Comparative analysis of three platforms: classification, competition and evolution From Ali vs Jingdong vs pinduoduo

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The following is the Comparative analysis of three platforms: classification, competition and evolution From Ali vs Jingdong vs pinduoduo recommended by recordtrend.com. And this article belongs to the classification: Brokerage Report, Electronic Commerce.

The long-term impact of Xinguan epidemic on retail sales is far greater than that on any other consumer goods. From the perspective of change trend, the speed of offline transfer to online is much faster than that in the past. After nearly 20 years of e-commerce development in China, the total amount of online retail sales will only reach 20% in 2019. After the outbreak of the epidemic, the penetration rate of domestic retail e-commerce will reach about 25% in a few months, and may exceed 30% by the end of the year. China’s retail e-commerce has completed the development of the past five to 10 years in one year. It can be imagined that the acceleration of the epidemic on retail has had a profound impact on the development of brand, e-commerce platform and service industry chain, thus cultivating consumers’ habits, thus changing the long-term strategic development focus of enterprises. Through text summary and chart logic verification, we deeply compare the differences in user characteristics, platform characteristics, underlying operation logic, organizational structure, brand profitability, live broadcast and future platform development potential between Alibaba, Jingdong and pinduoduo platforms, so as to provide reference for industrial development and investment.

First of all, six long-term judgments on retail e-commerce are as follows: 1) demand or supply thinking determines the attributes of the platform; Alibaba and jd.com are supply thinking, and pinduoduo is demand thinking; 2) the comparative advantages of e-commerce operation efficiency make e-commerce still have the conditions for rapid growth, and the online penetration rate will be further improved; 3) the strong retail e-commerce giants will remain strong, and the concentration may be further enhanced 4) the demand for e-commerce flow and product operation is gradually increasing, and more technical means are needed to solve the problem of experience and efficiency; 5) each platform has the value of difference dimension, and the profit status of different platforms for the same level of brand selection is different.

Short term data recovery is fast, and e-commerce provides an entry point for domestic consumption recovery: according to the feedback from the tripartite data (fuel number technology and QM), the retail e-commerce was damaged in the short term during the Xinguan epidemic period, but the recovery speed of the three platforms was very fast, and the active users basically recovered after the Spring Festival. The epidemic has a great impact on the domestic consumer industry. As one of the core channels to provide consumers with goods, e-commerce is also affected by the decline of large single categories, such as clothing and household appliances, and the recovery rate is relatively slow. However, the rapid growth of consumer goods has made up for the structural decline in some categories. According to the data from April to may, in terms of active users, Gmv and other indicators, pinduoduo, Jingdong and Alibaba are the fastest to recover. At present, the growth rate of retail e-commerce has almost recovered to the level before the epidemic. Pinduoduo announced on April 7 that the number of orders increased by more than 60% in the past 15 days since March 15, and the growth of JD Q1 users, revenue and net profit exceeded expectations. Through holiday promotion and other means, Alibaba’s Gmv, active users and other indicators have basically recovered to the growth level before the epidemic.

The road to the rise of double disk platform: the second take-off of Alibaba’s C-end e-commerce retail comes from the upgrading of Taobao to tmall. The success of tmall is especially marked by the creation of “double 11”, and the number of consumers and brand participation continues to increase. Mr. Zhang Yong led the brand upgrading of tmall. In 2015, Mr. Zhang Yong, the leader of double 11, served as CEO of Alibaba group, announcing Alibaba’s future direction – consumption upgrading. In many organizational structure adjustments, he stressed the core strategic position of tmall. Mr. Jiang Fan led the innovation of algorithm technology, implemented the strategy of dry noodles, adjusted the flow distribution path, and improved the matching efficiency. In some categories, such as clothing, home appliances and other traditional industry brands, the proportion of e-commerce has increased from less than 10% in the past to more than 25%. Alibaba enjoys the consumption upgrade bonus of traditional brand online. In the past two years, the growth rate of platform brand has gradually returned to 30%, and the consumption upgrading has entered a stable period, but it is still higher than the growth rate of total social retail sales. In the future, consumption upgrading is still one of Alibaba’s main core directions. At the same time, Alibaba enjoyed the profit increase of advertising and Trading Commission, and the monetization rate increased from 2.44% in 2015 to 3.6% in 2019, and the market value of Alibaba nearly doubled from 2015 to 2018. In 2015, Alibaba took a stake in Suning e-buy, which made up for the short board of tmall in household appliances and 3C. Meanwhile, Suning e-buy obtained the first-class flow entrance of tmall platform, and Alibaba had the confidence to compete with JD in the field of home appliances / 3C.

