After more than 20 years of development, China’s e-commerce industry has now basically established its e-commerce landscape.
The biggest advantage of Alibaba e-commerce is its rich resources, JD.com’s ’s biggest advantage is genuine products and fast logistics, and Pinduoduo’s advantage is low price and high volume!
Currently, all major e-commerce service providers are committed to providing more professional services to platform users, thereby minimizing the costs required in the transaction process.
The reason why Jingdong Mall was able to stand out among its competitors largely benefited from Jingdong Logistics .
It is with the blessing of JD Logistics that JD Mall can achieve differentiated operations. However, with the rapid development of China's express delivery industry in recent years, JD.com's delivery advantages are no longer prominent, so JD.com is now more eager for traffic.
JD.com, Alibaba and Pinduoduo, they do not control the Internet traffic pool. What controls the Internet traffic is Tencent . WeChat, owned by Tencent, has more than 1.1 billion users worldwide and is a national-level APP.
The reason why JD.com was willing to accept Tencent’s investment was that, on the one hand, JD.com and Tencent’s common rival was Alibaba, and on the other hand, JD.com was eager to obtain Tencent’s traffic support.
So the question is, how much help does WeChat provide to the development of Jingdong Mall? Let's take a look at a set of data.
From 2019 to 2021, JD.com’s annual active buyers reached 362 million, 472 million, and 570 million respectively, and the net number of new users were 56.7 million, 110 million, and 98 million respectively. Each year’s new users come from lower-tier markets. Accounting for about 60%.
As of March 31, 2022, the number of active purchasing users on JD.com in the past 12 months increased by 16.2% to 580.5 million from 499.8 million in the same period in 2021.
From the above data, we can conclude that most of the user increases that JD.com has gained in the sinking market in recent years have benefited from WeChat’s traffic output.
Although JD.com is a member of Tencent, Tencent has also launched traffic output to JD. All this is based on the strategic cooperation between the two parties.
Recently, media broke the news that JD.com announced the renewal of a three-year strategic cooperation agreement with Tencent. The total cost of the cooperation has not been announced. The cost in the previous cooperation cycle was estimated to be US$800 million. As part of the total consideration, JD.com will issue a certain number of Class A ordinary shares to Tencent over the next three years, with a value of up to US$220 million.
According to the agreement, Tencent will continue to provide primary and secondary entrances for JD.com on the WeChat platform. To put it bluntly, JD.com can once again enjoy the traffic support of WeChat.
So here comes the final question, why does JD.com value WeChat so much?
is actually easy to understand. The Internet is essentially a traffic business. Only when traffic passes through your platform can you make business.
JD.com is actually very anxious now because the competition among e-commerce companies has become fierce again. As competition becomes increasingly fierce, JD.com faces considerable operating pressure.
Judging from the financial report previously released by JD.com, JD.com’s revenue in the first quarter of 2022 was 239.7 billion yuan, a year-on-year increase of 18%; the net loss (GAAP) was 2.991 billion yuan, and the net profit in the same period last year was 3.617 billion yuan. Although
users and revenue are growing, profits are not as good as before. This is because in order to compete for users in the sinking market, JD.com launched Jingxi and spent a lot of subsidies on Jingxi.
In a word, JD.com exchanged shares for traffic entrance, and JD.com has made a good start. After all, WeChat has nine grids. If JD.com doesn’t use it, will its rival Pinduoduo have exclusive access to WeChat traffic? Obviously, JD.com would not agree!
