Image source: Visual China

BEIJING, June 12 (TMTPost) -- For some consumers, the 618 shopping festival hasn't officially started yet, but it has already ended. "618" means June 18 in the Chinese language.

"Are you afraid that I will return the goods? The delivery was made immediately after I bought it," many consumers said, feeling that this year's 618 was faster. Before the real 618 arrives, consumers have not only completed the payment, but also received the delivery.

As the first major promotion after the release of the epidemic and the recovery of consumption, brands, merchants, and platforms are all attempting to open the growth valve at this e-commerce feast.

This year, there are more players in the 618 platform. In addition to the usual Taobao, Tmall, JD.com, Kuaishou, Xiaohongshu, and Douyin, WeChat Video Accounts have also joined. Various e-commerce platforms are competing with each other, and "low price" and "efficiency" are still the core, with "full reduction" as the main promotion method. The form is more focused on and biased towards "live streaming and sales".

Faced with the fiery slogans shouted by major e-commerce platforms such as "billions of subsidies", "penetrating the bottom price", and "lowest price on the entire network", consumers are unusually calm. When "low prices" and promotions become commonplace, and after experiencing the harm of "raising prices and then lowering them", consumers' enthusiasm for 618 gradually fades.

"Vouchers" for low prices

This year is a special year for e-commerce platforms. Alibaba's "1+6+N" organizational structure has undergone major changes, Xiaohongshu has accelerated its commercialization, JD.com and Kuaishou have changed CEOs, and Xu Ran and Cheng Yixiao have made their first appearances.

Competition among e-commerce platforms is gradually intensifying. After the organizational structure adjustment, whether the new leadership team can fight this battle well, maintain previous market share, or even go further, faces more unknowns and pressures.

Mu Shan, the general manager of Taobao Tmall 618, shouted, "This year is the largest investment in history."

JD.com Retail CEO Xing Lijun also said that he will hold "the largest industry-wide investment in 618".

On May 18th, one month before June 18th (618), Kuaishou (快手) was the first to launch its 618 pre-sale. Over the following week, JD, Xiaohongshu (小红书), Douyin (抖音), and Taobao successively began their 618 pre-sales. Taobao and JD started their official sales ahead of time on May 31st, and other platforms quickly followed suit.

When it comes to prices, almost all e-commerce platforms have proclaimed their commitment to offering the "lowest prices".

Discounts of 20% and 10% have become standard for 618 promotions. Taobao has launched discounts such as ¥30 off for orders over ¥200, and ¥50 off for orders over ¥300, and for the first time, introduced a "Juhuasuan direct discount" category, requiring products to be offered at an 8% discount off their lowest post-coupon price within 30 days. In addition, Taobao will also launch the "Taobao Good Price Festival", offering nearly one million items for ¥1 each day, and this is Taobao's first 618 marketing channel exclusive to small and medium-sized businesses.

JD has lowered all prices across the board, and each user can receive three ¥20 discount coupons for orders over ¥200 per day, which is equivalent to an additional 10% off. Xiaohongshu has launched flash sales and direct discounts, with ¥50 off for orders over ¥300. Douyin has offered a discount of ¥25 for orders over ¥150.

In addition, JD has made a bold statement with its "Double the Difference if You Buy at a Higher Price" policy. Except for special categories such as gold, if consumers find that JD's Billion Yuan Subsidy products are priced higher than on other platforms during the same period, they can submit their receipts, and if approved, they will receive double the difference; Taobao has launched a "Breakthrough Bottom Prices" campaign, with major products opening up a "Buy at a Higher Price and Get Compensation" channel; Pinduoduo has declared "Every day is 618", emphasizing on 3C electronics; Xiaohongshu has advertised "The Lowest 618 Prices on the Entire Web".

Taobao told TMTPost App that "the price for the iPhone 14 on Taobao is as low as ¥4888, and the price for SK-II's Facial Treatment Essence is ¥769, even lower than its usual 50% off price."

