Shen Nanpeng once said that losing completely in his own territory made him very angry.
This means that the Sequoia, which once made a lot of investment in the e-commerce track, was unconscious when a new e-commerce company came up, and even gave up its attention to e-commerce, thinking that the era of e-commerce was over.
Not only sequoia, but before pinduoduo, "no grass grows under the Ali tree" has long become the consensus of the industry. Investors in the primary market talk every day about what products can subvert Wechat, and no one has ever talked about who can replace Ali.
In those years, Ali, who knocked all his rivals down, was frantically sucking milk and honey from the land of e-commerce. I can't help it. the business is so good that it's hard to find lanterns with high ceilings.
So much so that the VC, which earned hundreds of times the return on JD.com and VIPSHOP, invested heavily before pinduoduo went public in 2018. Of course, this investment also made Sequoia a lot of money.
However, just as Shen Nanpeng could not bear to lose on his own turf, Ali could not stand it either. This is actually the most unpretentious rule of survival in the business world, even if you are a supercapital or superenterprise, you can't lie down on the merit book. After the rise of pinduoduo, the growing tension in the entire e-commerce track is the best example.
On the one hand, traditional e-commerce is facing the impact of short video e-commerce, the anti-monopoly knife of supervision is on the ground, the difference between platforms is further narrowed, the overlap of users and brands is further intensified, and homogenization competition is intensified.
On the other hand, the trillions of community group-buying tracks derived from e-commerce are a must for giants. Therefore, in the context of the high investment of all enterprises, the pressure on the profit end can not escape. Just yesterday, it was also reported that Ali would invest at least 20 billion to enter the top three of community group buying.
As a result, "volume" has become the latest issue on this track. What is "inner volume"? For example, when you go to the cinema, the people in the first row stand on tiptoe, then the people in the back row have to stand on tiptoe, which is the "inner roll" caused by passive competition.
Some people even exclaim that "the domestic e-commerce track has taken a sharp turn for the worse, Ali has been forced into a prisoner's dilemma, and this track has been destroyed in value." This is somewhat exaggerated, the growth of the track is certain, but the fattest phase of e-commerce stocks is indeed a thing of the past.
To put it bluntly, the business is still that business, but the meat is not so fat.
/ 01 /
Traffic and differentiation intensify competition
Shake up and rush to eat the mainstream e-commerce platform cake.
In the concept of "inner volume" originally put forward by anthropologist Alexander Gordon Weitzer, its core feature is "inward evolution", which is about low-level complexity.
To some extent, e-commerce is also experiencing this change locally. Its main performance is that in the past, the picture and text brought goods, and the live broadcast goods appeared in the user behavior and the direction of change, which is similar to the relative incremental market under the stock market.
However, the competition in the relative incremental market is very fierce, and traditional e-commerce may not necessarily get high benefits in the relative incremental market. The reason is that Douyin and Kuaishou, the two rising short video platforms, are more suitable for live e-commerce, cutting away most of the market share of live e-commerce.
Relevant data show that Taobao's live e-commerce took the lead with 400 billion GMV in 2019, catching up with or even surpassing Taobao's live e-commerce GMV in just one year.
You know, Taobao was the first to do live e-commerce. So why did it steal the limelight of Taobao in just one year?
The logic behind this is that, on the one hand, Douyin and Kuaishou are giants themselves, the former MAU 700 million, the latter MAU 600 million, such a large number of user products, combined with e-commerce with goods, hundreds of billions of GMVs were born a year.
On the other hand, Doukui itself is a content platform, and short video content perfectly fits the trend of e-commerce internalization. Content has become the core link of the platform to link users and promote efficient matching between supply and demand.
In the context of the absolute dominance of short video content, what worries traditional e-commerce even more is that the scale of live e-commerce is still expanding. According to the Froy Sullivan report, the market size of live e-commerce was 416.8 billion yuan in 2019, accounting for only 4.2% of retail e-commerce, and is expected to grow to 6.4172 trillion yuan by 2025, accounting for 24% of the compound annual growth rate of 57.7% from 2019 to 2025.
Imagine that before the rise of short videos, live e-commerce belonged to traditional e-commerce (mainly Taobao Tmall), but with the rise of short video e-commerce, and traditional e-commerce did not have an absolute advantage in the field of live e-commerce. Once the short video platform builds its own supply chain capacity, then the huge live e-commerce market share and traffic will be completely cut away by Douyin and Kuaishou.
Such concerns are not unreasonable. Galaxy Securities statistics show that Tmall has 80% of merchants participating in promotional activities this year, JD.com has about 60% Mel 70%, and Douyin's merchant participation is also as high as 46.6%, ranking third among all platforms. From the performance of Douyin 618, it is not difficult to see that the relative gap between Douyin and traditional e-commerce (merchants, brands, platform services) shows a narrowing trend.
At the end of last year, Douyin cut off the chain of third-party platforms, Douyin stores accounted for more than 96% of channels, Kuaishou is also further going to Taobao, Pinduohua, to create a trust tag independent e-commerce platform. Judging from the actions of both, they are trying to narrow the gap with traditional e-commerce.
Considering the intensification of competition in the entire market and the continuation of the subsidy war, in the short term, the profits of mainstream e-commerce platforms Ali, JD.com and pinduoduo will inevitably be affected.
/ 02 /
User and brand convergence
The platform falls into the "trap" of homogeneous competition.
With the rise of short videos, live e-commerce has built an ecological closed-loop cut-off online e-commerce share, intensifying market competition and putting pressure on traditional e-commerce at the profit end. On the other hand, the landing of the anti-monopoly knife will lead to the weakening of the differentiation ability of e-commerce platform and the intensification of homogenization competition, which will affect the profitability of the industry.
