Image source @ Visual China
Text | Photon Planet, author | Furong He, Editor, | Wu Xianzhi
On the eve of the Spring Festival, the three links and one arrival in a small town in the southwest region and the express delivery collection points such as Jitu became extremely hot.
With the continuous penetration of e-commerce and express logistics, many townships and even more remote areas across the country can also receive packages from afar.
In the small town's annual consumption power of the most exuberant days, Jingdong Express collection point and other counterparts do not seem to be in the same time and space. The only Jingdong collection point in town, a few parcels are neatly placed on the shelves, which is in stark contrast to the chaos caused by too many parcels such as the three links and one arrival.
Even if it sponsors the Spring Festival Gala, Jingdong seems to be still staying in serving big cities. Due to the audience of the Spring Festival Gala, it is regarded by various Internet companies as an opportunity to open up the sinking market, and Jingdong also has this demand this year.
At present, the sinking market is mainly in the two tracks of e-commerce and community group buying. Its competitive landscape is also becoming clearer, but it seems that JD.com is missing.
Cat and dog fight the sinking path
Pinduoduo's social e-commerce game of relying on WeChat took the lead in opening up the sinking market to occupy the opportunity, and then the giants rushed to the top, and Jingdong also had to throw the anchor point to a broader sinking market.
In September 2019, Jingdong changed the name of its special price platform "Jingdong Pinchao" to "Jingxi", accessed the first-level entrance of WeChat in October, and rose from a business unit to a business group in December. After Jingxi rose to a business group, it mainly included the original social e-commerce platform Jingxi, as well as the community group buying business "Jingxi Spelling", and changed the original convenience store business to "Jingxitong".
In the JD financial report, the "Jingxi Business Group" was proposed separately to give a more important mission, that is, to "deepen and expand the influence in the sinking market".
The new business of the sinking market has indeed brought some new users to JD.com, which announced in its 2020 annual report that more than 80% of the new active users come from the sinking market.
Pinduoduo is the originator of social e-commerce and has risen by relying on WeChat's social relationship chain. Today's sinking market has long been a red sea, although Jingxi has a good entrance advantage in WeChat, but in the end it has not been a strong competitor.
Taote and Jingxi are both C2M e-commerce companies that focus on the sinking market, and they are also the lines of Ali and Jingdong that directly benchmark Pinduoduoduo.
Taote came online later than Kyoki, but the growth momentum was much stronger.
As of September 30, 2021, Taote's annual active consumers have exceeded 240 million, directly catching up with Pinduoduo. Jingxi did not publish relevant user data, but compared with the number of installs of the Huawei app market, as of the end of January 2022, the number of Jingxi installations was only 300 million times, and the number of Taote was 3.1 billion, a huge difference. The number of installs is affected by the update frequency of the App, and the user gap between the two cannot be fully measured, but it shows that Kyoki's activity is not very high.
For the offensive of the sinking market, ground push and subsidy are immutable but effective ways to play. Nowadays, Taote's ground push has sunk to the township level.
Yang Ping is a ground pusher, and at about 8 a.m. on January 28, he and his companions set up a stall at a crowded intersection in a small town in the southwest to prepare for the day's work - to do ground push for Taote.
Chinese New Year's Eve is just two days away, which is often the busiest and most crowded time of the year in the town. "The Spring Festival is an important window, everyone is going home for the New Year, and the flow of people is very large." Yang Ping said.
For the promotion caliber, according to his reflection, it mainly includes "a new App made under Taobao" and "platform things are very cheap", etc., in addition to sending some laundry detergent, Spring League and other small gifts, there is a group of uncles and aunts around them to download.
It is no secret that Ali and Meituan have strong pushing capabilities in the industry, and Taote and Meituan Preferred can stand out in the ranks of competition and play a pivotal role.
In addition, the sinking market is mainly facing price-sensitive users, Taote in the process of expansion directly impacted the market of Pinduoduoduo, for the sinking market users can be described as open competition and secret grab.
Nowadays, Jingxi lies silently in the "shopping" entrance of WeChat, holding WeChat's private domain traffic, or it is difficult to compete with Taote, and Jingxi's promotion to consumers can almost be described as lying flat.
