The lowest price on the Internet, driving buyers and sellers crazy

It’s another “Double 11” shopping festival. All major platforms have launched different types of preferential policies and engaged in “price wars”. There are always endless lowest prices.

This year’s Double 11, the magic weapon that each e-commerce platform has brought out is: the lowest price on the entire network.

Not long ago, the dispute between JD.com, Hai’s and Li Jiaqi brought this topic to a climax again.

For platforms, striving to provide the most cost-effective products on their platforms is a good thing for the sake of users. However, merchants nowadays often operate on multiple platforms, and it is not easy for the same products to meet the rules of different platforms. Some merchants directly set the same price across the entire network, but because the mechanisms of each platform are different, the price difference is caused by the addition of coupons and subsidies.

When it comes to the consumer side, the biggest feeling of most people is that because many things have different combinations and specifications, different stores and platforms, different discount methods, and prices fluctuate from time to time, it takes time and patience to buy the absolute lowest price on the entire network.

In recent years, consumption has become more rational and users are pursuing cost-effectiveness. It is a good thing for merchants and platforms to meet this demand as much as possible. However, once many actions are distorted, they evolve into a variety of commercial wars.

In fact, whether it is consumers or practitioners, there is a consensus that the real meaning of the lowest price on the entire network is extremely cost-effective, rather than an absolutely low price. Because everyone knows that a healthy consumption environment must not be blindly involved in price wars. Only by achieving a reasonable profit margin can consumers, merchants, and platforms win together.

1. The lowest price on the Internet

The difficulty that Li Jing from Beijing encountered in price comparison was that the lowest prices on the two platforms kept reversing.

Li Jing has two cats at home. Every year on Double 11, she stocks up on cat food. Her cats often eat an imported brand of cat food, and she chooses Tmall and JD.com as the channels.

At first, she saw that the price on JD.com International was 475 yuan per bag, 5.4kg, and Tmall Supermarket was 479 yuan. On October 24, the price on JD.com International was 449 yuan, and Tmall Supermarket was 455 yuan. It seemed that JD.com was cheaper. Later, Li Jing found that Tmall Supermarket could give back 20 yuan of cat super cards. In the end, Tmall Supermarket won again, equivalent to 435 yuan, and you can also charge 698 yuan and get 15 yuan. Because she needed to stock up three or four bags of cat food, and recharging could get her a cheaper price, she decided to buy from Tmall Supermarket.

On October 27, the situation reversed again. Li Jing noticed that there was another discount on JD.com International. If you buy 4 bags of cat food, the unit price is about 415 yuan, but the system shows that it is out of stock at that time. She decided to wait and see if it will be restocked. She has not placed an order after comparing prices for so many days because the lowest prices of the two selected channels have been reversed.

She plans to wait until November 1 or 11 to see the final price. "According to my experience, there are still some cross-store discounts and large member coupons, so it is difficult to determine the price. Considering that price comparison is too difficult, I may choose to buy from both platforms and quickly return the expensive one before delivery."

Li Jing also found a Jingxi store on JD.com, where the same cat food was sold for only 380 yuan. The customer service said that the store was a brand authorized store and used Tongda Logistics. After all, it was not a JD.com self-operated or brand flagship store, and Tongda Logistics only delivered to the post station near her home. Considering the store's authority and logistics experience, she gave up this option.

Regarding price comparison, Li Jing's experience is that on the same platform, you should compare the platform's own stores, brand flagship stores, and dealer stores. In addition to comparing prices, you should also compare stores, logistics, and validity issues . Some things are cheap but have a short validity period, so you need to calculate whether they can be used up within the validity period. There are also some hidden discounts, such as some that return coupons after receiving the goods, and some that say to note xx live broadcast room and return red envelopes after receiving the goods, so you need to keep an eye on the live broadcast room.

Xiaoqing from Zhejiang just got pregnant this year. She plans to buy a batch of maternal and child products on Double 11. She started doing her homework on many things after the Mid-Autumn Festival, reading guides on Xiaohongshu and comparing prices on Taobao, JD.com, and Douyin official accounts. Her problem is that after doing a lot of homework, she still ended up losing money.

