618 Preview: New and old players start the "offensive and defensive battle"

Before the consensus of "everything for user experience", the growth goals of new and old e-commerce platforms are indeed different, which is mainly reflected in their different understandings of the concept of "growth" and their strategic choices. Read this article to learn more.

This year's 618, the competition between e-commerce platforms is more intense than in the past.

From Taobao taking the lead in announcing the cancellation of pre-sales, JD.com's big announcement of price increases for first-tier procurement and sales, to the aggressive actions of new 618 players such as Xiaohongshu and Bilibili in 618 investment promotion and preheating, all signs show that in the stock battlefield of e-commerce, new and old players are still trying every possible means to seek growth and breakthroughs.

The essence of shopping festivals represented by 618 is a consumption scenario where traffic and purchasing power are concentrated. Marketing is done through "concentrated sales". Against the macro background of slowly climbing consumption power, the significance of big promotions for more businesses is no longer to increase sales and profits, but to market brands and attract new customers through discounts. Therefore, "volume" is certain.

For the platforms, the earlier start time and greater publicity efforts essentially expose the battle for the user's mind. During this year's 618, a general consensus among new and old players is to return to the user, and the strategy of e-commerce platforms has changed to "user-centric". Whether it is price, service, or supply, it is the platform's routine operation under this "first principle".

Whether it is "Maogoupin" which started as a shelf e-commerce, or Douyin and Kuaishou which started as content e-commerce, or Xiaohongshu which emphasizes buyer e-commerce, Bilibili which is an open-loop e-commerce, or Video Account which has a clear offensive signal in e-commerce business this year, this year's 618 is a key wrestling point for all major platforms.

What is slightly different is that different platforms have different understandings of "growth". In addition to the same actions such as creating content and attracting merchants, new players also have their own key KPIs. On the eve of 618, this article mainly summarizes and provides insights into the actions of major e-commerce platforms, mainly answering three questions:

1. With the consensus on user experience, what have the major e-commerce platforms mainly done in terms of user experience this year?
2. What are the differences in the key strategies of new and old players when it comes to growth targets?
3. Why are AI e-commerce and people in organizations the most noteworthy highlights of this year's 618?

1. A consensus: everything is for user experience

From the “low-price competition” that started last year to a series of adjustments made by e-commerce platforms this year, this year’s 618, reshaping the user mindset is still the primary KPI for new and old players.

From the perspective of user experience, "more, faster, better, cheaper" is the ultimate goal pursued by e-commerce platforms. In the past competition landscape, e-commerce platforms have different genes and it is difficult to have both. But in this year's 618, new and old players have started a comprehensive competition in terms of "more, faster, better, cheaper".

In terms of "savings", low prices are still the main weapon. The "low-price competition" of major e-commerce platforms this year is obviously more aggressive, with three main directions: first, adopting more direct preferential gameplay, second, taking low-price measures in key areas. Third, in terms of traffic mechanism, traffic is tilted towards low-priced goods.

From questioning Pinduoduo to becoming Pinduoduo, e-commerce platforms have been following Pinduoduo's low-price mechanism. In addition to the familiar 10 billion yuan subsidy, the platforms have also come up with various tricks to create a "low-price atmosphere". For example, Pinduoduo's flash sale channel launched a 6.6 yuan flash sale on the basis of the 9.9 yuan flash sale; JD.com launched a "2 yuan free shipping event" during the 618 shopping festival.

In terms of Taobao, in addition to the first time of connecting Taobao and Tmall to discounts, the "price power" policy it has always implemented. In addition to "trading price for volume" on super items and main styles, hundreds of billions of subsidies and Taobao live streaming are also key areas for low prices.

In terms of traffic mechanism, e-commerce platforms convey the message to merchants that "if you offer low prices, you can get traffic." On the eve of 618, Pinduoduo adjusted the 618 search and push traffic rules, saying that "all price-reduced products will increase the weight of the entire site's traffic, with the weight increased by up to 9 times." On the other hand, Douyin e-commerce, which divides "price power" into "lowest price on the entire network, low price for the same style, and high price for the same style," will direct its traffic mechanism in 2024 to "good products at good prices."

In terms of "speed", the company will continue to improve the certainty of fulfillment. Taking logistics as an example, e-commerce platforms are all pushing for timeliness and door-to-door delivery.

Recently, Douyin Mall has quietly launched a "customized delivery" service, where consumers can choose the delivery method and make an appointment for delivery according to their needs. JD.com, which has always had an advantage in "speed", announced before the 618 campaign that it would upgrade its two original instant retail brands, JD Hourly Delivery and JD Home Delivery, to "JD Second Delivery" and give the "golden entrance" to Second Delivery on the JD main site, which shows how much it values ​​it.

