Without pre-sales, what’s the point of 618?

This year's 618, Taobao and other platforms have tacitly chosen to cancel the pre-sale system. This is a signal to refocus on user value. Major platforms will continue to focus on low-price mentality and start a round of user competition. 618 and Double 11 will also return to their original value.

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“I heard that Taobao and JD.com have no pre-sales for 618 this year!” When a colleague told Xiao Chen the news, she just said “Oh”.

For her, who is a congenital online shopping saint, the loss she suffered in pre-sale made her choose to turn a blind eye to it early on. "I bought a massager last year. The pre-sale price was 200 yuan cheaper than the regular price. I placed an order on impulse, but found out that it would take another 60 days to receive the goods. I couldn't refund the deposit because it was a 'deposit'."

Xiao Chen told the Jingzhe Research Institute, "There are also cases where the goods are not what they seem. For example, the regular packaging is 12 cartons of milk per box, but the goods I received were 10 cartons. I can't return them because they have already been unpacked. I can only blame myself for not reading them clearly when I placed the order."

As consumers are no longer interested in pre-sales, e-commerce platforms have coincidentally cancelled this promotional mechanism before this year's "618 Big Sale".

Why has pre-sale, which was once beneficial to e-commerce platforms, brands and consumers, now become an "abandoned child"?

01 Why do we need pre-sale?

The pre-sale system is actually not a new way of playing.

Before Tmall introduced it into the e-commerce promotion in 2012, it had always been one of the main sales models in the real estate industry. The main purpose of real estate pre-sales was to increase operating income for real estate development, thereby reducing the developer's capital utilization costs.

Therefore, the pre-sale system is essentially a way to improve operational efficiency. After Tmall introduced this gameplay into e-commerce, it also brought about a win-win situation for all parties:

1. With more "large orders", the brand can clarify the cycle production, avoid inventory backlogs, and attract more "large orders" by making partial concessions;
2. Consumers are attracted by this new way of playing, and they can also buy new products at a lower price. Why not?
3. Tmall not only drives GMV growth in advance through pre-sales, but also binds consumers to its own platform.

In this way, when Double 11 officially starts and consumers pay the final payment, they may purchase another wave of "spot goods" on the platform.

Therefore, it is not difficult to see that the birth of the e-commerce pre-sale system is actually mainly due to three reasons.

First, it reduces the stocking cost for merchants . For brand merchants, pre-sale is the best way to release new products. On the one hand, it can measure the market acceptance of new products, and on the other hand, it can better estimate sales and reduce production costs and inventory stocking risks. For small and medium-sized merchants, predicting sales in advance can better control the company's cash flow and "survive". Especially for clothing, shoes and hats merchants, the pre-sale system can help them better control inventory turnover during the promotion period.

Second, it meets consumers’ demand for new things . For consumers, 618 and Double 11 are not only important nodes for “shopping without limit”, but also a good time to hunt for new things because at this time, new products released by brand merchants “will have discounts”.

The third is to help the platform achieve the goal of GMV growth . Among e-commerce platforms, Taobao and JD.com have always been in a "confrontation": when Taobao created the Double 11 promotion, JD.com also launched 618 and had its own promotion home; when Tmall introduced pre-sales, JD.com also launched super pre-sales and deposit inflation.

Behind this is the competition between the two sides over the GMV figures of the big promotion.

Therefore, the pre-sale system is equivalent to locking up the goods of brand merchants and also locking up the wallets of consumers. Whoever can attract consumers to "place an order" on their platform earlier and faster is equivalent to locking up a portion of the GMV in advance.

In previous years, Taobao and JD.com continued to release sales data during the big promotion period, and one of the important sets of data was the pre-sale sales before June 1 and November 1.

02 Why was pre-sale “abandoned”?

Success or failure depends on pre-sales.

If you do something repeatedly for a long time, problems will definitely arise.

This is particularly evident in the e-commerce sector.

Over the past decade, the drawbacks of the pre-sale system have gradually become apparent in three aspects.

First of all, there are loopholes in the model, and more and more businesses are beginning to "take advantage of it."

