Author | Meng Xiao The main text contains 5192 words, with an estimated reading time of 13 minutes. BYD Qin is rightly called China's industrial miracle.
The main text is a total of 5008 words, with an expected reading time of 13 minutes.
This year's 618 seems particularly quiet, but the data released by the three e-commerce giants for 618 is still good.
618 had no previous barrage of overwhelming advertising, and people around me were not particularly looking forward to 618. The number of packages at the downstairs express station did not increase significantly. The boss said, "There has been an increase, but it is not too obvious."
Jingdong's data for this year's 618 is still good, with more than 500 million ordered users, 83 brands with cumulative transaction volume exceeding 1 billion yuan, and more than 150,000 small and medium-sized merchants with sales growth of more than 50%. In Alibaba's report, 365 brands achieved sales of over 100 million yuan in Tmall 618, and over 36,000 brands achieved double the sales volume. As a strong point of Taobao, live-streaming sales inevitably released relevant data. This year's live-streaming sales performance was good. After being far surpassed by PDD in terms of market value, JD.com and Alibaba recovered some momentum in this year's major promotion. During 618, 34 live-streaming rooms on Taobao broke through 100 million yuan, a year-on-year increase of 53%, and 47 stores broke through 100 million yuan. During the same period, JD.com's live-streaming orders increased by more than 200% year-on-year.
The highest market cap PDD was relatively low-key, with almost no data released and only some individual product data being announced. For example, the sales volume of home appliance brands achieved a year-on-year growth of 103% in this year's 618. Live-streaming sales are not PDD's strong point, and PDD has not disclosed relevant data in this regard.
The top three e-commerce platforms all say their performance is good, but the accumulated sales of comprehensive e-commerce platforms and live-streaming platforms is 742.8 billion yuan. Last year, this figure was 798.7 billion yuan, a year-on-year decrease of 7%. In terms of channels, the sales of comprehensive e-commerce platforms totaled 571.7 billion yuan, a year-on-year decrease of 6.9%. Because none of the three companies have disclosed their specific sales figures. According to Star Map data, Tmall is ranked first in comprehensive e-commerce platform, followed closely by JD.com, and PDD is ranked third. This may mean that the orders of the three companies may have increased, but the prices have been lowered, resulting in a decline in total sales.
It should be noted that the achievement of this year's 618 seems qualified, but the data is "watered down" compared to previous ones because this is the longest-ever statistical time for 618. PDD entered 618 on May 19th, Tmall entered 618 on May 20th, and JD.com entered 618 on May 31st. This means that the statistics of 618 have much more sales data than last year, which is 10 days longer. In the case of Tmall and PDD, the entire 618 promotion lasted for a month. Compared with the sales in 20 days last year, the overall sales value fell by about 7%.
This situation has caused capital to be skeptical. In the two trading days after 618, the stock prices of the three e-commerce giants all fell to different degrees. As of the close of June 20th, JD.com's stock price fell by 1.27%, PDD fell by 0.03%, and Alibaba fell by 0.15%. The previous day, they fell by 0.65%, 2.78%, and 0.12%, respectively. The current market value of JD.com is only USD 43.79 billion, a decrease of USD 117.6 billion from its peak of USD 161.4 billion, while the total market value of Alibaba is USD 179.8 billion, a decrease of USD 586 billion from its peak of USD 765.8 billion. PDD, with the highest market value at present, has a market value of USD 200.2 billion, but it has also fallen by USD 95 billion from its peak. Compared with JD.com and Alibaba, PDD has the smallest decline in its market value, becoming the highest-valued company among the top three e-commerce giants.
It can be seen that 618 such a "big promotion" has fallen from its altar and cannot become a savior for the top three e-commerce giants.
1
618, the first time in 16 years to decline.
618 has special significance for JD.com and Liu Qiangdong.
According to reports, on June 18, 1998, Liu Qiangdong and his first girlfriend Gong Xiaojing started their business and founded JD.com in Zhongguancun. JD.com's official website also introduces this day. Liu Qiangdong founded JD.com with an initial capital of 12,000 yuan. JD.com was listed on the Hong Kong Stock Exchange on June 18th, and even the stock code is 09618.HK.
At the same time, 618 is also the anniversary of the establishment of JD.com. In 2008, JD.com launched the first 618 shopping festival. At that time, JD.com launched the mid-year promotion activity on its website for the first time. It was presented in the form of pre-sales and supplemented by the form of second killing to attract consumers. From second killing to group buying, from brand specials to full reductions, this became one of the most important promotional nodes for JD.com throughout the year. At this time, 618 became a real shopping carnival that many consumers must pay attention to.
Since 2011, JD.com 618 has gradually evolved into an annual shopping festival for the e-commerce industry, and other e-commerce platforms have participated. 618 is no longer just JD.com's "big promotion," but the entire e-commerce industry's overall "big promotion." From a simple promotion activity, 618 has grown into a iconic event for JD.com and even the entire e-commerce industry.
