Source | BohuFN
Author | Dream
On the morning of January 10, Dangdang.com said on Weibo: "Opponents become teammates, hello, new teammates." "Announced the entry into JD.com, put on a full posture. Jingdong Book & Entertainment also released the same blog post, and also put it on the top and gave a full response.
Once a "bitter rival" company, there was actually a day to shake hands and make peace.
(Source: Internet)
Some say it's the end of an era. Some people also say that losing is losing, and you have to admit it.
01 Jingdong Dangdang, the old wrongdoer
Back in 2010, JD.com, which was in a loss-making situation, was still looking for money to raise money everywhere, and when it successfully landed on the New York Stock Exchange, it was regarded as the "Amazon of China".
Soon after, Liu Qiangdong claimed that JD.com's book business was "blocked" by Dangdang.com, and "Dangdang.com threatened all publishing houses not to supply JD.com". Due to the small business, JD.com took the lead in launching a price war, announcing that the book "until the price drops to zero."
Dangdang.com, as the big brother who occupies half of the book business, immediately announced that it would spend 40 million yuan to follow up, in addition to books, it also significantly reduced the price of 3C, department stores and other products, which means obviously. Jingdong also announced that it would launch a promotion of 80 million yuan.
This is the first price war. Just three months later, the second price war resumed.
(Source: Internet)
Liu Qiangdong said that the book department was not allowed to make a profit, "If you make a penny of gross profit for the company within three years or a penny of net profit within five years, I will fire all your entire department personnel!" ”
Li Guoqing was not to be outdone: "If you fight with Dangdangwang at a low price, Dangdangnet will definitely retaliate and fight back!" ”
At that time, the result looked like a lose-lose situation, and JD.com's listing was affected, and Dangdang.com lost nearly 1 billion yuan in three years.
Now it seems that after the price war, JD.com has quickly increased its market share and won the favor of capital, and it is still one of the three domestic e-commerce giants that are difficult to shake. And when the price war of Dangdang Network pulled down the gross profit margin and fell into a loss situation, now it is worse every year.
However, the price war with JD.com is only a catalyst to accelerate the weakening of Dangdang.
02 Get up early and catch a late set
When it went public in the United States in 2010, Dangdang.com was the largest online bookstore in China, with annual sales of more than 10 billion yuan and accounting for more than 50% of the domestic online book retail market share. I thought it would be the next "Amazon", from books to the largest full-category e-commerce platform, but I didn't expect it, but it deviated from it in the future.
Why? The main thing is that there are problems with internal decision-making.
On the one hand, they dare not firmly expand the category, and they are not willing to burn money to build their own logistics, and they are trapped in the subdivision of books.
(Source: Internet)
Compared with full-category e-commerce, the coverage of vertical e-commerce products is low, the traffic conversion rate is worse, and the traffic price is also high. In particular, comprehensive e-commerce with algorithm recommendation capabilities allows vertical people to see vertical content on comprehensive e-commerce.
How terrifying is this blow to vertical e-commerce? Just take a look at the pendant e-commerce in 2022.
On August 12, the former e-commerce big brother, Haitao e-commerce platform eBay, collapsed.
On August 23, the ten-year old player of cross-border e-commerce, Yang Pier, went to the empty building and survived.
On September 10, the mother and baby e-commerce APP Honeybud stopped serving. There are also luxury e-commerce companies that have repeatedly spread negative news, and koala sea purchases, which have been quietly purchased after being acquired...
A large number of vertical e-commerce platforms fell in 2022.
To make matters worse, the book category featured by Dangdang.com is not special, almost all categories of e-commerce have them, in addition, all category e-commerce platforms also have their own characteristics. Jingdong has a "one-day price" and "next-day delivery" experience, Taobao's huge commodity category, Pinduoduo's low price, Douyin, Kuaishou traffic, these are all straws pressed on Dangdang.
On the other hand, the "mom-and-pop store" model has also become a constraint to the expansion of Dangdang. Because of the problem of distribution of benefits, when there are a large number of factions and management problems within the country.
(Source: Internet)
In the article "How Li Guoqing Was Expelled from Dangdang.com", Li Guoqing once said that the two are always inconsistent in management, employment, and strategy, "Every time I want to expand, she wants to sell every time." When it was mentioned that the two had a dispute over a business idea, they got a vote from the board of directors, and the board asked the two to go home and discuss.
With Li Guoqing's new business being forcibly withdrawn and seized, the company's top management has experienced great turmoil.
In the end, it also evolved into two people scolding each other in the air, exposing each other's family ugliness and other horse-catching deeds, all of which caused certain "harm" to Dangdang.com.
