The controversial Refund-Only policy is drawing to a close.

According to Beijing Business Today, several e-commerce platforms, including Pinduoduo, Taobao, Douyin, Kuaishou, and JD.com, will comprehensively abolish the 'Refund-Only' policy, with merchants taking over the handling of original 'refund without return' applications.

This shift is far more than a mere rule adjustment. The rise and fall of Refund-Only reflect a profound question: When traffic dividends peak and technological cycles iterate, how do enterprises navigate between 'internal competition' and 'innovation'?

The answer lies in the laws of the Kondratieff Wave. Over the past two decades, e-commerce has soared on the tailwind of the information technology revolution. Now, the previous Kondratieff cycle is waning, and a new cycle centered on AI is emerging.

Abolishing the 'Refund-Only' policy is the industry's self-correction of outdated rules. 'TMD' (Taobao, Pinduoduo, JD.com) is bidding farewell to zero-sum games that sacrifice ecological health and embracing a new round of value reconstruction driven by technology.

'Refund-Only' Exit: A New Starting Point in the Kondratieff Cycle

The Kondratieff Wave theory (Kondratieff Cycle) uncovers a profound economic law: disruptive technological innovations drive economic fluctuations of 50-60 years, with each cycle experiencing prosperity, recession, depression, and recovery.

Since the Industrial Revolution in the 18th century, revolutionary technologies such as steam engines, electrification, and information technology have successively dominated previous Kondratieff cycles. During the boom period of the information technology cycle, the dividends of the mobile internet enabled e-commerce giants like Alibaba, JD.com, and Pinduoduo to achieve rapid growth.

However, with the diminishing returns of technological dividends, the momentum of global economic growth has significantly slowed, and the e-commerce industry has fallen into a dilemma of 'stock game'.

Against this backdrop, the 'Refund-Only' policy emerged. Pinduoduo pioneered the 'refund without return' rule to tap into the sinking market, with platforms like Taobao and Douyin quickly following suit.

This policy essentially served as a short-term strategy where platforms leveraged their rule-making power to trade merchant profits for user growth and market share, reflecting the typical disconnect between capital investment and technological innovation during the Kondratieff recession. When technological stagnation causes the industry to fall into 'involutional' competition, platforms rely on unproductive rules, such as price wars and traffic subsidies, to sustain growth.

Over the past year, the double-edged sword effect of the 'Refund-Only' policy has been evident. It boosted user activity in the short term but compressed merchants' profit margins, attracted fraudsters, surged logistics and insurance costs, and even threatened the survival of small and medium-sized merchants in the long run.

It's time to hit the brakes. Starting with Taobao loosening the Refund-Only policy, major platforms have successively optimized this approach. E-commerce platforms are gradually recognizing the need for a development model with more long-term value. History has repeatedly proven that enterprises that can navigate through cycles often possess two traits: keen insight into technological innovation and a long-term commitment to ecological health.

Currently, the world is at the tail end of the previous Kondratieff cycle (information technology cycle) and the nascent stage of the next Kondratieff cycle (centered on AI, biotechnology, etc.). At this historic juncture, the end of the 'Refund-Only' policy signifies both the e-commerce industry's farewell to the old growth model and its embrace of the new Kondratieff cycle.

Since the beginning of this year, Taobao Tmall, JD.com, and Pinduoduo have accelerated their adoption of emerging technologies and changes in business ecosystems, on the one hand fostering a multi-win business ecosystem among 'platforms, merchants, and consumers' and on the other hand expanding exploration of AI technology applications.

At the starting point of the new Kondratieff cycle, competition in the e-commerce industry has escalated from 'rule games' to 'racing in technology and ecology'. Those who can embed innovation in the soil of the real economy will anchor their future coordinates in the long wave of technology.

Changes on the Supply Side: Seeking the Greatest Common Denominator of Innovation

Historical experience indicates that giants from the previous technological Kondratieff cycle often become the pioneers of the next. At this time, 'TMD' is leading a new wave of changes in the e-commerce industry.

First, the three major platforms have spearheaded strategic adjustments, shifting from 'traffic involution' to 'value return', optimizing the business environment, supporting high-quality merchants, and reducing internal competition to allocate more energy to growth and innovation.

In addition to loosening the Refund-Only policy, Taobao, JD.com, and Pinduoduo have introduced a series of policies to support merchant development. Taobao Tmall has led merchants in the beauty, apparel, sports, and outdoor industries to launch a 'growth campaign', governing the business environment and planning support and incentive strategies; JD.com has upgraded the 'Spring Dawn Plan', investing at least 1 billion yuan in advertising subsidies for brands and merchants; Pinduoduo has intensified the construction of a high-quality e-commerce ecosystem, launching the '10 billion yuan reduction' last year and the '100 billion yuan support' plan this year.

This means that on the current e-commerce battlefield, giants have quietly changed tactics. The driving force behind e-commerce giants shifting from short-term traffic competition to long-term ecological reconstruction is undoubtedly the arrival of the new Kondratieff cycle, nurturing more growth opportunities.

