Did the “10 billion subsidies” ignite the 38 promotion?

Has the "10 billion subsidy" project recently launched by JD.com caused more waves in this 38 promotion? It is possible that each e-commerce platform has its own actions and considerations in this 38 promotion, and the platforms do not seem to be very enthusiastic about the price dispute behind JD.com's "10 billion subsidy". Let's take a look at the author's analysis and interpretation.

E-commerce practitioners don’t have any expectations for the 38th Festival after the coldest Double 11. After all, at this point in time, consumers have just been "ripped off" by four consecutive rounds of Double 11, Double 12, New Year's Day, and Spring Festival.

But this time, Liu Qiangdong tried to ignite the 38 promotion with a fire, and facing Liu Qiangdong who returned three years later, JD people had to show their desire to survive.

They have become the biggest variable in this 38 promotion.

A wave of price war combinations targeting straight men, including "10 billion subsidies", "iPhone + Wuliangye", "double compensation for overpriced products", "free shipping for all items" and "exclusive customer service", made the girls who were preparing to buy some clothes and cosmetics nearby a little confused.

However, according to Analysys Qianfan data, JD.com’s daily active users during the promotion period were not even the peak in the past 30 days.

Daily activity data of the three leading e-commerce platforms

What about other friendly companies?

Taobao still let Li Jiaqi and others set up a long-term battle, with nearly 8 days of continuous theme live broadcasts, continuing to drive "all girls" to buy, buy, buy. At the end, it continued to build momentum with the topic of "TVB Taobao Live"'s first show; while Douyin and Kuaishou represented their presence in the form of consumption coupons, and the Douyin "Shopping" column kept flipping the eye-catching words indicating "low price"...

At midnight on March 9, this "overzealous" promotion show seemed to come to an abrupt end without users noticing and with competitors' disdain.

1. JD.com has made every effort, but is the effect obvious?

JD.com’s preparations for this 38 promotion were hasty.

According to the internal leaked PPT, the "10 billion subsidy" was originally scheduled to start at 8 pm on March 3. However, on March 4, JD.com's official account announced that it would be fully launched at 8 pm on March 6. On March 5, the launch time was urgently advanced by 20 hours to midnight on March 6.

JD.com also made urgent adjustments to the column settings for "10 billion subsidies". In the preview on March 4, the entrance to JD.com's "10 billion subsidies" was located below the channel column, to the right of "JD.com flash sales". But after the official launch, the "10 billion subsidies" column occupied the entire column below the channel column.

In comparison, Pinduoduo’s “10 billion subsidies” is the third column on the homepage, only after the channel column and Duoduo Maicai.

JD.com and Pinduoduo's 10 billion yuan subsidy entrance

In fact, the original design of JD.com’s “10 billion subsidy” was only half the area of ​​Pinduoduo’s, which also reflected sufficient attention. The online version was equivalent to another power upgrade.

What made Pinduoduo’s “10 billion subsidies” famous all over the world were the iPhone and Moutai, while JD.com’s main products this time are the iPhone and Wuliangye.

The official account of JD Liquor recently revealed that Yao Yanzhong, the newly appointed president of JD Retail Supermarket Business Group, visited Moutai and Wuliangye on January 4 and January 5 respectively. These intensive visits may be to discuss cooperation on the "10 billion subsidy".

Moutai, which is currently suing Pinduoduo, did not agree to join. However, Wuliangye, which sent a letter to JD.com on Double Eleven last year proposing to suspend cooperation and deduct support costs, was dealt with by Yao Yanzhong this time and joined the ranks of JD.com's "10 billion subsidies."

The price of the iPhone 14 128GB featured by JD.com's "10 billion subsidies" was 4,949 yuan on March 8, while the price of the same model featured by Pinduoduo's "10 billion subsidies" was 5,199 yuan. The price of the iPhone 14 pro 256GB featured by Pinduoduo was 7,489 yuan after the coupon, while the price of the same product on JD.com after the subsidy was 8,049 yuan.