In 2017, 618 was the peak of Jingdong’s first stage of development. Relying on the advantage of traffic, Jingdong required the three-party merchants to lock in inventory and reduce prices for promotion. The sales volume of the three-party platform market increased rapidly. In 2017, Jingdong 618 reached 119.9 billion, close to the sales volume of tmall’s double-10 last year, and the tripartite platform of jd.com has developed rapidly. Alibaba, taking advantage of the platform, requires local brand merchants and Taobao brands to choose one from another, especially clothing merchants. More than 100 local clothing brands withdrew, which seriously affected the supply side of Jingdong third-party platform. At the same time, due to the expansion of self operated products, Jingdong has brought about diseconomies of scale, the performance fee rate has continued to increase, and the profitability has declined. Due to the withdrawal of categories, the traffic side continued to grow at a low level until Q1, 2019, when the organizational structure of JD was adjusted and the assessment indicators focused on user experience, the traffic growth bottomed out and reversed. During the new epidemic, the number of users of Jingdong with its self-supporting logistics system rose sharply compared with the previous period. It can be said that the self-supporting system of Jingdong well accepted the new users and orders during the epidemic period, and realized the second take-off. From 2019 to 2020, the sinking of Jingdong is just like the fire like tea, and the annual active number of sinking users of Jingxi has increased significantly.

From 2015 to 2018, while Alibaba and jd.com are upgrading their consumption in the first and second tier cities, pinduoduo is quietly budding.

Pinduoduo was just started as a game project, and later it was integrated with spell good goods. After the event, another consequence of tmall’s consumption upgrading is that Taobao’s middle and tail merchants are hard to get good traffic, and the profitability of merchants is declining. At the same time, the rise of pinduoduo has given these middle and tail businesses a good flow entrance, and their profitability is not wrong. The rise of pinduoduo also has the advantages of time, location and people.

From 2017 to 2018, the three-party platforms of jd.com were suppressed, and tmall could not find competitors with binoculars. The active users of the platform continued to grow, the profitability of e-commerce was greatly improved, and domestic consumption was upgraded strongly. In 2016, Alibaba proposed a new retail strategy to look for offline traffic. However, due to Alibaba’s demand for consumption upgrading and its neglect of the sinking market, Alibaba has marginalized Taobao and juhuasuan. Alibaba’s strategic appeal for brand upgrading has given pinduoduo two-year opportunities. Until the listing of pinduoduo in 2018, Alibaba really attached importance to the low-end market and pinduoduo, and began to formulate competitive strategies for sinking the market, such as juhuasuan 10 billion subsidy, Taobao special price version, etc., but it is difficult to block the development momentum of pinduoduo.

Consumers in China’s first tier cities are upgrading their consumption and enjoying the dividend of brand growth. However, the indisputable fact is that the gap between the rich and the poor is widening, and consumption classification emerges as the times require. The biggest characteristic of consumption classification is that consumers need different products and channels, and there are great differences in the consumption ability of high and low line level. Therefore, it is necessary to establish different consumer minds. According to the theory of wealth of nations, the poorer a place is, the more expensive things are. The backwardness of consumption classification and low-level retail market provides the conditions of consumption and supply side for the birth of pinduoduo. The vast majority of China’s population only met the needs of the Internet. Before pinduoduo was launched online, there was no better mining of online demand. However, there were many fake problems in the low-level supply, and the price was not cheap. Pinduoduo’s online use of online high-dimensional and low-dimensional, which increases the transparency of commodity information and reduces the price of goods. In addition, the low-level online products solve the problem of unsalable goods.

The underlying logic of the operation of the three major retail e-commerce platforms: the sinking of wechat users is the most thorough of all Internet enterprises; the threshold free payment of wechat solves the problem of currency circulation in the low-level market; wechat is an important starting point for the flow sinking. In 2013, wechat blocked Taobao links, providing a good flow soil for pinduoduo’s growth in another dimension. Pinduoduo is demand driven supply thinking, how to understand? Huang Zheng, founder of pinduoduo, quoted a saying that “the demand side is the raw nose to pull the supply side reform. Through the collection of information and the connection of the whole link, there is a lot to be done to achieve higher quality of the existing demand. In most cases, it is also worth encouraging. This kind of demand change is to exchange the unity of time and space for the overall efficiency High e, low cost Abstractly, there is a possibility that the supply side can realize the semi market economy of small and medium-sized batch “customized production” by promoting the demand circulation side to adopt more planning, so as to promote the supply, and realize the semi market economy of small and medium-sized batch production, that is, the semi planned economy on the demand circulation side can promote the realization of the semi market economy on the supply side To the embodiment of demand driven supply thinking, it is in line with the founder Huang Zheng’s semi planned economic theory of demand and supply. First of all, the algorithm promotes the user selection, the user promotes the thought of single product pop up, and the pop up promotes the product low price strategy, so as to realize the promotion of consumers’ love. Rational economic people have common characteristics for the low price of the same product. Therefore, according to the user convergence, the platform presents the state, even if the user’s real individual and overall response.

