Recently, foreign media reported that JD.com is seeking to acquire British electronics and electrical retailer Currys, and the industry interprets this move as a major shift in JD.com's business expansion strategy - with the fierce competition between e-commerce companies in the Chinese market, major industry players including JD.com, Alibaba, Pinduoduo and ByteDance have set their sights overseas, hoping to achieve global expansion.
At present, Jingdong Group has released its financial report for the first three quarters of 2023, which shows that JD.com achieved revenue of 7785 from January to September8.5 billion yuan, a year-on-year increase of 37%。In stages, in Q1 2023, JD.com will achieve revenue of 243 billion yuan, a year-on-year increase of 14%, of which product sales revenue was 195.6 billion yuan, down 4 percent year-on-year3%, but the revenue of logistics and other services increased significantly, with a year-on-year increase of 345%;Q2 in the peak consumption season as well as 6Under the influence of 18 and other first-class nodes, the company achieved revenue of 287.9 billion yuan, a year-on-year increase of 76%;Q3 achieved revenue of 247.7 billion yuan, a year-on-year increase of 17%;As for Q4, based on the sluggishness of big promotion nodes such as "Double 11" in 2023, institutions generally believe that JD.com's revenue may increase slightly by about 1%. Flattened to the whole year, it can be seen that although JD's overall revenue is still growing, the growth rate has dropped significantly compared with the past.
Similar to JD.com, Alibaba Group's revenue growth has also encountered bottlenecks in recent years, and in fiscal year 2023 (April 1, 2022 - March 31, 2023), Alibaba reported revenue of 8,6868.7 billion yuan, a year-on-year increase of 2%; And its recently disclosed Q3 results for fiscal year 2024 (October 1, 2023 - December 31, 2023) also show that Ali is weak, with its quarterly revenue of 2603500 million yuan, a year-on-year increase of 5%, but net profit fell 77% year-on-year to 1071.7 billion yuan.
In contrast, in terms of revenue growth, Pinduoduo and ByteDance have achieved the best behind. In the first three quarters of 2023, Pinduoduo's revenue was 376400 million yuan, 522800 million yuan and 688400 million yuan, a year-on-year increase of 58%, 47% and 94% respectively, with a strong growth momentum. ByteDance announced an overall revenue of $110 billion in 2023, a year-on-year increase of 30%, and Byte claimed that the development of domestic Douyin and overseas TikTok e-commerce business is becoming a new growth engine for the company. The growth rate of enterprise revenue reflects the market's recognition of enterprise products and services to a certain extent, especially for e-commerce platforms, investors attach great importance to their attractiveness principles such as user stickiness, activity, and user stay time, and these evaluation dimensions often represent the future growth and potential value of the platform.
As a traditional e-commerce duo, JD.com and Ali have declined in terms of user attraction and retention in recent years, especially with the emergence of Doukuai, Pinduoduo and other players, the once focused platform users have begun to show dispersion, and JD.com and Ali are also ushering in "growth anxiety".
In fact, judging from the trend of China's online retail development, after the market size reaches a huge base, online retail has also seen some "stock" characteristics, such as slowing growth and red sea games. According to data from the China Internet Network Information Center, as of June 2023, the scale of China's Internet users has reached 107.9 billion people, 19.1 billion, it can be said that in addition to special groups such as children and the elderly, almost everyone can access the Internet, which also means that the traffic dividend of the Chinese market is "peaking". In 2023, the scale of online retail in China has reached 154 trillion yuan, a year-on-year increase of 116%。The growth rate of online shopping is currently negatively correlated with the base of online shopping scale - in 2008, China's online transaction volume exceeded 100 billion yuan for the first time, a year-on-year increase of 128%;In 2009, the national online transaction volume was 2483500 million yuan, a year-on-year increase of 937%;In 2010, the national online transaction volume was 498 billion yuan, a year-on-year increase of 865%..By 2016, China's online retail transaction volume had reached 516 trillion yuan, a year-on-year increase of 262%。It was also in this year that Ali felt the "growth pressure" of online and proposed the new retail concept of "online and offline" integration for the first time. Despite the continuous innovation of the online sales model, it will be more and more difficult to continue to expand the online cake on the basis of 15 trillion yuan. In this context, e-commerce is almost the only way to go overseas.
Wu Xianjian, assistant to the chairman of the China Household Appliances Business Association, mentioned that China has become the world's largest online retail market for 11 consecutive years, and has cultivated Ali, Jingdong, Pinduoduo and other global technology and concept leading e-commerce platforms, e-commerce "going to sea" is not only the inevitable economic globalization, but also the internal requirements of e-commerce enterprises to open up domestic and foreign markets and accelerate the construction of a new stage of development of the dual circulation system.