On January 31, 2024, the China Consumers Association released an analysis of complaints received by national consumer associations in 2023. The first item clearly stated that the pre-sale model of e-commerce platforms urgently needs to be regulated. At the same time, it pointed out five major problems with the pre-sale model of e-commerce platforms:

First, the price increase of the “final payment” is dishonest;

Second, there is no price guarantee for pre-sale goods;

Third, the promised gifts are not delivered;

Fourth, the goods are not delivered on the promised time;

Fifth, the “lowest price” promotion is not true.

The China Consumers Association not only recommends that consumers carefully read and understand the relevant pre-sale rules of operators, especially various restrictive clauses, when choosing to purchase pre-sale goods, but also emphasizes that e-commerce platforms should strengthen their main responsibilities and clarify the information disclosure obligations, delivery guarantee measures, and return and exchange rules of the platform or merchants under the pre-sale model.

The reason why the China Consumers Association attaches so much importance to this is mainly because consumer complaints about e-commerce pre-sales have been increasing in recent years. In particular, some brand merchants have many "tricks" in pre-sales during big promotions, and some brands have even been directly "named" by the China Consumers Association.

During the 2021 Double 11 period, the China Consumers Association website released the "2021 Double 11 Consumer Rights Protection Public Opinion Analysis Report". The report stated that recently some consumers complained that they thought they could get a bargain by paying a deposit in advance on Double 11. The balance plus the advance payment for a pair of Converse was 569.17 yuan, but it only cost 558.50 yuan without advance payment.

The FILA official flagship store also follows the same strategy as Converse.

On November 4, a consumer said that during the "Double 11" pre-sale period, the store promised in the live broadcast room that a 400 yuan discount for purchases over 2,000 yuan was the biggest discount, and combined with the official platform discount, the total discount was 700 yuan for purchases over 2,000 yuan. After paying the balance at midnight on November 1, the store released 10,000 coupons on November 2 that offered a 900 yuan discount for purchases over 2,000 yuan. No deposit was required, and no one had to rush to buy. Those who paid in advance were treated like leeks.

Secondly, consumers are no longer enthusiastic, and pre-sales have become a hot spot for complaints.

Faced with more and more "tricks" from brand merchants, consumers' enthusiasm for pre-sales is declining year by year.

Some netizens said that those who are not good at math will have a headache. The key is that some pre-sales are not cheap at all.

In addition, some clothing, shoes and hats merchants even set the pre-sale period to 90 days, which almost turned the pre-sale system into a "customized" sales. In previous media reports, many netizens also complained about the long delivery period of the pre-sale system:

Netizen @刘MAX expressed his incomprehension of the "extra-long pre-sale period" set by merchants. "Isn't the original intention of online shopping to be convenient and fast? In the past, you could receive the goods one or two days after placing an order. Now, when you click on a store, you have to pre-sell in full, and basically the goods are shipped 15 days after placing an order."

Netizen @锅巴的巴 said that when buying clothes on online shopping platforms, it is difficult to find a piece you like, but it is pre-sale and you have to wait for more than ten days. "If it looks good, it's fine. But after waiting for more than ten days, the quality is not good, so you have to buy another one again, which wastes all your time."

To this end, Taobao issued an announcement on December 27, 2023, adjusting the upper limit of merchants' delivery time. The upper limit of delivery time for most clothing, bags, and shoes such as daily women's clothing is 15 days.

However, some consumers said that “15 days is too long.”

The third is that the role of the pre-sale system in attracting new customers and diverting traffic is declining.

In the past few years, pre-sale of new products has been one of the important ways for e-commerce platforms to attract new customers and attract traffic. However, in recent years, with the change of public consumption concepts, chasing new things and hunting for novelties have become a thing of the past. New products are no longer the first choice for most consumers, and cost-effectiveness has become a necessary condition for consumption.

In response to such changes in consumer demand, e-commerce platforms are also making active adjustments.

In April 2024, 1688 started to fully enter Taobao and opened three stores on Taobao - 1688 Strictly Selected Taobao Store, 1688 Enterprise Self-Procurement Tmall Store and 1688 Industrial Experts Selected Tmall Store.

In the same month, Jingxi Direct Sales, a discount shopping brand under JD.com, released a Weibo post, officially announcing the launch of a “price competition” campaign.

