Is the smoke of war coming for 618? Taobao and JD.com are overloading their military training

There is still more than a month to go before the 618 mid-year sale, and the e-commerce field is already full of smoke, especially Taobao’s frequent new regulations and activities.

Starting at 8pm on April 23, Taobao's 10 billion flash sale festival will last for six days. Among them, the subsidy for product combinations of well-known brands such as Apple and Dyson is about 30% to 70% of the original price; the prices of many subsidized items have also hit new lows. The day before the official announcement of the 10 billion flash sale festival, Taobao 88VIP launched an unlimited return and shipping fee-free service, which is the largest rights upgrade in recent times.

On April 25, JD.com announced an additional 10 billion yuan subsidy and launched a beauty gift game. Users can freely choose gifts from the gift pool when they purchase a certain amount of self-operated beauty orders. According to a report by Titanium Media on April 27, during the 618 period in 2024, Taobao and JD.com will cancel the pre-sale mechanism. Taobao's investment documents show that Taobao's 618 marketing rhythm will be more advanced, and the activities from late April to early May will be the "front station" to accumulate water and build momentum. In other words, combined with multiple recent daily promotional activities, this year's 618 full cycle can last nearly two months.

Under the high pressure of stagnant growth, Alibaba has undergone some "macro changes" in the past year to reshape its corporate values, including major adjustments to its organizational structure and slogans such as "return to Taobao" and "users first" to indicate the direction of the company. In the coming time, we will see more specific and clear tactical actions. 618, as a key promotion node, is the first battle for the "new Alibaba" to prove itself.

At the same time, New Standpoint also observed some signs of the beginning of a war from the perspective of merchants. As a "medium" of low prices, the platform hopes that merchants will advance and retreat with it, but under the guidance of returning to users, frequent promotional activities and rule adjustments that favor consumers inevitably make merchants feel pressured.

Taobao is not the only one to have “awakened”. JD.com also followed suit with its 618 promotion. E-commerce platforms are catching up with each other and copying each other’s work. Consumers are no longer superstitious about slogans and concepts. 01. Saturation attack, jointly “training” with merchants for 618

According to the statistics of Yuehu iApp during the Double 11 promotion last year, the user overlap rate of Taobao, JD.com and Pinduoduo was as high as over 50%, among which Taobao and the other two platforms had the highest user overlap. In the same position competition, the most taboo is the situation of "others have what I don't have", so shelf e-commerce companies have also begun to copy their opponent's strategies in terms of granularity. The 10 billion subsidy is a conspiracy of low prices, and Taobao's offensive rhythm starts with the key slogan of supplementing.

This is not the first time that Taobao has launched a 10 billion subsidy sign, but it can still be seen that the activity is quite strong. The main products participating in this activity are mostly low-frequency standard products + well-known brands. These categories easily give people an intuitive perception of low prices and are frequent visitors to subsidy activities. Another person in charge of Taobao's 10 billion subsidy project said that in addition to subsidies, sports and outdoor, clothing, beauty, home life, mobile phone 3C, food and fresh food and other industries have also launched 40 yuan off or 13% off for purchases over 300 yuan. According to LatePost, Alibaba bears the subsidy price difference for some products. However, this subsidy is limited, and the normal discount will be restored after it is sold out.

Looking back at the original intention of Pinduoduo to provide 10 billion yuan in subsidies, it was to get rid of the label of white-label factory and explore brand supply. According to Leifeng.com’s recent exclusive report, Pinduoduo’s main site branding is developing rapidly and is working hard to introduce more big brands. In the situation where the low-end market has been occupied by Pinduoduo, Taobao cannot give up the brand’s low-price mentality, so the re-introduction of 100 yuan subsidy is a necessary defensive attack. What’s more, JD.com, which is also promoting the 100 yuan subsidy activity, has long been alert.

At the same time, the essence of "100% subsidy/low price" is to compete with the supply chain. This six-day event can also be regarded as a joint merchant pre-promotion rehearsal. To become a supplier of subsidized goods, merchants need to evaluate their own production lines and price systems. After all, as an important marketing window, the platform review and random inspection will be stricter. On the other hand, merchants must be good at seizing the traffic dividends brought by low-price promotions and precipitating the exposure brought by volume into brand influence. Launching a limited-time 100% subsidy at such a time point before the mid-year promotion can also train for long-term low-price marketing.

