E-commerce will resume in 2024: New and old players leverage AI and live streaming to compete

Competition among e-commerce platforms will remain fierce in 2024, and the use of AI technology will make the competition even more intense. In this article, let's take a look at the development of e-commerce in 2024.

After going through the storm of 2023, at the beginning of 2024, e-commerce platforms ushered in the era of drastic changes in the AI ​​era.

In the past year, traditional e-commerce giants such as Taobao and JD.com adjusted their generals and promoted structural changes; and were involved in Pinduoduo's "low-price" strategy; Douyin e-commerce caught up and actively entered the local market to face Meituan; Baidu e-commerce relied on its technological advantages to launch digital live broadcasts to help merchants; Pinduoduo rose in overseas markets at the end of the year, surpassed in market value, and entered the Hurun Global Top 100; new players such as Xiaohongshu and Bilibili have also set clearer strategies to attack the e-commerce cake.

At the beginning of 2024, Taobao announced the establishment of a live streaming e-commerce company that is not for profit and aims to cultivate anchors, taking a key step towards cultivating its own anchors; JD.com announced the upgrade of its services, Pinduoduo began recruiting, and Ma Huateng announced at the annual meeting that the focus of WeChat Video Account this year will be live streaming e-commerce; Baidu restarted e-commerce, and Bilibili announced that one of its key profit goals is e-commerce.

E-commerce has become an unavoidable word when it comes to monetization of Internet platforms, and live streaming has become the most familiar tool.

Li Xinying, Secretary General of the Hangzhou Live E-commerce Association, told the Times Weekly reporter: "In 2024, the development of the live e-commerce industry will show two major trends, namely the normalization of live streaming and innovative applications. E-commerce live streaming combines live streaming and e-commerce, meets the consumption needs of users in the Internet era, and has good marketing effects. Live streaming e-commerce will become a standard feature of all companies. With the continuous maturity of artificial intelligence technology, live streaming e-commerce can realize functions such as voice recognition, image recognition, and natural language processing through the combination of AI technology, thereby improving the quality and interactivity of live streaming content."

As live streaming becomes standard and AI matures, what changes will the e-commerce landscape see in 2024?

1. The battle between the traditional three giants

Once upon a time, Taobao and JD.com were among the top giants in the e-commerce industry. In 2023, both companies experienced the dual shocks of organizational structure changes and reshuffles of executive teams.

In November 2023, Pinduoduo's market value once surpassed Alibaba and briefly took the throne, while JD.com's market value retreated to third place. Faced with the slowdown in growth and the catch-up of latecomers, Taobao and JD.com once joined Pinduoduo's "low price" strategy in 2023, and further competed in service in 2024.

During the 2023 Double 11 shopping festival, Alibaba launched the "Double 11 Everyday Low Prices" and "One-Piece Direct Discount" discounts. This may be the most direct response to Jack Ma's future strategy of "returning to users" in "returning to Taobao, returning to users, and returning to the Internet."

In 2024, Alibaba's approach will further correspond to its return to Taobao and the Internet.

Just after the 2024 Spring Festival, Taobao opened a live broadcast e-commerce company to train live broadcasters to bring goods to its own stores, and laid out a cross-border e-commerce industry belt in Guangdong. On the one hand, it opened up channels through live broadcast, a popular way of bringing goods on the Internet, and on the other hand, it strengthened Taobao's moat from the supply side.

On February 27, Alibaba announced at the "Guangdong Province Cross-border E-commerce + Industrial Belt" series of activities that it would support the development of Shantou's industry and launch the "Taobao Live Streaming Selection" Shantou Station to provide support for live streaming e-commerce. A few days ago, Taobao also announced the establishment of a live streaming e-commerce company to provide "nanny-style" full hosting and operation services for celebrities, KOLs, and MCN organizations who are interested in starting a live stream on Taobao. Yuan Ge, the company's head, introduced that the hosting model is equivalent to a new anchor incubation camp. The entire project is not for profit, but for the prosperity of the ecosystem. "

Compared with Douyin and Kuaishou, which started as e-commerce platforms based on content, Taobao's attitude towards live streaming has always been lukewarm. But after the structural adjustment in 2023, the new leader of Taobao began to adjust its direction.

In December 2023, Taotian Group, which dominates the e-commerce business, completed its independence. Dai Shan, one of Alibaba's original "Eighteen Arhats", resigned as CEO of Taotian Group and handed over power to Wu Yongming.

At this point, Wu Yongming concurrently serves as the CEO of Alibaba Group, Taotian Group and Alibaba Cloud Group. 48 hours after taking over as CEO of Taotian Group, Wu Yongming immediately arranged for six young managers to be responsible for the key business of Taotian Group and report directly to him.

