Three arrows, shot at the only promising market
Author丨Huang Peng
Cover source丨Jingdong official Weibo
The battle of tens of billions of subsidies has been fought for more than a month, and real money has been smashed in, and there is almost no sound. But some signs of optimism are starting to be felt inside JD.com.
"Those price-sensitive users are starting to come back." A JD source revealed to Snow Leopard Finance. The voice from the internal monthly meeting of JD Retail is: through the adjustment of strategy, Q1 has come out of the darkest moment, and Q2 will return to user growth.
This is an important reason for JD.com to provoke a new round of price wars, and it is also the first fire lit by Liu Qiangdong after ending his 4-year "retirement" and returning to the front of the stage.
People familiar with the matter said that even within JD.com, many employees did not know that one of the important reasons why "Dongge" suddenly angrily criticized executives and made radical adjustments to the organizational structure was that user data was less than expected.
"The low-price subsidy is first of all to win back the users who were 'hijacked' by Pinduoduo." A JD source told Snow Leopard Finance. Liu Qiangdong prepared "three arrows": low-price subsidies, rich categories, and user recruitment, each arrow is aimed at the bullseye of the sinking market.
Different from the time node of Pinduoduo's rise 4 years ago, competing for existing users now means higher customer acquisition costs. An investor believes that the sinking war is actually over in 2021, and JD.com is sinking again at this time, "somewhat out of line with the general environment."
But within Jingdong, there is no lack of voices optimistic about Dongge.
"Why let users put down Pinduoduo and come to you? JD.com must be prepared for long-term, large-scale subsidies. The above-mentioned Jingdong person told Snow Leopard Finance and Economics that as long as the boss is resolutely invested, there is confidence to win this sinking battle.
In a reply to Snow Leopard Finance, JD.com said, "We have always been committed to providing consumers with a more 'faster and better saving' consumer experience, which is based on the optimization of cost and efficiency, and then create the ultimate product, price and service experience for users." ”
"If you don't make a low price, you will die"
Snow Leopard Finance and Economics learned that the Jingdong platform operation and marketing center recently made an internal sharing: in the past three years, the number of new purchases in the broad sense has continued to grow, but the conversion rate and retention rate have continued to decline.
"The report mentioned that the retention rate of JD.com's new buyers in the following year was 30 percentage points lower than that of Pinduoduo." An employee of the department told Snow Leopard Finance and Economics, "It may be too late to make amends." ”
Snow Leopard Finance learned from within JD.com that in 2022, JD.com's main site did not complete the target of the number of users, especially the number of active purchase users in Q4 is not ideal. "Among them, there are reasons for the epidemic, and the two core modules in Shanghai and Beijing have been affected by the lockdown."
JD.com denies that it has not completed its internal user growth targets in 2022. In a reply to Snow Leopard Finance, JD.com said: "There is a discrepancy between [the situation of not completing the target] and the actual situation. In 2022, JD.com users still achieved high-quality growth, with an average number of daily active users showing double-digit year-on-year growth. ”
The number of annual active purchase users is a business indicator that JD.com attaches great importance to. Although JD.com claimed that the average number of daily active users achieved high-quality growth last year, in the 2022 Q4 financial report, the more critical "annual active buyers" was rarely disclosed.
"Stopping" data when user growth slows down is a common operation of domestic e-commerce giants.
As of Q1 2022, JD.com's annual active consumption users are 580 million, a significant gap with Ali (900 million) and Pinduoduo (880 million). In the next two quarters, JD.com's data did not increase by more than 1.5% month-on-month, and the total never exceeded 600 million, still being left behind by Alibaba and Pinduoduo. At its peak (Q1 2021), JD.com's number of active buyers was 324 million more than the competition.
Another data that disturbs JD.com is that JD.com and Pinduoduo's users highly overlap. Some media reported that in 2019, 40% of JD.com users installed Pinduoduo at the same time.
"In 2022, this number is even more exaggerated. Pinduoduo has begun to counterattack JD.com in first- and second-tier cities, and users themselves will open several apps for price comparison. The above-mentioned Jingdong employee told Snow Leopard Finance and Economics that this is a major reason why the number of Jingdong Q4 trading users is not ideal, "we do not do low prices is a dead end."
Liu Qiangdong should have felt the chill earlier than the outside world.
At the end of last year, Xie Fan, president of the home appliance business department, mentioned in the weekly report that Jingdong products ignored the cost performance, and Liu Qiangdong immediately came to a "group return": "With the success of our 3C home appliance business, many brothers began to be arrogant and complacent, thinking that they had the pricing power and no longer paid attention to the low-price advantage, so sooner or later they would become the second Suning!" ”
He set the tone for JD.com's 2023 in one sentence: "Low price is the most important weapon for our past success, and it will be the only basic weapon in the future." ”
Since then, the price war of JD.com has been in full swing: on March 6, the tens of billions of subsidy activities began; Subsequently, Xin Lijun, CEO of JD Retail, announced four "must-win battles" in 2023 - sinking market, supply chain middle platform construction, open ecological construction and intra-city business.