JD’s “Double compensation for expensive purchases” seems very powerful, but many products are not included in this activity, such as the iPhone14 pro mentioned above.

"Double compensation for overpriced purchases" rule

JD’s purpose this time is very clear, which is to regain the user mindset of “low price”.

But using the same name and even the same tactics can only be seen as a defensive battle. The "10 billion subsidies" to Pinduoduo is like the "Spring Festival red envelope grabbing" to WeChat. The same routine brings much less benefits to latecomers.

The price war launched by JD.com can be seen as a response to the task assigned by the senior management to JD.com. As a result, not only did the internal employees of JD.com respond that "it did not stir up any waves", but the 4.35% drop in the Hong Kong stock price of JD.com on March 8 also became a footnote to its "10 billion yuan subsidy".

"I wouldn't have known if you hadn't told me. JD.com also has a '10 billion subsidy'? Is it also called this?" Many users who are keen on JD.com's price guarantee expressed their surprise to Yifan.

They are the target users of JD.com’s “10 billion subsidy” as they are very penny-pinching. However, they only discovered the entrance and the “double compensation for overpriced purchases” activity on the APP on the last day of the promotion.

2. Taobao’s partial highlights won?

JD’s competitors are also not idle. “Official instant discounts,” “cross-store discounts,” “consumption coupons,” and “compensation for overpriced purchases” have become routine operations.

But it seems that none of them feels the need to confront JD.com.

JD.com's ally Kuaishou issued 1 billion yuan worth of vouchers this time, mainly targeting digital products and department stores. However, Kuaishou and JD.com have previously teamed up to offer "double 10 billion yuan in subsidies", and many of Kuaishou's stores' goods come from JD.com, so the promotion will not target JD.com.

The 3.8 Festival is still Taobao's S-level promotion, but Taobao's main goal is to take advantage of the festival to serve its female users well. Its focus is on live streaming rather than price.

After all, the core of the price war is the competition between standard products, and Taobao’s biggest rival in non-standard products such as clothing is live streaming e-commerce such as Douyin. Therefore, among Taobao’s five major strategies this year, live streaming ranks first, and “price power” ranks last.

Image source: Internet

Although Taobao's e-commerce market declined slightly last year, Taobao Live is still one of the fastest growing businesses. In the last Double Eleven, Taobao poached top MCNs such as Jiao Ge Pengyou and Yaowang Technology from Douyin, making a comeback in terms of volume.

In the live broadcast room of the 38th session, the one that attracted the most market attention was none other than TVB.

On March 3, when the news of the cooperation between Taobao and TVB was announced, TVB's stock price soared by 51% that day, setting a record for the highest increase in history. TVB's first live broadcast on the evening of March 7 attracted 4.898 million viewers and sales of 23.5 million yuan.

TVB's share price rose by 85.08% on March 8, setting a new record. In just four trading days, the share price rose by nearly 3.5 times.

Taobao's benchmark for TVB should be New Oriental. Both of them have experienced dramatic changes in the industry, are entrusted with the feelings of countless people, and have many outstanding employees. However, Dong Yuhui's live broadcast sales on June 9, 2022, the day he became popular, were only 2.247 million yuan, less than one-tenth of TVB's debut. From this point of view, TVB, which has a good start, is still promising.

Screenshot of TVB live broadcast

This shows that under the overall pattern of competition for existing resources, local bright spots can still exist.

The emergence of this local highlight also allowed Taobao to occupy social media with a higher level of discussion during the entire 38 promotion period than JD.com's 10 billion yuan subsidy. After all, TVB sentiment is still a "trademark" that can attract a glance or two from consumers across the Internet.

3. Pinduoduo and Douyin are losing interest and are only concerned about their “new rivals”

If Taobao's focus is misaligned with JD.com, then Pinduoduo and Douyin, two flexible and mobile "nomadic peoples", have more important things to do and more difficult opponents to fight.

