The year 2023 will start with a "billion yuan subsidy" and end with "live streaming sales". In 2024, JD.com chose to spend another "1 billion" on content.
On April 10th, JD.com officially announced that it will invest 1 billion in cash and 1 billion in traffic as rewards to attract more original authors and high-quality content institutions to settle on the platform, in order to help brand merchants find new growth points. The Daily Economic News reporter further learned that JD.com is actively preparing for the incubation of top talents and plans to select the top 100 talents by the end of the year. And the money spent solely on the stage of reserve talents has already exceeded billions.
The incentive combination of "cash+flow" is JD's greatest sincerity in investing in content.
However, the scale and magnitude of the 1 billion investment may just be an appetizer. Li Chengdong, an e-commerce analyst, told the reporter of the Daily Economic News that the investment of 1 billion yuan can only be "drizzle" under the weight of Xiaohongshu's tens of millions of grass planting pictures and texts every day, and Tiktok's hundreds of millions of videos every day. He predicts that JD may have more investment in the future.
It is worth noting that JD.com has anchored its strategy in the "content consumption market", which is a more generalized content e-commerce ecosystem with short videos, live streaming, and graphic and textual advertising as the primary forms.
For top traditional e-commerce players, this will no longer be a story of seeking secondary growth, but a standard feature, which is one of the key factors that makes it impossible to lose.
JD has invested 1 billion yuan each in "cash+flow"
In the context of traditional e-commerce, enhancing the content ecosystem has long been the top priority. This is not just an anxiety from short videos and grass planting platforms to share the cake. The growth in the new stage needs to be matched with new models, which is understandable in itself.
But unlike Tiktok, Kwai, Xiaohongshu and others who focus on content, live broadcast and grass planting, they have a set of logical businesses and work. JD and Taotian already have a huge scale in the area of shelf style shopping malls. In contrast, they naturally need to devote their energy to do it.
Although there are still concerns about a clone lacking skills at present, JD.com and Alibaba have not softened.
In order to recruit more outstanding talents and institutions to settle in, JD.com has decided to offer one billion yuan in cash and one billion yuan in traffic as rewards, stimulate enthusiasm, produce content, and recruit talents.
The reporter learned that on the one hand, JD.com will provide cash subsidies to experts in more than 20 creative fields, including digital 3C, home appliances, mother and baby, beauty and personal care, and automotive products.
Specifically, creators who meet the recruitment requirements can receive a maximum cash creation subsidy of 30000 yuan per account within a single cycle. On this basis, creators can also enjoy video playback subsidies and sales commissions.
On the other hand, JD.com provides more exposure for high-quality content, not only through algorithmic weighting and subsidies for fixed traffic vouchers, but also through evaluation and fashion TAB display methods in the browsing channel, as well as adding evaluation and fashion floors in the product details page to further attract traffic.
JD also sets incentives for the entry of institutions and influencers. In addition to providing basic recruitment incentives for institutions, a special institutional incentive list of up to 5 million yuan is also set up. As long as the number of people successfully introduced by the institution reaches a certain scale, there will be a generous one-time cash subsidy every month.
It is worth mentioning that the reporter noticed that JD.com is preparing to incubate top talents and plans to select the top 100 talents by the end of the year. During the stage of reserve talent, billions of yuan in cash have already been invested.
In Li Chengdong's view, the investment of 1 billion yuan and the subsequent presentation of content are more like a "drizzle" in front of the current content output scale of tens of millions or even billions on major content platforms.
"There may be further investment in the future. To some extent, although JD Alibaba's efforts in content, live streaming, and other areas have not been smooth, there are still opportunities. For JD Alibaba, content output and high exposure capabilities are now more like standard business operations, without excessive investment like before, eager to see results quickly. Now, the focus is on small and long-term flow, let's first stabilize the layout." Li Chengdong said.
The power of experts: an infinitely amplified "price breaking mechanism"
How much does the difference between influencer sales and the so-called "price breaking mechanism" and the prices within brand channels? The reporter of the Daily Economic News observed and experienced that in the live broadcast room of Tiktok, a brand bag with a price of 699 yuan was self broadcast at the brand's Taobao store at 999 yuan, and the member's hand price was 869 yuan when superimposed with Taobao membership coupons.
