Five major companies share Spring Festival traffic: Who loses money? Who wins?

As a traffic hotspot, the Spring Festival is a must-win for all the giants every year. However, this time, people no longer just choose to spend money in the traditional way, but some people start to compete with resources and capabilities - such as Meituan, Ele.me, and Douyin. The Internet circle has not been so lively for a long time.

The Spring Festival has always been a super battlefield for Internet companies. The festive atmosphere of the 2024 Spring Festival of the Year of the Dragon has already revealed the smell of gunpowder among major Internet companies.

If we zoom out, we can see two battlefields at the edge of a sword:

The first battlefield is also the biggest battlefield of the Year of the Dragon Spring Festival - the Spring Festival Gala. This year, the representatives of the money-spending faction are JD.com and Xiaohongshu.

JD.com, as an old face returning to the Spring Festival Gala "stage", paid a lot of money to obtain the exclusive interactive rights of the Spring Festival Gala. Xiaohongshu, a "newcomer" of the Spring Festival Gala, is also a partner of CCTV Spring Festival Gala, participating in the Spring Festival Gala interaction in the form of notes and live broadcast sharing. In addition to direct cooperation, Alipay, sent by Alibaba, is not to be outdone. It upgraded the "Collect Five Blessings" activity, which has been in its eighth year, to the "Five Blessings Festival", trying to attract a wave of Spring Festival traffic and do big things with little money.

Another traffic war during the Spring Festival took place in the local life service market. In the past, it was Meituan and Ele.me, and this year, Douyin has joined the fray. The three platforms of Meituan, Ele.me and Douyin are representatives of competing for resources and capabilities , and all claim to subsidize merchants and give profits to users.

Big brother Meituan chose to fight in three lines at the same time: in-store, home delivery and in-store integrated business; Alibaba let Ele.me take the lead and prepare for battle in the home delivery and store delivery lines, cooperating with Fliggy and AutoNavi. Douyin avoided the home delivery scene with higher barriers and focused its firepower on in-store delivery.

The Internet circle hasn’t been this lively for a long time.

Compared with the collective absence of major Internet companies from the Spring Festival Gala investment promotion in 2023, now, companies that are deeply anxious about traffic have restarted the battle for Spring Festival traffic.

In addition to Alibaba, Meituan, JD.com, Douyin, and Xiaohongshu, there will certainly be more Internet giants that will take action and not miss any opportunity to increase users and improve activity. After all, at a time when attention is constantly being diverted, the Spring Festival is still the largest traffic entrance of the year. Moreover, this marketing field is changing rapidly. It is no longer a battlefield where book investment and actual returns are equal. Those who spend the most money and seem to be the most aggressive may not necessarily have the greatest benefits.

In the end, whose account book for the Spring Festival is more cost-effective? Who will be the top internet star in the Spring Festival of 2024? A big drama is unfolding.

1. JD.com, Xiaohongshu and Alipay are all competing to spend money

The biggest battlefield for Spring Festival marketing in previous years is the Spring Festival Gala, and this year is no exception. This Spring Festival Gala marketing war is a "share" of traffic between JD.com and Xiaohongshu.

The first to release the news was Xiaohongshu. On January 19, Xiaohongshu announced that it had reached a cooperation with CCTV Spring Festival Gala and became a note-taking and live broadcast sharing platform for the Spring Festival Gala.

Wang He, an Internet operator, analyzed that after so many years of sponsoring the Spring Festival Gala, this cooperation mode of Xiaohongshu is the first time. According to the official statement, Xiaohongshu wants to do a companion live broadcast. On New Year's Eve, a live broadcast room will be set up next to the Spring Festival Gala studio to broadcast behind-the-scenes stories and interact with celebrities in real time. Users can post notes and buy the same items as the Spring Festival Gala stars in the live broadcast room.

In Wang He's opinion, Xiaohongshu chose a cost-effective way to participate in the Spring Festival Gala for the first time. The gameplay of notes + live broadcast is in line with the characteristics of the platform, but it also has a strong commercial flavor. Xiaohongshu wants to increase user activity and enrich the content ecology through note exposure, especially to promote the generalization and sinking of the user pool ; on the other hand, it allows users to "buy while watching", convert users into consumers, and leverage the e-commerce transactions of the platform.

