Taobao and JD.com do not pre-sell, and 618 enters "minimalist mode"

Taobao and JD.com cancelled the pre-sale mechanism during the 618 Shopping Festival, marking the entry of e-commerce activities into the "minimalist mode". This article deeply explores the consumer psychology, market competition situation and future direction of e-commerce platforms behind this change, and provides unique analysis and insights for readers who are concerned about the dynamics of the e-commerce industry and consumption trends. It is recommended for readers who are interested in e-commerce, marketing and consumer behavior.

At the end of April, Taobao and JD.com announced in succession that they would cancel the pre-sale mechanism for this year's 618 and directly start selling the goods.

In previous years, Taobao and JD.com have received many complaints about pre-sale activities, such as more expensive pre-sale products, higher final payment prices, long delivery times, etc. The original intention was to allow consumers to enjoy more favorable products, but the result was that consumers' shopping experience was seriously affected.

With Taobao and JD.com’s drastic reforms, we are about to usher in the “easiest 618 in history.” Netizens applauded, saying that the pre-sale mechanism would only make them “less willing to buy the more they look at the products.” If the platform had “less tricks and more sincerity,” they would “be able to directly purchase the products they like without worrying about the capital occupation and long waiting time during the pre-sale period.” A small number of netizens also expressed regret, saying that “it would be much cheaper if you could reserve the items you like during the pre-sale period and then pay with a large red envelope at the end.”

In 2010, JD.com held its third 618 event. That year, 618 began to scale up, but the rules of the event that year could be described as "simple and crude": full discounts, member discounts, free shipping, and point rewards almost constituted all the rules of the event. Ten years later, JD.com reached its peak in 2020 618. When making purchases, consumers already had to face very complicated game rules such as pre-sales, store coupons, category coupons, flash sales, gift activities, full discounts , etc.

In the past fifteen or sixteen years, the shopping festival experience of Chinese consumers has been like a "roller coaster": at its peak, JD.com's 618 cumulative order amount in 2020 was 269.2 billion yuan, and Taobao's sales on Double Eleven in 2021 reached 498.2 billion yuan, refreshing the global online single-day sales. Consumers enjoying huge discounts used real money to create these two "artificial carnivals" ; in recent years, although the pre-sale mechanism and increasingly longer activity periods can still ensure that Taobao and JD.com can hand in good report cards, it has been difficult to conceal the decline. The importance of the carnival in the hearts of consumers has taken a sharp turn for the worse, and more and more consumers have expressed that they no longer want to do complicated math problems or wait for the long pre-sale period .

Nowadays, Taobao and JD.com do not have pre-sales. Is it really a relief for merchants and consumers?

1. How to play without pre-sale?

Take the pre-sale rules of JD.com’s 618 in 2023 as an example: the pre-sale activity lasts from May 23 to June 3. Consumers need to pay the product deposit before 19:20 on May 31, and then pay the balance before 23:59:59 on June 3.

Admittedly, the advantage of pre-sale is that the platform will limit the price of pre-sale goods to not be higher than the spot price during the event, and on this basis, there are also deposit reductions and deposit inflation, which can enjoy cheaper prices overall; but what consumers are tired of, in addition to some merchants' illegal operations, is that people are unwilling to spend too much time and energy on buying things, and many consumers who have immediate shopping needs have to cooperate with platform activities and extend their waiting time. Let's take a look at what the 618 rules are like this year after Taobao and JD canceled pre-sales?

For Taobao and Tmall, May 20 and May 31 are the first wave of activities; May 31 and June 20 are the second wave of activities. Taobao has been building momentum since the end of April. The rules of the event have also returned to the "refreshing" mode, with only two basic gameplays: official instant discounts + cross-store discounts . In addition, Tmall has put forward delivery time requirements for merchants, free shipping in China other than Hong Kong, Macao and Taiwan, price protection and other requirements that are more friendly to the consumer experience. For JD.com, starting from 20:00 on May 31, a special period, a climax period and a return period will be set up, and cross-store discounts will be provided. Consumers can stack various coupons such as Dongquan and Jingquan.

Of course, in order to boost sales, while canceling pre-sales, Taobao and JD.com also took other actions to stimulate sales, mainly focusing on two words - low prices . Taobao and Tmall extended the overall activity cycle of 618, and used multiple rounds of small activities to grab consumers' attention before the official event. For example, from April 23 to April 28, they created a "Taobao 10 Billion Seconds Sale Festival" for the first time. Under the official subsidies, consumers said the prices were "really good." From May 6 to May 10, the "Taobao Anniversary Celebration" event was launched. Almost every day, there were various promotional methods such as second kills, buy-one-get-one-free, 50% off, and free orders.

JD.com will focus its major events on the official event period. After the 618 event officially starts on May 31, it will launch a 10 billion subsidy day event; on June 2, June 3, and June 8, it will launch single-day events such as 9.9 Free Shipping Day, Super Live Broadcast Day, and PLUS Member Day. In any case, it is an established fact that Taobao and JD.com, the two "first-generation e-commerce top streamers", have cut pre-sales. The former attracts consumers to place orders with high-frequency and continuous activities; the latter attracts users with concentrated, low prices, and free shipping days combined with logistics advantages. Taobao and JD.com stand in the middle to improve consumers' shopping experience with their left hand and provide cost-effective products with their right hand, seeking the best solution.

2. De-node shopping platform

Is this an inevitable trend? Looking back, why did Double Eleven and 618 become shopping nodes that attracted the whole nation?

In the first few years, when online channels were just born, consumers were exposed to a richer selection of goods on online platforms, and cheaper prices for the same selection. In the years when the big promotions began to take shape, consumers gradually established trust in Taobao and JD.com and their purchasing stickiness, and the big promotions did provide benefits to consumers. In addition, with little competition, "Taobao Double Eleven" and "JD.com 618" became two options that consumers had to choose between.