The "JD Instant Delivery" entrance on JD.com's main website. Image source: JD.com APP

In terms of "more", major platforms are also making frequent efforts to enrich platform supply. The common point is that they provide more resources and tools to support small and medium-sized merchants and merchants in key categories.

The difference lies in that Pinduoduo is accelerating its branding, while JD.com, Alibaba, Douyin and others are stepping up their efforts to compete for small and medium-sized businesses, including white-label businesses and industrial belt businesses.

At the just-concluded JD.com 618 launch conference, JD.com Group CEO Xu Ran revealed that the number of third-party merchants attracted by JD.com through the "Spring Dawn Plan" has exceeded one million, and the number of third-party merchants' product SKUs has increased by more than 100%.

The significance of "Maogoudou" increasing its efforts to introduce small and medium-sized businesses is twofold:

First, they cater to consumers’ price comparison behavior, replenish more low-priced goods for the platform, and create a low-price mentality. Second, they strive for the scale effect of sales volume, use the logic of “small profits but quick turnover” to reduce price costs, and fight the protracted battle of “low prices”.

In terms of "good", in addition to simplifying the gameplay, the user experience is optimized in various details. The most typical cases are the revision of Alibaba Taobao Mobile and the restart of the Taobao web version.

Many consumers told Caijing Wuji that it is easier to place orders than the previous fancy mechanism, and they can finally understand the logic of the platform's deduction. Wu Jincao, an analyst at Soochow Securities, believes that the cancellation of pre-sales and earlier sales during this year's 618 will help consumers reduce the time they spend on research and price comparison, which may be conducive to the release of consumer demand.

2. Different class goals: new and old players with their own agendas

However, before the unified consensus of "everything for user experience", the growth goals of new and old players are not the same.

Traditional shelf e-commerce represented by Alibaba and JD.com has a large enough base and a long enough history. They are good at fighting tough battles in the era of rapid growth of e-commerce. Their stage goal for this year's 618 is "both": they must hold on to their traditional positions and tell new stories. Holding on to the "advantage position" means continuing past advantages, such as Taobao's user base and JD.com's service advantages, and tapping into the incremental growth of these existing businesses, which can be seen from Taobao's emphasis on 88vip and JD.com's upgrade of the second delivery service on the eve of 618.

For traditional e-commerce giants, the new story lies in content e-commerce. According to LatePost, JD Retail has set three "must-win battles" internally, namely "content ecology, open ecology, and instant retail", with "content ecology" being placed first.

Compared with the past, this year's 618 has two main actions in terms of content: First, enrich the content supply, take multiple measures to promote content, and use content to attract traffic. For example, in the short drama track that has been popular recently, according to media reports, JD.com and Taobao have launched special short drama entrances, trying to shorten the content realization path through the form of "short drama + e-commerce". Second, accelerate the integration of content and shelves, and improve the link from planting to pulling, among which live broadcasting has become a key accelerator.

Taobao and JD.com have invested a lot in live streaming in the past, but compared with the native content genes of platforms such as Douyin, Kuaishou, Bilibili, and Xiaohongshu, they have always lacked a strong "lever" in the integration of shelves and content. The turning point of this year's 618 is that they have found the "lever" and clarified the main line of content.

In March 2024, after the merger of Taobao Live and Guanguan, Cheng Daofang, general manager of Taobao's content e-commerce, announced that the core KPI of Taobao's content side is - DAC (daily purchasing users), a year-on-year increase of 100%. This indicator represents that the value of Taobao's content e-commerce lies in helping Taobao retain users and helping merchants shorten the transaction path.

This is reflected in Taobao live broadcasts. According to the E-commerce News, during this year's Tmall 618, hundreds of celebrities will join Taobao to broadcast live, and about 80% of them will try live broadcasts for the first time, which is far greater than in previous years in terms of scale and influence. Caijing Wuji observed that Zhang Xiaohui, the "top streamer" who had previously sparked discussion on Xiaohongshu, also recently completed her Taobao live broadcast debut.

JD.com has targeted “people” in differentiating its live streaming rooms, and the anchor point it has found is JD.com Procurement and Sales. The JD.com Procurement and Sales live streaming room, which features “no slot fees and no commissions”, has become the main feature of JD.com’s content ecosystem over the past period of time.

The goal of “latecomers” such as Douyin, Kuaishou, and Pinduoduo is to continue to find incremental growth. The same actions of Douyin and Kuaishou are to continue to explore incremental growth in shelf scenarios. The main actions include interconnecting content and product traffic, optimizing traffic distribution mechanisms, and increasing the guidance and development of search behaviors.

