Another 618, no winners

Why is there no winner in this year's 618? This article will help you explore the reasons. At the same time, this article is also recommended for individuals or companies engaged in the e-commerce industry to provide reference and reference.

Before we knew it, JD.com posted its battle report, and 618 ended quietly once again.

As a pioneer of 618, JD.com put the performance of small and medium-sized merchants in the forefront for the first time - "sales of more than 150,000 small and medium-sized merchants increased by more than 50%". In addition, the most boastful thing is the live broadcast that has been popular since last year's Double Eleven. The data this time is "the number of live broadcast orders increased by more than 200% year-on-year", and "digital human live broadcast" also received a lot of attention.

We could have anticipated this result. After all, JD.com announced on May 27 during the big promotion that its purchasing and sales staff’s annual salary would increase from 16 months to 20 months.

However, the general background of this is still the fierce fighting on June 18th.

JD.com 618 Battle Report

Whether it is Taobao, JD.com, Douyin and Kuaishou all competing for small and medium-sized businesses, or live streaming e-commerce, which all parties are betting heavily on, they all suffered a series of grievances during this 618. The morning of the second day after 618 ended, the hot searches were #Little Yangge Oriental Selection did not enter the top 10 of 618##Merchants say that the big sale sold more than they lost# and other topics.

On the one hand, small and medium-sized businesses are extremely happy to see that after various platforms enthusiastically embraced them, they are faced with the result of "Why can't we make money this 618". The high return rate burns their hearts. The merchants behind these standard products such as books and liquor are either fighting or lying down. "Even beauty products can't be sold" has been reported by various media; on the other hand, the live broadcast e-commerce that the platform is proud of has encountered a serious mystery. Li Jiaqi bluntly said that it was difficult, Dong Yuhui lost his way, Simba and Xiao Yangge gradually retired, and the big anchors are like this. The current market situation is clear at a glance...

After the 618 event comes to an end, merchants, platforms, and anchors are all sliding towards their own unknown fate.

1. E-commerce platforms: Growth requires “bleeding”

618 is JD.com’s home court, so Liu Qiangdong’s brothers are undoubtedly the ones who bear the most pressure.

A week before the big sale started, JD.com released new attendance regulations, requiring that the number of people at work be counted at 9 a.m. and that lunch breaks be shortened to one hour, during which lights must not be turned off. At the same time, employees who leave work at 6 p.m. and do not get off work overtime will be subject to work saturation assessments.

In 2018, Liu Qiangdong said: "JD.com will never fire any brother." This time, he patched this oath: "Anyone who has poor long-term performance and never works hard is not my brother." JD.com wants all its employees to "roll up", but its biggest problem is that it cannot give employees a clear direction to strive for.

JD.com has finally discovered the bright spot of live broadcasting of purchases and sales, and it is also supporting it with all its strength. JD.com's purchases and sales also made frequent moves during the big promotion period.

Huawei’s high-value HR Ren Yue was introduced as the live broadcaster, and a “little brother Li” who looks a bit like Li Jiaqi was found to play the jokes of “low price +7” and “that Li is expensive”; after Dong Ge’s digital person, Xu Ran’s digital person was introduced, and the digital people of 18 presidents formed a “President Digital People Team”; Xu Ran and Zhou Hongyi also personally sold goods in JD.com’s 3C digital procurement and sales live broadcast room...

At the same time, according to media reports, the most important assessment point for JD.com's performance bonus for procurement and sales is still profit. This is why JD.com's gross profit margin increased by 0.5 percentage points in the first quarter and its profit exceeded expectations.

High profits are of course a good thing intuitively, but it also shows that JD.com seems to lack the courage to fight in the increasingly fierce competition.

In comparison, Alibaba’s determination to move down is even stronger.

Tmall 618 Battle Report

Taobao's GMV grew by double digits in the first quarter, but the cost was that the growth rate of customer management revenue was only 5.48%, lower than JD.com's 6.6%, and adjusted profit was negative year-on-year. According to Wu Yongming, the reason for Taobao's declining monetization rate is that Taobao's GMV has exceeded Tmall.