In 2017, JD.com first disclosed the sales data of 618, which amounted to 119.9 billion yuan according to the industry standard. They truly showed off their strength and the myth of "one night, one hundred billion" began to emerge. 618 has also become the main arena for e-commerce competition, and more and more e-commerce companies are participating and disclosing their own performance. At this time, the sales of major mainstream e-commerce platforms were basically in a growth trend, and they were also willing to let investors see their own strength. However, since 2022, the slowdown in growth has been the general situation for major e-commerce companies, and based on the low or declining growth rate, e-commerce companies have stopped disclosing specific sales figures.
After 16 years of development, there were actually some innovations in this year's 618, and various platforms have abandoned the previously widely criticized "routine" and cancelled the pre-sale system that has been used for some time. However, as of June 20th, major e-commerce platforms have yet to release specific GMV data, replaced by more ambiguous growth rates. The intuitive feeling is that this year's 618 is relatively "poor". One intuitive data is that on May 19th, the Tmall Li Jiaqi beauty live broadcast began pre-sales, and the GMV of beauty products was about 2.7 billion yuan, a decrease of 46% compared to the nearly 5 billion yuan in the same period last year.
Compared with previous years, the duration of this year's 618 "big promotion" is longer. Public information shows that the average length of 618 for 7 mainstream e-commerce platforms exceeds 30 days, with the longest span being Kuaishou, reaching 42 days. The shortest is 21 days for JD.com. Ali and PDD are both 33 days, with Ali extending by 7 days compared to last year, and PDD extending by 4 days, only JD.com reducing by 8 days.
However, even though the 618 was extended for several days, overall sales declined for the first time since the establishment of 618, and both the overall network and comprehensive platforms saw a 7% decline. Based on current consumer habits, the decline in 618 this year may only be the beginning. In this context, it seems like the e-commerce promotion is losing its significance, and the myth of "overnight billions" is fading away. Consumer spending habits are gradually becoming rational.
2
Consumer rebound is not related to 'big promotions'.
Affected by the epidemic for three years, the consumption environment was relatively volatile in the first few years. However, compared with previous years, the overall consumption environment has improved this year, and consumption is in a strong rebound period. Data from the National Bureau of Statistics shows that in May 2024, the nationwide online retail sales reached as high as 2.0313 trillion yuan, a year-on-year increase of 15%. From January to May 2024, food, clothing, and daily-use commodities increased by 19.6%, 9.0%, and 10.8% respectively, all in a period of rapid growth.
At the same time, according to the "618 Consumer Insight Report (2024)", the overall online retail sales from May 31 to June 18 was as high as 1,149.12 billion yuan, a year-on-year increase of 10.5%. Among them, the real net retail sales were RMB 994.99 billion, a year-on-year increase of 7.8%. The overall sales of major e-commerce platforms fell by 7%, which means that the consumption environment has improved, and the willingness to consume is increasing. However, this wave of consumption dividend has nothing to do with e-commerce.
Before, 618 was a shopping festival for the whole people. Even because of the pre-sale system, consumers had to stay up all night for time-limited sales. But now, with the emergence of low-priced platforms such as PDD, consumers no longer need to wait for special deals on 618. It's almost 618 every day, so the expectation of 618 for consumers has decreased a lot. After more than 10 years of development, 618 has evolved from a traditional e-commerce festival to a carnival for all people, permeating into all walks of life. Offline supermarkets and local life are gradually trying to go online. The "flash sale" played by the e-commerce industry is no longer attractive.
According to the transportation department of Qualcomm, the parcel volume during this year's 618 period has increased significantly. In the first week of the 618 promotion, which was from May 20th to May 26th, the national express collection volume was about 3.593 billion pieces, a month-on-month increase of 7.29%, with a daily business volume of 513 million pieces. However, in the third week of the 618 promotion, postal express collection volume decreased by 3.31% month-on-month, and cumulative delivery volume decreased by 0.73% month-on-month. Even if the parcel volume showed a month-on-month decline, it still had a significant growth compared with the same period last year. In 2023, the daily package volume was 400 million pieces, and the package quantity had increased by 25% compared with the same period last year.
The surge in parcel volume, however, has coincided with an overall decline in sales, which means that the average transaction price of major e-commerce platforms is significantly declining, and the platforms are waging a price war. For example, according to the "618 Consumer Insight Report (2024)", the average prices of men's shoes, women's clothing, men's clothing, and women's shoes have dropped by 18.4%, 9.6%, 9.5%, and 2.8%, respectively, during this year's promotion period. The average price of men's shoes has seen the most significant decrease among all categories. This is only a part of the commodities whose prices have dropped on a year-on-year basis. In general, price reduction is the trend, and there are only a few products that have seen an overall price increase.
