Liu Qiangdong pushes JD.com to become more content-oriented. Can his efforts work wonders?

JD.com has been very anxious in recent years. The actions of Taobao and Pinduoduo have put pressure on JD.com. In the desire for traffic, Liu Qiangdong's AI digital people also sell goods in the live broadcast room, and invested 1 billion cash to attract authors and institutions to settle in. But as the comments pointed out: JD.com's ambition and ability to create content cannot be overestimated.

JD.com is working on content, is it hoping to create miracles this time?

Recently, JD.com has been moving fast and vigorously in building its content ecosystem. Here are a few examples that are indicative of trends:

On the evening of April 16, Liu Qiangdong's AI digital person "Caixiao Dongge" made his first live broadcast to sell goods. JD.com may have been preparing for this for a long time. It took only one day from the official announcement to the start of the live broadcast. It attracted 20 million viewers in less than an hour, and the final transaction volume exceeded 50 million. The sales performance was impressive, but not outstanding.

On April 10, JD.com officially announced that it would invest 1 billion in cash and 1 billion in traffic as rewards to attract more original creators and high-quality content organizations to join; on March 15, JD.com Retail Group announced the three major strategic directions for 2024: content ecology, open ecology and instant retail. Among them, content ecology is a strategy proposed for the first time, which will focus on in-site sections such as live broadcast, short video and pictures and texts.

Before the rise of WeChat and short videos, JD.com's desire for traffic was not as urgent as it is today. However, as live streaming, the main form of content e-commerce, quickly eroded the market share of traditional e-commerce, video and live streaming became standard capabilities of major e-commerce platforms. Liu Qiangdong's emphasis on content ecosystem construction and the intensity of his bets have never been greater. But as the comments pointed out: JD.com's ambition and ability to create content cannot be overestimated.

1. The JD account no longer mentioned

In fact, JD.com’s exploration of content or new traffic does not stop at the moment. From the timeline, JD.com, Taobao and Pinduoduo started their content layout at almost the same time.

In 2015, JD.com and Pinduoduo both gained access to the WeChat Nine-square Grid. Pinduoduo used social fission gameplay such as "cut one knife" to dig a hole in WeChat and frantically collected high-value social traffic. In addition, Pinduoduo used the method of "no middleman to make a profit from the price difference" to directly direct traffic to platform products or single hot products to earn merchants' investment fees; on the other hand, it promoted returns only in a "partial" manner to improve consumers' shopping experience.

The former is reflected in the financial report. In recent quarters, Pinduoduo's platform advertising revenue has soared rapidly. For example, in the fourth quarter of 2023, Pinduoduo's advertising revenue reached 48.7 billion yuan, a year-on-year increase of 57%; the latter has accumulated a large number of loyal consumers in low-tier cities for Pinduoduo to expand its base. After that, Pinduoduo also tried short videos, live streaming, short dramas and other content formats.

Currently, on the Pinduoduo App, "short dramas" are listed alongside "live broadcast", "follow", and "recommendations", together forming "Duoduo Video", which occupies one of its first-level entrances. According to media reports, the DAU of "Duoduo Video" exceeded 150 million in early 2023, and the peak user duration exceeded 40 minutes.

The results are impressive, but the drawbacks are also obvious. Most of Duoduo Video's users are attracted by subsidies. Before they develop a habit of content consumption, their stickiness is extremely low, and they will be lost at any time if they don't get subsidies. Moreover, within the Pinduoduo system, Duoduo Video gives the outside world a sense of separation, and it is difficult to effectively integrate content scenes and shopping scenes. An intuitive feeling is that there is only content, but no ecosystem. However, Pinduoduo still spends a lot of money on content regardless of cost. The purpose is very simple, which is to exhaust all means to obtain traffic, increase the platform's DAU, and earn traffic conversion revenue.

JD.com was once the only e-commerce platform with two major traffic entrances on WeChat and the only one with a first-level entrance on WeChat. This "huge social traffic" helped JD.com almost double the number of platform users. In 2018, Liu Qiangdong revealed that WeChat brought a quarter of JD.com's new users. JD.com also tried to use WeChat's resources to cultivate a new business, Jingxi.

JD.com also paid a high price for this. Data shows that in 2019, 2020 and 2021, the total amount of JD.com's purchases of Tencent's advertising resources and payment processing services was 2.22 billion yuan, 3.26 billion yuan and 5.01 billion yuan respectively, with an annual year-on-year growth rate of about 50%.

WeChat has not fundamentally alleviated JD.com's "traffic anxiety". Behind the losses is JD.com's huge investment in seeking market growth. During this period, in addition to spending money on sinking markets, content layout has become an important means. In 2016, JD.com launched a content platform: JD.com. At that time, it was positioned as JD.com's official first wireless shopping guide information platform. Its operation method is to invite experts with professional backgrounds and senior experience to share information such as products, information, reviews, experiences or experiences to help users make consumption decisions.