Pinduoduo is a single product operation thinking, and it has no shopping cart. Compared with shopping carts of traditional e-commerce platforms such as Alibaba / Jingdong, pinduoduo’s sales evaluation and operation of a single SKU are more refined. The popularity of single product is based on the choice of users. The algorithm gives pinduoduo a low price strategy in product recommendation. These low prices are not intervention, but the results of users’ click to purchase and browse. In terms of the underlying operation logic, although both Alibaba and pinduoduo are platform e-commerce companies, pinduoduo is more inclined to Google algorithm thinking. The consumption link attaches importance to the price for consumers – the platform increases the price weight – and the cost-effective platform consumers. The page display of pinduoduo comes from the feedback of consumers’ real implementation. The realization of pinduoduo traffic comes from advertising and commission. It is also possible that a membership system will be established in the future to increase the repurchase rate of users and reduce the cost of brand enterprises by charging membership fees. Alibaba is inclined to search promotion thinking, and the link is external traffic entry – brand purchase traffic – converting into sales – improving brand premium – traffic. Businesses need to find a more appropriate flow distribution method and logic among many platform traffic products, which is similar to financial engineering modeling to realize RO1 maximization. It is difficult for many overseas brands and traditional domestic brands to understand the flow operation rules, and the e-commerce agent operation mode has been born. Many mid-range brands, such as Antarctica and domestic cosmetics brands, have been born on Alibaba platform. There are also many acting operation companies of operating brands, such as baozun e-commerce, one net one creation, etc., serving traditional brands and overseas big brands. Jingdong’s cash flow mode has changed from the past flow thinking to user experience as the main way, including page replacement, from single page in the past to the mode with merchants and user algorithm as the main body. Self operated products can reduce subsidies by increasing prices, ensure the timeliness of genuine products and logistics distribution, improve user activity, obtain new users and enhance the repurchase of old users.

Different dimensions of brand profits are different: we have recently investigated many platform brands and merchants, and come to the following conclusion: the overall profitability of brands such as worm and above in Alibaba and JD is high, Wang pinduoduo, while brands of waist and below are in pinduoduo. The profitability of aribaba and Jingdong, such as agricultural products, e-towel, etc., are high. In order to maintain their own premium ability, the top brands have to maintain their own premium ability , they are not willing to obtain traffic through price reduction, which will affect the tonality and gross profit margin of the brand, which is not conducive to brand building and the cultivation of consumers’ minds. The traffic brought by price reduction is less than that brought by the same investment in Alibaba. Pinduoduo, in order to upgrade the brand, has found a new way to cooperate with brand licensors. Pinduoduo’s 10 billion subsidies are basically concentrated on big brands. And brand merchants by reducing the gross margin, pinduoduo to low-cost commodity flow to give a tilt. On the whole, the gross profit margin sacrifice of head brand is greater than ro conversion due to price reduction. The profitability of head brand is weaker than that of Alibaba, mainly because the commodity price of Alibaba platform is more expensive than pinduoduo. This is because the brand is bound to Alibaba, willing to invest advertising expenses in Alibaba, obtain search traffic entrance, and maintain the premium ability of the brand continuously. From the perspective of real efficiency and experience, pinduoduo is more like a retail enterprise than Ali, while Alibaba is more like an online shopping center.

We have calculated the profitability of users of e-commerce platforms, and the net interest rate of pinduoduo users in the first year is about 70%. The ARPU value of old users is higher, which can better share the new sales cost, and also reflects the success of pinduoduo in the business model. The profitability of Alibaba’s core business platform is relatively high, and the overall net interest rate is close to 40%. The profitability of the old user platform will be stronger. As a self operated platform, Jingdong has begun to turn the net interest rate to positive, and the overall profitability is also steadily improving. The profitability of old users is also a process of steady improvement.

