In 2022, according to the financial report and calculation data, there were six e-commerce platforms with GMV exceeding or approaching the trillion scale, namely: Taobao/Tmall 8.3 trillion, JD.COM 3.47 trillion, Pinduoduo 3.3 trillion, Meituan 1.6 trillion, Tik Tok 1.5 trillion and Aauto Quicker 0.7 trillion. (Because the WeChat applet and video number contain multiple e-commerce platforms and entity retailer applets, it is suspected of repeating GMV calculation, so statistics are not added separately. )
In addition to GMV data, Taobao/Tmall/Pinduoduo, which have the largest number of users on e-commerce platforms, both exceed 900 million, which means there is still room for 500 million users to increase. However, if the elderly aged 70 and above and children aged 10 and below are excluded, the room for users to grow is basically very small.
From these two data, we can see that the e-commerce industry in China has really entered the competition stage of the stock market from 2023, and the most obvious feature is that the growth rate of platform GMV and users continues to slow down, or even negative growth.
Then, in the stock market stage, what strategies will the six major e-commerce platforms adopt to maintain their existing market position, and at the same time launch competition with other platforms to gain new growth?
First, Taobao’s five strategies
Zhang Yong once said on the earnings conference call in the third quarter of 2022 that the biggest threshold of Ali platform is that it has formed a methodology to help businesses continue to operate.
In the organizational adjustment at the end of last year, he said that Ali should change from "fixed" to "advanced". Internally, he also stressed that he should change from "defensive" to "advanced". With the five strategies of live broadcast, private domain, content, local retail and price power clear, Ali will finally start to take the initiative to attack and play a stock game with e-commerce rookies such as Pinduoduo and Tik Tok in 2023.
The purpose of these five strategies is to continuously improve the user experience and life cycle value of Taobao’s more than 900 million users, mainly including three aspects:
First, provide richer consumption forms through three strategies: live broadcast, private domain and content, and strengthen user stickiness and duration.
Taobao live broadcast is one of the fastest growing businesses in the whole Taobao department in 2022. In the first nine months, nearly 200 live broadcast rooms with turnover exceeding 100 million yuan have been generated on Taobao live broadcast. In the past year, there were 25,000 live broadcast rooms with an annual turnover of over one million, and 334 categories with an annual turnover of over 10 million and a growth rate of over 100%.
From May to September, 2022, the monthly turnover (GMV) of Taobao Waist Anchor maintained a year-on-year growth of more than 50%. Before the Double Eleven last year, Ali officially released a set of data: in the past year, Taobao added more than 500,000 anchors, and more than 100 live broadcast organizations settled in Taobao in the first two months of the Double Eleven.
At the same time, Taobao Live has precipitated 120 million new members for brand guidance, with more than 20 purchases per capita, and the average daily ARPU value exceeds that of 30 yuan.
In terms of private domain, as early as the end of 2020, Taobao App underwent a major product revision. One of the most important changes was to upgrade the important position of merchants’ private domain "Weitao" to "subscription", and "subscription" and "recommendation" were juxtaposed to form two major channels on Taobao’s home page.
Taobao’s public domain traffic is concentrated on the "recommendation" page, and the platform controls the traffic distribution and makes personalized recommendations according to the user’s usual click behavior; Private domain traffic, including "subscription" page, shop and details page, group chat, etc., has become an important position for merchants to operate fans and members in Taobao.
It is reported that Ali is currently trying to upgrade Tmall’s flagship store. The general direction is to change the single store form dominated by shelves in the past. Secondly, the construction of brand members will be a key point of this upgrade.
On September 1st, 2022, at the 2022 Taobao Live Festival held in Hangzhou, Taobao Live 2.0 "New Content Era" was officially released. The live broadcast of this domain and the first guess, shopping, search, hand-scouring fields with good goods and point-scouring realized "common domain connectivity", and the traffic distribution mechanism was changed from the main indicator of transaction to the dual indicator of transaction and content, and the live broadcast rooms with good content and high conversion will get more public domain traffic.
Cheng Daofang, general manager of Alibaba Taobao Live Business Group, said that excellent content entrepreneurs will receive all-round support such as industry binding, commission incentives and exclusive traffic when they enter Taobao. "In the past, many people had the impression of e-commerce live broadcast. We have made clear the new value proposition of Taobao content, that is,’ professional and interesting people will take you to buy’. "
It is reported that the four anchor policies released this time, such as the new pilot plan, the light guide alliance, the super new coffee plan and the source power plan, will support the doubling of 2,000 accounts, the annual turnover of 5,000 stores will exceed 10 million, and 100 content accounts with more than one million fans will be cultivated, and the benchmark accounts with over 10 million transactions will be incubated in the industrial belt for 500 years.
