Jingdong's "10 billion subsidy" was launched 20 hours earlier than the original plan, focusing on explosive ultra-low prices, and the competition on e-commerce platforms has entered a white heat. But when marketing strategies such as low prices, full reductions, and promotions evolve into the daily operation of the platform, merchants are in pain. It is time for e-commerce to innovate in terms of efficiency, mode, operation and other aspects to find a way conducive to the sustainable and healthy development of the industrial chain.
Author | Zhang Chao Edit | Luo Lijuan
On March 5, All-weather Technology learned from people familiar with the matter that Jingdong's "tens of billions of subsidies" will be fully launched on the Jingdong App at 0:00 on March 6, appearing in the center of the home page and the first screen, 20 hours earlier than the original plan (8 pm on March 6).
JD.com originally planned to launch tens of billions of subsidies at 8 p.m. on March 6
This is also a major change made by JD.com to continue this strategy after Liu Qiangdong strengthened the mentality of "low price is the only basic weapon" in internal emails at the end of last year.
So far, the low-price sales strategy of "tens of billions of subsidies", which was first stirred up by Pinduoduo, has attracted core e-commerce platforms including Tmall, Jingdong, etc. to follow up and open event entrances.
Interestingly, each company is also similar in terms of publicity, all of them attract users under the banners of "official subsidies", "low prices", "expensive to lose" and so on, quite a kind of competition with each other, no one is convinced of the other.
Tens of billions of subsidies have also risen from a killer tool for Pinduoduo to enter the "five rings" and share the e-commerce cake, to the key to breaking the offensive and defensive game of core e-commerce platforms. If you are a little careless, the platform will lose not only the transaction profit, but also the entire e-commerce pattern.
The big war to bet on the future of e-commerce platforms is about to break out.
1
Tens of billions of subsidies that have attracted much attention
Unlike the previous short launch of "tens of billions of subsidies" during the 618 shopping event, this time JD.com obviously wants to stick to this as a long-term strategy.
All-weather technology learned that "low price" has become a key work goal of JD.com, and "tens of billions of subsidies" is a heavy content to implement this goal. And 36Kr also learned from a middle-level employee of JD Retail that the "10 billion subsidy" project was finally decided by Xin Lijun, CEO of JD Retail, and there was no upper limit at the budget level.
JD.com's emphasis on this business is also vividly reflected in the actual implementation process.
Some Jingdong merchants told All-weather Technology that half a month before the official launch of the 10 billion subsidy (February 20), the relevant personnel of the Jingdong Marketing Center held the "10 billion subsidy new traffic gameplay training" to introduce the rules of platform subsidies, deduction discounts, traffic support, marketing communication and so on.
The training will be held in the form of online live broadcast on JD Yi Live Broadcast, screenshots are not allowed throughout the process, and the live broadcast playback is not public, which will be very thorough in confidentiality.
Only ten days after the launch of the 10 billion subsidy, JD.com opened the 10 billion subsidy registration to merchants (since February 25). Merchants can register independently through the "marketing-marketing activities-channel position-tens of billions of subsidies" path of the Jingmai platform.
Jingdong tens of billions of subsidized merchants registration path
However, the aforementioned merchant told All-weather Technology that as of March 4, it still could not register, and "clicked into the (registration) page".
From the front-end consumption side, Jingdong's "tens of billions of subsidies" are in a prime position, replacing the "ranking", ranking alongside "Jingdong second deal", and even higher than "Jingdong live broadcast", once again highlighting the internal importance of the business.
In contrast, Alijuhuasuan's "tens of billions of subsidies" are only on the second screen of the hand-Taotao App, and users need to slide down to see it; Only Pinduoduo, which made the "tens of billions of subsidies" popular, put the entrance on the home page of the App.
Juhuasuan tens of billions of subsidies (left) vs Pinduoduo tens of billions of subsidies position comparison
Click to enter the details page of JD.com's "tens of billions of subsidies" and you will find that "official subsidies", "free shipping" and "exclusive customer service" are written at the top of the page. The subsidized products cover most e-commerce categories such as computer digital, household appliances, mobile communications, alcohol, skin care products, maternal and baby toys, personal care, home improvement, and food.
JD.com's 10 billion subsidy details page
It is worth mentioning that based on the genetic differences of the platform, "computer digital", "household appliances" and "mobile phone communication" are obviously the sub-categories of JD.com's "tens of billions of subsidies" at present, and are listed in the forefront of sub-labels; Juhuasuan's "10 billion subsidies" put "new", "clothing" and "fresh" in the forefront, and the top sublabels of Pinduoduo's "10 billion subsidies" are "beauty", "fresh", "sports" and "mobile phones".
Or because of new business, JD.com's "tens of billions of subsidies" are not many goods at present. According to incomplete statistics of all-weather technology, as of 14 o'clock on March 5, the number of products on the shelves of "mobile phone communication", "computer digital" and "household appliances" was relatively large, respectively: 82, 78, 90, while the categories of "beauty and skin care", "medical health", "life services" and "maternal and baby toys" were significantly less, and the number of products on the shelves was only 30, 27, 21, 11.
