Original title: Gather Budget, JD, and Pinduoduo's “10 billion subsidy” war favors industrial upgrading Source: He Xi

The 10 billion subsidy is becoming an important tool for e-commerce to seize “people and goods” and build core competitiveness.

Taobao has launched a cost-effective “10 billion subsidy” section to accelerate its decline!

On December 11, the day before Double 12, Xi Ge discovered that the Taobao homepage had gathered a bargain and launched the “10 billion subsidy” section. Following Pinduoduo and JD's “10 billion subsidies,” Ali also joined the “10 billion subsidy” war.

Currently, the “10 billion subsidy” product selection is similar to Pinduoduo, focusing on “brands.” The slogan for gathering and calculating “10 billion subsidies” is that there are subsidies for genuine brand products every day, and insane price compensation is equivalent to reducing official subsidies at low prices on the entire network.

Currently, dozens of popular products, such as iPhones, Dyson hair dryers, Nintendo game consoles, and Beats headsets, are launched in the first phase of the 10-billion-dollar subsidy.

According to what Ali revealed, gathering and calculating “10 billion in subsidies” will become a normalized activity in the future.

Xi Ge believes that this is an important step taken by Ali after seeing the value of the competitor's “10 billion subsidy.”

According to data, at present, the number of daily active users through Pinduoduo's “10 billion subsidy” portal has exceeded 100 million, more than 2,800 domestic and foreign brands have participated in the program, and more than 23,000 popular subsidized products. Through the “10 billion subsidy,” Pinduoduo has also improved the two key indicators of “frequency of user purchases” and “customer unit price purchased by users.”

During Double Eleven this year, JD also launched a “10 billion subsidy” campaign. Relying on the concessionary measures of the “Super 10 billion subsidy of 100 billion dollars”, sales of JD-related products increased rapidly. Throughout November 1, the sales volume of BoseQC35 noise-cancelling headphones increased 214% year on year. The sales volume of the 5G version of the Huawei Mate 30 series exceeded 100 million in 1 minute, and won the top of the 5G phone sales list. According to JD's financial report, in September 2019, the number of monthly active JD mobile users increased 36% over the same period last year. In the third quarter of 2019, more than 70% of JD's new users came from low-tier cities.

The positive effects of the “10 billion subsidy” of Pinduoduo and JD have allowed Ali to further clarify its market value.

Xi Ge believes that the normalization of the “10 billion subsidy” operation of Gathering Budget is a further strengthening of Ali's declining competitiveness against Gathering Budget.

The normalization of the “10 billion subsidy” is to push the agglomeration and economic costs to sink at an accelerated pace.

E-commerce platform “10 billion subsidy” war, similar gameplay, different crowds

Xi Ge once analyzed Pinduoduo's “10 billion subsidy strategy” in the article “Pinduoduo's “10 billion subsidy” is building a “goods-centered” moat.

Xi Ge believes that the “10 billion subsidy” is Pinduoduo's strategic move to deal with the “sinking” of the giants, and it has multiple values. First, it is an important means for Pinduoduo to stabilize the decline of users in the market. Through the “10 billion subsidy”, Pinduoduo has further increased platform user stickiness, deepened platform users' perception of product value, and strengthened users' trust in the platform; second, the “10 billion subsidy” helps the platform unite brands, manufacturers, merchants, and integrate industrial chain resources; third, the “10 billion subsidy” is also conducive to boosting Pinduoduo's platform value and has become an important tool for its penetration into high-value people in Tier 1 and 2 cities.

Ali's gathering of plans and JD's promotion of 10 billion dollars in subsidies have also seen its multiple value. However, compared to Gaodong and JD's “10 billion subsidy” and Pinduoduo, although the gameplay is similar, the target group is also different.

If Pinduoshi pushes the “10 billion subsidy” to increase the stickiness of the platform and infiltrate Tier 1 and 2 cities, then it is more about gathering and budgeting, JD is aimed more at sinking and gaining new growth in the lower tier market.

In March 2019, Ali announced that it would merge its original merger with Tiantian Sales and M&A in the Taobao business group to form the Daju Costing Division as Ali's main force in entering the sinking market.

During the 618 period of this year, the Gathering Budget was pushed forward as the main force in Ali's downturn. According to data on aggregation and calculation, during the 618 promotion period, the number of UVs (unique visitors) that can be gathered and calculated increased by more than 215% year on year, and the increase in user traffic was remarkable.

This time, the “10 billion subsidy” was introduced in order to further strengthen its competitive advantage in the sinking market. Of course, it is also to reinforce user stickiness in the mid-range market. After all, the offensive of Pinduoduo and JD was actually a bit ferocious.

The essence of the “10 billion subsidy” is to seize control over goods, which is beneficial to industrial upgrading

In fact, the reason why the “10 billion subsidy” has attracted e-commerce giants to collectively increase their value is that in addition to its multiple explicit values, it also has great invisible value.

On December 2, Jiang Fan, president of Tmall and Taobao, released an internal email announcing the organizational upgrade of Tmall and Taobao: the Tmall business group set up a consumer electronics and home improvement group, the FMCG apparel group, and the Taobao business group established a C2M division.

Why did Ali set up a C2M division? Xi Ge wrote in “Why did Ali set up a C2M division? Strengthen control over goods!》 There has been an analysis in this article.

Fundamentally speaking, Ali's side wants to strengthen its control over goods. In the era of commercial competition, people and goods are the core competitive factors.

To grasp the element of “goods” from the source, we must first focus on the supply side.

Since entering 2019, Ali's process of building an industrial belt has been speeding up. Among them, Taobao, a B2C business line, launched the “Three Arrows” plan focusing on the supply side through its collection and planning. In the future, it will join forces with 2,000 industrial belts, 1,000 agricultural bases, 5,000 digital factories, and 50,000 special production lines to bring good products directly from the place of origin to consumers across the country; while 1688 from the B2B business line launched an event called “Super Origin Day”. In this event, 1688 has successively built 15 industrial belts, including Zhejiang Yiwu, Shandong Qingdao, Zhejiang Zhili, Zhejiang, Baigou, Hebei, and Wenzhou, Zhejiang, into 15 super IPs.

The focus of Ali's initiative to build an industrial belt is to continue the vitality of the factory and greatly improve operational efficiency through digital upgrading. The second is to use the results of digital technology to significantly improve supply chain efficiency, improve efficiency and reduce costs, so that consumers can not only benefit, but also enable manufacturers to obtain better economic benefits.

Gathering the budget to launch the “10 billion subsidy” section is only one part of Ali's strengthening of “control over goods.”

It should be said that the current “10 billion subsidy” war is good news for domestic manufacturing, agriculture, animal husbandry, etc. E-commerce platforms need to increase in volume, users, and industrial belts need to be upgraded and have output value. This is a good opportunity for the transformation and upgrading of manufacturing, agriculture, animal husbandry, etc. Relevant practitioners, industrial belts, and localities should seize the opportunity to expand and strengthen their own brands.