The tragic situation of 618: the platform promotes "automatic price reduction", and the store owners dare not click the backstage easily

The e-commerce platform's mid-year 618 promotion is coming to an end, but what comes with it is not the joy of achievement, but more fatigue. Merchants who are forced to engage in low-price competition seem a little helpless.

Today is June 20th, and the 618 mid-year promotion of e-commerce platforms is coming to an end. In this round of promotion, how are the merchants living on the e-commerce platforms doing? According to the survey conducted by the Zhiwei editorial department on merchants, they are less happy about sales and revenue, and more tired.

Some of them were passively or forcibly involved in the low-price war, and chose to endure, collapse more slowly, or collapse immediately. Yu Li (pseudonym) was surprised when he first saw the platform's automatic price-following system at the beginning of the month. If you want to get better platform resources, you have to activate such a system, and the platform will constantly pop up windows in the merchant backend to remind you to join.

In short, this system is that merchants delegate power to the platform, allowing the platform to directly adjust the store's product prices based on price changes of competing products. The default range is: the maximum price reduction for a single product in a single day is 10 yuan, or the maximum price reduction for a single product in a single day is 15% of the current price.

Yu Li's product category is wigs. Summer is the off-season, and many local factories have no work and have already gone on holiday. He did a simple calculation and felt that once he gave the platform the pricing authority, combined with previous promotion fees and other after-sales situations, he might lose money, so he chose not to open it.

The automatic price tracking system is constantly adjusting its scale based on external feedback, from the initial "After clicking "Agree", it cannot be modified before June 21" to "It can be modified", but the page prompt is relatively hidden. At a time when consumers are more price sensitive and frequently compare prices manually across platforms, such a system monitors price changes in the market in real time and automatically adjusts product prices based on merchant authorization to maintain a price advantage for a period of time.

However, it is not just Yu Li who has chosen not to participate. Some merchants in popular categories have also chosen not to participate. For them, the original prices have been lowered in order to cope with the promotion. The lack of control over pricing will bring insecurity and worries about losses. However, even if merchants do not participate in such price reduction activities, they will still have to bear the brunt of the low-price war.

A few days later, the platform suddenly launched the "order-grabbing artifact". As long as this promotion is selected, it will "target our store's products to all consumers on the site who have recently consulted, collected, or browsed the same products from peers." This function can only be implemented if merchants accept the platform's low-price strategy.

According to the exposure position of the promotion, when users consult and communicate with customer service about products in the same category and the same store, the system will directly pop up the low-priced product link of the merchant who has selected the order-grabbing artifact in the chat interface. Even when entering the payment interface, if there are similar products with lower prices, the system will also pop up the low-priced product link.

The introduction of this function that directly grabs traffic for the same product within the platform has caused some merchants to report a decrease in store conversion rates and an increase in the rate of immediate refunds after placing an order. After all, there is only one dynamic low price, and merchants cannot control the timing of consumer behavior, and a lower price will appear clearly in the payment interface of their own products.

During this year's 618, when low prices were highly bundled with traffic exposure and event promotions, small and medium-sized businesses were obviously forced to become "smart": when opening the platform backend, do not click on various notifications at will, but read them carefully to see if there are any traps; if you make a mistake, you must actively apply for recovery.

Small and medium-sized businesses are becoming increasingly clear about what kind of goods to sell on what platform, what prices to set, and which limited activities to participate in, in order to survive in the cracks of the low-price war and maintain exposure.

The interlocking low-price policies may actually reduce the consumer experience, because if merchants want to continue to play, they will recalculate the cost, and include the platform's price comparison behavior and the sudden increase in the return rate into the cost. If they cannot produce, they can only reduce the quality of the product. A month ago, on May 22, Chen Lei, chairman of Pinduoduo, mentioned in the Q1 earnings call that at this stage, consumer demand shows a "rational and stratified" trend. "This requires us to better meet consumers' demand for higher quality goods and richer consumption scenarios on the basis of affordability. The platform should strike a balance between merchants and consumers.

The needs of both parties are crucial to the platform. In this 618 promotion, e-commerce platforms still have a lot to do. "In fact, in the current market environment, the platform's balance is infinitely inclined to consumers, which has been proven to be an unfavorable choice. The low-price measures of platforms such as Pinduoduo on 618 may just cause opposition from small and medium-sized merchants and a new example of public contradictions.

The "refund only" function of the e-commerce platform previously reported by the Zhiwei editorial department has gradually ceased to be an innovation to eliminate inferior merchants and provide better services to consumers. Instead, it has become a sword of Damocles for the platform to transfer service pressure and increase merchant costs.

From the end of last year to the beginning of this year, Taobao, JD.com, Douyin, and Kuaishou successively launched the refund-only function. The backlash effect brought by the refund-only function was concentrated in this 618, and the wool party became more and more intense.

As of early June, there were as many as 152,000 complaints about refunds alone on Heimao Complaints. Most of the complainants were merchants, and the parties complained against were mostly the customer service staff of the e-commerce platforms mentioned above. Considering that merchants will give priority to communicating and negotiating with the platform internally when encountering problems, these external complaints are only a part of them.

It is worth mentioning that in the past, the industry believed that refunds alone would help force merchants to improve product quality and services, and would only affect white-label merchants that provided low-quality products and promote industry reshuffles. However, the tilt of the status of consumers and merchants has led to a reshaping of consumption habits, and the foundation of fair and honest transactions has been shaken. The trend of zero-yuan purchases has become popular again, and those affected are not just low-quality merchants who should be eliminated.

A merchant who closed his store due to refund-only policy mentioned to the Zhiwei editorial department that a local colleague was forced to close his store and lay off 50 employees last year. Due to the increasingly severe pressure of refund-only policy, logistics fines, promotional deductions, etc., the store only made a profit of 300,000 yuan on sales of 80 million yuan in one year.

Prior to this, the company was listed as a typical case of local e-commerce development by the Development Zone Management Committee. A new observation is that the clothing industry's inventory acquisition industry is extremely prosperous this year. In previous years, clothing with a unit price of dozens of yuan could often be sold in packages at a price of 5 yuan due to inventory clearance or poor management, but this year it has appeared at an extremely low price of 1 to 2 yuan.

This means that more and more businesses are unable to continue. This situation has created a three-way dislocation: the e-commerce platforms are all promoting the concept of "high-quality development" in their publicity notices; consumers are starting to say "I'll use whoever is cheaper"; and the actual plight of businesses is just the incompetent shouting and cursing in the circle.

The industry's joys and sorrows are not shared. The platforms take advantage of the inconsistency of the short-term interests of several parties and wantonly promote abnormal internal circulation and unreasonable price wars. From a long-term perspective, it may be an embarrassing situation where everyone loses. The only suspense is when this tight string will break.