Jingdong officially said that the 10 billion subsidy activity is a commodity subsidy activity carried out by JD.com to give back to users and joint merchants, through which users can purchase extremely cost-effective goods. This activity is only available to users on the JD App, and some event products need to be verified through real-name authentication.
2
Open auction is intended for traffic
At the entrance of the "tens of billions of subsidies" merchant registration, JD.com clearly wrote that this is a new high-traffic channel, platform + merchants jointly create the ultimate cost-effective explosive products, help commodity conversion, and establish a low-price mentality."
The recently updated introduction to the Jingdong App version also puts "tens of billions of subsidies online" at the forefront, and writes down rules such as "explosive ultra-low price, double compensation for buying expensive".
Earlier, JD.com also issued the "Jingdong Open Platform "Buy Expensive Double Compensation" Service Rules" in the merchant center, which clearly pointed out that after consumers purchase goods marked with this service logo, if the actual amount paid for their order is higher than the price of the same product on a specific platform, consumers can apply for compensation for double the difference between the actual amount of the order and the actual payment amount of the order with a valid voucher on the day of the order.
The "specific platform" here refers to Pinduoduo's tens of billions of subsidies and Tmall (including websites, apps, WeChat official accounts, WeChat malls and mini programs, etc.). It is reported that the rules apply to third-party merchants who settle and open stores JD.COM on the JD Open Platform, excluding JD small stores, and will take effect on February 28, 2023.
All indications are that in order to regain its advantages in price, JD.com has engraved "low price" into the key goals of the business, and "tens of billions of subsidies" is the core carrier to help the platform establish a "low price" mentality.
In order to achieve the goal of "low price" of goods, JD.com's "tens of billions of subsidies" adopts the principle of bidding. The official will release the demand for the bidding on the relevant platform, and give the highest bidding price and starting inventory, except for individual industrial and commercial enterprises/natural persons or stores that are not within the scope of the category, and the lowest price that meets the inventory requirements wins the bid.
All-weather technology learned from the merchant side that at present, the platform only considers the participation qualifications of merchants from the dimensions of enterprise subjects, limited categories, merchant violations, and store stars, and the requirements are not high; However, it will require the free shipping service to be opened during the period of participating in the 10 billion subsidized commodity activity, and the promotion shall not be deleted independently after the bidding is successful, and malicious arbitrage and malicious bidding shall not be allowed; Correspondingly, orders generated during the 10 billion subsidy activity can enjoy the discount of reduced deductions.
Jingdong tens of billions of subsidy bidding rules
In contrast, the entry threshold for Juhuasuan tens of billions of subsidies to merchants is much higher. A Tmall health care products industry insider revealed to All-weather Technology that taking the 14-day event as an example, the platform's requirements for the new revitalization of the 10 billion subsidy in its track are 3,000+ monthly sales or more than 500,000 monthly sales, and the fee adopts a pure commission model, with no guarantee and no cap; However, in terms of pricing mechanism, Juhuasuan tens of billions of subsidies adopt the merchant's independent quotation method, requiring a real low price on the whole network, and it is recommended to report at 8-9% off the lowest price in 15 days.
Juhuasuan tens of billions of subsidies for a certain activity merchant in the health care products industry review requirements
Different pricing mechanisms reflect the differences in strategies of platforms at different stages of the development of tens of billions of subsidies.
Tmall gives priority to ensuring low prices when the merchants and the product plate base is large, and then screens powerful merchants through revenue capacity as much as possible; At the current stage, JD.com focuses more on the pursuit of "low price", and appropriately relaxes the requirements for merchants, so as to enrich the category and attract more traffic.
According to the financial report, JD.com's single-quarter user growth rate remained in the range of 20%-30% from 2020 to 2021; But last year's figure fell significantly, with year-on-year user growth rates of 16.2% and 9.2% in the first and second quarters, respectively, and JD.com's annual active users were 588.3 million in the 12 months ended September 30, a year-on-year increase of only 6.5%.
In the final analysis, JD.com still has to revitalize traffic through "tens of billions of subsidies" and even find new user increments.
Zhuang Shuai, founder of Bailian Consulting, believes that tens of billions of subsidies can bring more incremental users to the sinking market to e-commerce platforms, and can also play a good role in promoting consumption for price-sensitive users in first- and second-tier cities.
Not only that, in his view, the "tens of billions of subsidies" also have a great auxiliary effect on the repurchase rate of e-commerce platforms, because consumers will identify other required goods through this label, so as to make continuous purchases. At the same time, it can also enhance users' trust in the platform and improve the previous image of the platform.
3
Is the e-commerce war on the verge?
As we all know, the 10 billion subsidy was officially launched by Pinduoduo in mid-2019. In order to firmly hold the golden signboard of "tens of billions of subsidies" in hand, Pinduoduo once tried to apply for a trademark, but it was not approved.