At present, C2M e-commerce players are more like the double-headed competition between Pinduoduo and Taote, and Jingxi is gradually losing its color.
In addition, the community group buying business that also belongs to the Jingxi Business Group also fell out of the first echelon. Community group buying has experienced a sudden explosion in 2021, followed by a rapid shutdown process. During this period, JD.com's community group buying business, Jingxi Pinpin, also had to shrink.
According to public media reports, since May last year, Jingxi Pinpin has successively withdrawn from Fujian, Gansu, Guizhou, Jilin, Ningxia and Qinghai provinces, and then withdrawn from Shanxi and other markets in August.
Up to now, according to the provinces and cities that have been opened in Jingxi Spelling, it can be seen that it currently only operates in 11 provinces such as Beijing, Guangdong, Hainan, Hebei, Henan, Hubei, Jiangsu, Jiangxi, Shandong, Shanghai and Sichuan, and is mainly concentrated in provinces and cities with high economic levels such as the east.
At the beginning of the Jingdong community group purchase investment, Liu Qiangdong, who originally retreated behind the scenes, led the team, and its attention needless to say. The ambitions of the giants in community group buying are well known, that is, the users who seize the sinking market are still debatable how much revenue they can really generate.
In the second half of 2021, the community group buying industry has undergone a major reshuffle and bid farewell to the competitive situation of unlimited burning money. The same city life, food enjoyment, and orange heart preferred have withdrawn from the historical stage, and the second echelon of players left behind, such as Xingsheng Preferred and Jingxi Pinyin, have also continued to operate in a small number of areas with a more rational attitude.
Only Meituan Preferred and Duoduo buy vegetables achieve nationwide penetration through continuous investment, of which Meituan Preferred mainly relies on ground pushing, Duoduoduo relies on pinduoduo's drainage, and after the two strong ones, they also follow the Taocai vegetables backed by tao.
An insider said that most of its business is currently concentrated in first- and second-tier cities, and there is no plan to sink again for the time being. "According to my estimate, 80% of the community group buying industry is brushed goods, such as reverse sales, and the other 20% or so are real sales, which itself loses a lot." Where the consumption habits are placed, the more they sink, the more money burns. ”
Meituan Preferred invests heavily in layers of penetration, not because of how much revenue it has obtained with community group purchases, but in order to seize users' conversions from other businesses. Putting aside this purpose, it is reasonable for other community group buying companies to reduce investment.
Since the first quarter of 2021, JD.com has adjusted its business classification report to separate the internal businesses of Jingxi and JD.com from JD retail and incorporate them into the new business where overseas business and technological innovation are located. The overall growth rate of new business is high, but it is difficult to hide the huge operating loss.
According to the financial report data, throughout the Q1-Q3 quarter of last year, JD.com's new business has always been in a state of loss. Although in the second quarter of last year, JD.com's new business revenue was 6.96 billion yuan, a year-on-year growth rate of 60.3%, but at the same time, the net loss also continued to expand, and the year-on-year growth rate was as high as 157.7%. In addition, with the contraction of the community group buying business, the loss in the third quarter of last year has decreased, but the revenue has shrunk at the same time.
It can be seen that the new business, including Jingxi, has a very obvious characteristic of exchanging investment for growth, and there is no possibility of profitability at present, and JD.com's sinking road is in a dilemma.
3C and logistics get the sinking ticket, the dilemma is still there
Yu Lin, a delivery man at JD Express in a town in the southwest region mentioned above, seems to only regard the town's delivery work as a part-time job. When the photon planet communicated with him, he learned that in addition to large shopping festivals such as 618, he usually came to the town every one or two days to deliver, and the rest of the time he was responsible for other express deliveries in the local city.
For parcels in town, he usually takes a certain morning or afternoon to deliver to the collection point and agrees to collect them, and the rest of the time is closed. Centralized distribution is also convenient for yourself, excluding the situation that customers require timely delivery.
"I'm also in charge of an area in the city, and if I only do this point (town)'s parcels, it's too few, and there's no need to guard here every day." Yu Lin said.
"In a small town like ours, there are not many users in Jingdong, and it cannot be compared with Taobao and Pinduoduo. Overall, the volume of parcels in the town cannot afford to open a collection point. ”
The TOWN's JD collection point has been open for about 6 years, and the volume of parcels has been small in the past few years, and the demand cannot cover the cost.
