I don't know if you found that the e-commerce advertising that was once overwhelming has suddenly become less since last year. At the moment when the development of e-commerce is slowing down, cutting marketing has become a common choice for mainstream e-commerce platforms. The recent financial reports released by Ali, JD.com and Vipshop released the same signal.
In the second quarter of this year, in terms of external market expansion and other investments, Ali reduced 1.5 billion, JD.com reduced 1 billion, and Vipshop reduced by 900 million, it is clear that both Ali and JD.com Have a more prudent attitude.
For example, JD.com has revenue of 267.6 billion yuan, and the growth of revenue is only 5.4%, but the profit has increased by 1160%, achieving an operating profit of 3.8 billion. One of the biggest reasons why JD.com can achieve a substantial increase in profits in the absence of much revenue growth is the significant reduction in marketing expenses.
According to the data, JD.com's revenue expenditure in the second quarter was only 9.5 billion, a real decline of 10% compared with the same period last year. In other words, in just three months, JD.com has "saved" nearly 1 billion cash flow.
Xu Lei, the helmsman of JD.com, said publicly: "In the face of the current macroeconomic and industry adjustments, what JD.com is doing is to cultivate internal strength, improve refined operational efficiency, and ensure healthy profit margins and cash flow. This means that after experiencing a crazy money-burning expansion, JD.com began to "throw away its baggage and go lightly."
Vipshop, an e-commerce seller, has done the same thing as JD.com. Vipshop achieved total orders of 186 million yuan in the second quarter, profit increased by 8.4% to 1.6 billion yuan, and the number of SVIP active users increased by 21%.
Vipshop's marketing expenditure has declined even more than JD.com. In the second quarter of last year, Vipshop spent 1.4 billion yuan on marketing expenses, but this year it was only 556 million yuan, down more than 60% year-on-year.
Although BOTH JD.com and Vipshop are "budgeting" and reducing marketing expenses, the money that should be spent still has to be spent, and it is spent more than before. JD.com invests more cash flow in logistics infrastructure construction and logistics technology research and development. In the second quarter of this year alone, JD.com's investment in logistics research and development reached nearly 700 million.
Vipshop is a dead end to selling supply chains and services, and constantly increasing investment. Up to now, Vipshop has penetrated into the supply chain of more than 40,000 brands, from delivery to warehousing to distribution to quality tracking. In addition, Vipshop has also continuously expanded the scale of manual customer service, increasing the cost of manual customer service by 3 times on the basis of the original, so that the size of the customer service team has reached more than 2,000 people.
It is said that the wine aroma is not afraid of the deep alley, and now Jingdong, Vipshop and other e-commerce companies are doing so. On the one hand, reduce marketing expenses, on the other hand, strive to cultivate internal strength, and continuously improve in logistics, services and supply chains, bringing users a better shopping experience. At the end of the day, e-commerce is returning to the essence of business, shifting its focus from marketing and performance to the quality of goods and services.