Source | Bohu Finance (bohuFN)

In recent years, there has been a rather amusing unspoken rule about Double 11: As the founder of Double 11 and currently the largest e-commerce platform in China, competitors tend to observe Taobao's Double 11 schedule and deliberately start their promotions before Taobao does. The logic here is that the earlier you start, the more you can capitalize on the first wave of sales.

In the past few years, Taobao has suffered quite a bit from this trend. Hence, this year's Double 11, which started as early as October 10th, became the longest in history.

The change in timing is just one aspect of the chaos in China's e-commerce landscape. A Goldman Sachs report shows that Taobao and Tmall's market share has dropped from 66% in 2019 to around 45% in 2023, a decrease of one-third in just four years. In a domestic market where mobile internet growth has peaked, every share lost by Taobao can be attributed to fierce competition from its rivals.

So you can clearly see the new changes in this year's Double 11.

For example, Taobao completed its interconnection with WeChat before Double 11, allowing WeChat users to open Taobao product links shared in WeChat chats and complete product selection, ordering, and payment directly. Additionally, platforms that have been heavily promoting "refund only" policies for half a year have also increased their support for merchants, with Taobao even shouting the slogan "Let's do Double 11 again."

From building walls to tearing them down, from collectively learning from Pinduoduo's "refund only" policy to vigorously promoting measures beneficial to merchants, both consumers and e-commerce practitioners need to better understand the transformations of platforms to make choices that are favorable to them.

01 Double 11 is about to kick off, and platforms are desperately courting merchants

Based on the promotional strategies of various platforms, it can be seen that restarting pre-sales and extending the promotional period are major highlights of this year's Double 11.

According to the official announcement from Taobao, the 2024 Double 11 pre-sales will start at 8:00 PM on October 14th, with the entire event spanning three waves of sales.

JD.com, on the other hand, will not have a pre-sale period for this year's Double 11. Instead, the first wave of flash sales will begin at 8:00 PM on October 17th.

Kuaishou's Double 11 will enter its preheat phase on October 16th, with the official event period running from October 18th to November 11th. The event is divided into five stages: preparation, preheat, opening ceremony, category day, and finale.

To support the development of merchants and gain an advantage in Double 11, major platforms have launched various preferential policies to help merchants reduce operating costs.

On September 24th, Tmall Double 11 officially announced that it will invest tens of billions of yuan this year to help merchants grow their businesses from multiple dimensions, including promoting transactions, expanding customer flow, and reducing costs.

In terms of traffic expansion, Tmall Double 11 will invest billions of yuan to purchase traffic and collaborate with over 200 internet platforms to expand customer flow for merchants. Ahead of this year's Double 11, Taobao and Tmall will officially support multiple payment methods, including Alipay and WeChat Pay.

In terms of cost reduction, Taobao and Tmall have fully launched the Return Guarantee service, which can reduce merchants' return costs by about 20% to 30%. The platform will fully refund Tmall commissions for products participating in the "Billion Subsidy" program. During Tmall Double 11, Taobao merchants will enjoy commission-free promotions and live streaming, and Taobao will also unbind shipping insurance for merchants.

JD.com is also supporting merchants in various ways, such as introducing a multi-billion traffic support policy to help white-label products and factory-direct products gain more traffic and price subsidies. It has also launched an advertising fund reward pool for merchants and provided 20 free AI tools covering product management, order management, and customer service. JD.com Logistics is offering warehouse service coupons and business warehousing discounts to platform merchants, and providing special shipping insurance subsidies for low-margin orders.

According to iResearch, Pinduoduo has upgraded its original "Buy Expensive, Get Refund" service to "Buy Expensive, Get Double Refund," which will take effect on November 16th and apply to all products participating in the "Billion Subsidy" program. It has also introduced a merchant exit mechanism.

There are also new players in the game. This year, Xiaohongshu is hosting its first Double 11, or "Annual Shopping Frenzy," which will officially kick off on October 12th and run until November 11th. The festival will introduce innovative online themed street gameplay, where users can enter "streets" through searches and posts, browse live streams, and collect stamps to redeem rewards.

02 A new Double 11, ushering in e-commerce transformation

Some merchants have told Bohu Finance that even if small and medium-sized merchants do not participate in promotions, their sales volumes do not change much.