In 2023, "content-oriented" will continue to be listed as one of the strategic priorities, and the business departments related to big Taobao products will also adjust their organizational structures in the same period. For example, "browsing" and homepage recommendation business will be merged by one person, and more content originally on the "browsing" channel will appear in the homepage information flow in the future.
Second, through a clear "price power" to continuously improve the cost performance of goods, including the design of market mechanism, various marketing products, and the business model of Taote agricultural products and factory goods directly reaching consumers (D2C and F2C).
When Zhang Yong was asked how to look at the low-cost subsidy competition of his peers in the past fourth quarter of 2022, he said that price is a very important customer experience, but throughout history, only low-cost subsidies and low-level competition can not change the situation.
"Only the innovation of technology and business mechanism can truly let merchants give the best goods and prices to consumers, forming a positive cycle."
In other words, Ali’s "price power" is not just a simple low price, but a cost performance ratio under high quality.
"Price Power" will be implemented by Zou Yan, the former head of Taote products, and reported to Wang Mingqiang, the head of platform development center of Big Taobao.
An Ali person familiar with the situation said that Zou Yan’s role is similar to that of PM (Project Manager) in the campaign of "Price Power". On the one hand, he is responsible for importing the low-cost supply and service practices accumulated by Taote before, and on the other hand, he is responsible for docking the business centers of Big Taobao.
The third is to fulfill the contract through local supply and local logistics, and cooperate with Taoxianda and TaoCaicai to meet the immediate demand for high-frequency goods, which is the local retail strategy.
As early as May 2020, Ali made clear the retail battlefield in the same city headed by "Tmall Supermarket+Taoxianda+Box Horse". On February 9th this year, the background platform of Tmall merchants issued a notice, adding a delivery mode in the same city, supporting multi-capacity calls and displaying logistics details. Merchants can choose relevant delivery services from instant delivery platforms such as Hummingbird Matching, UU Running Legs, Shunfeng Tongcheng and Flash Delivery, or contact other platform riders or merchants to deliver their own goods to meet users’ immediate receiving needs.
This means that Ali will continue to increase local retail in 2023.
In the view of "Zhuangshuai Retail E-commerce Channel", the success of Taobao live broadcast is the main position of Ali. No matter whether it is private domain, content-based or local retail, we can make breakthrough progress by relying on Taobao live broadcast, continuously increase the scale of DAU for daily users, activate the shelf mall system of the main station, and continue to play games with three new e-commerce platforms, namely Pinduoduo, Tik Tok/Aauto Quicker and WeChat Video.
In addition, with the adjustment of organizational structure at the end of 2022, Zhang Yong announced that he will concurrently be the CEO of Alibaba Cloud Smart, and it can be seen that Ali will actively consider the business model changes and breakthroughs brought about by technological innovation while actively investing in technology research and development and increasing 2B business.
Second, JD.COM’s four must-win battles
The annual JD.COM Retail Commendation Conference was held in a low-key manner on March 7th. Xu Lei, CEO of JD.COM Group, and Xin Lijun, CEO of JD.COM Retail, both attended and made speeches. At the meeting, Xu Lei pointed out bluntly the long-standing problem in JD.COM-it is difficult to push forward the reform with the goal of "separation of mining and marketing".
Xu Lei said that it must be thoroughly implemented this year. "If it doesn’t change, this company will be finished!" .
Xin Lijun briefly reviewed the difficulties of JD.COM retail in the past year, pointed out the existing problems of JD.COM retail, and put forward four battles that JD.COM retail will win in 2023-sinking the market, building a middle platform in the supply chain, opening up the ecological construction and doing business in the same city.
From the long-term research and analysis of JD.COM by Zhuangshuai Retail E-commerce Channel, it is found that the construction of middle platform and the open ecological construction in the supply chain are actually serving the sinking market and the same city business, and these four must-win battles are also the battles of fully opening the platform in JD.COM.
In 2020, Xu Lei’s battle for JD.COM retail was "omni-channel, sinking market and platform ecology". At that time, Jingxi’s business had just begun to explore the sinking market, and Dashang Super-omni-channel business group was also established at the end of April of that year, and it became the fastest growing business in JD.COM in the following two years.
