Can JD.com’s “Dark Moon and Strong Winds” pave the way for Double Eleven?

JD.com launched the "Dark and Windy" event before Double 11, preheating the market in advance through limited-time and limited-quantity price cuts. This strategy not only reflects JD.com's emphasis on Double 11, but also demonstrates its determination to seek new growth in the e-commerce competition. JD.com tried to gain a favorable position in the fierce e-commerce market by launching Double 11 events in advance, increasing marketing investment, and optimizing merchant services.

The National Day holiday has not arrived yet, but JD.com’s “big move” has been unveiled in advance.

On October 8, JD.com launched the annual "Dark Moon and High Winds" event with a limited-time and limited-quantity price reduction, and started a flash sale at 8 p.m. that day to "warm up" for Double Eleven in advance.

Some media reported that the event was decided at an emergency meeting within JD Retail, and the scope of products covered and the extent of price cuts were the largest of the year.

"Dark Moon and High Wind" grand event, photo/JD APP

In the development history of JD.com, "Dark Moon and High Wind" is of great significance. It was proposed by JD.com founder Liu Qiangdong himself and he led the team to implement it, laying a solid foundation for JD.com's early e-commerce transformation.

On the other hand, in recent years, e-commerce platforms have attached increasing importance to the Double Eleven Shopping Festival, investing huge subsidies and advancing the event time further, and competition is imminent.

Yike Business noticed that, unlike the time mentioned at the previous JD.com press conference that "Double Eleven shopping will start on October 17th", the bottom of the "Dark Moon and High Winds" poster clearly states: "Double Eleven goods will go on sale at 8pm on the 14th."

On the morning of October 10, JD.com’s official WeChat public account tweeted that “JD.com’s 11.11 spot sales will start at 8pm on October 14,” confirming that JD.com’s Double 11 start time will be advanced.

It’s a “dark and windy” time before Double Eleven. What plans does JD have?

1. It’s a dark and windy night. What should JD do?

Speaking of “Dark Moon and Strong Winds”, we have to mention the history of JD.com’s rise as an e-commerce platform in its entrepreneurial stage.

In 2003, JD.com, which started out in Beijing's Zhongguancun, had gone through years of development but was still just a digital 3C agent with more than a dozen offline stores. Under the background of SARS, offline business was difficult, and the boss Liu Qiangdong happened to come into contact with the concept of "e-commerce".

In January 2004, Liu Qiangdong decided to "fight to the bitter end" and closed all offline stores. He focused on online transformation to e-commerce and established the "JD Multimedia" website, the predecessor of today's JD.com.

“Dark Moon and High Wind” was born in 2004. In the early stage, the newly launched JD Multimedia website was in urgent need of publicity and effective customer traffic.

Liu Qiangdong noticed that the after-get off work period around 8 o'clock is when digital enthusiasts are most active in the forum, and netizens with shopping needs often post inquiries.

So, he led the team to launch a store anniversary promotion called "Dark Moon and High Winds", using product prices almost at cost price to attract users to visit the website and wait for "treasure hunt".

JD Multimedia's early team, photo from JD's official WeChat account

Judging from the results, "Dark Moon and High Wind" quickly gained popularity and a reputation for "low-priced genuine products" for JD Multimedia's website.

After 2004, JD Multimedia grew and expanded from 2005 to 2007, and then entered Shanghai and Guangzhou, gaining the favor of venture capital. In 2007, it was renamed JD Mall and stood at the center of the early domestic e-commerce industry as a B2C e-commerce giant.

In other words, "Dark Moon and Strong Wind" is not only the source and prototype of all promotional activities of JD.com's e-commerce, but also lays a solid foundation for JD.com's e-commerce journey, symbolizing JD.com's emphasis on authenticity, low prices, and service.

As e-commerce promotional activities became more and more frequent, the classic "Dark Moon and High Winds" strategy was dormant for a time. It was not until 2023 that it returned to the forefront as JD.com vigorously promoted its low-price strategy. At 8 o'clock every night, search for "Dark Moon and High Winds" on the JD.com APP to enter the flash sale channel and participate in the purchase.

The usual "Dark Moon and High Winds" event page, photo/JD APP

Back to the present, the "Dark Moon and High Winds" on October 8th is very different from the usual flash sales.

First of all, this event is called the "Annual Festival", and the range of products covered and the price reduction are the largest in the whole year. The inventory quantity and categories of goods have increased several to dozens of times;

Secondly, the timing of this event was very "coincidental", just before JD.com's Double Eleven advance promotion on October 17. The promotional poster mentioned "JD.com's Double Eleven gift" and "Double Eleven spot sales at 8 pm on the 14th". Combined with the internal information of the previous "emergency meeting", it is obvious that this is to warm up for Double Eleven, test the market reaction and maintain user expectations.

