Consumption Promotion Year 2024： Emotion pays the bill, price war continues, and brand changes are accelerated.
2023 is defined as "the year of boosting consumption". We are experiencing the overall recovery and recovery of the consumer market, and also witnessing the popularity of various emerging scenes. According to the data of the National Bureau of Statistics, the total retail sales of social consumer goods increased by 7.2% in the first 11 months of 2023, and the retail sales of services increased by 19.5% year-on-year. Consumption is still a strong driving force for economic growth.
In 2024, expanding domestic demand and promoting consumption will remain the focus of economic work. The Central Economic Work Conference proposed that in 2024, efforts should be made to expand domestic demand and promote consumption to shift from post-epidemic recovery to continuous expansion. The Ministry of Commerce has designated 2024 as the "Year of Consumption Promotion".
Where will the consumer market go in 2024? Which tracks will the growth potential come from? Nandu reporters re-examined the hot phenomena and events in the field of consumption in the past year, and sorted out the following trends worthy of attention.
Consumer trend forecast 1 price competition continues.
"It’s not that XXX can’t afford it, but XXX is more cost-effective." This is a sentence that was popular at the end of 2023, and it was called "cost-effective" literature by netizens. For example, the hot stalk that was recently screened on the short video platform "is not that the down jacket can’t be worn, but that the military coat is more cost-effective". In the video, "post-00" college students are wrapped in military coats to attend classes, go shopping and climb mountains, and enjoy it. The sentence pattern of "cost-effective" reflects the shopping concept of contemporary young people, and also reflects that "price power" has become the key word of consumer market competition in the past year.
The "price war" in the field of e-commerce has hit double 11 from 618, and Taobao Tmall and JD.COM have launched tens of billions of subsidized channels to create low-cost awareness, but the growth is still far less than that of Pinduoduo.
Snack companies have also played a "price reduction card". Good shops, which have always claimed to be high-end snacks, announced price cuts. The average price of their 300 products was reduced by 22%, with the highest drop of 45%. Then Zhang Liaoyuan, the chairman of the three squirrels, made a rare claim in the circle of friends that he had implemented the strategy of "high-end cost performance" as early as a year ago. The same is true of the coffee track. Cuddy and Ruixing have been fighting for a year, pushing the price of coffee to 9.9 yuan and even 8.8 yuan, and KFC and McDonald’s have followed suit and introduced discounted prices.
The same is true for the trend of retail channels. In the past year, discount stores such as Good Sale and Hi Special Purchase accelerated their expansion, and the number of stores exceeded 500. Box Horse launched the "moving mountain price" and plans to turn all 350 offline stores (including Box Horse Fresh Life and Box Horse mini) into discount supermarkets. In December, the prices of dozens of goods in Sam were lowered for a long time. Ding Dong bought vegetables and opened the first Ole store, and Yonghui Supermarket added "authentic discount stores" to its nationwide stores.
Looking forward to 2024, the price competition in China’s consumer market will continue, with more and more diversified purchase channels and brand choices, and consumers will become more rational. The consumption concept of "you can buy expensive, but you can’t buy expensive" will continue to dominate. However, price sensitivity does not mean that the quality is degraded. This generation of consumers will only choose products with more price advantages on the premise of the same or similar quality, and will not give up the pursuit of quality of life for low prices.
Consumer Trend Prediction 2 Emotional Value Warms Up
Although consumers are more sensitive to price, their yearning for a better life has not diminished at all, which also drives "emotional value" to be selected as one of the top ten buzzwords in 2023.
In this era of surplus commodities, people need not only the basic functions of commodities, but also additional functions that can bring spiritual comfort, relieve anxiety, release stress or enhance happiness in daily life. This is the emotional value of commodities. In many phenomenal consumption scenes in the past year, we can see that the younger generation of consumers attach importance to emotional value.
Among the top ten products of Taobao in 2023, "Einstein’s brain" is unique, and it is the first virtual product selected as Taobao’s annual product over the years. This is an emotional value service product that has sprung up on Taobao in recent years: sellers hang pictures of Einstein’s head on the product page, usually priced at a few cents, claiming that taking this link will "automatically grow their brains." In essence, this is a "small ceremony" for young people to cheer themselves up or for friends to interact and have fun. Similar products include virtual goods such as "wake up the brain of love", "offer good luck spray" and "test ashore". Paying attention to emotional healing has become a new idea for a new generation of young people to deal with inner setbacks.
