618 Survey: Small and medium-sized businesses under the carnival trend

On June 3, the first phase of the 618 e-commerce promotion came to an end. The sales of various platforms and merchants have shown phased results. This year's 618, the front line was extended to nearly 40 days from May 13 to June 20. Compared with previous years '618 promotion, this year's 618 promotion e-commerce platform has many highlights. First, the Tmall platform has canceled the "full reduction to make up orders" gameplay that has been used for many years and changed it to "official reduction", so that consumers no longer need to carry out complex calculations for discounts; in addition, in Jingdong, for the first time, national subsidies have been integrated, cross-store full reduction, live broadcast exclusive prices and other gameplay methods, and various discounts have been gathered together, making this year's competition for the promotion particularly fierce. Second, according to industry insiders, this year Xiaohongshu no longer promotes 618 as its core concept. Instead, it uses the "friendly market" activity to provide large subsidies, traffic tilt and other rewards for emerging merchants within three years of its establishment. In addition, Luo Yonghao wore familiar black-rimmed glasses and appeared in Baidu's preferred live broadcast room. Industry insiders speculate that combined with Baidu's traffic support (such as search jumping to live broadcast rooms) and Luo Yonghao's IP effect, the GMV for the first show may be in the range of 80 million yuan to 120 million yuan. If expectations are met, it may set a new record for Baidu's Live streaming eCommerce. Third, as the current large model technology gradually matures, AI tools are being applied to 618. For example, JD. com has launched a new fashionable digital person image, opening free live broadcast digital people, customer agents, Short videos generation and other related applications to merchants. Ali Mom has launched AI crowd insight tools including AI crowd insight, AI global innovation, and AI creative grass planting to increase the paid conversion rate of merchants. Fourth, content e-commerce has increased interconnection, and super-head anchors and store broadcasters have formed a delicate balance. For example, in the "Red Cat Plan" that is deeply linked by Taobao and Xiaohongshu, Xiaohongshu notes can be directly mounted to Taobao links, and Taobao Tmall can also heat and stream in Xiaohongshu's related grass planting notes, trying to increase merchant conversion rates through grass planting and conversion closed-loop. For another example, after Li Jiaqi's return, it is still a phenomenal live broadcast room on Taobao. As a comparison, in 2024, Douyin stores will account for more than 70%, and the contribution of top performers will drop to 9%. Compared with e-commerce platforms and super-head anchors, we want to focus on small and medium-sized sellers promoted by the 618 National Congress, and present industry changes and development changes from the perspective of small and medium-sized merchants, as well as the other side of the promotion activities. Without "collecting orders", the GMV of small food merchants fell by 2/3 In June 18 this year, the big promotion platform adjusted the gameplay to "direct reduction" and "subsidy superposition". Fewer numbers are collected, which is a good thing for big brands, but it is a disaster for small commodity merchants. "The decrease in the number of consumers collecting orders has caused the daily GMV of our Taobao stores to plummet from more than 30,000 yuan to more than 10,000 yuan." said Xu Yang (pseudonym), an e-commerce manager from a food company in Henan Province. Xu Yang said that pure natural traffic is getting less and less and the cost of paid traffic continues to rise, which has become the current status quo in the e-commerce food industry. For example, the average cost of click (CPC) of snacks in 2024 will increase by 30% compared with 2023, and the proportion of paid traffic will reach as high as 70%. During the June 18 and Double 11 promotions, whether it is an e-commerce platform or a leading brand in a segmented category, it is required to deliver to the market the "high-growth" performance during the promotion period-relying on large amounts of investment in exchange for growth, becoming a lot of brand practices during the promotion period. When leading brands raise the price of industry search keywords or hot words higher and higher, small and medium-sized businesses with insufficient financial strength will inevitably not easily follow up. This makes the conversion rate and GMV of many small and medium-sized businesses worse than that of non-large promotion period. As a result, small and medium-sized businesses began to perform more and more poorly in promoting the 618 National Congress. To this end, he informed the production department in advance before the promotion started: reduce stocking and reduce sales expectations by 40% during the promotion period. This phenomenon is also confirmed by lamp seller Liu Hui (pseudonym). Liu Hui said that due to the annual promotion nodes such as 618, Double 11 and Double 12, the concentrated bidding volume of branded lighting merchants has made keyword bids higher and higher. Small and medium-sized businesses with no dominant capital can only passively "lie down". The promotion is a "carnival for others" for small and medium-sized lighting merchants. He complained: "Today's e-commerce promotion is a game between e-commerce platforms and brands, and its relevance to small and medium-sized businesses is getting lower and lower." Although it is normal for small and medium-sized businesses to compete for traffic during the annual promotion period, why is it so much reduced this year? Xu Yang explained that on the one hand, the company's sales of hot snacks in Douyin continue to decline, and it will be more difficult to create hot snacks in the future. Although the Douyin algorithm mechanism + broad crowd base + closed-loop of grass planting and trading provides the foundation for small and medium-sized businesses to create popular snacks, for example, Xu Yang's company only took two to three months to sell a small snack with quantitative packaging from daily sales. Dozens of orders have been sold to thousands of orders a day, and this snack has long dominated the TOP 10 list of subcategories; However, the high replicability of the Douyin snack category and the weak demand for snacks. The characteristics of many categories of snacks have categories and no brands, which means that after a certain snack explodes, a large number of manufacturers will quickly enter the track through OEM methods. Not only has consumers 'sense of freshness in new categories accelerated, but the life cycle of popular snacks continued to shrink. It has also raised the current threshold for noisy snacks from more than 100,000 orders to several million orders-this is a threshold that most small and medium-sized businesses cannot reach. Although this year's 618 e-commerce promotion platforms no longer promote the lowest price on the entire network, price is still the key to affecting the weight of product links. For example, many e-commerce platforms tilt traffic to low-priced products or live broadcast rooms. However, if 618 continues to increase low prices in pursuit of short-term sales growth, it will bring many problems to the company's subsequent development. Namely: manufacturers 'profits are compressed → costs are reduced through downgrading of raw materials, simplifying processes, shrinking packaging, etc. → e-commerce repurchase rate declines, and dynamic sales declines → prices are reduced to process inventory → Profits continue to be compressed, and the supply chain continues to be impacted → manufacturers seek survival, products are becoming more homogeneous → continue to rely on the platform. The consequence is that manufacturers will eventually become "workers" on e-commerce platforms. Clothing sales started well, but merchants were "returned"