Behind this lies the impending turning point in e-commerce competition.

The essence of e-commerce is to connect supply and demand more efficiently. E-commerce competition revolves around these two dimensions. Shelf e-commerce based on the "people find products" logic, live streaming e-commerce based on the "products find people" logic, and Pinduoduo based on low prices and group buying all leverage their advantages in these two areas to capture market share.

The wave of consumption downgrade has forced Taobao and JD.com to learn from Pinduoduo, making billion-yuan subsidies increasingly commonplace. The Double 11 promotion, centered on low prices, is losing its original appeal.

However, facts have proven that blindly pursuing low prices is difficult to sustain as a competitive advantage for platforms: prices on core categories have converged across platforms, and Unbounded efforts to please users will only drive merchants away.

While low prices or cost-effectiveness may still be key to competition for some time, consumers' needs are increasingly diverse, and it is becoming essential to meet these needs from the supply side.

As a Tmall insider put it, Double 11 merchant policies are a continuation of Taobao and Tmall's cost-saving measures this year. The platform has fully "unbound" the "refund only" policy, launched an experience score system, and abolished Tmall annual fees. In today's e-commerce environment, most merchants need not a more competitive platform operation but someone to save them from dire straits.

Taobao was the first to realize this.

After this year's 618 event, Taobao held a closed-door meeting with merchants. It was made clear that Taobao would weaken its absolute low-price strategy and revert to allocating search weight based on GMV. With this change, Taobao's evaluation focus has shifted to GMV and AAC, no longer pursuing high DAC driven by low prices.

On August 9th, Taobao launched an optimized "refund only" strategy for merchants, followed by the introduction of the new Return Guarantee service in early September, which reduced micro-merchants' return and exchange costs by 10% to 30%. According to the latest data from Taobao, after implementing the new strategy for two months, the platform daily averages over 400,000 unreasonable "refund only" requests, effectively addressing the issue across the platform.

In addition to optimizing "refund only" policies, Taobao has continued to introduce measures such as refundable technical service fees, refundable promotion fees, and the abolition of Tmall annual fees to reduce merchants' operating costs.

Meanwhile, JD.com remains committed to its low-price strategy, aiming to cover more merchants and consumers and increase the platform traffic available to merchants.

This transformation is nearly all-encompassing. In addition to the platform's own iterative measures, interconnectivity between platforms has also made new progress.

Since the beginning of this year, Taobao has enabled WeChat Pay, and later, Taobao and JD.com have reached cooperation in logistics and payment.

Through the cooperation with WeChat Pay, Taobao is expected to gain access to a larger user base and improve the user experience, ultimately benefiting merchants. The cooperation between Taobao and JD.com will enhance both merchants' shipping experience and consumers' logistics experience. For JD.com Logistics, it means increased express delivery volumes and a higher market share in warehousing and management services.

In Bohu Finance's view, major platforms are intentionally stimulating market demand through a series of interconnection initiatives, thereby injecting new vitality into the industry and ushering in a new era of e-commerce transformation.

Interconnectivity between platforms is expected to enhance the competitiveness and service level of the entire industry, providing users with a richer and more diverse range of products and services, and further improving platform service quality and user experience.

This year, e-commerce platforms have introduced various measures to achieve interconnectivity. How effective will these measures be? Can redoing Double 11 unleash new vitality? These questions will be answered during this year's Double 11.

References:

1. Labor News: The promotional period for Double 11 has been extended again, as the "cat, dog, pin, dou, and kuai" platforms heat up their warm-up matches

2. Dahe Finance: No more low-price wars this year? Double 11 warm-up begins, and e-commerce platforms compete to give merchants "big red envelopes"

3. iResearch: No fear of "refund only" during Double 11! After two months of the new policy's implementation, unreasonable "refund only" requests on Taobao have been comprehensively addressed

4. iResearch: Xiaohongshu's Double 11 will kick off on October 12th, with the number of purchasing users increasing by 4.3 times over the past year

5. Kanchai: Pre-sales return, and events are brought forward. How can merchants get ahead in this "Double 11"?

6. The Beijing News: The battle for Double 11 has ignited early, and this year's competitive landscape may change

7. Taobao Express: Taobao daily averages over 400,000 unreasonable "refund only" requests

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