Differences in organizational structure: Alibaba: Alibaba’s organizational structure has to undergo adjustment after double 11 every year. One of Alibaba’s corporate culture is to embrace change. Each adjustment is mainly the addition or merger of clusters. The adjustment of clusters brings about personnel changes, which should be adjusted according to whether KPI is achieved. From 2015 to 2020, the organizational structure will be adjusted every year, mainly after the promotion of major festivals. It can be seen that Alibaba relies more on the promotion of festivals to get more traffic and pay more attention to the assessment of major festivals. Traffic, profitability, ROI and user growth are the key indicators of cluster assessment. Doudong: in 2019, Jingdong will deeply adjust the operation right, and Liu qiangdong will retire behind the scenes, mainly making macro strategic layout, transferring the management right to the CEOs of various groups, and implementing more strict assessment system within the company. Through the adjustment of the organizational structure, the company has stimulated the vitality of the organization, which has hit the bottom and rebounded in the second half of the year. In addition, user experience has become one of the most important KPIs in the company’s three KPS. Adding performance score will affect department evaluation and bring very significant results. At the same time, the logistics terminal has also begun to open the logistics and improve the efficiency of warehouse utilization. Pinduoduo: pinduoduo’s management is a more flat management mode, which ensures the timeliness and effectiveness of senior management.

Judgment of moat and future platform attributes: from the perspective of core competitiveness and differences, we can see different moat capabilities and platform attributes of the three platforms. Making more subsidies of 10 billion does not mean that we intend to make a tmall or Jingdong. The core experience in JD comes from the fast logistics experience. Although the platforms consumers see are similar, the underlying realization and display logic are different. Jingdong is like a retailer grafted with Internet capabilities; pinduoduo is like an online version of Costco, while the algorithm technology is equivalent to a buyer. It constantly collects your needs and recommends products you may like. The tonality of the platform and the occupation of its own categories may determine that the unit price of pinduoduo will not reach the level of tmall or Jingdong in the future, but it is expected to exceed the repurchase rate in the future Alibaba. Alibaba is the gathering place of new products and brands. With a large flow pool and many dimensions, Alibaba is a typical traffic ecosystem. Maintaining traffic growth and realizing better realization of traffic flow are the main directions of Alibaba, which is more like the online version of shopping center business. In terms of core competitiveness, there are differences among platforms.

Jingdong achieves brand quality assurance through strong management and control. At the same time, the instant logistics experience has won many fans from the first and second tier. The platform is highly cost-effective, whether it is fresh food, general merchandise and daily necessities, or brands with 10 billion subsidies. The core feature of these users is rational purchase, just as technology has already made a close loop to users’ portraits. At present, each platform has 10 billion subsidy activities. In terms of effect, the 10 billion subsidy is far more significant to pinduoduo than Ali and Jingdong. The core strategy of pinduoduo is to attract first-line and second-line consumers to spend more other products on pinduoduo.

At present, pinduoduo’s strategic direction is in the upward direction of consumers and platform brands. From the hierarchical level, pinduoduo’s first-line and second-line consumers account for about 27% (similar to that of platform brand sales), which is about 15% lower than that of Taobao. Pinduoduo’s 10 billion subsidy, through brand publicity and sales cost investment, unites brand licensors to bypass the platform and choose one with less cost To leverage nearly 100 billion brand sales. The subsidy brand activities attracted many first-line and second-line consumer groups, changed their views on platform brands, and established a high-cost mentality. Pinduoduo needs to do more layout and brand introduction in the supply side in the future. According to the data of the three parties, pinduoduo brand sales account for about 30% – 40% in 2019, the number of platform brands is more than 10000, and the brand merchants are about 100000. Compared with Jingdong or tmall, there is still room for improvement and potential. Focus on Gmv. From the ARPU value of users, pinduoduo in 2019q4 is about 1700 yuan, and Alibaba is about 9000 yuan. Pinduoduo still has great potential space. The core to solve the ARPU value of consumers is to include more commodity SKUs through the upward movement of brands and consumers, and from the perspective of commodities, the repurchase rate – SKU x average number of single product purchases. Assuming that the average purchase times of consumers are fixed, the influence factor of repurchase rate is to increase the number of SKUs. At the same time, different SPU determine the price of different commodity attributes, and the fresh product customer list is obviously inferior to the brand products such as clothing, household appliances and wine.

Ali’s strategy lies in the sinking of users and localization layout. It is facing not only pinduoduo but also meituan’s competition for localized life. In particular, meituan has also begun to expand the distribution services at the commodity end, increasing the categories of goods except catering and wine travel, which has put pressure on Alibaba’s localized traffic. Alibaba’s current 10 billion yuan subsidy is also a market choice to restrain pinduoduo and its sinking. However, juhuasuan does not pose a real threat to pinduoduo, and it is more to contain it. Although all subsidies are 10 billion yuan, pinduoduo is more in the first and second tier, while juhuasuan’s 10 billion subsidy is in the third and fourth tier cities.

