Text/Wang Xinxi
Today, JD.com's 10 billion subsidy war has been fully launched.
At present, open the Jingdong APP, you can see the Jingdong 10 billion subsidy channel in a prominent position on the home page, and the activity will be online for a long time. According to Jingdong, Jingdong's tens of billions of subsidies are directly subsidized by its co-brands and merchants, and consumers can directly rush to buy without complex operations such as coupons.
Jingdong's tens of billions of subsidies war began, the user's first intuition is to go to various platforms to compare prices, from the current point of view, in the tens of billions of subsidies channel, some of Jingdong's products are indeed cheaper, to achieve a lower price than Duoduo. For example, JD.com's iPhone 14 128GB version is priced at 4979 yuan. The price of the same version of Pinduoduo is 5029 yuan, which is 50 yuan cheaper.
iPhone14 256G version, Pinduoduo is 5959 yuan, Jingdong is 5859 yuan, iPhone13 256G, Jingdong subsidized price is 5529 yuan, and Pinduoduo iPhone13 256G is 5499 yuan.
In general, this wave of tens of billions of subsidies, JD.com is still sincere.
And tens of billions of subsidies have long been the label of Pinduoduo, and the pressure of JD.com's wave of subsidy war has undoubtedly come to Pinduoduo.
JD.com's online tens of billions of subsidies stems from the fact that JD.com is feeling an increasingly strong crisis. A few years ago, Jingdong launched the "Jingxi" APP focusing on the sinking market, and later launched the special version of Jingdong, operating more than 10 billion subsidy activities, but because the utilization rate of the APP is too low, it only appears in sub-channels, there are few categories, and the discount is relatively uncompetitive with Pinduoduo, so the effect is not good.
Now that JD.com has been online for tens of billions of subsidies on the homepage for a long time, it seems to be about to move seriously.
From the external factors, the growth rate of Pinduoduo not only makes Ali anxious, but also troubles JD.com. Over the past few years, Pinduoduo has grown much faster than JD.com, and its size (in GMV terms) is likely to surpass JD.com this year.
According to the data, the GMV scale in 2021, Pinduoduo is 2441 billion, Jingdong is 3290 billion, the gap is 850 billion, the gap between the two sides is likely to narrow to about 500 billion in 2022, and Pinduoduo may even achieve a reverse surpass this year.
From the perspective of market value, Pinduoduo's market value is already 1.65 times that of JD.com, and its profit is several times that of JD.com, and the position of the second in the Jingdong industry is not guaranteed.
In the past, Jingdong has been entangled with Ali Meituan competition, but now, Pinduoduo has become JD.com's biggest rival, according to the growth rate, in the next few years, Pinduoduo in GMV, market capitalization and other aspects may widen the distance with JD.com, the e-commerce market may become Ali and Pinduoduo double hero dispute, which is the root of JD.com's anxiety.
Jingdong tens of billions of subsidies, Pinduoduo is under pressure, but this is a hard battle
Before the official launch, Jingdong has launched a subsidy war, in the previous wave of subsidies, some insiders noticed that taking the iPhone PRO 256G full Netcom version as an example, the subsidy price of JD.com is 7579, the subsidy price of Pinduoduo is 7699, and JD.com is 120 yuan cheaper. But a few hours later, at 18 o'clock, Pinduoduo made a price adjustment.
From the current price of some products, Jingdong's profit margin is very large, showing a certain sincerity, but compared to Pinduoduo's price advantage is not large, in mobile phone digital products, Jingdong's price advantage is concentrated in iPhone products, some domestic mobile phone products price is still Pinduoduo to be lower, such as Redmi K40S 256G, Jingdong is 1839 yuan, Pinduoduo is 1819 yuan. With the subsequent price adjustment of Pinduoduo, JD.com is also under pressure.
However, JD.com's advantage is that the quality trust of platform products is higher, and although Pinduoduo has improved over the years, consumers may still have concerns about the quality of Pinduoduo.
Jingdong starts the tens of billions of subsidies war, Pinduoduo will probably follow, because tens of billions of subsidies are the label of Pinduoduo, then now than who can burn money, more with cost control ability, Pinduoduo tens of billions of subsidies have been playing for several years, regardless of traffic costs, user mental level has certain advantages, than cost control, commodity categories, than burning money, for the time being, I can't see that Jingdong has a greater advantage.
At present, the number and categories of Jingdong tens of billions of subsidies online products are still less than Pinduoduo tens of billions of subsidies, take mobile phone products, in addition to the iPhone, Pinduoduo's tens of billions of subsidies basically cover Huawei, Xiaomi, OPPO, vivo and other mainstream mobile phone brands and models, Jingdong's current subsidized mobile phone category is mainly iPhone, other brands are not complete, outside the iPhone, only Huawei Xiaomi part of the product, the richness of the product is not as good as Pinduoduo, OPPO, vivo, Honor and other mobile phones also have only a small number of product categories.
However, in the digital 3C category is the home of JD.com, JD.com is not completely without advantages, fighting costs, JD.com and Pinduoduo have their own advantages. A price war is actually a cost control war. For e-commerce products, the cost is subject to factors such as purchase price, traffic cost, warehousing, logistics, distribution, turnover rate, and account period.
Pinduoduo occupies advantages in traffic costs and account periods, while Jingdong has greater advantages in warehousing, logistics, distribution, and turnover rate, and if the turnover is fast, the comprehensive cost may also be lower.