This year's 618, Wang Bao, an e-commerce practitioner, did not participate in the promotion. Although he had planned to participate at first, the platform asked him to lower his prices by 5%, which he found difficult to accept. "We are already selling based on quantity, with a slim profit margin of around 3%. If I lower the price by another 5%, then I am losing money for publicity. It is better not to participate in such a promotion." Regarding the fading interest in big promotions like 618 among consumers, Wang Bao believes that e-commerce platforms are already competing on prices every day, and prices have been pushed to the limit. "In fact, now every day is like 618, and consumer interest in such big promotions is decreasing." Shop owners who don't participate in 618, like Wang Bao, are not exceptions. Many merchants find it not profitable and time-consuming, and they simply do not participate.
In fact, the low-price strategy is eroding the interests of merchants, and many merchants are under increased pressure due to the low-price strategy, and may even incur losses. Some merchants said that platforms use monopoly resources, forced price reductions and other means to disrupt the market and make it difficult for merchants to set their own prices. Profit margins are severely compressed. In addition to the sales discounts required by the platforms, such as full discounts and free shipping, the operational costs of merchants will skyrocket.
3
E-commerce Three Kingdoms: Who is the most vulnerable in 618?
Currently, the main e-commerce platforms are Ali, jd.com, and PDD. Two of them have experienced changes in their top management. After the Singles' Day sales in 2023, Xin Lijun, the CEO of JD Retail, withdrew and Xu Rong, the CEO of JD Group, took over the position. Soon after, Ali did a similar thing. Wu Yongming, the CEO of Ali Group, replaced Dai Shan as the CEO of Taotian Group. Both companies have their group CEOs managing e-commerce business, indicating their importance attached to this business.
The two CEOs at the helm of e-commerce have no better way than to compete on price. The price war is a common and helpless approach. The price war on both sides is an open secret. According to media reports, in early June, searching for "cheaper than JD" on the Taobao App would take you to a prominent top page with a "how to compare prices to be lower" comparison page, followed by a comparison of specific product categories. Similarly, JD is also unwilling to be left behind. Searching for "cheaper than Tmall" would take you to a price comparison page that says "If you buy more than the Tmall price guarantee, we'll pay you double the difference." However, the above-mentioned pages of Taobao and JD have been offline.
The emerging e-commerce platform Douyin, whose GMV reached 2.6 trillion yuan in 2023, is also a player in the price war. In May, Douyin announced a small-scale test of a price adjustment system. This system gives a pricing range based on the pricing of the entire network through intelligent analysis, becoming another milestone in e-commerce price comparison. Then PDD followed suit and introduced an automatic follow-up price system. When e-commerce users hit a ceiling, the high-growth era will not return. Taking Ali as an example, its revenue growth rate in the past three years was 18.93%, 1.72%, and 8.34%, respectively. The growth rates from 2019 to 2021 were 50.58%, 35.26%, and 40.72%, respectively, showing a significant decline. JD also showed a downward trend, with revenue growth rates in the past three years of 18.29%, 13.95%, and 8.59%, respectively. Even in the previous three years, the lowest growth rate was as high as 28%.
Revenue growth has slowed down, and e-commerce users have hit a ceiling. Whether it's the traditional big three of Ali, JD, and PDD or emerging e-commerce platforms like Douyin, Kuaishou, and Xiaohongshu, they are all actively or passively joining the "price war."
The person in charge of a certain brand's online store in Shanghai expressed concern about the price war, "Prices are currently at a low point and are about to fall to the ground. For some brands that are not strong enough, engaging in a price war will harm their own interests. Falling into a vicious circle of not getting traffic without waging a price war and making no money or losing money if they do so is not healthy and cannot be sustained for long."Regarding the competition between Ali, PDD, and JD, Zhang Fei believes that PDD is more advantageous, and Ali may be the most injured. "PDD is known for its low price, while JD emphasizes the timeliness of shopping experience. Ali may not be able to compete with PDD in terms of price, and may not be able to compare with JD in terms of timely shopping experience. Although Ali performed well this year's 618 shopping event and ranked first, in the long run, Ali may be the most injured. JD is also facing challenges. After all, the rise of emerging e-commerce platforms such as Meituan has gradually eroded their timeliness advantages."
Perhaps, as Zhang Fei said, Ali is currently the e-commerce giant with the largest market cap evaporating in the US stock market, with a high point evaporation of 586 billion US dollars. PDD, known for its low prices, has become the e-commerce company with the highest market cap. In the environment of collective cooling of US-listed Chinese stocks, PDD's market cap has fallen the least among e-commerce companies.
The 618 Shopping Festival has ended, and there are joys and sorrows. The joy is that the major e-commerce platforms have scrapped the "first raise the price and then lower it" and various hidden algorithm routines, and moved on to the most direct price "knife fight", which makes it simple and clear for consumers to choose the most cost-effective products. The sorrow is that despite the price being pushed to the bottom, the overall sales volume has still plummeted, and consumers' passion for the 618 event may have dissipated. This is the worst 618 in the past 16 years, but it may also be the best 618 in the future. In the case of touching the interests of many businesses, how many businesses are willing to participate in the 618 event in the future is still unknown. Whether there are other paths besides price competition in the shopping mall competition is also a difficult problem that Alibaba and other companies have to pay attention to and solve.
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The article reflects the author's personal opinion
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