When asked about the Taobao store anchor of the store, the anchor said, "I'm glad that some users can get their products at a lower price in the influencer live broadcast room, but try not to continue talking on the public screen in the live broadcast room to avoid affecting the judgment and ordering of other users in the live broadcast room."
Previously, when the talent brought another brand of women's shoes to Tiktok Live, the price was 239 yuan, and the internal language of the studio was: "The price of the brand of Tiktok was 269 yuan, and consumers were welcome to compare prices." According to him, even if there were only dozens of people watching, the studio could sell nearly 10000 pairs of shoes a day.
The super anchors who have been openly criticized by the outside world for being collectively tired are gradually losing control over the prices of the products they sell, and many consumers also feel this way. Under the continuous low price strategy and huge subsidies, JD and Taotian can almost achieve no comparison or even lower prices for products of the same brand.
But the elite anchors in the middle and lower back can still obtain bargaining power and the so-called "price breaking mechanism" through resource accumulation. The uncontrollability of super anchors is becoming increasingly apparent, and the celebrity effect of live streaming sales is also weakening. However, the top influencers can still support the most solid growth in live streaming sales.
The leader dispersed and the expert came on stage. A larger quantity, stronger controllability, and the accumulation of industry resources by top influencers and grass planting anchors will further become the focus of competition among various platforms in the new stage of content consumption.
It is a standard configuration and also the key to victory or defeat
The latest released Research Report on the Development of Online Audiovisual in China (2024) shows that 71.2% of the interviewed users shop online because they watch short videos and live broadcasts, and more than 40% of Internet users believe that short videos and live broadcasts are their main consumption channels.
Li Chengdong told reporters that based on the current situation, live streaming e-commerce in China has entered a bottleneck period, whether it is the growth of scale or the corresponding advantages in price, traffic, etc. But at present, the content consumption field is still the key for e-commerce platforms to compete for future initiative. Even if the expected results cannot be seen in the short term, it is necessary to do so.
In fact, JD's layout in the content ecosystem is not just beginning. The reporter noticed that in terms of video content, JD.com began to focus on "live testing" last year. A set of data provided by JD.com shows that tens of thousands of people have created tens of millions of videos around "personal trial+evaluation", with orders, user scale, duration and other indicators all increasing by 300% year-on-year. In the first quarter of this year, the year-on-year growth rate still reached 100%.
If the high year-on-year growth rate of the small base cannot be seen, GMV data can also show that the new content based gameplay is to some extent "proven". Last year, among the 20 vertical topics on JD.com during Double 11, 26000 authors brought in nearly 100 million yuan in transaction volume. During the Spring Festival, there were 30 hot topics and over 50000 video submissions, with over 20 million GMV transactions made through video submissions.
Perhaps it is also because it sees potential space, even if it is a "small step fast run", JD.com will first invest 1 billion yuan. Because the entire closed-loop process of content creation, output, and completion of transactions and delivery requires a longer period of preparation, JD Alibaba has not become the "first launch" of the new stage of e-commerce, has not received the first wave of dividends, and also needs to follow the logic of the initial layout, which is urgent.
However, JD.com has the advantage of self operated business, and compared to Taotian, it has a slightly greater ability and space to counter the risk of "loss" in content consumption.
In contrast, Taotian clearly chooses to continue re investing. On March 28th, Cheng Daofang, General Manager of the Content E-commerce Business Unit of Taotian Group, announced the growth goals for the new year (fiscal year 2025): a 100% year-on-year increase in user base, a 100% year-on-year increase in the number of anchors with monthly transactions exceeding one million, and an 80% year-on-year increase in GMV.
To achieve this goal, Taobao will add 10 billion yuan to promote content e-commerce operations. In terms of specific actions, Taobao will further promote the integration of live streaming and browsing this year. After the establishment of the Taobao Content E-commerce Business Unit in December last year, the Taobao live streaming and shopping teams merged, and live streaming, short videos, and text and images were connected for the first time.
That is to say, the money invested in content cannot be saved, but it must be spent on the cutting edge. The founders of both companies, Liu Qiangdong and Jack Ma, candidly reflected on the radical innovation of the past and the trial and error of the past in their latest employee letters.
After reflection, both content e-commerce and low-priced strategies will continue to run parallel, and neither is indispensable. These two moves are not wrong, but the target must be accurate and the strength must be fierce. Stabilizing and growing is a new story, while conversely, it can only be an unprecedented large-scale accident.