According to industry data, the iPhone online occupies about 50% of the total market share, and JD.com's online share is about 50%, which means that as an Apple dealer, JD.com's (self-operated) procurement scale and price are very advantageous.
But in general, the difficulty of winning Pinduoduo lies in the fact that Pinduoduo wins lighter business model than JD.com, Pinduoduo is a "factory direct sales" model, products are mostly white-label, the price is low and affordable, and overall JD.com's self-operated and logistics costs are larger.
Secondly, Pinduoduo's "social + e-commerce" traffic model has reduced traffic costs and occupied the minds of users in the sinking market, and in the past, Jingdong "Jingxi" has always wanted to leverage the sinking market, but it is difficult to say that it is successful, and Jingdong cannot beat in market awareness and traffic costs. In addition, Pinduoduo's tens of billions of subsidies occupy the user's mind obviously, and it takes more time, investment and cost for latecomers to surpass Pinduoduo to seize the user's mind and market.
In general, Jingdong's tens of billions of subsidies can definitely drive a wave of traffic and sales, but from the current point of view, Jingdong does not see significant advantages in terms of category or price and traffic cost.
Moreover, it is difficult for JD.com to invest regardless of cost, or set the time period and stop loss line of subsidies. And Pinduoduo's subsidy war has been for many years, Jingdong wants to fight the subsidy war, is aware of the crisis, the road is right, but awakening too late, this battle may be destined to be very difficult.
Ali is likely to follow up, and offline physical malls are more difficult
In addition, based on the decline of e-commerce consumption, after Jingdong opens the tens of billions of subsidies war, the pressure will definitely come to Pinduoduo and Ali, and Pinduoduo will hold the home of tens of billions of subsidies, or will follow up the price adjustment, Ali may not be indifferent, Ali will probably follow up and increase the code, pushing tens of billions of subsidies to a white hot war.
Ali's advantage is that there is no shortage of high-quality head merchants, only need to let out a part of the traffic to support these merchants to compete, can also achieve certain results, but Ali's current problem is that the traffic cost of Taojie is more expensive than Duoduo, how to spend more investment to retain traffic and popularity, how to make advantages in price concessions, and also need to be decisive and resolute.
In general, the pressure of Pinduoduo and Taobao is real, but one group we cannot ignore is offline digital shopping malls. Tens of billions of subsidies have become the norm for e-commerce platforms, and the days of offline business entities are becoming more and more difficult.
At present, Jingdong's home market is 3C digital electronic products, such products have a large number of offline sales channels, including digital shopping malls and mobile phone offline stores in various cities, the more eye-catching e-commerce, the greater the possibility of offline business snub.
In the past, almost every city had its own computer city, but now, offline digital city is closing more and more, the reason is not complicated, offline digital city prices are not transparent, merchant sales lack of integrity, pit people's routines emerge endlessly, computer city pit people, is the unforgettable memory of many users who have shopped in the digital city in the past.
And the current development of e-commerce platform is becoming more and more standardized, online prices are transparent, service, quality and after-sales are guaranteed, this tens of billions of subsidies war, and Jingdong to maintain the home field advantage of digital 3C products, Pinduoduo in the past and long-term mobile phone digital products in the subsidy war, in order to maintain its lowest price advantage, Pinduoduo may further adjust the price, will lead to many platforms to follow, its price advantage is bound to further impact the offline mall.
At present, mobile phone manufacturers are vigorously expanding offline stores, and offline stores are now uncompetitive in price, the author went to an authorized iPhone offline store some time ago, when asking the price, found that its products are actually 100~200 yuan more expensive than online.
Therefore, this may also further force offline commercial entities to transform to quality-based cost-effective routes, higher service standards and new retail.
Offline undoubtedly needs to do a good job in product quality and service. As more and more netizens have recently feedback, the entity has not done good business in recent years, but Sam's Club is crowded. Behind this is Sam's spacious and free space, membership-based admission method, better shopping experience and more cost-effective quality goods with entry thresholds. Some netizens said that Sam's shopping does not have to worry about the quality of things, and it is convenient to return and exchange goods, and the brands settled in are carefully selected brands, and Sam's pastries are good, delicious and affordable, and cannot be bought outside.
In addition, we also see that Wal-Mart's transformation into e-commerce can also achieve the second in Europe and the United States, and once achieved the first in India, which is actually worthy of reflection on domestic physical stores.
In general, Jingdong has always regarded Meituan and Ali as opponents in the past, but now it has woken up, it is necessary to benchmark Pinduoduo, and it is determined, and the pressure has also come to Pinduoduo, which means that Pinduoduo needs to pay a greater cost to maintain the price advantage of tens of billions of subsidies. And this is a long war of attrition.
In this war of attrition, brand owners also need to cooperate with the platform to follow the profit, it can be said that the business is becoming more and more difficult to do, and whether it is offline entities or online e-commerce, you need to think about using cost-effective quality goods to retain consumers in addition to the price war, rather than through the price war to beat the quality of goods worse and worse, this internal consumption will eventually be more and more losses, in this regard, whether it is an e-commerce platform or offline entity, platform brand merchants, must have a clear understanding of this.
Author: Wang Xinxi TMT Senior Reviewer This article is not reprinted without permission