In March, the barbecue in Zibo exploded on social media, which triggered a "phenomenal" consumption trend. Countless tourists went to Zibo to taste delicious food, and some even took the high-speed train and plane to "catch the barbecue". What they are pursuing is not only the satisfaction of taste buds, but also social interaction, entertainment atmosphere, food culture, human fireworks, and a trip that goes away. On the short video platform, some people even described the "three-piece set of soul" of Zibo barbecue as an attitude towards life, with the oven representing temperature, the biscuit representing tolerance and the shallot dipping representing boldness.
On the other hand, the "blowout" of the performance market is also detonated by the interest consumption of young people. According to Alipay data, in 2023, the transaction amount of performances and movie tickets on Alipay increased by 223% year-on-year. According to the sampling, 71% of them belong to the cross-city performance, and the post-1995 generation occupies the main force of the audience. Young people are willing to cross a city and cross mountains and seas with light sticks, just to go to their own love.
Looking forward to 2024, the emotional value will continue to affect consumers’ decision-making. Some people need self-healing, some people need to release pressure, and some people need social entertainment … Compared with the functional value of goods, people are more willing to pay for the satisfaction of certain emotions, whether it is to get positive emotions or to smooth negative emotions, which reflects people’s yearning and pursuit for a better life. Emotional value is therefore regarded as the next growth "track" worth exploring.
Prediction of consumption trend 3. Counterattack of old domestic products and new Chinese style
The folk jingle "He Shen falls, Jiaqing is full" has been adapted into a new joke by netizens: "Li Jiaqi falls, old Chinese goods are full".
Last year, Li Jiaqi’s "Where’s Li Gui" storm made many established domestic products gain a wave of traffic. While Hua Xizi was busy arguing with consumers about whether 79 yuan’s 0.07-gram eyebrow pencil was expensive or not, the old domestic products started their own "conspicuous package" operations. In addition to offering various fancy 79 yuan packages, the established domestic products such as Bee Flower Company, Hongxing Erke and lotus gourmet powder even played "group building" and Lianmai interaction in the live broadcast room. Similar events have been staged frequently in recent years, which has made a number of old-fashioned domestic products turn red and achieved the growth of brand reputation, number of fans and sales.
In 2023, along with the old domestic products, there was a new Chinese style. In the past year, the popularity of Hanfu continued and the sales of horse-faced skirts soared.
Luoyang has even built an ancient city of Luoyi for Hanfu lovers, and tourists wearing Hanfu can be seen everywhere, including dignified and elegant horse-faced skirts in the Ming Dynasty, elegant dresses in the Tang Dynasty, and powerful armor in the Han Dynasty. Even street merchants and patrolling urban management are dressed in ancient costumes.
The tourist way of wearing Hanfu immersion punch card in the ancient city of Luoyi also made Luoyang fire out of the circle. From January to October, 2023, the old city of Luoyang received a total of 27.21 million tourists, achieving a comprehensive tourism income of 19.9 billion yuan, up by 191% and 233% respectively year-on-year, and continued to rank first in the most popular punching place for Hanfu in China.
Looking forward to 2024, driven by national sentiment and cultural self-confidence, domestic brands still have a lot of opportunities to turn red. No one can see clearly when the wheel of fate begins to turn, but opportunities are always reserved for those who are prepared. If you want to catch the "sky-splashing wealth", you can’t just rely on short-term traffic. Playing emotional cards frequently will only consume users’ trust. Only by making more efforts on products, improving quality, enhancing services, accurately understanding demand and flexibly responding to changes can you truly win in the competition.
Consumer trend forecast 4 brand change acceleration
In the changing consumer market, some people speed up their running, while others fall and withdraw.
In March 2023, Christine, known as the "first baking stock", announced the temporary closure of all stores after nine years of losses; At the same time, the new Chinese baking online celebrity brand Tiger Head Bureau Standard Chartered bakery was also exposed that the cost was out of control and the capital chain was broken. In May, Michael Chen’s star restaurant "Xianhezhuang" closed all stores in Beishangguangshen and Shenzhen; Reading filed for bankruptcy. In June, people accompanying pets were exposed to the office space, and most of the products in APP Mall have been removed from the shelves. In August, Santu, a new fragrance brand with four years and three rounds of financing, announced that it had entered the stage of closing stores and clearing warehouses. At the same time, the make-up brand Kale said that COLORPEDIA and Fomomy were floating. In October, Huajia, a flower e-commerce company, announced that it would suspend business for rectification. In November, the "first share of fresh e-commerce" was delisted every day. On December 26th, La Chapelle issued a new announcement announcing the progress of the bankruptcy reorganization procedure, and the company’s assets will be auctioned according to law.