On October 20, Xiaoqing bought a pregnancy oil on JD.com for 91 yuan. On the 22nd, she found that the same product on Tmall Global was only 71 yuan. However, the product had already been received on JD.com and could not be returned or exchanged because it was a consumable product. So she placed another order on Tmall. On October 21, Xiaoqing bought 29 pieces of size S diapers on Tmall Supermarket for 30.85 yuan. She received the product on the 22nd. Then on the 23rd, she found that the same product on Tmall Global was only 14.92 yuan after using the coupon. She immediately felt that she had lost money again.

Xiaoqing noticed that consumables such as tissue paper have different prices for different specifications. For example, she bought a pack of 33 packs of 108 sheets of Kexinrou cotton wipes on JD.com for 124 yuan, and a pack of 10 packs of 40 sheets on Taobao for 9.9 yuan. Later, she saw a pack of 60 packs on Douyin for 352 yuan. After calculating, the best deal was on Douyin, but she didn't dare to stock up more.

Xiaoqing is now so hesitant that she doesn't dare to place an order. She is afraid that she will pay too much. She feels that you can only know whether many consumables are good or not after you use them. However, such items are discounted only when you buy in large quantities, which is equivalent to getting a wholesale price. If you buy less, the discount will not be big, and she always feels that she has lost money.

At present, she feels that different platforms have their own advantages. The Douyin anchors’ explanations are very detailed, which helps to better understand the products, but it is easy to make impulse orders; Taobao has many packages to choose from and is relatively affordable, and its preferential policies such as discounts on purchases over a certain amount are the largest among the three platforms; JD’s logistics are very attractive to pregnant women living alone. After all, the express delivery of other platforms is delivered to the post station, and the customers have to take them home by themselves, but JD can deliver the goods to their door.

Ruimin initially targeted a live broadcast room of a famous anchor, intending to place an order directly to save the trouble of price comparison. But when she was buying, she found that the lowest price for a small washing machine was on JD.com, and the lowest price for a tissue was on Pinduoduo's 10,000-person group purchase. There was also an internal purchase meeting for a face towel, which was 20 yuan cheaper than the live broadcast room of the famous anchor.

At the same time, she also noticed that the prices of some things are constantly changing. For example, a pair of shoes from a certain brand originally cost 449 yuan, but the Double 11 discount price was 229 yuan on Tmall flagship store, 205 yuan on Pinduoduo, and 189 yuan on JD.com. On October 27, she found that the Tmall store had launched a limited-time one-hour promotion on October 31, offering a half-price discount on the second piece. The estimated price per piece was 172 yuan. Ruimin has not yet decided which platform to buy from, and she is not sure whether the final price will change.

Many users have lost themselves in endless price comparisons.

2. How hard do merchants fight for the “lowest price”?

All platforms offer the lowest prices, and merchants operating on all platforms can only "compete wits and courage".

From the disputes between Hai’s, JD.com and Li Jiaqi, it can be seen that merchants are often a disadvantaged group among big anchors and platforms.

A toy brand has been troubled recently. Xiaoqu, the brand's operations manager, told Dingjiao that during the event, the platform has a lot of coupons for full discounts that need to be borne by merchants, but merchants often don't know in advance. The platform where Xiaoqu works has a docking group for merchants and platforms, and the group often sends some platform activity information. These activities are not signed up by merchants themselves, but if a merchant does not want to participate, he needs to fill in the non-participating products in the blacklist, and the platform that has not filled in can execute by default.

"There were more than 400 activities in the past period of time alone, which increased our workload and required us to keep an eye on it all the time. If the product was originally on sale, we would lose money after adding coupons. Some things would be sold out if we are not careful." They encountered such a thing recently. There was a toy worth 199 yuan in the store, and the promotional price was 99 yuan. As a result, a user added various coupons and paid 39 yuan to buy it. After they found out, they had to urgently remove the product from the shelves.

Later, when the product was put on the shelves again, the platform required the brand that Xiaoqu belonged to to reduce the price to the lowest price on the entire network, 79 yuan. The boss agreed. However, the link was not posted for long before it was reported by the official flagship store of other platforms and the dealer's store and removed from the shelves. "After all, we are a branded product and need to control the price. "

According to her, there was a peer brand in the docking group that did not fill out the blacklist in time. The store sold a product for 59 yuan, but after participating in the event, it was sold for 9.9 yuan. The merchant and the platform docking person had a big fight.