However, these adjustments also further pushed the "old promotion model" of big sale pre-sales to quickly exit the stage.

03 Abandoning pre-sales, what else does JD.com and Taobao have?

It is understood that this year's JD.com 618 will start at 8 pm on May 31, and will have a direct "good start" with spot sales, and will then enter the special period, climax period and return period in turn.

Taobao and Tmall have also extended the 618 event cycle. The first wave of spot events will be held from May 21 to May 28. The second wave of spot events will be held from 20:00 on May 31 to June 20. The discounts for the two waves are exactly the same: 50 off for purchases over 300 across stores.

Low-price strategies, spot sales, shortened activity cycles, and increased value-added for goods and services will become new means for e-commerce platforms to replace pre-sales during big promotions.

For e-commerce platforms, the low-price strategy will be a "long-term project."

Recently, JD.com released an announcement on its website stating that starting from April 26, buyers of beauty products in JD.com’s “10 Billion Subsidies” and “Beauty Gifts” section will receive additional gifts from big brands on top of the subsidies!

A consumer said that when he bought perfume on JD.com, he received a lot of gifts: "The promotion is that you can choose different gifts if you spend more than 300 or 600 yuan, including facial masks, toner, makeup remover, etc. There are many, basically all in small sizes. But I have never given them away before."

As for Taobao, the 10 billion flash sale festival officially started on April 23. At the same time, the entry of 1688 into Taobao, with its features of brand substitution and direct supply from big-name OEM factories, will also attract more consumers' attention and purchase.

In addition, shortening the promotion cycle and providing ready-made goods can also allow consumers to focus more on current products. After canceling pre-sales, the discounts for big promotions have become relatively simplified, which is also more conducive to consumers purchasing "directly given" discounted products and improving their decision-making ability when shopping.

The added value of goods and services has been an area where major e-commerce companies have been competing in the past two years. When Pinduoduo attracted a large number of users through its "refund only" policy, Taobao and JD.com also announced that they would follow suit.

At the same time, since March last year, JD.com has successively launched projects such as 10 billion subsidies, 9.9 free shipping, and JD.com grocery shopping. In August last year, in addition to lowering the free shipping threshold for self-operated products to 59 yuan, JD.com also announced that its highly sticky user PLUS members can enjoy unlimited free shipping throughout the year.

Taobao has not only launched a special service called "refund if you don't like the food", but on April 22 this year, Taobao Tmall officially announced that from now on, 88VIP members can return goods unlimited times with shipping included.

Of course, the fundamental reason for this series of actions is that the direction of traffic has changed, so the actions to chase traffic must be adjusted in a timely manner.

However, in the pursuit of traffic, more and more people in the industry have discovered that JD.com, Taobao and Pinduoduo are copying each other's homework.

"Pinduoduo's 10 billion subsidy channel has more and more big-name authentic products, which has a bit of JD.com's own-operated flavor." An industry insider observed, "JD.com has been increasing its investment in live broadcasts, from the procurement and sales live broadcast room to Liu Qiangdong's digital person, which has a very Taobao live broadcast feel. Taobao brought in 1688, and the white-label and factory goods were put on the market, which is exactly the same as Pinduoduo's main approach of 'substitutes'."

"However, during the 618 shopping festival, no matter who learns from whom, selling goods and making money are the bottom line," said the industry insider.

For the entire e-commerce industry, consumers have changed from purchasing habits to consumption concepts. The only thing that remains unchanged is the pursuit of price. The birth of the pre-sale system was originally a promotional tool designed by the platform for itself, merchants and consumers when the consumer market was in a rapid growth period. However, when the market lost the momentum of rapid growth, the pre-sale system was obviously no longer applicable.

Some netizens are worried: since pre-sales were cancelled on 618 this year, will they be revived on Double 11? The answer to this question lies in the hearts of consumers themselves. When no one is enthusiastic about pre-sales, what reason do e-commerce platforms have to continue to insist?

To put it more bluntly, the elimination of pre-sales is not a "big retreat" by e-commerce platforms, but a signal to refocus on user value. It is foreseeable that major platforms will continue to focus on low prices and start a round of user competition, and 618 and Double 11 will also return to their original values.