Wu Yongming also seized the key point of Jack Ma's internal letter that "the era of AI e-commerce has just begun, and it is an opportunity and challenge for everyone", and started a new round of innovation in e-commerce business according to the idea of ​​"AI + e-commerce". According to media reports such as The Paper and Wandian, Alibaba International Business Group has established an AI Business team in the field of AI, and related technologies have been applied to AliExpress and other businesses within Alibaba International.

Not only Taobao, but JD.com's strategy is also following Pinduoduo's lead, focusing on "low prices and improved services". At the beginning of 2023, JD.com lowered the price threshold of goods and launched "10 billion subsidies" and "9.9 free shipping channels". This strategy will be implemented throughout the year.

Although Liu Qiangdong stepped down as CEO of JD.com in 2022, his sense of control as founder has been strengthened over the past year. When it comes to personnel management, he split the power of senior executives while offering "high salaries" to front-line employees.

JD.com previously built a moat through logistics, but under the impact of Pinduoduo, JD.com had to re-examine itself. Price may not be JD.com's advantage, but JD.com can increase its service. In February 2024, JD.com further launched a "refund only" strategy to improve user experience.

For Pinduoduo, the growth in market value in 2023 has verified the results of the "low-price strategy" and "10 billion subsidies", and Pinduoduo has snatched more cake from Taobao and JD.com.

Unlike Douyin, which started out by selling goods through content, Pinduoduo started its live streaming business relatively late. In 2023, Pinduoduo first launched the Million Anchor Challenge, and then added a live streaming column at the bottom of the APP homepage to promote live streaming sales.

A few days ago, Pinduoduo began to further develop its offline group buying business, and its subsidiary Duoduo Maicai opened recruitment for hundreds of positions in Guangdong warehousing manpower, investment promotion and operation, etc. According to Pinduoduo's data, for the last mile of community group buying, Duoduo Maicai's pick-up points have covered 70% of administrative villages in China.

As of February 27, Pinduoduo's market value has fallen back, and it is still far from Alibaba's market value, but it is more than 4 times that of JD.com. Now, Taobao is impacting live streaming, JD.com is further competing in services, and Pinduoduo is expanding offline. The offensive and defensive battles among the three companies are imminent.

2. New players use all kinds of tricks to compete for the cake

In 2024, Alibaba and JD.com will not only have to face strong rivals like Pinduoduo, but also many newcomers who are eyeing them. Douyin officially established its e-commerce department in 2020, and after three years of formal layout, it has also won a place in the market.

According to Douyin data, from July 2022 to June 2023, the number of users placing orders on Douyin's e-commerce global shopping app increased by 43% year-on-year, GMV increased by 80% year-on-year, and the number of merchants increased by 111% year-on-year. This year, Douyin also announced an investment of 500 million yuan to promote cooperation between merchants and influencers.

In 2023, Douyin will accelerate the conversion of traffic between the content field and the shelf field. On the one hand, it will enter the local life market previously occupied by Meituan, and on the other hand, it will increase its investment in picture and text sales to compete with Xiaohongshu.

On the eve of the 2024 Spring Festival, Douyin CEO Zhang Nan announced his resignation and turned to seek breakthroughs in AI-assisted creation related to ByteDance's product Jianying. Previously, Douyin Group not only established a new AI department Flow, but also launched a tool to divert AI traffic to stores to empower e-commerce.

In addition to AI empowerment, live streaming has become a popular trend on e-commerce platforms.

In Robin Li's business plan for 2024, e-commerce business was proposed for the first time to achieve leapfrog development and was ranked at the forefront. Unlike other companies, Baidu's e-commerce business started with "AI power". At the "AI Reconstructs E-commerce" Ecological Conference on January 10 this year, Baidu leveraged AI digital human live broadcast and Wenxin big model capabilities to enter the e-commerce market, emphasizing "AI reshaping e-commerce."

Li Xinying, secretary general of the Hangzhou Live E-commerce Association, told the Times Weekly reporter: "The current hot virtual digital human live broadcast has broken the traditional live broadcast model with its high-quality, low-cost and more interactive live broadcast format, injecting new vitality and opportunities into the live broadcast industry."

In addition, more emerging players are waiting for an opportunity to share the e-commerce pie. Xiaohongshu will close its two self-operated e-commerce platforms, "Little Oasis" and "Full Service", in 2023, and devote itself to the "buyer e-commerce" model. Celebrity Dong Jie's "slow live broadcast" on Xiaohongshu not only made herself popular again, but also has the tendency to promote buyer e-commerce; Bilibili has set advertising and e-commerce as the focus of its 2024 profit target; at Tencent's annual meeting in January 2024, Ma Huateng identified live e-commerce as the direction that WeChat Video Account will focus on this year.

Author: He Shanshan

WeChat public account: Time Weekly