Coincidentally, according to the China Trademark Network, up to now, the number of applications for the "10 billion subsidy" trademark has reached 13 times, and two of them have applied for the trademark multiple times within a month, the most recent time was last November, but most of the applications are in the stage of "waiting for substantive examination".
Just one trademark has attracted so many companies to flock, and the reason is that it looks at the strong traffic attraction shown by the "tens of billions of subsidies" business.
Price has always been one of the core factors that determine consumer purchasing behavior. In today's popularity of e-commerce and transparent information, consumers will naturally be tempted by absolute low prices after shopping around, and flow to platforms with more price advantages.
According to the third quarterly report of 2019, due to the gimmick of "tens of billions of subsidies", the average number of monthly active users of Pinduoduo was 429.6 million, a year-on-year increase of 85%, daily active users exceeded the 100 million mark, and more than 2,800 active merchants; In the fourth quarter of 2019, Pinduoduo's average monthly net activity increased by 51.9 million, a net increase of 209 million over the same period of the previous year, reaching 481.5 million, achieving strong growth.
Also in this year, the number of active buyers of Pinduoduo (585 million) and JD.com (362 million) further expanded, from 114 million in 2018 to 223 million in 2019, a difference of less than 150 million with Alibaba's annual active buyers.
In essence, "tens of billions of subsidies" is not only a marketing method of Pinduoduo, but also a customer acquisition strategy. It uses a low-price promotion model to attract users and enter new markets, and the same method has also worked in its overseas application Temu, which naturally attracts many platforms to follow suit.
As early as December 2019, Juhuasuan also launched tens of billions of subsidies. At that time, the person in charge of the relevant business also said that Juhuasuan's tens of billions of subsidies are very attractive to users in the sinking market and price-sensitive users. After that, Juhuasuan tens of billions of subsidies have successively launched business such as college student subsidies, expensive purchases, and low-price news, in order to implement the goal of genuine products and low prices to the end.
In June 2020, JD.com announced the launch of super tens of billions of subsidies and other activities in "618" in an attempt to create the best consumer experience and the most preferential "618", but the event was removed after the promotion.
Until today, Jingdong relaunched the "tens of billions of subsidies" entrance, and regarded this business as the highlight of the year, and was bound to do it to the end, suddenly making the competition between major platforms enter a white-hot state, and sounded the clarion call for the "tens of billions of subsidies" battle of e-commerce.
Speculation that e-commerce platforms will set off a new round of price wars has arisen one after another, and Zhuang Shuai, founder of Bailian Consulting, also said in an interview with the media, "It is not impossible." However, in the existing stock market, it is difficult to change the current e-commerce market pattern. ”
When all platforms are pursuing the "lowest price on the whole network", the merchants in the upstream of the industry chain are actually not having a good time.
The aforementioned Tmall health care products industry insiders told All-weather Technology that 99% of the goods on the "tens of billions of subsidies" are prices set by merchants themselves, "(only) a few hard standard products, (platforms) will subsidize some." ”
In other words, tens of billions of subsidies are actually merchants benefiting consumers, not platforms subsidizing consumers.
Because of the tilt of platform traffic, merchants will choose some products to participate in activities even if their profits are low; However, under the comprehensive influence of consumer supervision, intensified platform competition and other factors, it is unknown how willing merchants can be to participate.
During the Double 11 period last year, two enterprises, Luzhou Laojiao and Wuliangye, submitted letters to JD.com to suspend cooperation and deduct support fees due to suspected selling price problems.
From past experience, e-commerce platforms have relied on subsidies for hard standard products such as mobile phones and digital to enter the high-tier market with "tens of billions of subsidies", but this measure is not so attractive to consumers in the sinking market.
A mobile phone channel seller in a third-tier city in Shandong told All-weather Technology that many users in the sinking market still prefer to buy mobile phone hard products offline, especially elderly consumers; At the same time, Xiaomi, OPPO, vivo brand mobile phones are basically online and offline at the same price, so they have little impact on channel providers.
But he also admitted that Apple's mobile phone in 618, double 11 such a big promotion node, when there is a platform subsidy, it will have an impact on offline sales.
If JD.com also subsidizes this, how much impact will it have?
"Its tens of billions of subsidies can now be kept up with without losing money." The distributor added, "Pinduoduo's side may not have enough supplies due to the channel of taking goods; The impact of JD.com's tens of billions of subsidies is currently difficult to judge. ”
In the past 20 years of e-commerce development in China, there have been countless battles of various platforms, and the battle to determine the ranking of enterprises has always been inseparable from the "price war".
Relying on low prices, full reductions, promotions and other means, e-commerce platforms have earned enough eyeballs and traffic; This non-positive marketing strategy has gradually evolved into the daily operation of e-commerce platforms, forcing the majority of merchants to "get involved" and be very painful.
E-commerce players who master cutting-edge technology, huge funds and abundant resources are now time to change their competitive means, seek innovation from efficiency, mode, operation and other aspects, and find a way conducive to the sustainable and healthy development of the upstream and downstream of the industrial chain.
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