Based on the current situation of Xiaohongshu, the plan of focusing on both content and e-commerce is really urgent. Wang He told "Dingjiao" that Xiaohongshu, which is frequently rumored to be going public, urgently needs to increase the number of new users and retain them, speed up commercialization and monetization, and increase its valuation.

According to media reports, the number of daily active users on the Xiaohongshu platform exceeded 100 million at the beginning of 2023. The original plan was to increase the number of daily active users on the platform to 140 million by the end of 2023, but the goal was not achieved. However, Xiaohongshu did not respond.

Xiaohongshu has made careful calculations, but the actual effect remains unknown. The reason is that in addition to the lack of previous reference, JD.com is the biggest variable.

Five days after Xiaohongshu announced its cooperation with the Spring Festival Gala, JD.com officially announced that it had become the exclusive interactive cooperation platform for the 2024 CCTV Spring Festival Gala. Discussions about it instantly overshadowed Xiaohongshu, not only because it spent a huge sum of money to obtain the exclusive interactive rights, but also because its gameplay was quite eye-catching.

Image source: Screenshots of JD.com, Xiaohongshu, and Alipay APP

JD.com has launched the slogan "One Cent" and will set up the Spring Festival Gala main venue on its APP to give away 100 million physical goods, including large items such as cars. The prizes will be given out in the form of a lucky draw interaction, and users only need to pay one cent. Compared with the traditional way of directly dividing up cash red envelopes in the previous Spring Festival Gala sponsorship, JD.com's gift-giving event this time has an additional payment link .

Zhou Qian, an Internet person who has participated in the Spring Festival Gala, said that JD.com did not make good use of the Spring Festival Gala two years ago. The gameplay was too complicated. The red envelopes had to be converted into JD.com vouchers or payment was enabled, which could only be converted temporarily. In this "Second Round" of the Spring Festival Gala, JD.com intends to fully tap into the Spring Festival Gala traffic, and the gimmick of one cent is more innovative than red envelopes.

JD.com's intention is to increase e-commerce transactions, or more precisely, to use the traffic peak of the Spring Festival Gala to divert traffic to the platform and attract more price-sensitive users in the sinking market. However, it is still uncertain whether users need to pay for shipping and whether they need to open JD.com payment. The key is how many users who come here to get the free deals will stay.

Compared with Alibaba and Pinduoduo, JD.com still has a gap in user scale, and the vast sinking market is where JD.com's e-commerce business has a low penetration rate and the greatest potential for new users. JD.com's many actions in the past year, including 10 billion yuan in subsidies, low-price mentality, live broadcast promotions, and now spending money to sponsor the Spring Festival Gala, are all aimed at the sinking market. According to many people, sponsoring the Spring Festival Gala will cost at least hundreds of millions of yuan.

In addition to the "money-spending" JD.com and Xiaohongshu, there is also Alipay, an under-the-surface player. During this year's Spring Festival, Alipay upgraded the "Collect Five Blessings" activity to the "Five Blessings Festival", set up a 500 million bonus pool, 300 million red envelopes, and launched AI gameplay.

Although it has no cooperation with the CCTV Spring Festival Gala, its biggest advantage compared to JD.com and Xiaohongshu is that, in the context of the Spring Festival, exchanging blessings and winning red envelopes with relatives and friends has become an online folk activity with social implications.

Alipay's "Collect Five Blessings" campaign no longer needs to spend a lot of money to promote itself during the Spring Festival Gala, but the other side of the coin is aesthetic fatigue. Alipay's "Collect Five Blessings" campaign has been going on for eight years, and this upgrade seems to be "old wine in a new bottle". The cost is not high, but how much Spring Festival traffic it can attract and how many users it can help Ali gain in the social map remains to be seen.

2. Meituan, Douyin and Ele.me compete in local life

In addition to the CCTV Spring Festival Gala, the first window for competing for traffic, the Spring Festival holiday is also the peak consumption season for Chinese people in a year. Naturally, major platforms will not miss this much-watched traffic entrance.

In addition to OTA platforms such as Ctrip, Fliggy, and Tongcheng Travel, which are working harder than in previous Spring Festivals to recover the tourism industry, ordinary people are more aware of the local life war launched by the three major platforms of "Mei, Ele.me, and Douyin".

Local life is the most popular segment of the current Internet, and it has been particularly crowded in the past year. From group buying, food delivery to hotel and travel, and taxi-hailing, they have all become the main battlefields for competition between Meituan, Douyin, and Alibaba. With one month left before the Spring Festival, the three major platforms have already launched their big moves.

