stimulate repurchase rather than one‑off acquisition.

Long game over flash growth

The result is a broader shift from the “flow” era to an “operation” era. Product differentiation, membership lifecycle management and higher‑quality SKUs are back on the agenda. Small and large sellers are experimenting with higher average order values and more original design; Defulin (德芙琳), for example, has started moving its broadcast mix and raising product price points to improve unit economics. Can 618 still deliver growth without sacrificing profit? For many Chinese consumer brands, the answer this year is: only if growth becomes predictable and profitable.