JD.com is targeting Pinduoduo, which has also increased its official subsidies to a certain extent and issued an additional 388 yuan consumer voucher package. However, Pinduoduo has not slowed down its most important "plan" - going overseas.

Temu plans to launch in Australia and New Zealand next Monday, March 13. Pinduoduo now regards Shein as its most direct competitor.

Shein, which used to focus on small orders and quick response and flexible supply chain in clothing, has started to launch a platform model similar to Temu in the United States, Mexico and Brazil. It will not relax at all, because according to media reports, Shein's latest round of $3 billion financing has dropped from the previous peak of $100 billion to $64 billion.

Shein Financing History

Pinduoduo is fighting Shein overseas, while Douyin is invading Meituan’s territory.

Entering the shelf e-commerce is an important task for Douyin this year. This 38 promotion also brought out the "lowest price in the whole network". According to Ranciyuan, the natural traffic distribution mechanism of Douyin e-commerce will replace GPM (Gross Price per Thousand Impressions) with OPM (Number of Orders Per Thousand Impressions). Shifting the focus from the transaction amount to the number of orders indicates encouragement for low prices.

But the current local life market carries more hope for Douyin to a certain extent.

According to "LatePost", Douyin's local life transaction target this year is approximately 400 billion yuan, and the target for in-store and hotel and tourism business is 290 billion yuan, which is equivalent to Meituan's level in 2021. The remaining increase will come from the food delivery business.

Douyin's local life business has been accelerating since the second half of last year, gradually achieving full category coverage comparable to Meituan. Since Douyin's sales in in-store catering last year were equivalent to half of Meituan's, it pinned its future growth goals on other in-store businesses, hotels, travel, and food delivery.

Tik Tok screenshot

This year is indeed a good time for Douyin's local life business. With the lifting of the epidemic, the recovery of offline consumption is an inevitable trend. Moreover, Meituan does not seem to have given any strong response.

Meituan, which has the industry's top business analysis team, may think its competitors are all rational. Therefore, Meituan does not understand what Douyin wants to gain from this business that only contributed 1.4% of ByteDance's total advertising revenue last year and whose ceiling is not too high?

Tik Tok’s ambition is to create a “universal entrance” in the user’s mind.

Because of this, Douyin only sees the 38 promotion as a holiday marketing in its increasingly mature e-commerce business, and there is no need for it to immediately intervene in the low-price dispute between JD.com and Pinduoduo.

IV. Conclusion

The opponents are all playing their own games, so does being looked down upon mean that Liu Qiangdong’s return will end in failure?

That may not be the case.

Three years ago, when Liu Qiangdong returned, he proposed two strategic directions at the annual report meeting in early 2019: expanding into third- and fourth-tier cities and developing offline businesses. The specific focus was group buying and JD 7FRESH. Interestingly, JD did not succeed in either of these two business directions. But this did not stop its "rejuvenation".

The factors that led to JD.com's strong recovery at that time included not only the improved efficiency and execution under the pressure of Liu Qiangdong's return, but also the formation of a fully decentralized organizational structure.

At the annual management meeting held urgently on February 17, 2019, the third picture drawn by Dong Ge representing the future of JD.com depicted the different formations of JD.com fighting simultaneously.

JD.com has successively listed Dada, JD Health and JD Logistics since 2020, which is the biggest achievement of the decentralization strategy. Dong Ge’s brothers are naturally well aware of the benefits of listing, and they must fight hard in the process of promotion.

This time, Yao Yanzhong of JD.com may be able to help Dong Ge revive. But just like three years ago, the deep waters of the e-commerce world will not be stirred up by JD.com.

Author: James Taishi

Original title: Liu Qiangdong cannot light up the 38 big promotion

Source public account: YIFAN (ID: finance_yifan), business and life of the younger generation.