"The sinking market was put first," one JD.com employee explained, "because it was the only battleground that could hopefully pull users back." ”
The "low-price bombing" in March was a test of the sinking battle, and JD.com has seen some optimistic signs inside. According to JD.com employees, they recently reviewed the number of active purchase users after the launch of tens of billions of subsidies, and "the current returning users are not bad."
Three arrows, shot at the only promising market
As domestic e-commerce users approach the ceiling, the three giants have adopted different approaches: Taobao has focused on the intensive cultivation of existing users, Pinduoduo hopes to find increments in overseas markets, and only Liu Qiangdong has chosen to resolutely "roll in".
Low-price subsidies are Liu Qiangdong's first arrow, he is very determined, and his steps are further than before: he does not distinguish between self-operated and POP, and only cares about whether consumers are satisfied or not; Whoever can achieve a low price will give a certain traffic tilt to whom.
To this end, JD.com has recently vigorously adjusted its organizational structure, and the business units under the management of the original business group will be divided into specific business units according to subdivided categories, giving category leaders more decision-making autonomy. After the split, POP and self-operation will no longer be distinguished, and will be fully opened up and managed by a unified category leader.
The 10 billion subsidy activity not long ago was also hurriedly launched at Liu Qiangdong's insistence. At first, the back-end functions had not yet had time to be developed, and it was all dependent on manual inventory operations. "We were all shocked to see the promise of double payouts for the spread." A JD.com employee quipped that this was "very unpopular."
Jingdong flash sale activities are fixed as daily changes, and there is a wave of flash sale activities every day at 8 am, 10 pm and 12 am, and the entrance to the event is permanently on the first screen, once juxtaposed with tens of billions of subsidies.
Rich categories are Liu Qiangdong's second arrow in the sinking market. In 2007, despite the opposition of investors, he insisted on opening a full-category strategy, "JD.com meets the needs of users (except for 3C products), and can keep them." ”
A JD.com operator told Snow Leopard Finance: "After manual inventory before the Spring Festival, some categories of JD.com have much fewer SKUs than competing products, especially daily necessities. In January this year, JD.com launched the "Spring Xiao Plan" to lower the registration threshold for individual stores (JD.com small stores). From April 1, JD.com launched "0 yuan trial operation" to further reduce the operating costs of individual stores.
Jingdong officially revealed to Snow Leopard Finance and Economics that in the more than three months after the release of the "Spring Dawn Plan", the number of third-party merchants settled in far exceeded expectations, and many college students, farmers, veterans, intangible cultural heritage craftsmen, designers, and craftsmen have come to Jingdong to open stores, and have achieved very good results in the early stage of opening stores.
Pulling new users is not only the third arrow shot by JD.com in the sinking market, but also the focus of Liu Qiangdong's return this time.
Regarding which product to use to focus on sinking users to pull new ones, JD.com has been undecided, and once had two products for the sinking market at the same time: Jingxi Pinpin and Jingdong Extreme Edition (later changed to Special Edition). At that time, it was the stage when Liu Qiangdong took a back seat and the remote control business, and it was also the period when the number of active buyers of JD.com was quickly widened by Pinduoduo.
Jingxi initially set up a separate business department to re-establish the supply chain in line with Pinduoduo's group buying model, with a maximum of 4,000 employees, which was expected to be high. Jingdong special version is a product of the marketing department, which screens out cost-effective products that sinking users like in the supply chain of JD.com. But after a few years of running, the results were not satisfactory.
A Jingxi employee told Snow Leopard Finance: "Professional managers pay more attention to short-term performance. Everything has been done for the past few years, and the sinking market has been fighting, but it feels like it's not focused. ”
In the organizational structure adjustment last year, the Jingxi business department was transferred to JD Retail, and the special version was also handed over to the Jingxi team for operation.
On March 30, Jingxi version 6.0 was launched, covering the Jingdong special version of the App, and the two were combined into one. Slogan has changed from "spending less and saving more" to "saving a new life", focusing on low-priced goods in beauty, food, wine and other categories, and has opened the entrance to personal stores, and only needs an ID card to register as a merchant.
In the new pull of this sinking battle, JD.com once again adopted an internal horse racing mode. Another division of JD.com retail is recently preparing to launch a minimalist version of JD.com, which subtracts from the function to make the product package as small as possible to meet the needs of low-configuration mobile phone users.
Regarding which products to focus on in the sinking market, JD.com replied to Snow Leopard Finance and Economics: "Our (sinking battle) promotion measures will not be limited to a specific business, and the businesses and sectors involved will be involved." ”