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In recent years, with the progress of technology and the change of consumer habits, the competitive environment of e-commerce industry has become more diverse and dynamic. In order to maintain market competitiveness, major e-commerce platforms need to constantly innovate and adjust their competitive strategies. As a result, under the background that the e-commerce market has matured, major e-commerce platforms have begun to gain competitive advantages by focusing on specific market segments.
Nowadays, the competition in the e-commerce market is rapidly evolving, focusing on several key aspects such as pricing strategy, customer experience and technological innovation. Therefore, as the most important e-commerce platform in China, Taobao, JD.COM and Pinduoduo launched a fierce competition in terms of price, service and AI technology in 2023.
Low price is king.
Price has always been a topic in the development of e-commerce industry. Especially in recent years, after "low price" has gradually changed from consumers’ demands to KPI of e-commerce, the "price wars" on subsidies and support among major e-commerce platforms have emerged one after another, and Taobao, JD.COM and Pinduoduo have also been seriously involved in price issues. In order to compete for the "lowest price of the whole network", these three players have launched their own strategies by virtue of their own advantages.
With the help of traffic distribution mechanism and product operation orientation, Taobao provides consumers with more cost-effective quality goods. As one of the leading e-commerce platforms in China, Taobao can use advanced algorithms to analyze users’ browsing records, purchase history and search habits, so as to give consumers personalized recommendations and help them find products with reasonable prices and meet their needs. In addition, Taobao’s open platform strategy can attract more merchants to settle in, and its evaluation system can also evaluate the reputation of merchants. Therefore, in order to attract consumers and enhance their reputation, merchants will make greater efforts to provide cost-effective products while improving their services.
JD.COM has made use of tens of billions of subsidies and various preferential activities to bring consumers the simplest and most direct low-cost consumption experience. In order to attract and retain more consumers, JD.COM launched a 10 billion subsidy activity in March last year. Not only that, but the subsidy in JD.COM last year was far stronger than before. It is reported that during the JD.COM 618 period, on the basis of the direct drop of commodity prices, users still have the opportunity to receive three "over 200 minus 20" subsidy coupons every day, and all commodities except special commodities can be used. The implementation of these strategies has not only enabled JD.COM to achieve large-scale sales, but also further enhanced its market share.
With its low-cost business model and supply chain advantages, Pinduoduo can further expand its price competitiveness in the minds of consumers. Since the birth of Pinduoduo, it has been to burn money at a low price for the market. Pinduoduo has built a system with price as the core dimension, which is used to screen the dealers of similar products, so as to select the products with the highest cost performance to display and sell at the front desk, thus attracting a large number of price-sensitive users. In addition, Pinduoduo directly connects consumers and manufacturers through C2M mode, which shortens the traditional supply chain. Without middlemen to earn the difference, Pinduoduo’s "lowest price in the whole network" has won the favor of a large number of users in the sinking market.
Service priority
With the development of Internet economy, consumers pay more and more attention to the price factor, but service is also a point that consumers pay special attention to. With Taobao, JD.COM and Pinduoduo playing more and more important roles in the domestic and even global e-commerce industry, they have also sacrificed their own unique styles in the competition of e-commerce services.
Taobao has improved the security system and brought consumers more diverse and convenient shopping choices. In 2023, Taobao paid more attention to consumer rights, so it proposed many service measures to promote the development of the platform. For example, Taobao has established and improved the consumer protection system, launched seven-day unreasonable return service, fake one-compensation third-class service, and also provided a user evaluation system and similar "refund only" return refund service to enhance user loyalty and increase the repurchase rate.
JD.COM has increased its logistics services, providing fast delivery and high-quality after-sales support for its e-commerce business. JD.COM’s service advantage has always been reflected in its self-built logistics system. Therefore, in 2023, JD.COM not only emphasized its fast and reliable logistics service, but also provided fast delivery and high-quality after-sales support. JD.COM’s professional after-sales services, such as quick return and exchange, on-site maintenance, not only ensure consumers’ rights and interests, but also better protect consumers’ rights and interests by introducing the "refund only" service.
Pinduoduo has optimized customer service, lowered the shopping threshold and improved the shopping experience of consumers. As the first e-commerce platform to launch "refund only" service, Pinduoduo attaches great importance to after-sales service. Especially in customer service, Pinduoduo has taken many measures, such as setting up a consumer protection fund to check the quality of goods. At the same time, through the interactive nature of its platform, Pinduoduo encourages users to share shopping experiences on social networks, which indirectly improves the customer service experience.