In the past year, the consumer market ushered in a major reshuffle, including established domestic products, cutting-edge brands that are popular with capital, foreign brands that have been deeply involved in the China market for many years, and online celebrity restaurants blessed by stars. Reading their stories carefully, we will find that the demise of brands does not mean the decline of the industry, but the renewal of the rules of the game. Those successful rules that rely on the rapid expansion of capital have failed. Doing a good job in internal management, meticulous operation and taking every step well are the current survival rules.
Looking forward to the consumer market in 2024, it is still a state dominated by stock competition. For survivors, only by constantly running and constantly bringing forth the new can they stand in the wave of market changes for a long time.
E-commerce industry:
In 2023, fight for prices and fight for new coaches; "Copying Pinduoduo’s homework" in 2024?
Just like 2009, when double 11 was born, 2023 with great changes is enough to go down in the history of e-commerce development. In this year, the market value of the humble "cut a knife" briefly surpassed Ali at the end of the year, and the e-commerce interested in holding traffic accelerated the sharing of cakes. The e-commerce pattern is no longer a three-point world. Under the internal and external troubles, the founders of Ali and JD.COM had to go to the arena from behind the scenes and stand on the arena again.
After the return of Ma Yun and Liu Qiangdong, the actions are synchronized: holding an internal business meeting to point out the direction, one emphasizing the return to Taobao and the other returning to low prices; The two major groups have successively changed coaches and replaced the "No.1 position" of the group and e-commerce business; After the release of the third quarterly report, the two of them even made a rare reply to the post of the intranet staff and made a statement: one said that Ali would change, and the other said that he would never lie flat.
In the new economic cycle and consumer market environment, faced with the growth dilemma and competitive pressure, anxious bosses are eager to find a way out and start a series of changes. However, judging from the weak growth of double 11 and the double 12 with no sense of existence, 2023 was not smooth for them who missed the low-priced bonus. However, what is certain is that the change has already started. Whether it is the AI e-commerce era or the firm implementation of the low-price strategy, they have opened an era and actively embraced change, and together with their competitors, they have once again opened a new e-commerce era.
Keywords: low price
Founders Return to Establish Low Price Strategy
Last year, there was no retaliatory consumption. The penetration rate of e-commerce has increased, and the growth rate of online retail sales nationwide has dropped from 13.1% in January to June to 11% in January to November, showing a slow decline. The whole consumer market presents new changes, and consumers’ habits have also changed, paying more attention to cost performance.
The big brother who noticed the change early in the morning chose to return. Liu Qiangdong criticized JD.COM retail executives in an internal meeting, stressing that "low price is the only basic weapon", and he should do everything possible to reduce prices through the improvement of supply chain efficiency, so as to establish the main tone of low price for JD.COM.
Ali started the biggest change in 24 years at the beginning of last year. After the split of "1+6+N", Ma Yun, who returned to China, said in the business meeting of Taotian Group that "the methodology that Ali relied on for success in the past is not applicable and should be quickly changed". At the same time, he pointed out the direction for Taotian: returning to Taobao, returning to users and returning to the Internet.
As we all know, Taobao quickly seized the market at a low price in the past, and then turned to Tmall because of the trend of consumption upgrading, and the traffic tilted towards brand merchants. However, the financial report data shows that the growth rate of Ali’s core e-commerce business has slowed down to single digits, and its net profit has dropped sharply; Since 2022, the growth rate of revenue in Jingdong continued to slow down, and the revenue from commodity sales once experienced negative growth. In contrast, while Pinduoduo’s revenue maintained double-digit growth, its net profit increased from 2.6 billion in the first quarter of 2022 to 15.54 billion in the third quarter of last year. The star map data also shows that the growth rate of live e-commerce in 618 and double 11 last year was 27.6% and 18.6% respectively, which was much higher than the growth rate of traditional e-commerce of 5.4% and -1%.
Under the internal and external troubles, the two major e-commerce giants had to make adjustments, and e-commerce returned to the era of low prices.