Domestic Internet platforms make good use of the strategy of creating festivals for promotion. Opening these apps, without exception, they are pushing Spring Festival activities to users, and they all hold the banner of "subsidizing businesses and giving profits to users". However, after comparison, it is not difficult to find that the three companies have different focuses in their ways of competing for festival traffic.

The first to make a move was Meituan, which is also the most high-profile and busiest. Meituan adopted a traffic diversion strategy for the three major sectors of local life: home delivery, store delivery, and store comprehensive (hotels, travel, leisure and entertainment, etc.).

In terms of home delivery, in addition to Meituan's strong food delivery business, Meituan Flash Purchase, Meituan Youxuan and the recently upgraded Xiaoxiang Supermarket (formerly Meituan Grocery) have all launched New Year Festival activities early; in the store section, Meituan has launched a special area for "Advance Order for Family Dinner at the End of the Year Reunion Night". In addition to the reservation business, it also focuses on group buying, which not only tilts traffic to merchants, but also launches a large number of discount packages to users.

Hotel, travel, entertainment, etc. are also major consumption items during the Spring Festival. Meituan's strategy for this comprehensive business is to tilt traffic exposure and subsidy discounts toward merchants in popular tourist cities.

Image source: Screenshots of Meituan, Douyin, and Ele.me apps

Compared with Meituan's three-pronged approach, Ele.me focuses more on the home delivery and store delivery sections . The launched Dragon Year New Year Festival section mainly covers the two major categories of instant retail and catering. Like Meituan, the method is to issue coupons to users and divert traffic to leading brands.

The advantage of Ele.me is that it has the support of Alibaba's Hema Fresh, and has attracted leading merchants including Unilever and Starbucks to participate. However, compared with Meituan, the number of merchants participating in the New Year Festival is generally smaller.

As for the in-store hotel and travel section, Alibaba arranged for Fliggy and AutoNavi to take on the challenge, and linked it with Alipay's Five Blessings event.

Alibaba and Meituan have been competing in the local life market for many years. A major variable this Spring Festival is that Douyin, which has a traffic advantage, has joined the battle.

Unlike the high-profile promotion in the past year, Douyin launched the "New Year Food, Drink and Fun Festival", which looks lively, but actually focuses on in-store dining, leisure and entertainment, parent-child activities, etc. Users can order various group purchase packages. Compared with Meituan and Ele.me, Douyin has more resources for small and medium-sized merchants.

Liu Li, a service provider close to Douyin, analyzed for "Focus" that in-store dining and in-store comprehensive services are the relatively dominant sectors of Douyin. The overall business model is not complicated. The platform controls C-end traffic and merchant supply, and brokers transactions to earn commissions or advertising fees.

This Spring Festival, Douyin focused on in-store delivery, which actually magnified its advantage as a traffic-based content platform and avoided the home delivery scene with higher barriers . In addition to a large enough traffic platform at the front end, the home delivery business requires a logistics distribution scheduling system and store data management tools at the middle end, and a merchant service and support system at the back end.

Unlike direct participation in Spring Festival Gala marketing with real money, the local life traffic battlefield is more about resources and competitive barriers. Not only because the market is large enough, but also because during the Spring Festival, the demand for dine-in, travel, film and entertainment and other consumption suddenly exploded, involving a large group of merchants and a large number of users from first-tier cities to sinking markets.

In other words, the three platforms of Meike, Ele.com and Douyin are not the winners just because they have a larger user base and are the most popular in online festivals. A Spring Festival marketing war is unlikely to change the competitive landscape of local life, but it is still worth looking forward to who can get a bigger share, break through the bottleneck of user growth, and bring more confidence to the market and business groups.

3. The money-making plan is getting louder and louder

Whether it is the battle for the Spring Festival Gala title or the competition for Spring Festival traffic, the reason why the attention is so high is not only that at the user level, "you can participate in a billion-dollar project", but also from the perspective of Internet development, this Spring Festival business guide is also a history of changes in China's Internet traffic.

Internet giants started to focus on the Spring Festival Gala as a traffic window in 2015. Tencent WeChat was the first to test the waters during the Spring Festival Gala. WeChat Pay used 500 million cash red packets and bound 200 million personal bank cards, breaking Alipay's monopoly on online payments at the time.