AI escorting
As the era of "AI+ e-commerce" is accelerating, AI has become an important tool for major e-commerce companies to enhance user experience and ensure ecological prosperity. When the application of AI has gradually become the trend and standard of e-commerce industry, the deep integration of e-commerce and AI technology has also brought new development opportunities to the entire e-commerce industry. Under this background, Taobao, JD.COM and Pinduoduo have also begun to show their own advantages and characteristics in AI technology, AI products, AI services and AI experience.
Taobao upgraded its e-commerce system with AI technology, further improving its operational efficiency and management level. It is reported that Taobao has released a series of AI tools and services, such as AI one-click shop opening, AI updating, AI data analysis, etc., to help businesses achieve more efficient and lower-cost store operation. In addition, Taobao is also testing a large model native AI application "Taobao Ask", aiming to enhance the user’s shopping experience through personalized recommendation. Whether it is Taobao’s vigorously open AI capability or its vigorously cultivated AI ecosystem, it has further strengthened its personalized recommendation capability and optimized its intelligent algorithm.
JD.COM reconstructs intelligent logistics by using AI technology, which effectively improves service quality and user experience. JD.COM also showed no weakness in AI layout. It is reported that only 10 minutes after the launch of double 11, the cumulative consulting service volume of intelligent customer service in jingdong cloud exceeded 1.88 million times. Besides AI intelligent customer service "Beijing Xiao Zhi", JD.COM has also added automated logistics. At present, JD.COM has made remarkable achievements in the fields of intelligent warehousing and unmanned distribution, all of which are realized through the application of AI technology. JD.COM has established an open platform of NeuHub artificial intelligence, which can help merchants build an intelligent supply chain and effectively reduce the cycle of goods from production to delivery.
Pinduoduo has optimized the shopping process by using AI technology, bringing users a more convenient and intelligent shopping experience. The core of Pinduoduo’s market value surpassing Ali is its brand-new business model of "e-commerce +AI". Moreover, Pinduoduo has also made innovations in the "refund only" service by using AI technology. Pinduoduo’s "Refund Only" service allows consumers to apply for a refund without returning goods under certain conditions. The introduction of this policy not only simplifies the after-sales process, but also creates a more convenient and personalized shopping experience for consumers.
Competition "has two sides"
With the progress of technology and the change of market, Taobao, JD.COM and Pinduoduo are constantly exploring and optimizing the price, service quality and AI application, which leads to more and more fierce competition among e-commerce platforms. However, it is undeniable that this competition also has its positive side. Looking at the entire Internet industry, competition among e-commerce platforms is not necessarily a bad thing.
For users, competition can bring more and better goods and services to users, so that the user experience can be significantly improved. The competition among e-commerce platforms is related to the shopping experience and vital interests of consumers. Once the e-commerce platform has the right to speak, the user experience will be more or less poor. Once there is fierce competition between e-commerce platforms, in order to attract and retain users, e-commerce platforms will generally take measures such as optimizing shopping processes, providing personalized recommendations, and enhancing customer service. This can improve the user experience to a certain extent, and it can also effectively prevent users from stepping on the pit.
For merchants, competition can give merchants greater concessions and more support, so that merchants can reduce costs and increase sales. With competition among e-commerce platforms, businesses can get a lot of benefits from it. As we all know, rich product categories and differentiated choices are the focus of consumers’ stay and transformation on e-commerce platforms, and businesses that can meet this requirement have become the key to e-commerce platform competition. In order to attract and retain merchants, e-commerce platforms often provide a series of preferential policies and tools, such as reducing transaction rates, providing data analysis tools, increasing exposure opportunities, etc., to give merchants the greatest concessions and support.
For the platform, competition can force e-commerce platform technology and services to innovate continuously, thus promoting the development of the entire e-commerce industry. With competition among e-commerce platforms, these e-commerce platforms will actively innovate because of the pressure of survival, such as logistics. In the past, many express delivery services were not delivered to the door, but once a platform can deliver goods to the door, other platforms will actively increase or even improve this service in order not to be abandoned by users. Under this kind of competition, it not only improves the operational efficiency of various e-commerce platforms, but also promotes the overall development of e-commerce ecosystem.
Generally speaking, Taobao, JD.COM and Pinduoduo each have their own unique competitive advantages and strategic priorities. They are constantly adjusting and improving in terms of platform innovation, experience enhancement and service optimization to cope with the rapidly changing market environment and consumer demand. I believe that in the future, with the increasingly changing e-commerce environment, these head players will also conduct deeper exploration in more aspects, but now these three platforms will continue to compete more fiercely in the segmentation of e-commerce, and who will continue to be in the leading position in this competition in the end, I am afraid only time can give an answer.