Keywords: coaching change
The two giants took the lead in replacing the "No.1 position"
Generally speaking, the end of the year and the beginning of the year are the peak period of changes in e-commerce platforms. 2023 is somewhat different, with changes throughout the year, and major changes always occur in the earnings season.
One of the tacit understandings of the head platform is to change coaches. Xu Ran, CFO of JD.COM Group, took the lead and was promoted to CEO of the group. He also served as CEO of JD.COM Retail Group, and he had multiple roles and provoked core business. In the industry’s view, the CFO-born helm is more suitable for JD.COM, which needs refined operation, and it is easier to implement Liu Qiangdong’s strategy. The final financial report data also confirmed that JD.COM’s profit increased from 6.3 billion to 7.9 billion last year, and its profitability was greatly improved.
Ali’s changes were concentrated in the second half of the year, involving the highest level and number of employees in history. Ma Yun chose two "eighteen arhats". One has investment experience; One has served as the chief technology officer in Taobao, Alipay and other businesses. These two people are Cai Chongxin and Wu Yongming respectively. Wu Yongming even holds three CEO positions: Ali Group, Taotian Group and Alibaba Cloud Intelligent Group. After 70, he is regarded by the outside world as the key to Ali’s future success or failure. Zhang Yong, the former chairman and CEO of Alibaba Holding Group, who once led Ali from the PC era to the mobile era, bid farewell to the rivers and lakes completely. His departure also represents the end of an era in Ali.
In Pinduoduo, which has always been low-key, the domestic e-commerce business has also ushered in a new helm. After Pinduoduo’s offshore platform TEMU was launched in September 2022, Chen Lei, chairman and co-CEO of Pinduoduo Group, focused on global business. In April last year, co-founder Zhao Jiazhen became the executive director and co-CEO of Pinduoduo, which provoked a heavy domestic burden. After the growth of domestic users has peaked, and the number of merchants and business volume has reached a certain scale, Pinduoduo needs a general who can fight hard to cope with the fierce domestic competition, and more importantly, it should concentrate on seeking long-term development for the platform. Zhao Jiazhen is a post-80s member of the founding team. He is not only one of the early backbones to build the upward model of agricultural products, but also a Kaicheng general who buys more vegetables.
Within a year, the young successors of the 1970s and 1980s will become the helmsman of the three platforms, and their next actions will also determine the e-commerce pattern.
Keywords: change
The new officials are burning "three fires" when they take office.
In the development of e-commerce in 2023, change is probably the most mentioned word by the top management of each platform. In order to cope with competitors and seek new growth, the new coach quickly determined the strategic direction after taking office.
Wu Yongming, a technical background, has a strong style and moves very quickly. Only two days after taking up his new job, he issued a letter to all employees, stating that "the times are changing, and Ali must change!" He first clarified the strategic focus of the group and determined the strategy of "customer first, AI driven" for Ali. He made it clear that the core business maintains high-intensity investment, while the non-core business realizes asset value as soon as possible through various capitalization methods.
In the second month after Zhao Jiazhen took up his new job, the company’s financial report put forward "high-quality development" for the first time, and determined that Pinduoduo would start the transformation from quantity to quality. They would further optimize the platform ecology by increasing subsidies, expanding categories, upgrading services, and fully protecting the rights and interests of consumers.
The transformation effect is faster than the high-level expectation. In the third quarter of last year, Pinduoduo’s total revenue was 68.8 billion, a year-on-year increase of 94%; Temu, which has been online for one year, has become the second growth curve. Since then, the market value of Pinduoduo has reached US$ 192.1 billion, once surpassing Ali. That night, Ali employees posted on the intranet: "I once cut a knife and became a big brother." Ma Yun also personally replied on the intranet, "I firmly believe that Ali will change and Ali will change."
Less than a month after Ma Yun’s voice, Wu Yongming took over the organizational structure of Taotian Group CEO on the third day, and comprehensively promoted the reform of the younger management team. The newly announced six core management teams involved six key businesses: Ali Mama Division, Taobao Division, Tmall Division, M2C Division and Clothing Development Division, Taobao Live Broadcasting and Content Division, and the young generation appeared after the 1980s.