At present, Xiaoqu’s store responds to the minimum price requirements of all platforms by combining products of different specifications and listing them on different platforms . For example, selling a robot combined with a magic wand or a necklace is similar to bundling two products at a slightly more favorable price.

" The Double 11 promotion brought us some sales, but our gross profit margin dropped from 18% to 9% this month, " Xiao Qu said.

Some merchants also encountered the situation where the prices were different after the platform subsidies and without subsidies. A pet supplies merchant has brand flagship stores on Tmall, JD.com, Douyin, and Pinduoduo. Their approach this year was to treat all platforms equally and set the same price across the entire network for Double 11. However, the problem that followed was that some non-subsidized platforms required merchants to set the same prices as other platforms after subsidies . After several rounds of disputes, the merchant still rejected the requirements of some platforms and insisted on setting the same price across the entire network.

However, there are still some merchants who are able to comply with the platform rules and maximize their profits during the promotion.

The new consumer brand Bingquan Toothpaste mainly sells various types of oral toothpaste. Cheng Yingqi, founder and CEO of Bingquan Toothpaste, told Dingjiao that this year's deployment method is to use different product matrices to provide consumers on different platforms with different cost-effectiveness.

In his opinion, merchants have a misunderstanding that they equate consumers on all platforms with the same consumer habits, needs and cognition. In fact, the current consumer market is diverse and the consumption is stratified and fragmented. Some people are used to using JD.com as their main battlefield, while others are used to using Taobao. There are also a group of people who watch live broadcasts and buy goods on Douyin and Kuaishou. "We brands should study the platform and build the advantages of the platform's corresponding people, goods and markets, rather than trying to do everything at once and let ourselves fight against ourselves or shift the blame."

Bingquan's final approach is to focus on different aspects to reflect their respective cost-effectiveness. For example, one is the combination method, which may be a combination of toothpaste, toothbrush, and mouthwash, or a large combination of toiletries. Another is the distinction in taste. Cheng Yingqi gave an example that Tmall has more female users, and toothpastes with cherry, peach, and milk tea flavors can produce the ultimate cost-effectiveness on Tmall; JD.com has more male users, and the taste of toothpaste may tend to be neutral, and have the function of removing stains and smoke; there are more people in the sinking market on Kuaishou, and there will be some low-priced products. In addition, toothpastes with Chinese medicine, ginseng, and ganoderma lucidum ingredients will also be more suitable; the live broadcast room uses some popular products to reflect the cost-effectiveness, similar to different combinations of toothpaste, toothbrush, and mouthwash.

What Cheng Yingqi is most worried about in terms of the lowest price on the entire network is the disorderly market competition. "There are some merchants on the market who counterfeit our products. Their names are often one or two characters different, and the packaging is very similar. They use low quality, low prices and exaggerated publicity to disrupt the market. They often move from one place to another, and it is difficult to protect their rights." In this case, some users who excessively pursue low prices will get lost and may buy counterfeit and shoddy products.

3. Cost-effectiveness, not absolute low price

There are several reasons why the lowest price on the entire network has become the biggest keyword for this year's Double 11.

Cheng Yingqi believes that the general background of the lowest price on the entire network is the change in the overall consumption environment in recent years; at the same time, interest, impulse, appearance, and curiosity used to be the mainstream of new consumption, but now users' consumption habits tend to be rational; in addition, platform competition has intensified. In addition to traditional online and offline channels, there are also Douyin, Kuaishou, Video Account, and various communities. Users have a wide range of choices and competition is fierce; finally, excessive internal competition between brands has also led to price wars.

From the platform's perspective, providing users with the most cost-effective products and services is also the best way for them to acquire and retain users.

Diao Long, vice president of Youmi Cloud's brand marketing, who has been paying close attention to the consumer industry for a long time, analyzed to "Focus" that the main reason why the platform offers the lowest price on the entire network is the platform's insight into consumers. The "2023 Douyin Consumer Product Marketing Report" released by Youmi Cloud in August this year shows that consumers tend to "pragmatic consumption upgrades" and the consumer market is showing a rational and cost-effective trend. For example, the 50-100 yuan price range of the cosmetics and skin care track performed well, and the second best-selling products were those priced over 300 yuan, indicating that consumers pursue cost-effectiveness while paying attention to quality.

