The three quarterly reports of JD.com, Alibaba, and Pinduoduo show that the sinking market has become the focus of efforts——
Large-scale e-commerce platforms tap the potential downward
Our reporter Ma Chunyang
A few days ago, JD.com, Alibaba, and Pinduoduo have all released three quarterly reports for 2021.
The financial report shows that under the impact of the new crown pneumonia epidemic on the consumption recovery, the growth of the operating income of the three e-commerce platforms has been weak and the growth of net profit has declined, but the active users are still showing an upward trend.
At the same time, each company further deployed new markets to stimulate potential consumption momentum.
Performance growth has slowed
Judging from the financial reports of the three leading e-commerce companies, different from the previous high performance, although the operating income in the third quarter of this year has increased, compared with the previous two quarters, the year-on-year growth rate has slowed down.
Among them, Jingdong's revenue was 218.7 billion yuan, the highest of the three, a year-on-year increase of 25.5%; Pinduoduo's third-quarter revenue was 21.51 billion yuan, a year-on-year increase of 51%, and its growth rate was in the leading position.
In terms of net profit, the polarization is obvious.
Pinduoduo has the strongest ability to "attract gold", with a net profit of 1.64 billion yuan in the third quarter, which has been profitable for two consecutive quarters.
The net profit of the other two companies dropped significantly.
Regarding the reasons for the lack of revenue growth of the three companies and the decline in net profit growth, Wu Qi, executive director of the Wuxi Institute of Digital Economy, believes that the local spread of the epidemic will have a certain impact on consumption.
At the same time, in the context of stricter compliance and supervision, various e-commerce platforms have also actively adjusted their business strategies and increased their investment in new businesses, resulting in a decline in profitability.
Mo Daiqing, a senior analyst at the Online Retail Department of the E-commerce Research Center of the Net Economics, said that the third quarter was the off-season for online shopping between "618" and "Double 11". The slowdown is also expected.
"To be specific, Ali continues the idea of trading profits for growth, and further increases investment in businesses such as Taote and community business platforms. JD.com continues to increase its efforts in new business development, logistics construction, and sinking marketing. These long-term investments It takes time to see the benefits. Pinduoduo's profitability continues to improve, and its business model is further recognized." Mo Daiqing said.
It is worth noting that the current consumer market in my country has shown a recovery trend.
Statistics show that the total retail sales of consumer goods in October increased by 4.9% year-on-year, and the growth rate was 0.5% faster than in September and 2.4% faster than in August.
Shen Junli, a statistician from the Department of Trade and Foreign Economic Relations of the National Bureau of Statistics, said that in the next stage, as the epidemic prevention and control becomes more precise and effective, and the promotion of consumption policies continues to be effective, the consumer market is expected to continue to recover steadily.
In addition, the third quarterly report also showed that users of the three e-commerce companies continued to show a growth trend.
Among them, Alibaba’s Chinese market consumers reached 953 million, a net increase of 41 million in a single quarter; JD.com had 552 million active purchase users in the past 12 months, a net increase of 20.3 million in a single quarter, a net increase of 110 million over the same period last year; The average number of monthly active users in the third quarter was 741.5 million, a year-on-year increase of 15%.
"In the long run, consumer demand is gradually being released, and the huge domestic consumer market is still to be tapped." Wu Qi believes that e-commerce can optimize supply, promote demand, and smooth connections, thereby further promoting consumption upgrades and expanding the consumer market.
Stimulate the momentum of the sinking market
Compared with the almost saturated first- and second-tier cities, the sinking market has become the focus of many e-commerce businesses.
As Ali's main force in the sinking market, Taote has become its fastest growing business.
In the first 12 months to the end of September 2021, Taote’s annual active consumers have reached 240 million, with a net increase of more than 50 million in the third quarter. The proportion of new consumers from the sinking market has continued to increase. This is also Taote’s continuous success this year In the three quarters, users grew by more than 40 million.
According to industry insiders, the sinking market is a new battlefield for e-commerce platforms. E-commerce companies with complete business ecology will gradually show their competitive advantages. Supply chain integration capabilities, warehousing and logistics capabilities, etc. will also become e-commerce companies to further tap the potential consumption power of the sinking market. Important ability.
From the perspective of Pinduoduo, which focuses on the sinking market, increasing investment in research and development has become its main direction.
The financial report shows that Pinduoduo's marketing expenses in the third quarter decreased by 3% from the previous quarter, showing a downward trend for three consecutive quarters.
At the same time, the investment in technology research and development was further increased, and the research and development investment in the third quarter reached a new high, reaching 2.42224 billion yuan, a year-on-year increase of 34%.
Mo Daiqing believes that “burning money” once became the label of Pinduoduo, but now Pinduoduo has drastically reduced marketing expenses and increased investment in agriculture, which has become its second growth point.
"Driven by the leading e-commerce platform, rural e-commerce will accelerate its development, and it has become the backbone of rural revitalization. The'digital agriculture' with a market scale of several trillion yuan has many opportunities for e-commerce."
JD.com did not directly show its achievements in the sinking market in the three quarterly reports, but from the sales data during the "Double 11" period of JD.com, the importance of sinking the market can also be seen.
It is understood that during the "Double 11" period, the number of users in the rural consumer market on the JD platform increased by 78% year-on-year, and the transaction amount, customer unit price, and consumption frequency also increased rapidly.
Quality consumption is deeply rooted in the hearts of the people
With the intensification of e-commerce competition and the increasingly diversified needs of consumers, in addition to price, quality and service have gradually become the focus of consumers' consideration when choosing products.
Liu Xiangdong, deputy director of the Macroeconomic Research Department of the China International Economic Exchange Center, said that the enthusiasm of the "Double 11" shopping festival demonstrated the innovative growth of my country's new consumption formats and models, as well as the new changes, new trends, and new characteristics of residents' consumption upgrades.
The all-round rise of different user groups, different consumer classes, and new consumption forces reflects people's yearning for a better life, and reflects the consumption upgrade trend of quality, diversification and individualization.
JD.com continues to increase its investment in technology research and development, promotes infrastructure construction, consolidates its "moat" in the supply chain, and promotes user consumption with improved service quality.
In the third quarter, the average shopping frequency of JD.com users increased by 23% year-on-year. Consumers' consumption frequency of food and beverages, fresh food, mothers and babies, and other commodities all increased, and the per capita order volume of users in supermarkets and supermarkets continued to increase.
In the third quarter, Pinduoduo introduced a number of first-tier domestic and foreign brands, including brand flagship stores, specialty stores, and franchise stores.
Chen Lei, chairman of Pinduoduo, said that as Pinduoduo's user base becomes larger and user needs become more diverse, many brand merchants choose to open stores on Pinduoduo.
Many people in the industry pointed out that under the new development pattern of mutual promotion of domestic and international double cycles, to further expand the consumer market and release consumption momentum, it is necessary to return to the original aspiration and start with improving the consumer experience.
In addition, since the beginning of this year, the regulatory authorities have increased their supervision of Internet platforms, severely cracked down on unfair competition practices, and laid a good foundation for fair competition among e-commerce platforms. "Winning by quality" has become an inevitable choice for the further development of e-commerce.
Mo Daiqing pointed out that under the high pressure of anti-monopoly and anti-unfair competition, brands and merchants have more and better choices, which will also provide consumers with a better shopping experience, and at the same time allow the platform to gain more More profit opportunities.
Our reporter Ma Chunyang