Big brother is in sync again. At the beginning of December, employees in JD.COM Intranet posted a document, citing the complex promotion mechanism and the need to give more support to third-party businesses in the platform ecology. Liu Qiangdong said in his reply: "It will not lie flat, the organization is huge, bloated and inefficient, and it will take time to change."
It is rare for the two founders to reply to their employees at the end, clearly stating that they must change and mentioning the future reform ideas. In their reply, they set the tone for 2023 and even the future: change, must change.
Keywords: live broadcast room
Well-known anchors frequently fall into the wind.
Last year, in double 11, live e-commerce and traditional e-commerce met in a narrow way, and they quarreled about who had the lowest price. The first propaganda was JD.COM Cai Xiao, who questioned the head anchor Li Jiaqi’s "two-for-one" behavior.
This price war among brands, platforms and anchors quickly fermented, and JD.COM, which has the power of self-operated pricing, became popular. Subsequently, JD.COM set up a live broadcast room for purchasing and selling in JD.COM, and started a new mode of live broadcast. Li Jiaqi, who was accused of signing a "lowest price agreement" with merchants, suddenly became the target of public criticism.
In the era of low-price competition, similar conflicts are inevitable, especially the live e-commerce has an enviable growth rate. According to Ali data, there were 89 billion live broadcast rooms in double 11 last year, including 64 in stores; 834 live broadcast rooms, including 675 in stores.
Double 11 sales of star map data show that the sales of live broadcast e-commerce increased from 73.8 billion yuan in 2021 to 215.1 billion yuan in 2023, accounting for 19% of the total sales of the whole network from 7.6% in 2021, which is only one step away from the world. Among them, the internal pattern of live e-commerce has also changed, with Tik Tok and Aauto Quicker surpassing Diantao (formerly Taobao Live).
E-commerce has entered a state of integration of "you have me and I have you".
What do you spell in 2024?
● "Copying Pinduoduo’s homework" on the whole network?
After 10 billion subsidies and other services, will the head platform continue to copy Pinduoduo? "Ali can do now is to copy Pinduoduo, and then do innovation. If you are still your own creativity, you will only be pulled away by Pinduoduo. " A head merchant of a clothing industry belt told Southern Reporter that among different platforms, Pinduoduo’s various rules and play methods are simpler and more efficient, which is biased towards consumers, and copying Pinduoduo is a good one. Another middle-waist fresh merchant thinks that the traditional e-commerce should innovate and differentiate in the mode of Pinduoduo, and only then can there be a way out. Fully benchmarking Pinduoduo, more games and rules will become the industry standard.
● The platform competes for small and medium-sized businesses.
In the past year, in order to enrich cost-effective products, various platforms have introduced various support policies to compete for small and medium-sized businesses. In 2023, the overall number of businesses in JD.COM maintained a three-digit growth year-on-year; Ali’s financial report data for the first fiscal quarter of fiscal year 2024 shows that Taobao Tmall has added more than 5 million businesses in the past year.
It is noteworthy that Pinduoduo released the "Billion Ecology" plan to support merchants and ecological partners with good product quality and good service, and help high-quality merchants and platforms grow together. Some merchants believe that this will be another direction in the era of low-price competition. The platform tilts traffic and subsidies to support and guide high-quality merchants and provide consumers with cost-effective products.
●AI e-commerce era big model acceleration
From PC to mobile Internet, e-commerce has achieved leap-forward development. In the era of AI technology, new technological changes have brought infinite imagination to the e-commerce industry.
Wu Yongming once said: "The biggest variable in the next decade is undoubtedly the profound changes in the whole industry brought by AI." At present, Ali has launched AI tools such as intelligent generation of model drawings and unbounded version of Wanxiangtai at B-side, enabling businesses to reduce costs and increase efficiency; On the C side, the AI intelligent assistant "Taobao Ask" was launched to provide consumers with shopping advice and travel planning. After JD.COM launched the big model of words and rhinoceros in July, jingdong cloud upgraded the whole retail scene solution, and proposed to make the big model smaller, deepen the exploration in the vertical retail field, and launch a series of AI tools to support merchants’ refined operation, so as to help merchants understand users and improve operational efficiency.
In the new e-commerce era, what qualitative breakthroughs will be brought about by the integration of artificial intelligence and e-commerce, which is expected.
Produced by "Retail Lab" Research Group of Nandu Department of Political and Business Data and News.
Written by Southern Reporter Ma Ningning Huang Pei
Coordinator: Zhen Qin Tian Aili