Today’s e-commerce industry is no longer able to grow by pleasing “merchants and consumers” alone, and the era of e-commerce “overall war” has arrived unknowingly.
May 20 is a Valentine’s Day that is becoming more and more popular in the mobile Internet era, but last year, it was the node of the launch of the “618” pre-sale period.
A year has passed, and the 520 is still the same 520, but the promotion of “618” is a week earlier than last year, and it has been more than a full month ahead of “618”.
In the past two years, the slogans of e-commerce platforms have mainly focused on “10 billion subsidies”, “the lowest price on the whole network” and “refund only”, and the strength of concessions to consumers is unparalleled. But this year, with the “aesthetic fatigue” and “return of rationality” of consumers, the strategies of platforms have gradually changed.
This is not just a “cooling of enthusiasm” on the consumer side, but at a time when the increase in traditional shelf e-commerce is peaking, with the entry of emerging formats such as instant retail, the market has become more segmented, and consumers have begun to have more choices – but this does not mean that “618” has become “unnecessary”.
Whether it is the “618” that started the war in mid-May, or the more obvious resource tilt of major platforms towards merchant groups, this shows to some extent that today’s e-commerce industry is no longer able to grow by pleasing “merchants and consumers” alone, and the era of e-commerce “overall war” has arrived unconsciously.
01 “The earliest in history” 618
For mid-waist sellers, who occupy the vast majority of e-commerce platforms, the sharp advance of the “618” pre-sale period is unexpected.
Wang Wan, who has opened beauty stores on Taobao and Douyin, told Lu Jiu Business Review that Taobao’s earliest wave of “618” pre-sales began on the 13th, “pay the deposit on the 13th, and pay the final payment on the 16th.” For her, the time left for this wave of stocking was 20 days based on May 20 last year, but this year, it was compressed to less than half a month, a full week less.
The fundamental reason is that although the platform has advanced the pre-sale date, it has not notified the merchant in advance, which has led to many goods that have gone according to the original stocking rhythm and have no time to prepare.
Don’t underestimate the time of a week, according to today’s logistics efficiency, it is enough to go from Yiwu to Xinjiang. In other words, this is already a complete round of stocking cycle.
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On the platform side, the preferential policies of each e-commerce platform are also different.
Taking Taobao Tmall as an example, Taobao Tmall announced the cancellation of cross-store full discounts, and policies such as 200-30 and 300-50, which used to be the basis of big promotions, became history, and were changed to a 15% discount on a single product. In other words, as long as it is a product that participates in “618”, a single product can be discounted by 85%, up to 50% off.
On this basis, if you search for “Coupon Center” on Taobao, there will be a large number of category coupons and store coupons available for collection, such as Tmall International’s self-operated 300-40, Alibaba Health 400-30 and so on. If there is still Taobao’s 88VIP, you can get more coupons, and the discount will be increased again.
JD.com continues its previous cross-store full discount strategy, first of all, it retains promotional activities such as “200 minus 20 divine coupons”, “cross-store full discount” and “official instant discount”. On this basis, surprise days, super flash sale days, tens of billions of subsidy days, super savings special days, super live broadcast days, PLUS member days, and 10,000 store flash sale days are almost all lined up on the schedule, and the parity day of “no discount” has become a scarce commodity. Coupled with the tail of the national subsidy policy, a large number of JD.com’s advantageous 3C products have been discounted to an unprecedented magnitude. However, in terms of early strength, it is still slightly lower than Taobao, and its advantages have gradually become blurred in this annual promotion pioneered by JD.com.
However, on the consumer side, a considerable number of people do not buy the adjusted full reduction policy. Some netizens believe that the full discount is reduced on the basis of the original price, and the instant discount is reduced on the basis of the original price, and in the past big promotion, some stores themselves will have preferential activities for the store, and these superimposed full discounts will be cheaper.
However, another part of netizens refuted in the comment area that the price of the goods hoarded in their shopping carts was 378, and after the start of “618”, it became 459, and the merchant had raised the price.
In this regard, Wang Wan believes that this is a more flexible embodiment of the platform’s more flexible policy for merchants, and for some best-selling products, merchants have more flexible pricing power than before. It is a disguised concession of the platform to merchants. In addition, the categories purchased by different consumers and specific merchants are different, so there is a phenomenon of fluctuating discounts for different consumers.
“In the past, 618 had large discounts and low profits, but the victory was in the volume. Now that 618 discounts are available, sales are lower, but single product profits are increasing, which is actually understandable in today’s environment of reduced buyers and ARPU. Wang Wan said frankly.
02 “Absolute low price” is no longer there, and “traffic islands” are interconnected
Looking back at the past “Double Eleven” and “618”, it is not difficult to see that the past shopping festivals can be regarded as a consumer-oriented pseudo-“buyer’s market”, and in order to retain more consumers, the platform has changed the past consumer-oriented policies such as “10 billion subsidies” or “refunds only” of a single platform into a “full platform” and “whole network” policy, on this basis, it has also formed a “scissors difference” for a large number of merchants.
Now that a year has passed, whether it is the previously popular “tens of billions of subsidies” or the only refunds that have made merchants “complain”, they have been canceled or faded out in a substantial sense. For platform merchants, choosing which platform to “open a store” on and which platform to participate in “618” has already “changed the trend of offense and defense”, which platform has more traffic, better policies, and greater profit margins.