He added that the "lowest price on the entire network" proposed by e-commerce platforms is mainly a comprehensive "test" of the platform's location resources, product supply and after-sales service. This can also be seen from the official policies of various platforms. For example, Taobao launched a full-service guarantee of "compensation for overpriced products", Douyin proposed that if the final price of the product sold by the merchant is higher than the lowest price on the entire network, the resource support for the merchant will be cancelled, and JD's product page also has a label of "double compensation for overpriced products".

Diao Long also mentioned that on the other hand, during this Double 11, all platforms are also pushing merchants to implement stratification and refined management of members, converting platform users into members of merchants. For example, Taobao's original 88VIP was upgraded and renamed "Life Card", and Douyin launched the Mall Gold Card to increase member benefits. "The platform grabs consumers with the mentality of the lowest price, and increases consumer stickiness with the membership system."

However, the concept of the lowest price on the entire network can be explained in many dimensions. Diao Long said that one dimension refers to the lowest price within the verification period of the entire platform, that is, compared with the daily price and the price of 618 on the platform, and the other dimension refers to the lowest price on the entire network during the event, that is, the price competition with other e-commerce platforms during Double 11.

In fact, because products with different specifications, different barcodes or combination pricing can have different lowest prices on the entire network, the lowest price on the entire network is often a false proposition. In other words, if a certain item or a certain combination only appears in a specific channel and there is no similar reference to compare, it is also the lowest price on the entire network.

The whole industry is talking about the lowest price. Is it a good thing or a bad thing?

Diao Long believes that the "lowest price" war among platforms can force merchants to reduce costs to a certain extent, specifically by reducing supply chain costs, improving turnover efficiency, or reducing operating costs in other links, such as marketing costs, R&D costs, etc. However, such practices may also lead to merchants' profits being squeezed and consumers being tired of price comparisons and reducing their willingness to consume. If the rights of merchants, platforms and consumers cannot be balanced, this low-price mentality is not a long-term solution.

His advice to merchants is that merchants with strong supply chain capabilities are suitable for shelf e-commerce platforms such as Taobao and JD.com, while merchants with strong content capabilities are more likely to win on content e-commerce platforms such as Douyin and Kuaishou, and communicate with new groups with creative content. In addition, price is one of the dimensions of consumers' perception of brand value, and brands must have a reasonable pricing system to ensure market price stability.

Based on the opinions of many interviewees, the lowest price required by the entire industry is cost-effectiveness rather than an absolute low price.

Cheng Yingqi believes that cost-effectiveness is the mainstream. " The products that consumers ultimately buy are not determined by price comparisons, but are actually determined by the trust in channels, brands, and products. Trust is the foundation for the coexistence and win-win of consumer relationships. Otherwise, the prices of many products are not the lowest, but only lower . In the end, if neither the merchants nor the platform has any profit, they cannot provide better products. Only when the platform, merchants, and users jointly recognize high cost-effectiveness can they coexist and win together."

What is the lowest price on the entire network that users hope for?

"First of all, I hope that during the big sale I will be given a clear low price directly, without having to do math problems; second, once the price is set, don't change it, otherwise I will never dare to buy. It would be best if the price is clearly visible on the page, as many hidden coupons cause information asymmetry; in addition, I am not pursuing an absolutely low price, but I also have to let the merchants make money so that I can buy some products for a long time. As long as the quality matches the price, I can accept it." Li Jing said.

Diao Long also reminded that for consumers, the reliability of the word "best" needs to be within a certain range, and this range will not be too large. If after understanding the platform's various discount rules, you still want to further study this range and strive to find a lower price that may not exist, it is unnecessary. "Although the pricing power belongs to the brand, in reality, the potential of each party is different. The competition around the word "best" will lead to invisible business wars. Consumers should be careful not to be incited."

At the request of the interviewees, Li Jing, Xiaoqing, Ruimin and Xiaoqu are pseudonyms in this article.

Author: Tang Yahua

Source: WeChat public account "Dingjiaoone (ID: dingjiaoone)"