Last year, due to the abolition of Jingxi, JD.COM’s retail industry removed the "sinking market" in the battle to win, and became "large, medium and large units in the supply chain, omni-channel, search and recommendation, and business in the same city". With the stabilization of Shangchao’s business, and this year’s "low price strategy" was clarified and a long-term subsidy plan of 10 billion yuan was launched, JD.COM once again designated "sinking market" as a battle to win.
After all, in the battle for the sinking market, Liu Qiangdong had previously stressed internally that the retreat of Jingxi business did not mean that JD.COM gave up the sinking market.
JD.COM’s business in the same city includes Dada Group’s JD.COM home and the main station’s JD.COM hourly shopping, which has become an emerging business that can continue to maintain double-digit growth.
According to the financial report data released by Dada Group, in 2022, the total transaction volume (GMV) of JD.COM’s home platform reached RMB 63.3 billion, up 46.9% year-on-year, and the number of active stores exceeded 220,000, up 50% year-on-year, with 78.6 million active users and 62.3 million active users in 2021.
With the high-profile launch of "Ten Billion Subsidies" in JD.COM, the campaign to vigorously promote open ecological construction and attack the sinking market again has officially started. ?????????????
Three, Pinduoduo’s four strategies
In terms of agricultural strategy, Chen Lei, chairman and CEO of Pinduoduo, believes that "agricultural digitalization has just started, and there is still a long way to go".
In the future, Pinduoduo will continue to increase investment in agriculture, and remain dedicated and patient with this long-term vision, and strive to contribute to agricultural and rural modernization and rural revitalization.
Wang Jian, senior vice president of Pinduoduo, said that it is Pinduoduo’s long-term strategy to re-invest and re-supplement the agricultural sector. In addition to the zero commission policy for agricultural products merchants that has been implemented since its inception, this year, we will continue to deepen the promotion of helping agriculture and benefiting farmers around six aspects: increasing supply, expanding consumption, stabilizing production and marketing, cultivating talents, strengthening science and technology, and helping infrastructure.
According to the data, in 2021, Pinduoduo Platform generated a total of 61 billion orders, up 59% year-on-year, of which the sales of agricultural products accounted for 14%, and the growth rate of agricultural orders was particularly significant.
Kim Dae-jung Since 2019, Pinduoduo has held four consecutive agricultural goods festivals, and the number of radiation producing areas has expanded from 500 in 2019 and over 1,100 in 2021 to nearly 2,000 this year.
In 2022, it was upgraded to "Super Agricultural Goods Festival", which became the promotion activity with the longest duration, the largest production area and the largest subsidy among all e-commerce platforms.
According to the "Report on the Growth of New Farmers in 2021" issued by Pinduoduo, by October 2021, the number of "new farmers" had exceeded 126,000, accounting for more than 13% of the agricultural businesses. Among them, women accounted for more than 31%, reaching more than 39,000; 00, accounting for more than 16%, reaching more than 20 thousand people.
In terms of brand strategy, in 2021, Pinduoduo upgraded its "New Brand Plan", supported 100 industrial belts from 2021 to 2025, and customized 100,000 new brand products, driving sales of 1 trillion yuan.
At the beginning of 2022, Pinduoduo launched "Duoduo New Country Tide". According to the data of "Duoduo New Country Tide Consumption Report 2022", by the end of 2021, the number of domestic brands in Pinduoduo had increased by 270% year-on-year, and there were 327 brands with sales exceeding 100 million, including more than 50 old brands with sales exceeding 100 million and more than 30 new country tide brands with sales exceeding 100 million. The number of domestic products entering the platform had increased by far more than 530.
In the third quarter, "Many New Craftsmen Made" was released to promote the digital upgrading of local handicraft industry, non-legacy industry and secondary industry, and help the industrial revitalization of counties and villages.
Obviously, Pinduoduo’s brand strategy is divided into two directions: attracting investment to introduce mature brands, upgrading white or factory brands and farmers to brands.
Finally, through the platform advantages and traffic empowerment, we will provide a full range of professional services including digital tools, brand planning and promotion, technology research and development, design support and so on for many factories, farmers and craftsmen.
In terms of overseas strategy, in September 2022, Pinduoduo officially launched Temu, a cross-border e-commerce platform in North America. Currently, its overseas markets include the United States, Canada, New Zealand and Australia.