(Picture from the Internet)

However, frequent holiday promotions will inevitably put pressure on merchants. According to rough statistics, Taobao has arranged three major promotional activities since mid-April, namely the Happy Living Season, the 10 Billion Flash Sale Festival, and the 510 Anniversary Celebration. At the same time, "New Standpoint" learned from merchants that this year's Taobao 618 schedule may be advanced and the time will be extended. The first wave of activities started on May 21, and the second wave lasted from May 31 to June 20, spanning 20 days.

You should know that the 618 activity cycle runs from June to May, including the pre-sale period. Last year, Taobao started as early as May 26. This year, it is very likely that the start time will be advanced again without pre-sales. The super-long promotion is a protracted battle that tests the business capabilities of merchants.

After the era of free traffic has passed, missing out on event traffic means missing out on opportunities, but events also mean concessions and a possible increase in return rates. Similarly, canceling pre-sales has made it easier for consumers, but it has put higher demands on merchants' ability to control demand and supply, otherwise there may be inventory risks.

This strategy of comparing with competitors and putting pressure on merchants is also reflected in the service level. In December last year, Taobao added relevant regulations on "refund only", but the specific operation level is somewhat different from Pinduoduo. Pinduoduo directly refunds orders below 20 yuan, and considers more indicators for refunds of higher amounts; Taobao advocates that the platform makes a comprehensive judgment based on product quality information and consumer integrity data, and does not restrict merchants from filing complaints.

The latest progress in after-sales service is that in March this year, Taobao officially released a public notice on the addition of the "Taobao.com "Refund if You Don't Like to Eat" Service Specifications". On April 22, the official expanded the applicable items of this special service, adding some products under the first-level category of "Snacks/Nuts/Specialties". The return of opened and eaten goods can also better reflect Taobao's determination to "favor" users infinitely than the previous "refund only" new regulations. In this regard alone, it has finally learned from the essence of some competitors' business philosophy. 02. Taobao "goes all in" by moving out of its assets

After a thorough organizational change, Wu Yongming has become the CEO of three groups: Alibaba, Taotian, and Cloud Intelligence. In the past year, he has made several "tone-setting" speeches for the group and its pillar businesses.

A report by LatePost pointed out that Wu Yongming's management style is simple and direct. An Alibaba insider commented that he "is very clear about what he wants and what he doesn't want." Specifically, he emphasizes making decisions based on data. Data such as the number of orders, transaction volume, product reviews, and customer net recommendation scores must be compared with the market and competitors.

Taobao under his leadership is showing unprecedented radicalism, such as making the most of existing resources. In the past 20 years of development, Taobao has indeed accumulated a lot of "family assets", and now these business characteristics are being brought up again and tried to be shaped into "competitiveness that others do not have".

The first obvious action is "recall", that is, the return of resources. Since the beginning of the year, Taote's merchants and products have been moved back to Taobao, and the products have retained various data labels such as previous sales and reviews. 1688 has started to enter Taobao in an all-round way, opening stores to provide cheap goods. "New Standpoint" pointed out in a previous article that 1688 has a low-price mentality and has played a key role in expanding and diversifying Taobao's supply chain, reducing costs, and optimizing quality. The return of resources from Taote and 1688 allows them to polish the low-price supply chain without losing the characteristic of rich supply.

At the end of March, Alibaba announced the withdrawal of Cainiao's IPO application and emphasized its synergy value with its main e-commerce business. As a result, the two key drivers of e-commerce development, supply chain and logistics-related businesses, will be driven by the main website. Such a high-intensity business focus has a sense of risking everything.

As for how to mobilize all business features, for example, 88 VIP launched in 2018 is now also arranged as part of the big promotion offensive layout.

This is a highly praised member value-added service design. First, 88VIP is based on the "Naughty Value" - a series of algorithms to measure the comprehensive value of users in the Alibaba ecosystem; secondly, the member benefits it provides cover a variety of high-frequency life and entertainment scenarios for users, plus appropriate pricing, which is very attractive to consumers. The marketing logic behind it is simple but effective, and highly active/net-worth users get rich discounts and benefits.