Emerging technologies, represented by AI, are opening up the next decades-long prosperity wave. Companies that pioneer the application of new technologies to traditional industry fields have already tasted the first wave of dividends. For example, through the deep integration of 'hardware + algorithms', JD.com has improved the fulfillment efficiency of JD Logistics by 40%. Additionally, Alimama has stated that AI capabilities have demonstrated significant assistance in merchant operations, with the application of AIGC image-generated videos bringing a remarkable 65% increase in click-through rates (CTR) for merchants.

Undoubtedly, e-commerce giants are leveraging their resource advantages to preemptively carve out a significant share in the era of AI e-commerce.

Alibaba values AI operating systems in defining e-commerce ecological rules. Alibaba has invested 380 billion yuan in its AI strategy, with its Taobao Tianmao Group continuing to advance its AIGX technology system, large model family, and other technological advancements.

JD.com emphasizes its strengths in 'industrial AI'. For instance, it broadens its supply chain moat. In the past three years, JD.com has invested over 40 billion yuan in research and development, with over 30% going to the AI field, successfully creating an intelligent supply chain. Taking JD Retail's intelligent supply chain platform as an example, by applying AI capabilities to various supply chain scenarios, it provides precise predictions, intelligent decision-making, and efficient coordination for tens of millions of SKUs in its self-operated business, reducing JD.com's inventory turnover time to 31.2 days.

Furthermore, Pinduoduo allocates 70% of its AI resources to transaction links, breaking through barriers in agricultural product circulation through technological breakthroughs. CTO Chen Lei said, 'Engineers must go to the fields and workshops, and the value of technology must be measured in pounds and ounces.' This underscores that Pinduoduo's AI strategy serves the sinking market and agricultural digitization.

Although the paths differ slightly due to varying business pain points, the three giants are all turning to technology-driven ecological construction, supporting merchants and industrial chain upgrades through resource allocation and technological innovation.

Therefore, this transformation is not merely an upgrade of technology but also a reshaping of industrial logic.

E-commerce giants are shifting their focus from short-term traffic changes to medium-term ecological reconstruction and long-term technology transformation. Chinese e-commerce is collectively turning to knock on the door of a new Kondratieff cycle. Facts will prove that those who dare to break free from the shackles of short-termism and advance in the long wave of technology will reap more fruitful rewards.

For investors, this is a critical period for reassessing the e-commerce industry. As Zhou Jintao said, 'The accumulation of wealth in life depends on the precise positioning of the Kondratieff stage.' The future valuation logic of the e-commerce industry is shifting from 'traffic scale' to 'AI technology penetration rate and ecological collaboration capabilities.'

Paradigm Shift in E-commerce Valuation Logic in the AI Era

As the new AI-centered Kondratieff cycle kicks off, the global e-commerce industry is undergoing the most profound shift in valuation paradigms since the mobile internet revolution.

The dominant logic of GMV growth in traditional e-commerce valuation models is waning, with AI technology penetration rate and ecological collaboration efficiency constituting new value axes.

From the most intuitive performance indicators, the team of UBS analyst Kenneth Fong stated that as AI technology continues to enhance in the future, it will further assist JD.com in improving user experience and fulfillment efficiency, thereby consolidating its future growth potential and profit margin improvement space.

From the perspective of ecological collaboration, Alibaba's AI technology enables its retail, finance, logistics, and other businesses, unlocking cross-scenario collaboration value and driving long-term valuation premiums. In this regard, Guosen Securities pointed out its optimism about Alibaba's enabling effect on other business lines driven by the AI industry. Additionally, Pinduoduo has continuously invested in technology to empower agriculture, improving the efficiency of data interaction between fields and warehouses, verifying the value creation path of intelligent digital technology for in-depth transformation of vertical scenarios.

The upcoming mid-year sales promotion will become a litmus test for the AI transformation of e-commerce platforms. Alimama proposed the proposition of 'AI-Driven Quality Wins 618', emphasizing the AI full-link operational efficiency enhancement path; Jingzhuntong, a one-stop digital marketing service brand under JD.com Group, is preparing for the sales promotion with the theme of 'Wisdom Convergence and Co-Elevation'; Douyin E-commerce is currently developing its first AI e-commerce service for C-end users, 'AI Shopping Assistant'. Various signs indicate that the long-silent e-commerce sales promotion is ushering in more new attractions.

Of course, the current application of AI in empowering e-commerce by major platforms is still relatively nascent. From the efficiency revolution to the ultimate paradigm disruption, the imagination of AI e-commerce is still far from being unleashed. From a long-term perspective, AI large models are still in the early stages of rapid iteration, and the pioneers of this era need to achieve leaps through continuous exploration.

It is foreseeable that when the marginal cost reduction curve brought by AI intersects with the GMV growth curve, the e-commerce industry will break through the valuation ceiling of traditional e-commerce.

In this unprecedented business form transformation, those pioneers who can continuously output δ values (marginal improvement rates) will ultimately capture α opportunities in the rotation of the Kondratieff cycle. This is both the evolution theory of commercial civilization and the prophecy of value reassessment under industrial cycles.

Source: Hong Kong Stocks Research Institute