This classic Internet model of "sacrificing profits for growth" seems to be becoming increasingly difficult to follow, as market growth is visibly decreasing.

According to LatePost, even Douyin, which has the fastest growth among the major platforms, has seen its year-on-year growth rate fall below 40%. If this trend cannot be reversed, it will be difficult for Douyin e-commerce to achieve its goal of increasing GMV from 2.7 trillion last year to 4 trillion.

For all e-commerce platforms, future new sales will increasingly rely on snatching sales from other platforms . At least Douyin’s share of new sales snatched from external platforms has exceeded 50%.

2. Big anchors: leave or stay?

E-commerce platforms are fighting for their lives, and even the big anchors who shined in previous shopping festivals are feeling the plight deeply.

At the 2024 Mei ONE "618" media conference, Li Jiaqi spoke frankly about the difficulties of this year's 618. Unlike Taobao, Li Jiaqi's live broadcast room still has one day of pre-sale. The news that Li Jiaqi's live broadcast sales data has seriously declined has also become a hot topic. Mei ONE also gave a direct clarification that as of May 20, the GMV of Li Jiaqi's live broadcast room during the 618 period has exceeded that of the same period last year.

On the other hand, Simba, the top anchor of Kuaishou, was banned for a month because of his anger against the platform. He was not lifted until May 25, the eve of the 618 promotion. At the same time, at this point, he also announced that he would gradually fade out of live streaming and selling goods, "planning to use 10 live broadcasts to let Xinxuan get used to the absence of Simba, and let fans get used to Simba's departure."

Kuaishou screenshot

Xinxuan data shows that Simba's departure notice did not ignite fans' enthusiasm to retain him. In this year's first 618 live broadcast, Simba's GMV was 1.427 billion yuan, down from 1.6 billion yuan last year.

Brother Yang, who once replaced Dong Yuhui as the top influencer on Douyin, has begun to transform into the micro-short drama track since the beginning of the year. He opened the "Three Sheep Theater" and gradually approached the film and television industry. He is obviously not so concerned about this shopping festival.

During the promotion period, the most popular anchor was none other than Dong Yuhui. But in fact, he only appeared in 3 of the 40 live broadcasts with Hui during the 618 period. What pushed him to the forefront was actually the public opinion other than the sales.

On May 31, Dong Yuhui's boss Yu Minhong said in the live broadcast room of Wumart founder Zhang Wenzhong that "Dongfang Zhenxuan is also in a mess now." This immediately led to a drop of more than 20% in the share price of Dongfang Zhenxuan in five trading days.

In fact, since Oriental Selection let Dong Yuhui alone support the "Walk with Hui" live broadcast room at the beginning of the year, the combined performance of both sides is still quite good.

FeiGua data shows that in the first five months of this year, "Yuhui Xingxing" has repeatedly become the monthly champion of Douyin's influencer sales list, and Oriental Selection has basically been in the top 5.

Tik Tok influencer sales rankings for March

The market reacted strongly to Yu Minhong's casual remark because the fighting spirit of Yu Minhong and Dong Yuhui has faded.

Dong Yuhui cleared his Weibo account in February and said in a Douyin outdoor radio program on June 9: "I am very resistant to selling things. To be honest, I still don't enjoy this job to this day." He also said that even after taking sleeping pills during work, his sleep was still very poor.

Yu Minhong said: "I have been abused, accused and insulted online more times this year than I have in a hundred lifetimes."

Investors know that these intellectuals from New Oriental are doing live streaming with a "debt repayment" mentality. Luo Yonghao really owed 600 million yuan, while Yu Minhong did it for the employees who followed him after the "double reduction", and Dong Yuhui did it for the staff in the live streaming room.

No one knows when they will pursue new dreams like Luo Yonghao. It is possible that Oriental Selection, which has a market value of 15 billion today, will become Jiao Ge Pengyou, which has a market value of 2 billion.

