JD and Taobao Take Preemptive Measures: No More Waiting for Low Prices on 618?

With the annual 618 shopping festival on the horizon, JD and Taobao are gearing up to revolutionize the traditional approach to online shopping promotions. Once an exclusive extravaganza hosted by JD, the 618 event has evolved into a nationwide celebration influencing consumers and e-commerce platforms alike.

Since its inception in 2008, JD’s “618” mid-year promotion has gradually transitioned from a JD-exclusive frenzy to a highly coveted sales event embraced by all major e-commerce platforms.

Over the past sixteen years, we’ve witnessed the remarkable consumer spending power of 618. However, with the continuous evolution of the e-commerce industry, the time has come for adjustments to this iconic event born over a decade ago.

JD and Taobao Abandon 618 Pre-sales

In recent times, emerging players like Pinduoduo have posed significant competition to Taobao and JD. With Pinduoduo’s market value surpassing Alibaba’s and JD’s, the industry veterans promptly restructured their organizations and business operations to reclaim their positions in the fast lane of growth. This year’s 618 marks a crucial moment to evaluate the interim results of these strategic adjustments.

According to reports from Jiemian News, both Taobao shop and JD are scrapping pre-sales for this year’s 618 event. Instead, they aim to simplify the shopping process, enhance service quality, and emphasize price advantages, thus returning to a user-centric shopping model. In essence, they are cutting out the flashy pre-sale mechanisms and letting prices and services do the talking.

Additionally, a Taobao marketing document unveiled the marketing rhythm for this year’s 618. Late April to early May is designated as the buildup period, with the first wave of activities kicking off in mid to late May to recall users and drive transactions. The second wave, from 8 pm on May 31 to June 20, marks the full-fledged commencement of 618 activities. Notably, this year’s Taobao 618 event spans nearly two months, signifying a significant extension compared to previous years.

On the other hand, JD is set to commence direct sales at 8 pm on May 31, followed by promotional activities such as special sessions and returns, extending the influence of 618.

Changing the Game for 618: Within Expectations

If there’s one term to describe the reform of this year’s 618, it would be “returning to the roots.” The core demand driving consumer participation in promotions like 618 is to obtain desired products at more cost-effective prices, plain and simple.

The golden triangle of 618—platform influence and GMV, merchant sales volume, and consumer low prices—has been the foundation of most e-commerce platform promotions. Platforms like JD have witnessed significant sales growth through continuous refinement of 618 tactics. However, despite the impressive figures, consumer feedback indicates a waning enthusiasm for the event.

In recent years, phrases like “coldest 618 ever” have become commonplace, reflecting diminishing excitement among consumers despite heavy promotional efforts. The lack of disclosed transaction figures by platforms suggests a possible absence of remarkable outcomes. Many avid shoppers, once dedicated to scouring platforms for the best deals, now perceive 618 as just another sale event.

Indeed, the participation of various e-commerce platforms has enriched the 618 experience with gamification and incentives. However, uncertainty looms over whether users will truly benefit from these activities or fall victim to price manipulation tactics by some merchants.

The decision to abandon pre-sales for 618 was somewhat expected, but the driving force behind this change warrants closer attention.

Low Prices as the Norm: The Primary Challenge for 618

The latest trends in China’s e-commerce industry, as revealed by Xingtu Data’s 2023 E-commerce Industry Trends Report, demonstrate the impact of newcomers like Pinduoduo and TikTok’s live commerce on market shares. Both Taobao and JD have felt the effects, as their market shares have been influenced to varying degrees.

The rapid growth of these platforms can be attributed to one crucial factor: low prices. Whether it’s Pinduoduo’s focus on the lower-tier market or TikTok’s influencers driving down prices, the normalization of competitive pricing has reshaped consumer expectations. With consumers accustomed to everyday low prices, the allure of complex promotions like 618 has diminished.

Since last year, “low prices” have been the shared keyword among e-commerce platforms. Taobao company 2023 strategies include a focus on pricing power, with Alibaba establishing a center for SME development to support smaller merchants. JD’s founder, Liu Qiangdong, has emphasized low prices as JD’s core strategy, past and future alike.

The stance of these leading platforms reflects the industry’s direction: a return to basics, focusing on consumers’ primary concerns—price and service. While the abandonment of pre-sales simplifies the shopping process and enhances price competitiveness, the success of the reformed 618 remains to be seen.

Post-618 Era: Sustaining Consumer Benefits?

In recent online purchases, consumers like Xiao Lei have noticed changes in the platforms’ services. JD’s decision to switch a product from returnable to non-returnable upon Xiao Lei’s request and similar experiences on other platforms have left consumers feeling more at ease.

In the competitive landscape of e-commerce, subsidy-driven competition has always been prevalent, exemplified by events like the 100-billion subsidy and 618. The official claim that the reformed 618 will prioritize price competitiveness and service quality implies a shift towards more refined subsidies.

Consumers need not worry about a reduction in subsidy intensity post-reform. In fact, major brands may increase subsidy efforts, focusing on precision and effectiveness. As the industry reshapes itself, with players like Taobao and JD leading the way, consumers can anticipate tangible benefits from these changes.

As the e-commerce industry undergoes transformation, the actions of platforms like Taobao and JD mark just the beginning. As consumers, our role is to observe industry developments and enjoy tangible benefits amidst the evolving landscape of online shopping.

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