It can be seen from the above that the main reason for the gradual decline of Dangdang.com is actually the difficult genes of the pendant e-commerce model and the drawbacks brought by the mom-and-pop store model. In the face of a significant decline in market share and traffic, Dangdang.com must save itself.
03 Dangdang's new dilemma
Dangdang.com, which lacks traffic, found the first friend is Tmall.
In 2012, Dangdang.com opened its store on Tmall, and then moved more than 800,000 books and more than 300,000 department stores into its flagship store. After the gradual decline of vertical e-commerce and the traffic dividends brought by Tmall, Dangdang.com chose to settle in Pinduoduo in 2018.
At present, the official flagship store of Dangdang.com Tmall has 11.96 million fans, and the official flagship store of Dangdangwang Pinduoduo has 3.752 million fans.
So before 2020, Dangdang.com's little life was actually good. On the one hand, the interest of e-commerce giants such as Taobao, JD.com, and Pinduoduo is not in books. On the other hand, Dangdang.com has cultivated a large number of loyal user groups for many years, and data shows that in 2019, Dangdang's cumulative book customers exceeded 350 million, and its annual active users exceeded 50 million.
However, the advantage of "small but beautiful" is to make a fortune with a muffled voice, but the disadvantages are also obvious - the ability to resist risks is weak and vulnerable to shocks.
For example, Dangdang.com ushered in two new opponents: Pinduoduo and Douyin. In 2022, Pinduoduo suddenly entered the book market with tens of billions of subsidies, and even if Dangdang.com has high user loyalty, for book consumer goods, "cheap" is the biggest must-have.
In recent years, Douyin's book field has been one of the focuses of e-commerce business. In particular, the rise of live streaming has had a certain impact on Dangdang.com. For example, Douyin's top anchor Dong Yuhui and other oriental selected anchors have successfully emerged from the circle by relying on their rich knowledge reserves.
(Source: Internet)
Data show that in August this year, in the live broadcast room of Oriental Selection, the sales of books and audio-visual products were close to 25 million yuan, and the sales volume of goods was 465,000; in contrast, the official flagship store of Dangdang on Douyin, in the past 30 days, the sales of books and audio-visual products were 9.6 million yuan, and the sales of goods were less than 220,000. Professional book sellers, far lower than the "part-time book sales" Oriental selection data, it is difficult not to be anxious.
Especially when the number of daily active users of Douyin exceeds 600 million, and Pinduoduo's active buyers exceed 800 million for many years, Dangdang can only find traffic again, which is the handshake with JD.com.
In fact, earlier, when Dangwang chose to settle in the platform, it more or less bypassed JD.com. First, the two sides have historical entanglements, and the grudges and grudges have not yet been put aside. Second, the two users have a high degree of overlap, and the development momentum of Jingdong book categories is strongly related. And after the appearance of two new opponents, Dangdang also had to "bend" JD.com.
As of the end of September 2022, JD.com's active purchase users in the past 12 months reached 588.3 million, an increase of 6.5% year-on-year and more than 7.5 million month-on-month. In particular, the purchasing power of Jingdong users is the best among all e-commerce platforms, and when Dangdang enters the market, it may usher in a huge increase. Just one day ago, as of press time, Dangdang.com's official flagship store has 142,000 fans. However, it will take time to verify how effective the cooperation between JD.com and Dangdang will ultimately be.
Written at the end:
In fact, Dangdang.com's cooperation with platforms such as JD.com, Taobao, Pinduoduo, and Douyin faces huge risks. Under the topic of #JD Books and Dangdang.com signed a strategic cooperation agreement#, the comment style of netizens in the front row was almost "turning enemies into friends (prelude to merger)" and "Dangdang is not far from being sold".
Netizens' concerns are not justified. In the past, vertical e-commerce was reduced to abandonment by integrated e-commerce platforms, and it is not uncommon to start new business on their own. Another is the problem of user churn. Users who go to Dangdang.com find that JD.com, Taobao, Pinduoduo, Douyin and other platforms have them, so why download a Dangdang.com to occupy memory?
Bowing to traffic giants is the best way to acquire customers and expand channels at low cost. However, this may come at the expense of brand value. But for Dangdang's current situation, it is more important to survive first.
Reference source:
1, Guo Jing's Internet circle: Dangdang.com and JD.com have been fighting for 13 years, and now they shake hands and make peace, and Dangdang is moving towards pragmatism
2. City boundary: Dangdang finally settled in JD.com
3, the bullwhip: Internet celebrity "Dangdang's key battles
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