According to the latest data released by Kuaishou, the proportion of pan-shelf GMV in Kuaishou's market increased by 6.2 percentage points in 2023, and the number of daily active buyers of pan-shelf has increased by more than 75% year-on-year. As of the first quarter of this year, Kuaishou's e-commerce pan-shelf GMV accounted for more than 20%. In terms of the operation of shelf scenes, Douyin e-commerce explored earlier. As early as 2022, Douyin e-commerce announced its upgrade to "global interest e-commerce". Pinduoduo's actions continue to strengthen its low-price mentality and accelerate branding.

The main goal of "new players" such as Xiaohongshu, Bilibili, and Video Account is to make a name for themselves and set a benchmark during this year's 618. This year is the second 618 for Xiaohongshu and Bilibili, and the third 618 for Video Account. The main characteristics of new players are early warm-up, large volume, and continuous improvement of e-commerce infrastructure through big promotions.

Xiaohongshu "takes the lead" in 618 and focuses on store broadcasting

Image source: Xiaohongshu APP

Taking Bilibili as an example, Caijing Wuji observed that during this year's 618, Bilibili upgraded its commercial products and business tools, and at the same time strengthened its cooperation with mainstream e-commerce platforms such as Alibaba, JD.com, and Pinduoduo.

An analyst who has been observing the development of B Station's e-commerce for a long time pointed out that this year B Station's ambition is to expand into all categories, starting from the skin care category in 2022 and 3C digital products in 2023. This is also confirmed by the news "Small categories, leveraging big business opportunities at B Station" recently pushed by B Station's official commercial dynamics account (Bilibili Business Dynamics).

In summary, under the consensus of "returning to user experience", based on different growth goals, the anchor points for growth of new and old players are different. For old players, 618 is an important node for focusing on telling new stories, while for new players, it is to continue to cultivate their own internal strength during the big promotion.

3. New highlights of 618: AI e-commerce, new leader takes office

In addition to competition, there are two reasons why the 618 event has such a big impact this year:

First of all, from a technical perspective, this is the first 618 for major e-commerce platforms to implement the concept of "AI e-commerce".

Secondly, this year's 618 is also the first 618 after the organizational changes of major e-commerce platforms. "Financial Wuji" observed that with the accelerated implementation of AI big models, this year's 618, the competition between AI e-commerce in B-end merchants and C-end user experience is still fierce.

On the C-end, AI is penetrating into the user shopping process and optimizing the shopping experience. Giants are investing in products such as AI shopping assistants to assist users in making decisions. On Taobao, after launching “Taobao Ask” in September last year, the first self-developed large model “Taobao Star” was officially unveiled in March this year. In May this year, Taobao announced the launch of “Tmall AI Bargaining Assistant”.

“AI Bargaining Assistant” (left), Taobao Ask (right)

Image source: Taobao APP, Tmall APP

According to "Tech Planet", Douyin e-commerce is also testing the first C-end AI e-commerce service "AI Shopping Assistant". Looking at the long-term trend, in November last year, JD.com also launched the Jingyan AI Assistant beta version. Kuaishou recently stated at the 2024 Gravity Conference that it will introduce AI large model upgrade capabilities this year, including providing consumers with live broadcast room AI shopping guides, AI try-on and seller show comparison services.

On the B-side, AI marketing, AI digital people, AI customer service, etc. are still the battlegrounds for giants. Take JD.com as an example. Starting from the "Purchasing and Sales Dong Ge", at this year's 618 launch conference, JD.com Group CEO Xu Ran demonstrated his AI digital people. During this year's JD.com 618, 18 brand president digital people will appear in JD.com's live broadcast room as "JD.com 618 Welfare Officers".

In AI marketing, such as in the delivery link, Alimama, Bytedance, etc. have previously launched one-stop promotion and traffic products based on AI capabilities, such as Alimama's "full-site promotion" and Bytedance's "global promotion".

From the perspective of "people" on the organizational side, this is also the first 618 for the new coaches.

According to "Caijing Wuji", before 618 this year, all major e-commerce platforms have completed organizational changes, such as the rejuvenation of Taobao, the change of leadership in JD Retail, and recent new players such as Xiaohongshu and Video Account have also completed the latest organizational changes in e-commerce business.

In the past, people believed that the Matthew effect in the e-commerce industry was much greater than that in the physical retail industry, and that "winner takes all" was the only way to win the industry. But today, behind a series of new changes in e-commerce platforms, a common trend is that they are trying every possible way to find growth in this stock market, and the depth and breadth of the platform's involvement in operations are also expanding. "Winner takes all" is no longer the only rule. No one can lie flat, and no one can win everything.

Author: Hickory

WeChat public account: Caijingwuji