This homogenization is reflected in two aspects.
At the user level, users between e-commerce platforms are accelerating overlap. E-commerce platform essentially earns money from channels, and the degree of user coincidence will directly aggravate the competition.
According to the research report of Huajin Securities, the exclusive rate of users of Mobile Taobao, pinduoduo and JD.com is only about 13%, 11.6% and 1.5%, with a very high degree of user overlap.
The disadvantage of high user coincidence is that when choosing and purchasing goods, users are more inclined to compare the prices of each platform. In this way, it will create competitive pressure in terms of price, and once the platform adjusts its price strategy, it will affect profitability.
At the internal level, the brand convergence of e-commerce and the weakening of differentiation will intensify price competition and affect the profitability of the short-term industry.
In mid-April this year, the regulatory authorities fined Alibaba 18.2 billion yuan. This means that the past accustomed to "choose one of the two" has completely become a thing of the past, and the brand differentiation of the head e-commerce platform has been weakened. To put it simply, Tmall's core category advantage will be weakened day by day, while other e-commerce platforms will slowly do it, thus driving the growth of the entire category GMV.
For example, JD.com, who is making up for his shortcomings, on the Q1 conference call, JD.com retail CEO Xu Lei stressed that "the growth rate of clothing and cosmetics has reached a three-year high."
Not only JD.com, the transaction volume of Douyin and Kuaishou in clothing and makeup brands with high gross margins is also rising quickly. QM data show that during the warm-up period, Douyin, fast sales TOP5 are clothing, makeup, food, mother and child and other high gross profit products.
While clothing and make-up has always been the basic plate of Tmall on Taobao, antitrust has broken the hidden rule of "choosing one from two", allowing businesses rooted in Tmall in the past to return to other platforms. This means that e-commerce brands gradually converge and enter the era of homogeneous competition.
Just imagine, if the brand merchants of each platform are similar at this time, if the platform wants to get more revenue and share, it can only reduce the commission level (encourage merchants to sell more goods on their own platform, or ask merchants to lower the selling price). In this context, other platforms can only keep up with each other, and then forced to be involved in the e-commerce "volume".
In addition, the community group purchase of this "golden beast", but also let all the platforms into the "volume" can not extricate themselves.
/ 03 /
Community group purchase
The uncertainty of sustained high investment
Community group buying may be one of the few trillions of tracks that have not been fully developed in the Internet era.
Community group buying has gone through two development periods. From the early days of the industry, the giants followed the classic style of the Internet-burning money to fight a price war, but did not change the characteristics of community group buying, just to get more users into homogenized competition. In the end, this "no martial arts" style of play was stopped by supervision.
At this stage, after the price war is stopped, the giants enter into the supply chain of community group buying to improve the efficiency of the industry from the source.
In this year's Q1 conference call, Meituan and pinduoduo successively expressed their position to continue to plough the community group purchase supply chain link. Meituan said that the capacity of the supply chain will be further strengthened, in terms of SKU management and long-term competitiveness improvement, while pinduoduo said that he will continue to invest in the field of community group buying, including logistics system, science and technology (such as collection orders from different regions, etc.).
Yesterday, some media reported that community group buying is the key project of Ali's new retail sector investment this year, with an investment of at least 20 billion yuan.
"expensive" is a fair assessment. This is Shen Nanpeng's evaluation of the form of Internet competition in 2019. From today's point of view, this evaluation is more appropriate for the competitive situation of community group buying.
From the perspective of the opening cycle, the giant transformation of the supply chain is of great benefit to the development of the industry, but the problem at this stage is that the pattern of community group buying is not clear, and the profit pressure after high investment is deterministic. Look at a set of data:
From these data, it is not difficult to find a fact that the main players of group buying in the community have seen a substantial increase in revenue, but their profits are much lower. Meituan's new business loss is further extremely large, and pinduoduo's loss is only 11% smaller than the same period last year. Ali, JD.com profit end is under heavy pressure.
The most worrying thing is that it is impossible for giants to give up community group buying, either actively or passively.
On the one hand, the market size of community group buying can greatly improve the profitability of giants and drive up the valuation of enterprises. To calculate the account, based on the current net interest rate of 4%, assuming that the size of community group purchase reaches 2 trillion in 10 years' time, it will bring a net profit of 80 billion for the giants. At 10 times PE, that would raise valuations by hundreds of billions of dollars. This is fatally attractive to companies such as pinduoduo and Didi that urgently need to create a second growth curve.
On the other hand, because of the rigid demand and high frequency of the community group buying track, it is doomed that the community group buying is a good flow entrance. This is an excellent opportunity for companies with traffic anxiety, such as Ali and JD.com. What's more, whether it is Ali JD.com pinduoduo, or Didi, Meituan and other entrants, they covet each other's territory.
In the face of this situation, Internet giants can only spend money one after another, but it is obvious that high investment will directly bring the pressure on the profit side, that is, the increase in income reflected in the financial report does not increase profit. Moreover, due to the uncertainty of the track, this pressure on the profit side will continue for the foreseeable future.
Above, we can restore the real situation of the "volume" of an e-commerce industry, and its growth is deterministic, but due to the rise of differentiated competitors, the intensification of homogeneous competition, and the uncertainty of high investment in community group buying, the good days for e-commerce platforms to lie down and make money are gone forever, and then enter a process of inward evolution.
To put it bluntly, the business is still that business, but the meat is not so fat.