According to its first three quarterly reports, new business units, including "international business", currently account for only 15% or so, but these new directions will undoubtedly become the germ of JD.com's "reengineering". The strategic acquisition target Currys is attractive to JD.com not only because of its 21 warehouses in the UK and Ireland, and its network of 800 stores in eight countries, but also because of the solid position of the Currys brand in the Western European electronics and electrical retail market. Currys' already built sales network will help JD.com significantly reduce the time and investment required to build its own brands and infrastructure such as logistics and warehouses in new European markets. March 18 is the deadline for JD.com to negotiate the acquisition with Currys.
The successive expansion of Chinese e-commerce giants is also stirring up the world's retail map.
In 2018, Wired magazine published an article titled "JD.com, the Chinese e-commerce giant that can devour Amazon alive" ("inside JD.comcom, the giant Chinese firm that could eat Amazon Alive"), the article praised the achievements of Chinese e-commerce platforms in terms of development speed, mobile payment, automated logistics and distribution, etc., while mentioning that these Chinese e-commerce platforms are aiming at the world market and will become strong competitors to Amazon in the future. Now it seems that the prophecy of this article is coming true.
Ali is the earliest layout of overseas market of Chinese e-commerce platform, as early as 2010 it launched a foreign trade small single ** trading platform "AliExpress (AliExpress)", the platform is similar to the domestic 1688, the main B2B wholesale; In 2016, Alibaba acquired Lazada, an e-commerce shopping platform in Southeast Asia, and expanded its retail business to the Southeast Asian market. In 2018, it laid out the Middle East market through the acquisition of the Turkish e-commerce company Trendyol, and in the same year, it also acquired the Pakistan-based e-commerce company DARAZ, mainly covering the South Asian market; In November 2022, Ali launched the MiR**ia e-commerce platform in Spain, benchmarking against Shein, focusing on women's fashion and quality products. These overseas platforms of Alibaba not only provide key business infrastructure for Chinese brands and merchants going overseas, but also provide data and information such as local consumption habits, laws and regulations, as well as intellectual property rights, etc., and also allow overseas consumers to enjoy a wider range of products and differentiated experiences of "Made in China". Taking "AliExpress" as an example, in the first quarter of 2023, Ali added a "choice" service to the platform, which greatly shortened the delivery time of goods in overseas markets through licensed flights and overseas warehouses.
From October to December 2023, Alibaba's domestic "Taotian" two platforms achieved revenue of 1290700 million yuan, a year-on-year increase of 2%; The international business achieved revenue of 285100 million yuan, a year-on-year increase of 44%.
In September 2022, Pinduoduo launched the cross-border e-commerce platform Temu, which swept through more than 40 countries and regions in one year, becoming the strongest growth engine within Pinduoduo. Chen Lei, Chairman and CEO of Pinduoduo, mentioned, "Although our business outside of China is still very new, it has made great progress in the past year, and it is based on our accumulation and understanding of the domestic ** chain over the years, which has helped many manufacturing companies further develop the market and directly face consumers." It is reported that now Duoduo cross-border exports more than 400,000 parcels per day, with an average daily cargo weight of 600 tons. On the Internet, "Is temu legit or a scam??"Similar to Pinduoduo's early development in China, overseas consumers are attracted by Temu's low-priced products, but they are also full of doubts about its products and models.
Similarly, ByteDance also regards cross-border e-commerce business as an important strategy for platform development. Through live streaming, ** and window business, Douyin has achieved trillions of GMV in China in two years, and Mu Qing, vice president of Douyin e-commerce, once mentioned that from January to September 2021 alone, Douyin e-commerce GMV increased by 7% year-on-year9 times. In 2021, through the Tik Tok platform, Byte began to test the waters of overseas e-commerce, and its GMV reached 6 billion yuan that year; By 2023, TikTok Shop's self-operated GMV in Southeast Asia, the United States, and the United Kingdom will climb to $13.8 billion, with the Southeast Asian market contributing 118$600 million. Entering 2024, some foreign media reported that TikTok has taken the expansion of the US market as the focus of this year's expansion, and is expected to expand its business target by 10 times to $17.5 billion.
Wu Xiaobo, a well-known financial commentator, mentioned that relying on a strong domestic manufacturing foundation, China's overseas e-commerce companies provide overseas consumers with rich and high-quality goods, accurately connecting the two ends of the market and demand. Chinese e-commerce is good at using diversified social channels to quickly increase popularity and user stickiness, and continuously optimize logistics and other links, so that global users can enjoy an unprecedented efficient and convenient shopping experience. In contrast, although Amazon, the "first brother of e-commerce", has become the main channel for middle-class online shopping in Europe and the United States with its good logistics fulfillment capabilities and high-quality product experience, under the "cost-effective" offensive of China's "volume kings", Amazon's territory has also been continuously encroached, and in 2022 and 2023, Amazon's customer churn rate will increase by 8% and 15% respectively, which has also led Amazon to make changes, such as reducing sales commissions and providing larger discounts. It can be said that China's e-commerce going overseas is reshaping the world's retail map.