According to official data, as of March 2023, Temu had dominated the App Store shopping list and Google Play shopping list for several days, with more than 40 million new downloads.
Temu adopted the pre-Pinduoduo game, with large front-end traffic, quick and accurate marketing strategy, and presented in the form of a shop, and opened JIT (just-in-time production system) to facilitate merchants’ payment and measurement. At the back end, Temu’s goal is to sell one store worldwide, that is, the stores that meet the standard will be synchronized directly, and the synchronized goods will directly have a new round of incremental market traffic bonus without additional operation by the seller.
Since its launch, Temu’s hot-selling products such as women’s wear and small household appliances have sold more than 10,000 pieces per day, and the daily sales of a single store have exceeded 30,000 pieces. At present, Temu’s number of parcels in the United States has exceeded SHEIN.
The relevant person in charge of cross-border e-commerce business in Pinduoduo said that it will provide all-round infrastructure services to manufacturing enterprises going out to sea, including domestic and foreign warehousing, cross-border logistics and after-sales service, so as to open a "full link" cross-border channel for manufacturing enterprises.
From the long-term research on Pinduoduo conducted by Zhuangshuai Retail E-commerce Channel, it can be seen that the moat formed by agricultural products can keep the sinking market, and the repurchase rate of users in first-and second-tier cities can be improved by increasing the proportion of brand merchants, while the expansion of overseas markets can find more incremental markets.
In terms of local life and instant retailing, Pinduoduo’s entry advantage is also obvious. Apart from the user scale of 900 million, it also includes the operation ability of e-commerce platform, more than 1.8 million merchant resources, the push team for community group buying and the social tools based on WeChat.
In March, an investment promotion document showed that after the local life business of Kuaituan was officially launched, it will be launched at the personal center of WeChat applet and the homepage of the head of the delegation. For early admission merchants, Kuaituan will provide "one-to-one service for city managers, support for traffic resources, and product selection by official operators".
The data used in the poster to attract service providers are: GMV of 80% resident service providers increased by 200%, and the arrival rate of 50% offline merchants increased by 35%, providing 30 million daily activities and trillions of exposures.
Obviously, the four strategies of agriculture, brand, overseas and local life can make Pinduoduo form differentiated competition with other e-commerce platforms in the sinking market and overseas market, and thus continue to make profits.
Fourth, Meituan’s "Retail+Technology"
In September 2021, Wang Xing upgraded the strategy of Meituan from "Food+Platform" to "retail+technology". A month later, a special group was set up within Meituan to be responsible for the discussion and resolution of retail-related businesses.
Meituan’s retail business has clearly defined two categories: "instant retail" which focuses on Meituan’s flash shopping and Meituan’s grocery shopping, and "Mingtianda Supermarket" which focuses on Meituan’s optimization.
Among them, Meituan Flash Shopping, which was born in 2018, has become the core business of Meituan’s new strategy due to its rapid growth.
According to the data as of June 2022, the average daily order volume of Meituan’s flash purchase reached 4.3 million orders, and the peak daily order volume in Chinese Valentine’s Day last August reached 9.7 million orders, close to 10 million orders. In the third quarter, Meituan’s instant retail orders, including food and beverage takeout and flash purchases, exceeded 5 billion, up 16.2% year-on-year.
"Tomorrow’s Supermarket" was upgraded by Meituan, and now there are two open platform business models. One is the original community group purchase, which adopts "online pre-purchase+offline self-delivery", and the other is the traditional B2C shelf mall that benchmarks JD.COM Supermarket and Tmall Supermarket. Business food, fruits and vegetables, daily distribution of grain and oil, wine and milk drinks, home kitchen and bathroom and other daily life categories.
According to the financial report data, in 2021, Meituan preferred to achieve GMV of 120 billion yuan in the whole year, and by August 2022, the monthly users reached 8,103,300.
"Zhuangshuai Retail E-commerce Channel" believes that the layout of Meituan’s retail business has been completed, and the next step will be to continuously optimize and upgrade the retail business by changing the organizational structure and process.
The organization and process of instant retail business and Meituan takeaway business are relatively compatible and matched, and the original team and ability can be reused; However, there are significant differences in the B2C shelf mall of "Mingtianda Supermarket" in terms of investment promotion, platform operation, logistics and warehousing, after-sales service, etc., which requires the Meituan to make great adjustments in the person in charge, team and process to compete with Taobao/Tmall, JD.COM and even Tik Tok/Aauto Quicker.