Screenshot of early JD.com account

JD Live is also available on JD.com, which claims to "bring together popular anchors and hot brands, present fun entertainment content, and allow users to watch and buy during live broadcasts, allowing users to happily buy while being entertained."

It is worth mentioning that Jingdonghao was created by Xu Lei when he was also in charge of Jingdong's wireless business. Thanks to his long-term responsibility for Jingdong's market public relations, he has established a good cooperative relationship with the media and self-media. As soon as Jingdonghao was launched, self-media showed great support for it.

This early model of promoting products and promoting products through pictures and texts is more like the JD.com version of "Little Red Book" and "What's Worth Buying". With the support of JD.com, self-media, institutions or experts can customize high-quality content according to the characteristics of platform users, create content shopping guides, link to JD.com's product library, open up the shopping path, and realize internal circulation.

Screenshot of Tang Chen's conversation with media friends

When JD.com was just being promoted, Tang Chen had a conversation with a media friend who did digital product reviews. He said that this method was good and he planned to invest more energy in it. At that time, 50 to 60 orders had been generated in a short period of time. Compared with the size of his team of two or three people and the size of his account, this conversion rate was still good. In addition, there were some self-media that did well and had completed hundreds of transactions for digital mobile phones and other products.

In addition, JD.com also strengthened the development of external cooperation channels. In the year when JD.com was launched, JD.com also jointly launched the "Jingtiao Plan" with Toutiao, which was very popular at that time. According to the cooperation mode, the two parties opened the JD.com special sale channel through the first-level entrance of Toutiao, and jointly explored the content traffic monetization method.

The industry and media had different opinions on these trials, with some saying that "the dividend period of self-media platforms has passed, and it is too late for JD.com to enter the market", "JD.com lacks media and content genes, and its future is unpredictable", "there is a huge difference between self-media content publishing and shopping scenarios, and JD.com's account can only provide limited help to the main business". However, there is also a general consensus in the industry: the biggest role of shopping platforms in content and IP is to enhance user stickiness and transition from transactions to consumption, which greatly improves the transaction efficiency of the platform.

Later, JD.com was gradually abandoned and no longer mentioned. JD.com's content layout has been low-key for many years. Until Douyin e-commerce and Kuaishou e-commerce impacted the original e-commerce landscape, JD.com's anxiety was magnified again, and the construction of content ecology was pushed to the forefront again, setting off a new round of climax.

It should be added that the launch of JD.com was largely influenced by the contentization of Taobao. Around 2016, China's Internet industry was still in the stage of building high walls. Alibaba could hardly enjoy the traffic dividend of WeChat. Taobao had to build its own content system and dig deep into traffic entrances.

In this regard, Taobao's innovative consciousness has been released. In 2015, Taobao launched Taobao Toutiao; in May 2016, Taobao Live was officially launched, allowing users to watch and sell through live broadcasts. From the perspective of platform positioning, Taobao Toutiao is a popular, fresh, authoritative and credible experience sharing platform that brings together thousands of institutional media and self-media people.

2. It is difficult for JD.com to create miracles in content development

Judging from JD.com's content layout in recent years, JD.com's content ecosystem construction presents two characteristics: campaign-style and follow-up style. That is, JD.com will attach enough importance to content due to periodic growth anxiety, but after a gust of wind, it will return to silence. For example, JD.com account and JD.com live broadcast. Moreover, the methods and approaches adopted are mostly to cross the river by feeling the way of friendly competitors and copy the homework of mature solutions, such as following Taobao content community exploration and inviting top anchors to settle in.

This is different from Taobao's long-term bet on Taobao live streaming and Pinduoduo's introduction of short videos and short dramas, which show two completely different styles. These two characteristics were also concentratedly reflected in a recent all-staff event within JD.com.

According to media reports, JD.com is launching an internal incentive plan to encourage employees in all positions, including couriers, purchasing and sales, customer service, product managers, etc., to create personal content accounts on the Xiaohongshu platform and participate in the company's content marketing plan by sharing content such as daily work, product experiences, and shopping experiences.

Image courtesy of E-Commerce News

JD employees who participate in the program can get a basic reward of 1,000 Jingdou by simply posting content on Xiaohongshu that matches the theme set by JD. JD has also set up a reward mechanism: there is no upper limit on the reward for high-quality content. Depending on the number of likes and collections the content receives, the reward for a single note can be as high as 1,000 yuan.