The high cost of JD Logistics is difficult to adapt to the needs of the decentralized market, and JD.com is also trying to lay out in the sinking market in terms of logistics. Jingdong Logistics benchmarked "four links and one reach" and other express delivery companies, the establishment of Jingxi Express (formerly known as Zhongyou) mainly for Jingxi, Jingdong third-party merchants to provide logistics services, Zhongyou and Yuantong and other the same to adopt the franchise system.
According to past data, in 2019, of the nearly 50 billion revenue of JD Logistics, Zhongyou only accounted for 6 billion, and its revenue scale was less than 20% of YTO. As a latecomer, it is also difficult for Zhongyou to grab business with the Tongda Department. Last year, there was even a rumor that Jingxi Express was shut down due to continuous losses.
"Except for the Spring Festival, it is difficult to see a few young people in the town, where do you say the purchasing power comes from?" Yu Lin sighed. In the vast majority of Townships and Towns in China, more young people are choosing to work in other places due to the lack of local economic level, and these people are often the main consumers in a family.
On the one hand, the overall purchasing power of the sinking market is mostly weak, and Jingdong's relatively higher customer unit price goods will screen out a group of people, which hinders the penetration of JD.com's dominant commodities and JD logistics.
On the other hand, JD.com's advantage lies in its own 3C category, even if many families have the demand to buy 3C, consumers in sinking markets such as townships still prefer offline physical stores.
Jingdong, with its own advantages in category - home appliances, also through offline channels to sink the market force.
Jingdong home appliance store is a kind of sinking store built by Jingdong based on offline mode, which is different from traditional stores, cooperative store owners do not need to invest in stockpiling, logistics and installation, but use valet orders to complete transactions in Jingdong, and rely on Jingdong to help service stores for distribution and installation.
Jingdong home appliance stores and Jingdong e-commerce are basically connected, which can achieve online and offline mutual drainage, which seems to be further in line with the consumption habits of the sinking market. However, the brand perception of Jingdong home appliances in the hearts of consumers in the sinking market is low, and the effect of mutual drainage is not significant.
The person in charge of a Jingdong home appliance store in Yu Lin's town told Photon Planet that although the store has been open for about a year and a half, its brand power is still inferior to that of old stores such as Gree and Haier that have been working for many years.
In the minds of most users in first- and second-tier cities, JD.com's self-operation is often synonymous with reliability, which seems to be ineffective for many sinking market users.
In addition, according to the person in charge of the store, there are many people who consult during the Spring Festival, but due to the after-sales holiday, many consumers have been missed. Such a uniform break time is exactly contrary to the peak of consumption in the town.
3C products and logistics can be regarded as a moat for JD.com, so they also took the lead in entering the sinking market and got tickets. However, the specific results are ultimately trapped by the insufficient consumption power of the sinking market.
end
As far as the sinking path of JD.com in recent years is concerned, it is mainly through the online and offline two-wheel drive strategy.
Online, it is mainly to launch the Jingxi platform, including community group buying and C2M e-commerce with direct sales of factories, forming a differentiated complement with the Jingdong main station and focusing on the sinking market. In addition, the "Jingdong Spike" of the main station of Jingdong is also promoting penetration in the sinking market.
For offline, it is mainly to accelerate the layout of various physical stores in Jingdong, such as Jingdong stores, Jingdong home appliance stores, Jingdong convenience stores, Jingdong computer digital stores, etc. In terms of logistics, Jingdong Logistics has entered counties and even rural areas, and at the same time is also supporting Jingxi Express (formerly Zhongyou Express), which is more in line with the consumption level of the sinking market.
Online and offline collaborative promotion seems to be a relatively complete set of business models. However, in terms of specific circumstances, the online part competes with Ali, Meituan, and Pinduoduo, and Jingdong is temporarily overshadowed.
The offline part is heavy asset investment, coupled with the separation of the unit price characteristics of Jingdong's main categories and the sinking market, the transitional expansion of the line is easy to fall into the dilemma of increasing revenue and not increasing profits.
The problem of JD.com's sinking needs to wait until the overall consumption level of the sinking market is stepped up a few steps, and perhaps it can be truly solved.