"This year's 618 marketing strategies have been reformed across the industry, with simplified rules and a focus on 'low prices'." Suning Easy Buy told TMTPost App that it is focusing on the "home consumption" track, launching three "new bottom price" activities: "one million home appliances free trials", "super low prices", and "Super Member subsidies", emphasizing a shopping experience that is "genuinely low-priced and more favorable".

It can be seen that this year's 618 discount intensity is unprecedented, even reaching the level of Double Eleven. From the current strategies of various platforms, low prices have become the core competitiveness of each platform.

In the post-pandemic period, consumption has rebounded, but demand is still limited. With more players entering the e-commerce arena and markets overlapping, "protecting the plate" has become crucial.

In the current fierce competition, for platforms, "trading price for volume" is more of a last resort.

"Group" services

Aside from discounts, e-commerce platforms have brought out their ace cards in terms of the variety, quantity, and quality of goods, as well as logistics efficiency, for the 618 event.

In order to expand the range of products available during the event, JD.com's One Hundred Billion Subsidy Program has launched almost 10,000 items, including over 200 super popular products. During the JD.com 618 Conference, JD.com revealed that the number of products participating in the One Hundred Billion Subsidy Program had increased by ten times compared to March.

Taobao has also offered a lot of subsidies for merchants. This includes an 80% discount on shipping insurance and an 80% interest rate discount for credit loans in supply chain finance, as well as providing a service to speed up the receipt of payments without charging fees, allowing merchants to recover funds more easily. Douyin has launched policies such as "showcase management cashback" for merchants and Kuaishou has provided up to a 15% platform subsidy for some big-name products.

According to TMTPost App, this year, Taobao had 1.45 million participating merchants, over 60 million participating products, and 3 million new products. The scale of merchants participating in Tmall's official membership activities reached a historic high, with a year-on-year growth of 53%, and an expected profit-sharing of over 2 billion yuan to consumers.

A Taobao spokesperson told TMTPost App that the 618 event this year was the biggest consumer welfare event ever, which on one hand means that one of Taobao and Tmall's main goals is to provide good products at a good price, hoping to create a better shopping experience for consumers. On the other hand, the platform and brands have provided exclusive discounts for brand members, offering large consumption coupons for 88VIP users. The first batch of large consumption coupons includes two coupons: "400 off for purchases over 5000" and "120 off for purchases over 1500", which can be stacked with cross-store coupons for purchases over 300.

For the 618 event, brands and platforms have shown their utmost sincerity in terms of price, service, and variety of products.

"This year, the heads of 25 top consumer electronics brands, including Huawei, Xiaomi, Samsung, Haier, Gree, Philips, Vivo, and OPPO, came to the Tmall 618 venue and set up their own 'operations rooms.' Many of them set off from Shanghai, Chengdu, Qingdao, Foshan, and other places several days in advance and rushed to Hangzhou to make preparations," Taobao told TMTPost App.

In addition, logistics is also one of the aspects in which platforms compete with each other.

Workers at the Cainiao Hangzhou Bonded Warehouse told TMTPost App, "The stockpiling stage of 618 is very busy. All of our goods are imported from overseas by merchants, so the delivery cycle is relatively long. Therefore, merchants started preparing for 618 in April and will continue until June. Compared to usual, the amount of goods during 618 will increase by about six or seven times, and the amount of purchases will be very large."

To cope with the large promotion, the workers told TMTPost App that the warehouse employees will work night shifts and use bulk packaging stations to ship orders based on the order structure. Four to five people are assigned to each brand for bulk picking, packaging, and shipping to increase production capacity.

In addition to the warehouse operating around the clock, Tmall, Taobao, and SF Express have increased their cooperation efforts and enhanced services such as half-day delivery and next-day delivery. Cainiao and SF Express handle Tmall pre-sale orders in advance, offering a service promise of "pay in the morning and receive goods in the afternoon, pay before bed and receive goods upon waking up" in more than 300 cities nationwide. STO Express and Cainiao have launched the "Smart Warehouse and Distribution Next-Day Delivery" service, extending the cut-off and collection time to 10 pm, and are expected to achieve next-day delivery for 90% of orders throughout the day.