Yi Ke Business noticed that the official accounts of various platforms under JD.com released previews for this event around the 7th. On social media platforms such as Weibo and Xiaohongshu, related topics also maintained a certain level of popularity. Many users who missed the event and failed to successfully buy in seconds paid attention to JD.com's Double Eleven promotion in advance.

Based on the current e-commerce competition, JD.com brought out the trump card of "Dark Moon and High Winds" after many years, which is enough to show its determination to prepare for Double Eleven. The "low price" and "authentic" impression of "Dark Moon and High Winds" also conveys the signal of JD.com's main competitive strategy for this Double Eleven - to move further towards "low price".

2. JD.com is under great pressure during this year’s Double Eleven

Compared with previous years, the pressure JD.com faces during Double Eleven this year has only increased.

In August, JD.com Group’s second quarter 2024 financial report was released.

Financial report data shows that JD.com recorded revenue of 291.4 billion yuan in the quarter, a year-on-year increase of only 1.2% compared to 2023. Among them, the revenue from its largest business, JD Retail, was 257.072 billion yuan, a year-on-year increase of only 1%, the revenue from JD Logistics was 44.207 billion yuan, a year-on-year increase of 7.7%, and the revenue from new businesses was 4.636 billion yuan.

In terms of profitability, JD.com recorded an adjusted net profit of 14.5 billion yuan in the second quarter of this year, a year-on-year increase of 69%. The adjusted net profit margin increased from 3% in the same period last year to 5%; the gross profit was 45.9 billion yuan, a year-on-year increase of 10.78%.

On the expense and cost side, JD.com recorded expenses of 35.4 billion yuan in the second quarter of this year, a year-on-year increase of 7%. Among them, the largest changes were in marketing expenses and general and administrative expenses, which increased by 7.3% year-on-year to 11.9 billion yuan and decreased by 9.6% year-on-year to 2.1 billion yuan, respectively.

In addition, operating costs in the second quarter were 245.5 billion yuan, a year-on-year decrease of 0.4%.

JD.com’s financial data for the second quarter of 2024, Figure/JD.com’s financial report

Overall, the second-quarter financial data, which includes the 618 e-commerce shopping festival, clearly reflects the biggest challenge facing JD.com’s retail business today: it is stuck in a growth dilemma.

While reducing administrative expenses on the expense side, JD.com had to increase marketing investment in the face of a relatively weak consumer market. Although net profit continued to grow, the decline in operating costs was not significant, and the growth rate of revenue scale was unsatisfactory.

In recent years, the growth of the domestic e-commerce industry has slowed down, and the market has entered a stage of competition for existing shares. How to open up new growth points while maintaining one's own home turf has become a new topic on the table for e-commerce platforms.

It is not difficult to understand that the Double Eleven Shopping Festival, which competes in comprehensive strength such as fulfillment, service, product category, and discount intensity, has become an increasingly important stage for e-commerce platforms.

In the red ocean, JD.com must invest heavily to successfully reap the rewards of the Double 11 event. On September 20, JD.com announced that it would start the Double 11 event at 8 p.m. on October 17, a full week earlier than last year. On October 10, JD.com announced again that the event would be moved forward to October 14.

JD.com announced the early launch of its Double 11 event. Photo: JD.com official WeChat public account

In this year’s Double 11 press conference, JD.com divided the event into three phases: from October 17 to October 31, spot sales and pre-orders;

On October 31, the consumption red envelopes were officially opened through the "Auspicious Start" and "Hundred Yuan Subsidy Day", and then experienced a special period; around November 11, it reached the climax of "Peak 28 Hours" and then entered the return period.

The battle for Double 11 has already begun. Kuaishou released its Double 11 cycle plan, planning to enter the warm-up phase on October 16 and officially start the event on October 18. Tmall announced that it would start the first wave of pre-sales on October 14 and enter the spot stage at midnight on October 20. Douyin started the pre-sale phase on October 8 and started the official purchase on October 18. Pinduoduo announced that it would start the Double 11 event on October 14.

Among many e-commerce platforms, JD.com's Double Eleven strategy fully leverages its self-operated and logistics fulfillment advantages. For example, it starts spot sales in the pre-sale stage, and the activity cycle is clearer and more compact, which differentiates it from Tmall, which has restarted the pre-sale mechanism and laid out more links.

