Dongwu Securities 618 Outlook: Canceling pre-sale but selling earlier, "simplifying rules" ≠ "not involved"

According to the Wise Finance APP, the mid-year promotion in 2024 is about to start, with JD.com and Taobao canceling pre-sales. The start time of activities on major e-commerce platforms is earlier than in previous years. Dongwu Securities believes that the essence of the promotion is "sales aggregation" for marketing purposes, and the promotional and marketing battlefield of the top platforms will still be intense. The significance of the promotion for merchants is not to increase sales and profits, but to market their brands and attract new customers through discounted sales; however, due to the high discount intensity and marketing expenses, the profit for merchants during the promotion period is usually not high. Therefore, the cancellation of pre-sales by top platforms such as JD.com and Tmall in 2024 does not mean that the promotion will be less intense; on the contrary, due to the extension of the promotion period, merchants' discounts and marketing efforts will last longer, making competition among merchants even more intense.

Tmall & Taobao: The 618 event is divided into two waves. The first wave, the mid-year kick-off, will have a warm-up on May 19th and start at 20:00 on May 20th; the second wave, the 618 mid-year carnival, will have a warm-up starting on May 29th and officially start at 20:00 on May 31st, lasting until June 20th. The cross-store discount on the Tmall platform is "spend 300 get 50 off".

JD.com: The 618 event is divided into two waves, "Heart-pounding Shopping Festival" and "618 Mid-Year Promotion". The Heart-pounding Shopping Festival will have a warm-up starting on May 19th and officially start at 20:00 on May 20th. The 618 Mid-Year Promotion will have a warm-up starting on May 31st and officially start at 20:00 on May 31st, lasting until June 20th. The cross-store discount on the JD.com platform is "spend 300 get 50 off".

Pinduoduo: The "520 Promotion" will start on May 19th, and the "618 Mid-Year Promotion" will start on June 1st. The promotion methods and intensity for these two events seem to be the same based on the activity pages. The events will last until June 20th.

Douyin: The 618 Good Stuff Festival will start on May 24th.

Kuaishou: The 618 Shopping Festival is divided into three stages: "Good Stuff Pre-sale" from May 20th to May 31st, "Category Explosion Days" from June 1st to 18th, and "Return Visit" on June 19th and 20th.

Summary of the event planning: ① Although there are no pre-sales, the start time (May 20th) is earlier than last year's pre-sales (Tmall on May 26th, JD.com on May 23rd). ② Tmall and JD.com have greater publicity efforts compared to other platforms, while Pinduoduo emphasizes "everyday low prices" to reduce the rush, with the team believing it is not the main platform for the promotion. ③ The discount intensity of Tmall and JD.com (spend 300 get 50 off) is similar to last year.

The essence of the promotion is essentially "sales aggregation" for marketing purposes, and the promotional and marketing battlefield of the top platforms will still be intense. E-commerce promotions are more about aggregating demand for a period of time and releasing it in a short time, rather than generating new consumption demand, which can be verified by the continuous convergence of the promotion's GMV growth rate and the platform's annual GMV growth rate. Therefore, the significance of the promotion for merchants is not to increase sales and profits, but to market their brands and attract new customers through discounted sales However, due to the large discounts and high marketing expenses, merchants' profits during the big promotion period are usually not high. Therefore, the cancellation of pre-sales by top platforms such as JD.com and Tmall in 2024 does not mean that the big promotion will not be intense; on the contrary, because of the extension of the promotion period, merchants' discounts and marketing efforts will last longer, and competition among merchants may become more intense.

This means: ① More consumer demand is concentrated during the big promotion period, allowing merchants to continue high promotions and marketing efforts for a longer period of time. ② The proportion of sales during the 618 shopping festival in Q2 has become higher, and the performance of brand merchants during 618 is more important for Q2 revenue than in previous years. ③ Pay attention to the rise of domestic brands. During periods of significant platform rule changes, the local marketing and operational advantages of domestic brands are expected to be better utilized. ④ For consumers, the cancellation of pre-sales and simplification of rules can help reduce the time consumers spend on research and price comparison, or facilitate the release of consumer demand.

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