Logistics has always been JD's inherent advantage. This year, in order to ensure delivery efficiency, JD Logistics has continued to expand its pre-sale scale and achieved pre-sale in more than 300 cities. After consumers pay the final payment, the courier can immediately provide "last-mile" delivery, with the fastest delivery time being within minutes.

E-commerce platforms that do not have their own logistics system have increased their cooperation with external logistics. Platforms such as Douyin e-commerce have invited companies such as YTO Express, Yunda Express, ZTO Express, and J&T Express to provide logistics and operational support for merchants and consumer shopping experiences.

In terms of competition, e-commerce platforms are competing in terms of the number of merchants, service quality, and logistics efficiency, making this year's "618" the most exciting yet.

Heavy live streaming

Since this year, traditional e-commerce platforms such as JD, Tmall, and Pinduoduo have raised the curtain on "live streaming sales" in response to the attacks from Douyin, Kuaishou, and Xiaohongshu.

The competition for live streaming content has become increasingly fierce, and the scramble for top anchors has reached a fever pitch, which was fully displayed in this year's 618.

Douyin and Kuaishou rely on their live streaming genes to stand out. Douyin mainly promotes "good things live broadcast room," "selected alliance category day," and "Douke 10,000 orders plan"; Kuaishou has launched two main gameplay features: live streaming room for big brands and product pre-sale.

Pinduoduo directly hopped on the livestreaming bandwagon with Kuaishou. Prior to this year's June 18th shopping festival, Pinduoduo announced its official partnership with Kuaishou at the product level. They will recommend cost-effective products to new consumers in the sinking market through short videos on Kuaishou.

Prior to June 18th, JD Live announced a strategic partnership with "Make Friends", who will officially join JD Live and open an exclusive livestreaming room with the theme of "Good friends, friendly prices". Both parties also stated that they will fully leverage JD's supply chain advantages and "Make Friends" livestreaming sales operation capabilities to jointly explore new content consumption models and achieve growth.

In addition to regular livestreaming, "Make Friends" will also livestream on other platforms such as Taobao, Tmall, and Douyin. JD still has yet to explore how to create its own unique livestreaming model.

Since the beginning of this year, "contentization" has become the most frequently mentioned term on Taobao. Taobao continues to increase the penetration rate of video content, with more content scenarios such as browsing, livestreaming, clicking to search, short videos and guessing games.

At the June 18th Merchants Conference, Mu Shan, General Manager of Taotian Group's Marketing Department, outlined three key points: good products at good prices, Taobao Good Price Festival, and short videos and livestreaming that are good to watch and shop from.

Based on this, content anchors took center stage during this year's June 18th shopping festival. Over 50,000 new anchors livestreamed on Taobao and Tmall for the first time, including retired idol trainees, hosts, and variety show guests.

Suning Easy Buy has also increased its investment in livestreaming. This year, Suning Easy Buy has integrated online and offline channels, creating a livestreaming matrix that includes Super Livestreaming, Brand Livestreaming, Category Livestreaming, and Store Livestreaming.

For example, in Store Livestreaming, on the evening of May 31st, Suning Easy Buy leveraged its 36 major regions and over 10,000 stores to provide a service experience that combines purchase consultation, discounts on individual items, bundled discounts, and localized services. In terms of Category Livestreaming, during the June 18th shopping festival, Suning Easy Buy will also open a special livestreaming session for the "609 Ice Washing Machine Rush" event in over 10,000 stores nationwide, and distribute coupons such as "Spend 100, Get 200", "Spend 200, Get 400", and "Spend 300, Get 600" for top brands such as Hisense, Haier, Midea, Beko, and Electrolux refrigerators and washing machines.

Little Red Book has never denied its ambition for e-commerce. From Dong Jie to Hong Kong socialite Zhang Xiaohui, it has created a unique live streaming feature with a refined customer base as its main focus. This year's 618 festival, Little Red Book fully opened its "note-taking and product placement" feature, which is expected to establish a model of linking notes and live streaming, driving the full-chain scene of "product-effect-sales", realizing a shorter link between "people selling goods" and "goods finding people", and advancing towards e-commerce.