A merchant who opened stores on JD.com and Taobao at the same time told Lu Jiu Business Review that Tmall is a standard category deduction, plus some small fees, such as credit cards and Tmall points, and the comprehensive expense rate on the platform side is about 5 points. The second is the on-site marketing cost, which is about 10%-30% on the Tmall side, which is enough to cover most of the more cost-effective marketing promotion.
On the whole, Tmall is about 25%-35% of the comprehensive cost, and for the brand, Tmall’s overall profit is considerable.
JD.com is a typical asset-heavy investment, and the gross profit is generally guaranteed to be about 10%-25%, which will be different for different categories and brands. The basic logic is that when JD.com signs a contract, the merchant will give a supply (goods) price, for example, I will give him a price of 100 yuan for this thing, and the gross profit guarantee is 20%, which means that under normal circumstances, if he can sell for 125 yuan, then the 25 yuan higher cost will be borne by JD.com.
Assuming that in most cases, the platform may sell for less than 125 yuan. 100 yuan to sell, then in this case, when JD.com settles with the merchant, he will settle according to the 20% gross profit guarantee of 100 yuan, that is, 20 yuan, and finally 80 yuan. It is equivalent to me negotiating a supply price of 100 yuan with him, but in fact it is settled at 80 yuan. For merchants, there is still some money.
The traffic advantage of Douyin is more obvious, but its business logic is completely different from that of Tmall and JD.com. Wang Wan told Lu Jiu Business Review that at present, most merchants are on Douyin and Taotian Wuwu, and some Douyin will even be higher.
Tmall and JD.com need to hit the explosive model, and the explosive model needs to pave the way for enough sales to increase consumer trust, and it also needs to have enough praise. In the end, it must be the link that has many reviews and is not expensive to make consumers trust and then place an order.
For merchants, Tmall’s link is more traditional, but also a basic plate, Douyin’s explosive product rate is not controllable due to the recommendation algorithm, coupled with the price of daily activities is a big promotion price, so “618” or not, in fact, the perception of the merchant side is not obvious, “there is not much difference between big and bad promotions.” ”
For traditional shelf platforms such as Taobao, traffic is not dominant compared to content e-commerce platforms such as Douyin. The introduction of traffic from grass planting platforms such as Xiaohongshu has become a logical choice, and the “information islands” originally divided by APP have gradually been broken because of the interoperability of traffic and resources.
At the media communication meeting, the relevant person in charge of Xiaohongshu said that the “Red Cat Plan” cooperated with Tmall has a lot to do with merchants. On the one hand, “618” is the high point of mid-year promotion, but the opening of functions is not limited to “618”, and similar discussions have begun to take shape during the “Little Red Star” period of cooperation with Taobao three years ago, and have not gradually taken shape until recently.
In addition to the function of advertising links, the main cooperation focuses on the “grass planting” link in Xiaohongshu’s advantageous areas, which is reflected in the increase in the platform’s budget investment in merchants. On the platform side, it hopes to encourage high-quality merchants to plant grass through this process, exerting greater influence, and at the same time attracting more merchants on the platform to plant grass on Xiaohongshu. For Xiaohongshu, these merchants are both customers of Tmall and Xiaohongshu, in order to achieve the result of both parties jointly serving merchants.
03 The era of total war has arrived
Before the start of the “618” war, the “near-field e-commerce” of instant retail and takeaway had been burning for more than a quarter.
There is no doubt that “618” is also a continuation of the instant retail campaign. At the JD.com “618” surprise open day held on May 15, JD.com said that during this year’s “618” promotion, takeaway and national subsidies will “fight on two fronts” on the JD.com platform, Meituan, although only Meituan has clearly opened “618” to buy drugs, but Meituan flash sales have been connected to national subsidies in the digital field, and some categories have formed a price advantage that is not inferior to that of e-commerce platforms.
Taobao flash sale chooses to deeply integrate with Ele.me, on the one hand, it launches “10 billion hunger supplements”, and on the other hand, it uses Ele.me to build a complete terminal capacity system, and once again bet on the instant retail track.
So far, Meituan has not been inclined to fully join the “618” battle. But there has been some action in some categories. Meituan’s action to sell drugs even earlier than a number of shelf e-commerce companies advanced the promotion node to May 6. And in order to differentiate it from other e-commerce platforms, Meituan does not have pre-sale of goods, but chooses direct drops on products and works discount rules. In addition, you can also enjoy the discount by grabbing the “50% off divine coupon”.
An e-commerce industry analyst told Lu Jiu Business Review that before instant retail launches an independent battle report, it is not possible to hastily draw conclusions about the pattern of instant retail, but in terms of actual user demand, episodic demand actually occupies more time in the shopping scene.
For example, if you suddenly go on an outing tomorrow, you need 10 pounds of charcoal and 50 iron sticks, if it is a traditional e-commerce, although it will be dozens of yuan cheaper, but the timeliness is unattainable; For some large items, such as refrigerators, etc., it will be particularly suitable, which is a counter-common sense thing.
If the life cycle of consumers is extended, the number of air conditioners that will be purchased in 20 years will not exceed five, and the traditional channel in the past was JD.com or offline stores. If any of them are “hijacked” by Meituan or Taobao because of the timeliness of instant retail, it will be a transaction loss of 20% or more for the former. For some high-frequency price-sensitive goods, this is not the case.
In the past, Taobao and JD.com have not increased their investment in instant retail, but now with the improvement of the infrastructure of terminal distribution, they naturally have the strength and capital to bet heavily. And this has become the biggest attraction outside of the “618” shelf e-commerce. Regardless of whether the top three in the original e-commerce industry are willing or not, with this “618” as a landmark node, the era of the overall war of e-commerce is finally coming.