From 2016 to 2018, Ali, unwilling to admit defeat, sponsored the Spring Festival Gala for three consecutive years. Through the "Collect Five Blessings" activity where you can share money, Alipay attracted new users and strengthened its social attributes. Alipay's active users exceeded 500 million, but due to its lack of outstanding social scenarios and content attributes, its subsequent user retention was not as good as its competitors.

Although the Spring Festival Gala marketing incurred huge expenses, the traffic effect and the scale-amplifying effect on Internet products it brought were truly amazing. Since then, a Spring Festival Gala sponsorship competition ignited by WeChat and Alipay has become a battleground for giants of all sizes.

In 2019, Baidu joined the war, spending 1 billion cash red envelopes, and Baidu APP joined the 200 million daily active users club. In 2020, coupled with the impact of the epidemic, this year's Spring Festival marketing war has rewritten the e-commerce and video landscape to a certain extent. Kuaishou exclusively sponsored the Spring Festival Gala and issued 1 billion Spring Festival Gala red envelopes to divert traffic to e-commerce and payment businesses; in addition to directly cooperating with the Spring Festival Gala, Douyin and Weishi were not to be outdone, issuing 2 billion and 1 billion red envelopes respectively. The former is intended to increase the DAU of other ByteDance products, while the latter focuses on attracting new short video users.

From 2021 to 2022, Douyin and JD.com won the bids one after another, but the "myth" of changing the industry landscape in just 7 days during the Spring Festival holiday is no longer possible. In 2023, the absence of Internet companies from sponsoring the Spring Festival Gala and giving way to traditional companies may be a signal.

Zhou Qian analyzed from the perspective of Internet companies that Spring Festival Gala marketing was once seen as an opportunity for new Internet products to overtake others, but this opportunity has been continuously diluted as the red envelope gameplay has lost its novelty and the growth of Internet users has peaked.

Although the Internet red envelopes were extinguished during the Year of the Rabbit Spring Festival Gala, no Internet giant dares to say that Spring Festival traffic is not important. Judging from the return of JD.com and Xiaohongshu in this year's Spring Festival Gala, as well as the greater emphasis on conversion rates, the logic of Internet giants' participation in the Spring Festival traffic competition has changed, and behind this is the comprehensive transformation of the Internet.

An important signal is that although the traffic war is still intense, JD.com and Xiaohongshu, which sponsored the Spring Festival Gala in the Year of the Dragon, did not officially mention the word "red envelope".

Another change worth noting is that compared with the instant traffic obtained by sponsoring the Spring Festival Gala, how Internet companies use the Spring Festival traffic and use high stickiness to drive user conversion has become more meaningful. This year, the battle between "Mei, E, Douyin" in the local life battlefield is a typical example. They have tried their best, whether it is to spend resources or compete with creativity, the purpose is to first guide traffic into the site, and then convert it into "retention" through the operation and retention capabilities of the product itself.

Yang Dong, an investor who follows Internet giants, concluded that in the past, major Internet companies took the route of burning money first and then making profits, but now, the era of Internet driven purely by marketing is over . The reason for this is that in addition to the disappearance of traffic dividends, the lack of capital support is also an important factor. In addition, the slowdown in business growth is also difficult to activate by sponsoring the Spring Festival Gala.

"Consumers are paying less and less attention to marketing, but are caring about the real product experience." Yang Dong said that the significance of sponsoring the Spring Festival Gala is that it can make the public familiar with the product in a short period of time, but if there is no usage scenario or the usage experience cannot keep up, user habits will not change fundamentally.

Getting the opportunity to sponsor the Spring Festival Gala is certainly important, but it is by no means the only way out.

Zhou Qian told "Dingjiao" that from the Spring Festival Gala sponsorship and the red envelope battle to the various forms of content promotion today, the Chinese Internet world has gone through a process of "demystifying" the CCTV Spring Festival Gala as a weather vane. It can also be seen from this that the demands of major Internet companies for user growth and the path to commercial monetization are becoming more urgent.

Amid major changes, it is full of variables as to who will be the biggest winner in this year's Spring Festival traffic war.

* At the request of the interviewees, Wang He, Zhou Qian, Liu Li and Yang Dong are pseudonyms in this article.

Author: Jin Yufan, Editor: Wei Jia

Source: Dingjiaoone (ID: dingjiaoone), deeply influencing innovation.