The big anchors looked exhausted and had no desire to continue the fight, making this 618 event seem even more lackluster.

3. Merchants: Those who lie down and those who resist

This year's 618 is the first e-commerce promotion to completely cancel the pre-sale system.

The pre-sale system was originally intended to help merchants reduce the pressure of stocking up, reduce inventory waste, and increase the GMV of battle reports, but these reasons have become worthless under the guideline of "user-centricity".

In addition to selling spot goods, merchants participating in Taobao's "official instant discount" and "cross-store discount" activities during the 618 period must also support "seller version of freight insurance" and "use now and pay later"; JD.com has proposed a 365-day price guarantee and strict rating management for live-streaming e-commerce organizations and influencers; Douyin and Pinduoduo require "automatic price change" and "automatic price following" respectively.

Platforms that show unlimited favoritism to users are called "Somalia" by small and medium-sized businesses because the platforms are full of "pirates" who are out to take advantage of them.

But times have changed. When commodities are no longer scarce, the right to speak has quietly shifted.

Moutai is the main product promoted by Pinduoduo with 10 billion yuan in subsidies in 2020. It once became the hard currency of e-commerce brands together with iPhone. But in this 618, hard currency is not so hard anymore.

According to the data of Zhengzhou Bairong Wine Price, the price of 24-year-old Feitian Moutai was 2,430 yuan per bottle on June 11, which was nearly 300 yuan lower than that at the beginning of the year. The price of luxury wine can no longer be sustained, and the e-commerce promotion has become a channel for shipping and running away.

In the first hour of this year’s 618, Tmall’s wine and beverage live broadcast sales increased by more than 30 times compared to the first day of 618 last year, and the year-on-year growth rate on the first day was as high as 1,300%.

The ones competing against each other online were Moutai's distributors. The share price of Moutai Distillery itself also fell from a high of 1,777.8 yuan to a low of 1,520 yuan around June 18, a drop of nearly 15%.

However, shipping goods and running away seems to be a "privilege" that only leading merchants like Moutai can enjoy, and more ordinary liquor merchants have chosen to lie low.

According to a screenshot of JD.com’s WeChat group on liquor procurement and sales on June 14, the real-time sales data of many liquor brands on that day fell by more than 50% year-on-year.

Screenshot of JD.com’s wine and beverage purchasing and sales WeChat group

In addition to those who lie down, there are also those who resist.

On May 17, 58 units in Beijing and Shanghai, including the Commercial Press and the People's Literature Publishing House, united and declared that they would boycott JD.com's 618 promotion of 21% and 30% off all categories of books; on May 31, Shen Haobo, the founder of Motian Books, announced a complete suspension of shipments to JD.com.

The book retail market has indeed been in a tough time recently. In 2023, it was still able to maintain a false prosperity of discount sales with a year-on-year increase of 4.72% in sales and a year-on-year decrease of 7.04% in actual sales. However, in the first quarter of this year, the sales directly showed a negative growth of 4.72%.

No wonder publishers are rising up in rebellion.

What was the result? On May 31, many of the publishers in the “anti-JD.com alliance” still participated in the 618 event. It is unknown whether Motian Books sent books to JD.com, but JD.com’s “Motian Book Flagship Store” continued to operate.

Merchants from all walks of life are endlessly trapped in the maze of platform price manipulation. When price power becomes the only appeal of e-commerce platforms, no matter how the support policies are packaged, they are ultimately "paper tigers" for merchants. Merchants are also caught in the vortex of passive low prices, and finally shout out their resentment of "not making money".

Merchants, anchors, and platforms, their struggles and lying down, their hesitation and anxiety, their burning of money and their involution, everything points to one answer: the era of consumerism is gone forever.

Everyone knows that there are new rules in the new era, but most people who make a living from e-commerce find it difficult to start a new business and can only continue to struggle, wait, and get lost here.

Author: James Taishi

WeChat public account: YIFAN (ID: finance_yifan)