On the eve of the Double 11 promotion last year, Taobao upgraded 88VIP, including the original benefits and prices remained unchanged, renamed "Life Card", added "Shopping Card" and "All-purpose Card", and featured the "New Three Guarantees" benefits of e-commerce shopping, including daily red envelopes, return shipping package, and after-sales guarantee package. On April 22 this year, the benefit of unlimited "return shipping included" was added.

Both changes were made to make member benefits more closely tied to the platform's promotional direction. The continuous increase in discounts and after-sales related benefits, plus the official announcement of the reforms before the big promotion, have made it clear that Taobao wants this brand to participate more deeply in the holiday promotion and stimulate user consumption, aiming at 618.

Another aspect that needs attention is the content construction. As the first platform to break the "super-leading" concept of live e-commerce, Taobao is also unwilling to lag behind. In March this year, Taobao officially established a live e-commerce company to provide "nanny-style" full-hosting operation services for the launch of live broadcasts. The platform personally came out to act as a referee to show the outside world how much it values ​​content and its determination to revive. 03. Close combat, cats and dogs copy each other's homework

It's not just Taobao that's following its rivals. It's become the norm for e-commerce companies to learn from each other, and everyone is racing against time.

In addition to the "refund only" new rules introduced almost simultaneously last year and the cancellation of pre-sales for big promotions this year, two days after Taobao officially announced the 10 billion flash sale festival, JD.com immediately followed suit, saying that its 10 billion subsidies would seek breakthroughs in the beauty category, adding 200 million yuan in gifts, which was quite close to the competition. Big beauty brands have a strict price control system, and platform promotions are mostly based on additional gifts. In the past two years, the frequent big promotions on various platforms have made consumers aesthetically fatigued, and changing patterns and innovating gameplay have become the key to differentiation.

Taobao is also focusing on content. It is the first to become a live broadcast e-commerce company. JD.com has a new plan to promote the construction of its content ecosystem. On April 16, Liu Qiangdong appeared in the live broadcast room of JD.com's home appliance and home furnishing procurement and sales and JD.com Supermarket in the image of "AI digital person of procurement and sales Dongge". The number of views of the two live broadcast rooms broke the peak of the number of views of JD.com's home appliance and home furnishing procurement and sales live broadcast room, and the cumulative transaction volume of the live broadcast exceeded 50 million yuan.

Interestingly, not only in the main e-commerce battlefield, after Alibaba Cloud announced a full price cut for cloud products at the end of February, JD Cloud launched the "Spring Breeze Plan" at the end of March, setting up a "1 billion price comparison fund", promising long-term price comparison and compensation if the price is too high, and vigorously promoting its cost-effectiveness. Although JD is not the most aggressive one in this round of competition, it keeps pace with its competitors and is unwilling to fall behind.

Pinduoduo, which has been borrowed by many parties, is also making up for its content construction. Taking short dramas, a new traffic siphon, as an example, Chen Fangcai, general manager of Taobao's content marketing, said at the "2024 New List Short Drama Conference" that Taobao short dramas will continue to expand their business. On the other hand, Pinduoduo's short dramas have been quietly making money in its own app.

The current mainstream short drama monetization model is stand-alone payment and brand content customization, but Pinduoduo has come up with its tried-and-true trick: free. In the current Pinduoduo short drama column, almost all episodes are free, and the goods carried are not highly relevant to the content. Users will see the links to the products mounted in the site during the intervals between watching the dramas, and can directly click and complete the conversion within the site. It seems that Pinduoduo wants to replicate its strategy of relying on affordable prices to take the initiative and seize the opportunity of short dramas. At the same time, newcomers such as Douyin and Kuaishou that cannot be underestimated are also eyeing short dramas.

This series of "open and covert struggles" will intensify with the arrival of 618. Referring to the battle situation of the previous 618, QuestMoblie pointed out in the "2023 618 Insight Report" that the value of online retail channels remains, and big promotions are still the key nodes to drive performance growth and occupy the minds of users.

One of the key trends is that increasing the number of times and duration of user use has surpassed the competition for exclusive users. This echoes our judgment that under the saturated competition in e-commerce, it is extremely difficult to win with a surprising concept and gain a foothold. Execution will become the focus of the next stage. When everyone holds a deck of cards that includes low prices, supply chains, content, logistics, and AI, merchants and consumers will also compare their pros and cons in more detail.

When different methodologies lead to the same conclusion, only details can determine success or failure. *The title image and the accompanying images in the article are from the Internet.