Focusing on improving one's own products and services, and shifting the focus of competition to creating more incremental value for society.

Text | Huashang Taolue, Chen Siwen

Four years ago, People's Daily commented on the community group-buying wars at the time, addressing internet giants:

'You should have more responsibilities, pursuits, and contributions in technological innovation. Don't just obsess over the traffic generated by a few bundles of cabbages or pounds of fruit. The vast ocean of technological innovation and the limitless possibilities of the future are actually more exciting.'

However, some giants seem incapable of waking up.

【1】

Interconnection and interoperability are key terms in China's internet industry in 2024, leading to a series of groundbreaking openness and interoperability initiatives.

Among them, the most notable are the series of wall-breaking and interoperability measures taken by Alibaba, Tencent, and JD.com, which have long been isolated from each other.

For example, the interoperability between Taobao and WeChat Pay, and JD.com Logistics; the interoperability between Alipay and JD.com, etc.

These openness and interoperability initiatives first greatly benefit consumers, deepening their perception of the efficiency and convenience that the internet should inherently provide. Secondly, they are also beneficial to related enterprises, as they can all gain incremental business and customers through interconnection and interoperability.

In the context of the entire industry and even the entire industrial economy, these interconnections and interoperability have two long-term benefits, which are also two more important values and meanings worthy of attention.

Firstly, it allows major platforms and merchants to focus their energy on truly improving their products and services, breaking vicious competition, and forming a culture where good money drives out bad.

When barriers and walls to various information, transactions, and links are torn down, and everyone competes in the open, they will naturally put more effort into product services and can only win competition by doing a good job in product services.

Secondly, and most importantly, it allows the entire industry to bid farewell to low-quality stock competition to a greater extent, and can even be said to be zero-sum game-like involution and internal friction. It allows the accumulated resources, experience, and capabilities to unleash greater value, thereby transforming competition from stock competition to jointly creating more incremental value, exploring new growth models for the industry and even the entire economic development.

Simply put, in the past, much effort was put into the redundant construction of resource facilities and capabilities, and even into involution and internal friction after redundant construction. Now, everyone opens up these resource facilities to each other and uses larger resource facilities and capabilities to innovate and create better products and services together, focusing their efforts on enlarging the pie rather than fighting over it.

Opening up resources and capabilities for sharing, so that they no longer involve in stock competition and internal friction, but jointly create new value and incremental value. For current enterprises, this is not only a better choice for their long-term development but also a commitment to social responsibility: a commitment and contribution to promoting economic innovation and growth and jointly enlarging the economic pie.

It can even be said that this is also the overall situation awareness that should be possessed by industry leaders who have established a dominant position in the market.

However, beyond these forces of openness, interoperability, and upward momentum that jointly promote innovation and creation, there are still some forces going against the trend, resorting to any means to turn others' things into their own.

【2】

Recently, many users who have stockpiled a large number of express deliveries during Double 11 have faced a common dilemma.

Some netizens have complained that when they go to the post station to pick up their packages, they are required to follow the DDMC WeChat official account or download the Pinduoduo APP; otherwise, they cannot view logistics information, receive pickup codes, or pick up their packages. Among them, many users who were forced to download the Pinduoduo APP purchased goods on Taobao and then went to the post station with the sign of 'Cainiao Post Station' to pick up their packages.

Against the backdrop of major platforms becoming more open and striving to bring greater convenience to consumers, such operations are undoubtedly a major eyesore.

However, it is not news that Cainiao Post Stations have been replaced to promote Pinduoduo; it has been happening for a long time. The once sensational 'First Case of Unfair Competition in 2024' centered around what netizens described as 'nest encroachment'.

According to China Intellectual Property News, in April 2024, the Zhejiang Higher People's Court made a final judgment in the second instance on the case of unfair competition between Cainiao Networks and Pinduoduo, rejecting Pinduoduo's appeal and upholding the first-instance judgment.

Ultimately, Pinduoduo was ordered to pay Cainiao 5 million yuan in compensation and publish a statement on the 'DDMC' e-commerce platform on the homepage of the Pinduoduo official website for five consecutive days to eliminate the impact on Cainiao Networks, Cainiao Supply Chain, and Cainiao Post Stations.

This was a lawsuit that lasted two years.

In 2022, Pinduoduo's 'DDMC' developed a new business - entering the express delivery collection sector and launching the 'DD Post Station' brand.

The way 'DD Post Station' gained ground and even tried to come from behind was by 'pulling the rug out from under' Cainiao's terminal store resources, which had been established through years of continuous investment: persuading some Cainiao terminal stores to promote their 'DDMC Terminal System'.

This naturally caused dissatisfaction from Cainiao Post Stations, which believed that Pinduoduo's actions constituted unfair competition and required Cainiao Post Station managers cooperating with them to prohibit access to third-party collection service systems such as DDMC. Upon discovery, Cainiao had the right to terminate cooperation with the post station.

In April of the same year, Cainiao Post Stations officially filed a lawsuit against Pinduoduo.