WeChat video, which has a weak presence, has opened an entrance for the "618 Goodies Festival". Video bloggers can post short videos with products and use the topic "618 Goodies on Video" to gain short video traffic promotion.

As more and more consumers prefer to purchase goods through live streaming, whether it is emerging e-commerce or traditional e-commerce, the 618 promotion intensifies the live streaming with product placement, on the one hand to retain more users and attract more merchants, on the other hand to expand their competitive advantage.

A live streaming battle is about to begin. Various e-commerce platforms are raising their flags, creating differentiated content, cultivating unique top streamers, and forming their own live streaming features, which may become the future direction of e-commerce competition.

Discounted, but not much

Since 618 became an official promotion holiday, it has been 10 years. Every 618, various e-commerce platforms put in a lot of effort, competing for discounts, service, and quality, but the stimulation for consumers is not as good as before.

As a senior shopping aficionado, Tan Jing's main focus for this year's 618 is saving money. She told TMTPost App that firstly, there is not as much promotion as in previous years, secondly, there are many daily promotions this year, so the discount for 618 is not very attractive, and thirdly, since the recovery from the pandemic, she prefers to return to offline shopping scenes, and for some categories such as clothing, fresh produce, and fruits, she prefers to buy offline.

"The promotion is not enough, and the e-commerce atmosphere is not strong enough. As a consumer, it is becoming more and more difficult to stimulate me to buy. Therefore, I am tired of the promotion methods such as full reduction discounts and not raising prices." Tan Jing said.

Chen Xiaoling is a mother. Her main purchases this year for 618 were some children's products on Taobao. Like Tan Jing, she told TMTPost App, "I did not compare the price differences between platforms this year. The price is indeed cheaper than usual, but it is not as attractive as it was in the past few years."

Song Jia, who bought quite a few seasonal clothes, did not feel the "lowest price" discount offered by the platform. As an 88VIP member of Taobao, Song Jia said to TMTPost App, "I spent about 1,000 yuan and didn't feel much cheaper than usual. Maybe those who spend several thousand will feel cost-effective. One of the items was priced at 171 yuan, only 7 yuan less than the usual price."

For Song Jia, buying clothes is a necessity, and she moved her originally planned purchase in late May to the 618 shopping festival. "I took advantage of the event to make up for the discount. Taobao VIP is not very useful for 618. Only Tmall supermarket shopping can be discounted, and it's only a 20 yuan discount for every 1,500 yuan spent. I don't have that much shopping demand." Song Jia complained to TMTPost App.

When asked about the biggest feeling of shopping during the 618 festival, Song Jia smiled and said, "The delivery is very fast. I ordered it on the evening of May 31st, and I was done shopping before June arrived."

Zhang Feng, as a member of JD.com, chose to shop on JD.com during the 618 festival. He said, "The delivery is also very fast. I'm used to shopping on JD.com. I didn't specifically rush for the 618 festival, but some of the products I bought before the festival were indeed discounted after the festival started, some were directly discounted, and some had promotions. Because JD.com's one-click price protection is very convenient, I didn't pay too much attention to the details."

Li Xiaoxiao, like Zhang Feng, did not pay attention to the prices. "I bought a lot of equipment for short trips. I started shopping on June 1st and didn't care whether it was 618 or the lowest price. Now everything is price-protected." She told TMTPost App, "You get what you pay for, and cheap things are not good, but expensive things are not necessarily good either."

Faced with increasingly calm and rational consumers, the stimulating effect of the 618 shopping festival on consumers is weakening.

In the past, e-commerce shopping festivals were aimed at achieving platform and brand sales growth. But as the frequency of shopping festivals increases, from Double Eleven to 618, and to festivals of all sizes every month, the presence of platform subsidies and discounts never disappear. Consumers have become indifferent to this lack of innovative promotional stimulation.

As competition becomes more intense, high-quality and low-priced services and products become more "routine," and the space for e-commerce platforms to roll up is getting smaller and smaller, and consumers' enthusiasm for shopping festivals will fade away accordingly.

(This article was originally published on TMTPost App, author | Yang Xiujuan)