As for the strategic direction of the US Mission in science and technology, in addition to the continuous investment in related technologies such as unmanned distribution, the US Mission is also improving its scientific and technological strength by investing in technology companies, and Wang Xing also invests in some emerging technologies in a personal way to gain potential opportunities.
Five, Tik Tok’s shelf mall and Aauto Quicker’s "super head" trouble.
On May 31, 2022, at the second eco-conference of Tik Tok e-commerce, Wei Wenwen, president of Tik Tok e-commerce, announced the new plan of Tik Tok e-commerce, upgrading the interested e-commerce to the stage of global interest e-commerce, launching the shelf mall, covering users’ full-scene and full-link shopping needs, and opening up the two-way consumption link of "goods looking for people" and "people looking for goods".
More than half a year after upgrading the global interest e-commerce, Tik Tok e-commerce spread the expansion plan of Tik Tok supermarket and Tik Tok takeaway in early 2023.
In the view of Zhuangshuai Retail E-commerce Channel, the core categories of supermarkets are fast-moving consumer goods and fresh food, and the core category of take-out is catering, all of which belong to the category of "high frequency" (daily frequency, weekly frequency and monthly frequency). Tik Tok e-commerce obviously wants to improve supply through high-frequency categories, rapidly promote the improvement and development of shelf shopping malls in 2023, continuously cultivate users’ consumption habits and increase repurchase rate.
With the user scale advantage of 700 million daily activities and the experience and team of short video and live broadcast e-commerce with a scale of more than one trillion, Tik Tok e-commerce will be full of imagination in 2023, which will also make JD.COM, Taobao/Tmall, Pinduoduo and Meituan enemies. Except for JD.COM, other e-commerce platforms have increased their investment in short video and live broadcast to varying degrees.
E-commerce in Tik Tok can be firm in its strategic goals and determination, and its development pace is steady. At first, the recommendation mechanism of the platform well avoided the troubles of Taobao and Aauto Quicker in the "super-head anchor", so that every Tik Tok e-commerce anchor has the hope of growing into a super-anchor, and there will be no situation in which several super-anchors monopolize the platform.
In the process of platform governance, all anchors have gradually formed a hundred flowers and healthy competition, which has enabled Tik Tok e-commerce to grow healthily and rapidly. At present, facing the basic competition among Ali, JD.COM, Pinduoduo and the US Mission, it is advancing at full speed to the goal of 5 trillion GMV.
On the other hand, Aauto Quicker e-commerce, the "super-leader" from Simba and a group of apprentices, has always made the platform "resolute and continuous", which not only has been trapped, but also affected the merchants and other anchors of the platform, and the differentiation strategy of Aauto Quicker e-commerce is also unclear.
Only by solving the contradiction caused by "over-the-top" as Taobao Live, can Aauto Quicker e-commerce have the opportunity to build a differentiated competitive advantage and strategic goal with the other five e-commerce platforms again, otherwise the growth pressure of Aauto Quicker e-commerce platform in 2023 will be further increased.
To sum up, it can be concluded that in the game stage of the stock market, even if a platform adopts a seemingly radical strategy (JD.COM’s tens of billions of subsidies), it still has little effect on the pattern of the whole industry, and it cannot easily shake the pattern of the industry. For smaller latecomers (such as Xiaohongshu, bilibili, Zhihu, etc.), although the growth rate will be very fast, it is difficult to change the industry structure in a short time.
Innovation at this stage has also become cautious, and every e-commerce platform is worried that innovative business will bring huge losses, leading to opportunities for opponents.
The six major e-commerce platforms invariably take the sinking market and local life/instant retail as the main battlefields, and choose to directly enter the opponent’s basic disk. On the one hand, there is no need to educate users and markets, and the investment is less; On the other hand, you can learn and copy your opponent’s successful experience quickly and avoid making mistakes.
Of course, at this stage, it is also very likely that there will be new entrants who will break through and innovate with the help of technological explosion and then rise rapidly.
According to the technology explosion cycle of every 20 years, the technology explosion around the advent of iPhone in 2010 made the three major e-commerce platforms in Pinduoduo/Tik Tok/Aauto Quicker rise rapidly with the help of mobile Internet technology and 4G, so the next technology explosion cycle should be around 2030.
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