Another reason is that in the 2010s, Chinese residents welcomed a wave of consumption upgrades, and the massive stimulation of Internet product marketing information also deepened this consumerism to a certain extent. A survey by the French Ipsos Research Company in 2013 pointed out that among 20 countries, "Chinese people's enthusiasm for material things ranks first." A clear signal is the endless emergence of spending money: people who go crazy on Double Eleven Day are called "consumption bungee jumping"; people who don't spend much on Double Eleven are collectively called "Double Eleven Xiao Wu"; people who rush to pay the final payment in the first second of Double Eleven or 618 have a common slogan "Go for the final payment people"...

But as the saying goes, "Everything goes up, then down." Chinese consumers seem to have calmed down overnight. JD.com and Taobao are no longer the "only two choices" for shopping. Double 11 and 618 have lost their appeal to them. Consumerism has gradually been replaced by popular terms such as "minimalism" and "low material desire life." The "Double 11" Consumer Behavior Research Report of 21st Century Business Herald shows that consumers are becoming more rational. During Double 11 last year, 59.03% of the respondents said that "there was no budget, so they ordered some must-buy items, and other optional items were left to chance."

In the Douban "Minimalist Life" group, the topic of "How do you practice minimalist consumerism?" has attracted more than 18,000 discussions.

This actually reflects the current consumption situation of some Chinese people. The new generation of Chinese consumers have emerged from the hail of product advertisements and realized that their core demand is reasonably priced products ; the pre-sale mechanism is obviously contrary to the core needs of consumers, and it is easy for consumers to fall into the trap of "collecting for the sake of collecting, buying for the sake of buying", requiring them to spend a lot of extra time and energy on the act of shopping. In this way, the end of the pre-sale mechanism is an inevitable result driven by the change in consumer shopping psychology.

Let's look at the supply side. In the past, consumers still had a sense of novelty about 618 and Double Eleven. Last year, Taobao had an average of 5 or 6 promotional festivals every month, covering all major and minor tracks. 200-20, 300-50 became a year-round norm. Needless to say, the era of Taobao and JD.com as the "two dominant forces" has long ended. Pinduoduo's 10 billion subsidies, Douyin's live shopping and short video shopping, and Xiaohongshu's grass-planting economy are all eating into consumers' wallets in daily life. For example, this year's 618, major platforms successively announced their 618 strategies. Kuaishou's shopping carnival lasted 42 days, Douyin invested 10 billion traffic, and Xiaohongshu provided stores with "three upgrades and 100 million subsidies"...

After all platforms are creating their own big promotion carnivals, "there is a road in the world, but when too many people walk on it, it disappears." Taobao and JD.com's de-node or transformation of traditional shopping nodes has become an inevitable thing. And canceling pre-sales is just the beginning.

3. Two Key Factors in E-commerce Competition: Experience and Price

After 20 years of great promotions, e-commerce platforms are now staggering towards a crossroads. At this crossroads, canceling pre-sales is just the tip of the iceberg of changes made by Taobao and JD.com.

"Consumer experience" is one of the key areas of focus for the Taobao platform.

For example, Taobao recently announced the biggest overhaul of Taobao.com in the past seven years. The person in charge of the Taobao website said, "Upgrading Taobao.com is part of the overall experience optimization of Taobao." Among them, Taobao re-launched the early forum "Taojianghu", which is probably intended to enrich consumers' communication and interaction, and even improve the weight of content.

The most direct experience for consumers is that Taobao 88VIP has upgraded its rights and interests: "88VIP unlimited returns with free shipping". Before this, 88VIP could only enjoy a few 5-yuan return shipping discount coupons each month. From May 7th to 10th, 88 members will have the opportunity to enjoy offline experience activities of international brands such as Tiffany and Vacheron Constantin. Of course, while Taobao provides consumers with more interesting services, some inherent problems have not been properly resolved. For example, some netizens think that Taobao's after-sales service is not good.

On the other hand, in order to attract members, JD Plus launched the "Enjoy Now Pay Later" program last year, which means enjoying the low membership price first and then paying the membership fee after one year. You pay as much as you save, and the membership fee is capped at 149. The moves of the two major platforms show that in the future, as the competitiveness of various e-commerce platforms becomes similar, consumers will have more and more choices. Retaining consumers through better "consumer experience" and membership rights, and cultivating consumers' shopping habits and loyalty will be one of the competitive focuses of major domestic e-commerce platforms in the future.

Another change is "low price". Taobao's 10th anniversary free-order event held from May 6 to May 10 attracted hundreds of millions of people to follow and participate because the gameplay was simple and successful answers could get a chance to get a free order of up to 9,999 yuan. JD.com canceled the pre-sale on Double 11 last year and started a low-price strategy, and simultaneously carried out the "10 billion subsidies" and "9.9 Free Shipping Day" activities. Compared with last year's 618, sales performance in all aspects has improved significantly during the Double 11 period. As mentioned earlier, Taobao's "10 billion flash sale festival" was also launched for the first time last month.

IV. Conclusion

Referring to Amazon, the core advantages of being able to grow into an e-commerce brand that transcends time cycles are:

1. Customer service: continuously optimizing service capabilities for Prime members, including return and exchange policies, after-sales protection, etc.
2. Powerful Amazon logistics and distribution system;
3. With the ability to innovate and keep pace with the times, Amazon is also actively developing short videos under the impact of short video platforms such as TikTok, and has been continuously optimizing its AI technology capabilities this year.

These cores are also indispensable for Taobao, JD.com and all Chinese e-commerce platforms in the long-term competition in the future.

Author: Claire; Source public account: Morketing (ID: 1083455)