The development of Jingdong is more assisted by the improvement of logistics experience. As for the sinking market, because its products tend to be brand oriented, the consumers in the sinking market can not reach the ability of brand consumption in terms of consumption power. Therefore, it is not a reasonable choice to sink the main station. If the brand tonality is reduced, consumers in the first and second tier markets will be lost. Therefore, Jingxi, a separate version of Jingxi app, has been made for Jingdong. At the same time, it has given its own primary station a level of traffic entrance. If low-level users have the ability to upgrade consumption, they can divert to Jingdong’s main station. The overall effect looks very good, and Jingxi has grown rapidly. In order to improve the net interest rate and its own roe level, on the one hand, JD improves the cost control of its own business, and continuously improves its bargaining power with suppliers by taking advantage of its scale advantage, but it also considers the specific cost of each merchant to achieve cost reduction; on the other hand, through the reduction of subsidies by mature users, the self operated gross profit rate is increased by a higher margin, and the gross profit rate in 2019 is higher than that in 2018 It rose by nearly 2 points, and the gross profit rate also increased in 2020q1. The rising cost rate at the logistics end is the core indicator that criticizes JD’s overall scale diseconomy. However, we can see that through opening up social logistics, JD has improved human efficiency, reduced most of the labor compensation expense rate and discount and amortization expense rate, and the net interest rate is still in a relatively benign promotion channel. At the same time, the growth of users ensures that Jingdong can continue to gain the quality users in the sinking market power.

The significance of live e-commerce to the platform: our team has written several in-depth reports on live e-commerce this year, which has attracted the attention of the industry and the investment community. Live e-commerce is an upgrade of video compared with graphic display. Video is more able to establish interaction with users. Taobao live broadcast has led the whole live e-commerce industry. Through the supply chain capacity and flow capacity, Taobao has trained live broadcast talents such as Li Jiaqi and Weiya, and transformed commodity flow into popular traffic. Many brands also benefit from live broadcast, such as perfect diary.

The core advantage of Taobao live comes from the brand’s supply chain advantages. The products are rich enough. By creating several celebrities to lead the live broadcast of merchants, a large proportion of them have encouraged the live broadcast. However, if we look at the commission rate, it actually weakens the profitability of tmall’s brand advertising. Therefore, we judge that Ali’s resources and traffic will turn to the business live broadcast, after all, Taobao live broadcast It is enough to attract the attention of the industry. In fact, Jingdong has a separate traffic entrance for live broadcasting, and the deduction rate for merchants through live broadcasting business has decreased from about 7% to 1%, which greatly stimulates the enthusiasm of brand merchants for live broadcasting. Pinduoduo seldom sees celebrity live broadcast and has no separate traffic entrance. It is more business led live broadcast. Of course, for live broadcast, it focuses more on the traffic advantages brought by the supply chain, and pinduoduo is low enough. If it can assist the live broadcast experience of merchants, it will improve the interaction between consumers and brand merchants, and realize the improvement of conversion rate.

Jingdong – more is to strengthen its own moat, such as increasing the construction of warehousing infrastructure. In the past, it was more through the way of renting, now it is through the mode of taking land to build its own warehouse. As the core assessment index, the improvement of Jingdong’s user experience provides the correct choice of management direction to ensure and stabilize the first and second tier markets. It will become the key to the long-term growth of jd.com to make good use of the traffic entrance of Jingxi and continuously reverse the flow of its main station.

Pinduoduo – the flow is strong enough, which has already taken the second place in the e-commerce traffic industry. In the future, it will further enhance the potential of existing users, and constantly strengthen the mentality of consumers with high cost performance, which is also one of the important directions of market investment in sales expenses in the future. At the same time, the core is the business end, including commodity operation, user management, brand introduction, etc., to improve the repurchase rate of consumers and become a platform type Costco. We can see that the sales volume of pinduoduo’s agricultural products is growing rapidly, accounting for 15% of the platform’s sales, which provides a good grasp for the flow of agricultural supply to consumers. At the same time, the white brand c2m mode is used to spell brands The sustained investment will provide a strong driving force for pinduoduo’s long-term growth.

Alibaba has established the surrounding infrastructure around the core business, and its future growth is relatively stable. At the same time, compared with pinduoduo and Jingdong, the multi-dimensional application of data will provide a good opportunity for precision marketing of merchants and cost reduction of factories.

It is expected that the three e-commerce platforms in the future can reduce the cost of invalid information in production and consumption, realize the connection between production and demand, and create happiness and better life for more consumers and producers.

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