This "everyone is a soldier" approach also has a prototype of "going viral". A more recent example is the resignation of Baidu Vice President Qu Jing. One detail in this controversial topic is that before Qu Jing resigned, she proposed to transform Baidu's public relations department into a department for incubating Internet celebrity IPs, and planned to have all employees participate in the production of short videos. A more distant example is Gree's full-staff sales system. According to its 2019 annual report, Gree Electric Appliances required all employees to participate in the company's sales channel development and recommend high-quality products to friends and relatives in 2019, in order to upgrade Gree Electric Appliances' marketing model.

The result of the two cases is that after Qu Jing left, the Baidu PR department's plan to make short videos for all employees was shelved, and it is unknown whether it will be continued in the future; multiple sources show that Gree's all-staff sales system has quietly changed. Starting from April this year, Gree employees' product sales performance is no longer linked to performance. Therefore, the results of JD.com's "all-staff creation movement" are not expected to be very ideal.

We can also see from these "campaign-style and follow-up" content implementation plans that JD.com does not have a consistent content strategy, and gives the outside world the impression that it will only do what is needed at the moment. The reason why Taobao Live can achieve its current scale and still occupy a leading position in live e-commerce despite the competition from Douyin and Kuaishou is inseparable from Taobao's persistence and investment over the years.

This brings us back to a key question: Why are there such big differences between platforms when they are all content platforms? This is because Taobao, Pinduoduo and JD.com are fundamentally different in terms of platform nature and business model.

Tang Chen previously analyzed that JD.com has long been operating in the "self-operated + brand flagship store" business model. For many years, JD.com's self-operated business has accounted for more than 90% of JD.com's retail revenue. For example, according to the 2021 financial report, self-operated revenue accounted for as much as 94%. Since 2023, Liu Qiangdong has begun to implement the POP and self-operated equal rights strategy, vigorously introducing third-party merchants to strengthen the platform ecology.

But this has not fundamentally changed the nature of JD.com as a platform. For example, the controversy over JD.com’s live broadcast of purchases and sales lies in this. The contradiction between the platform’s control and the autonomy of POP merchants is difficult to reconcile. The result of “having both” will only result in losing one while gaining the other.

JD.com is essentially an online retail company. Taobao has stronger platform attributes and is engaged in matchmaking business, with the key being traffic distribution. In Ma Huateng's words, JD.com is a shop owner with its own store, while Alibaba is a landlord who collects rent. In terms of positioning, Pinduoduo and Taobao are most similar. They care about traffic and advertising, not JD.com's transactions.

This determines that the role that content can play on different e-commerce platforms is different. JD.com creates content in the hope of improving transaction efficiency through new traffic, rather than creating a content ecosystem.

From this perspective, Tang Chen agrees with the narrow broadcast point of view: the platform must clearly position itself and know what its needs for content are, so as not to be confused by the content and go astray by over-investment or fail to interact organically with the original e-commerce ecosystem.

JD.com does not need to create a content ecosystem similar to Douyin and Kuaishou that has a rich variety of creators and content types , can even generate various content trends, and has the ability to attract off-site traffic. JD.com should have limits in terms of its willingness and ability to create content.

Judging from the current progress, the official has released a lot of luxurious author data and content data, but it is still unknown how much this data will drive transactions on the platform. In this regard, Tang Chen's suggestion is that JD.com should focus on content creation and continue the low-price strategy. JD.com's content ecology can be built around low prices, and it is important not to take the route of being big and comprehensive.

Currently, Taobao Live is constantly evolving to face the competition. What reason does JD.com, which has just started, have to repeat the pitfalls it has stepped on in the past? JD.com will also face a bigger issue. Content e-commerce such as Douyin e-commerce and Kuaishou e-commerce are taking advantage of content traffic to catch up with shelf e-commerce. When the final forms of major platforms are basically the same, what will be JD.com's core competitiveness?

It is unlikely that JD.com will be able to build a moat by relying on content to answer this huge question. Fortunately, in JD.com's vigorous content-oriented initiatives, we can also see some changes worthy of recognition. For example, in terms of content ecosystem creation, JD.com continues to unlock new skills and try new ways of playing; in terms of live broadcast layout, JD.com has continued to make efforts in the past year to explore a development model with JD.com characteristics. During JD.com's 11.11 in 2023, JD.com's procurement and sales live broadcast became popular.

The most important thing is that JD.com has begun to consciously guide the platform anchors, experts and content with native attributes. These are all beneficial attempts for JD.com and are also the only way to alleviate short-term anxiety. But it is too naive to hope that great efforts can work miracles and solve fundamental problems.

References:

Narrowcast, "Don't overestimate JD.com's ambition and ability to create content"

Author: Tang Chen; Editor: Tang Chen

WeChat public account: Tang Chen (ID: late-news)