According to the 'Civil Judgment (2023) Zhe Min Zhong 1180' of the Zhejiang Higher People's Court, the court's trial opinion determined that Pinduoduo's promotion of the 'DDMC Terminal System' by relying on the mature terminal store resources of the Cainiao system constituted improper use of others' market achievements, violating the principles of good faith and business ethics.

Although the lawsuit took two years to reach a conclusion, Pinduoduo's actions of 'nest encroachment' have continued since the verdict came into effect.

Several Cainiao Post Stations have been 'incorporated' into the DDMC system under Pinduoduo's operation, and even more bizarrely, most of these stores still retain their original signboards and continue to operate in the name of Cainiao Post Stations after being 'incorporated'.

This also means that the resources and capabilities of the relevant Cainiao Post Stations are 'multi'-occupied, and the benefits are 'multi'-enjoyed, but Cainiao bears the blame for the poor experience caused by this to consumers.

What a clever substitution and killing two birds with one stone; its tactics are undeniably sophisticated.

A crucial factor enabling such operations is the improper use of others' market achievements.

According to consumer exposés on Xiaohongshu and verifications by multiple managers of DD Post Stations, Pinduoduo offers a one-time subsidy of 3,000 yuan for DD Post Stations that switch to their system, with a daily maximum of 500 yuan thereafter. In return, the relevant post station's backend is switched to Pinduoduo, and express delivery information is entered into the Pinduoduo system, but operations continue in the name of Cainiao Post Stations.

The aforementioned consumer complaints about being unable to view pickup codes and being forced to follow the DDMC WeChat official account or download Pinduoduo to receive packages are precisely due to this.

Moreover, Pinduoduo's 'Scan to Collect and Win Cash Rewards' promotion launched on October 31 also clearly priced the guidance of users to register by post station managers, with each user being valued at at least 0.1 yuan.

The arrival of Double 11 has made the entire situation out of control.

Every year, Double 11 is the busiest time for post stations due to the large volume of packages and customer traffic. Pinduoduo obviously hopes to take advantage of this good opportunity and let post stations assist the platform in better attracting new users and increasing traffic.

However, in an already hectic scenario, this 'bait and switch' operation ultimately led to chaos in post station operations, resulting in inconveniences for users to pick up packages, a backlog of express deliveries, a poor experience, and a large number of complaints due to forced double superimposition.

During the golden period of Double 11, such incidents directly harm the interests of every ordinary user.

In the long run, the ultimate damage will not only be to the interests of consumers and Cainiao but also to the overall e-commerce experience value and even Pinduoduo itself, especially further damaging its already poor brand image.

【3】

The rapid development of internet platforms has been one of the highlights and characteristics of the Chinese economy in recent years.

However, beneath these highlights and characteristics, there are also matters worthy of attention, with the industry ecosystem and even the competitive and cooperative relationship between traditional and emerging business formats being particularly important.

This year, American e-commerce giant Amazon, traditional retail giant Walmart, and Costco all achieved new highs in performance and market value. To date, Amazon has a market value of 2.08 trillion dollars, Walmart's market value exceeds 660 billion dollars, and Costco's market value exceeds 380 billion dollars. It can be said that e-commerce platforms and traditional retail are advancing side by side, continuously achieving a win-win situation.

Behind this win-win situation is the prosperity of the entire industry ecosystem and the resulting contributions to employment, taxation, and economic growth.

However, both Chinese e-commerce giants and traditional retailers seem to be having a relatively difficult time.

In terms of market value, Alibaba + JD.com + Pinduoduo is not even comparable to Walmart alone, and the disparity in traditional retail is even greater.

This disparity also implies the entire industry ecosystem and the resulting contributions to employment, taxation, and economic growth.

What has caused everyone to exert their utmost efforts but still end up having a hard time?

There are many reasons worth considering, but a crucial one may be how to maintain a healthy competitive and cooperative relationship.

Competition is the mission and destiny of every enterprise, and it is also necessary to drive progress. However, how to win competition, how competition can truly drive progress and create incremental value rather than being a zero-sum game; especially, how to avoid everyone exerting their utmost efforts but still having a hard time, is a question that should be considered not only by enterprises but also at a broader and higher level.

Macroscopically speaking, when the existing market has been highly competitive and can no longer be further squeezed, only innovation and creation of new incremental value can continue economic growth. It is time for everyone to enlarge the pie rather than fight over it.

Microscopically speaking, the greater one's ability, the more responsibility one should bear, putting more effort into enlarging the pie rather than fighting over others'.

Four years ago, People's Daily commented on the community group-buying wars at the time, addressing internet giants:

'You should have more responsibilities, pursuits, and contributions in technological innovation. Don't just obsess over the traffic generated by a few bundles of cabbages or pounds of fruit. The vast ocean of technological innovation and the limitless possibilities of the future are actually more exciting.'

This statement still holds true today.

——END——

Welcome to follow [Huashang Taolue] to recognize influential figures and read tales of strategy.

All rights reserved. Private reprinting is prohibited.

Some images are sourced from the internet.

If infringement is involved, please contact us for deletion.