In addition, "low price" has also become another line that JD.com sticks to during Double Eleven.

JD.com’s latest “Double Compensation for Expensive Purchases” service details show that the compensation comparison range covers prices on platforms such as Pinduoduo, Taobao and Tmall. The same product can be compared as long as the sales volume and reviews are greater than or equal to 30.

3. JD.com is still looking for new growth after cooperating with Alibaba

The struggle between e-commerce giants has been protracted. When neither side can invade the other's territory, "win-win cooperation" becomes a better idea.

Recently, according to LatePost, Alibaba and JD.com are moving towards mutual opening. Taobao Tmall will soon be connected to JD Logistics, which will be launched in mid-October, while JD.com will soon be connected to Cainiao Express and Cainiao Post Station.

In addition, JD.com will also be connected to Alipay. According to the cooperation news, these actions will be completed before Double Eleven.

Before the e-commerce shopping festival, Taobao merchants obtained a more secure logistics channel option, which greatly alleviated the various complaints caused by limited transportation capacity during Double Eleven every year. JD.com also gained the most effective and widespread solution to the "last mile of logistics" problem, reducing transportation costs.

When infrastructure breaks through monopoly and the e-commerce platform ecosystem further integrates, players return to the same playing field. JD.com, which is looking for new growth, no longer looks outward, but gradually turns the spearhead of reform to itself.

At the Double Eleven press conference, JD.com spent less time talking about its own operations, but in its attitude towards third-party merchants, it showed the same "unremitting efforts" as its old rival Taobao.

Liu Qiangdong and Jack Ma met for the first time in 2014. Photo: JD.com’s official WeChat account

During this Double Eleven, Taobao announced that it will invest tens of billions of funds to help merchants reach consumers through methods such as full-reduction discounts, consumer coupons, and red envelopes. It will also reduce merchants' operating costs through policies such as return security, zero handling fees, and hundreds of billions of subsidies and commission rebates. It will also provide free "use now, pay later" services to merchants participating in the promotion and provide exclusive resource exposure for related products.

JD.com has completely canceled the Double Eleven registration process, and automatically provided promotion and search traffic support to merchants that met the requirements. It has introduced traffic to merchants through means such as "10 billion subsidies for factory goods", billion-level marketing subsidies, 1 billion live broadcast subsidies, and advertising rewards, targeting the pain points of industry white-label merchants, live broadcast content ecology, and advertising operation services.

In addition, JD.com has also completed a comprehensive upgrade for the merchant backend, optimized traditional rules such as consultation and delivery, launched eight core service tools such as category-specific service products and intelligent customer service, and provided JD.com digital people with free 15 days, return and exchange guarantees, logistics rights and other welfare packages.

JD.com proposed that it will provide merchants with ecological services that will provide "more traffic, faster operations, better services, and lower costs". It plans to more than double the number of small and micro businesses with "daily sales exceeding 10,000" during the Double Eleven period, and to increase the number of businesses with sales exceeding 5 million by more than 50% year-on-year.

JD.com’s Double 11 merchant support targets, photo/Jingmai Merchant Center

Why has the battle for merchants become the hidden line of competition between the two traditional e-commerce giants? Why does JD.com, which started out as a self-operated company, attach so much importance to third-party merchants?

The answer is first about growth. At a time when the consumer market is relatively weak, the sinking market represented by third-party small and micro businesses has become a "hot commodity". For example, Pinduoduo, which started as a white-label merchant, recorded revenue of 97 billion yuan in the second quarter of 2024, a year-on-year growth rate of 86%, in sharp contrast to Taobao and JD.com, whose growth rates have entered the single-digit era.

The appearance of growth points to differences in platform image and sales strategy - Pinduoduo's "low price" image in the minds of consumers is deeply rooted. Only the prosperity of third-party small and micro businesses can compete with the former's low prices, which is the answer that JD.com has to admit.

Today, JD.com is learning from its own rapid growth in the past, and the "low price" label represented by the "Dark Moon and High Wind" event has surfaced. From "Dark Moon and High Wind" to Double Eleven, JD.com is trying to re-establish the impression of "low price", which is naturally difficult, but the result still needs to be repeatedly observed in the smoke of Double Eleven.

(The title image comes from JD’s WeChat official account.)

Author | Yan Ciga Editor | Yi An Shuang This article is written by the operation author [Yi Ke Business], WeChat public account: [Yi Ke Business], original/authorized to be published in the operation party, and any reproduction without permission is prohibited.

The title image is from Unsplash, based on the CC0 protocol.