Compared to previous years, this 618 seems to have entered a "minimalist mode".

On May 6, Taotian Group's major promotion project team announced the rule adjustments for this 618 promotion at the merchant conference, with the "cancellation of pre-sale" becoming the highlight of the entire event. Subsequently, JD.com announced that the promotion will cancel prepayments, and promotions will only be limited to spot goods, available for sale directly at the designated time.

This year, Tmall 618 will be simplified into two phases of spot sales. The first phase will start at 8 p.m. on May 20, and the second phase will start at 8 p.m. on May 31. At that time, multiple marketing venues will be opened for different types of merchants. On the other hand, JD.com announced the four stages of the promotion activities at the 618 Merchant Ecological Partner Conference, including: "Opening, Special Session, Climax, and Return Session".

Pre-sale's Decade Ends

The recent changes in the presale system undoubtedly shook the entire e-commerce industry. From 2012 to the present, the presale model has been used in major e-commerce promotions for over a decade. It was once a strategy adopted by major e-commerce platforms to help merchants stock up in advance, reduce costs, and alleviate logistical pressures. It could also ignite demand in live streaming sessions, extending the duration of the entire promotion. Data shows that with the help of presales, Alibaba's GMV achieved significant growth, and presales have appeared in almost every subsequent shopping festival.

However, in recent years, feedback on this mechanism from both merchants and consumers has been less than satisfactory. According to statistics, Taotian Group performed poorly during last 618, with pre-sale transaction volume accounting for only 5%-10% of the entire promotion.

For merchants, to comply with the presale mechanism, they generally need to lower prices and match funds and after-sales resources. With this process in place, business profits suffer. For consumers, the shopping process is cumbersome, with long waiting times and frequent issues. While it may seem like they are spending less money, the "cheapness" they get is hardly worth the hassle.

The "Analysis of Complaints Accepted by National Consumer Associations in 2023" released by the China Consumers Association in April showed that there are issues with the pre-sale model on e-commerce platforms, including dishonest price increases for final payments, lack of price guarantees for pre-sale items, failure to deliver promised gifts, delayed shipment beyond promised timeframes, and misleading "lowest price" promotions, all of which harm consumer rights.

Industry insiders have stated that in the increasingly competitive e-commerce market, innovation and service optimization will be challenges that major e-commerce platforms need to collectively address. Currently, it seems that the dismantling of the pre-sale system largely benefits both merchants and consumers, who will experience a simpler and more efficient shopping festival.

Address the Shortcoming

However, the most immediate consequence of canceling pre-sales is the increased inventory pressure on merchants. The pre-sale strategy of securing sales in advance is no longer suitable for this year's battlefield. Merchants now face higher financial pressure and stocking costs, as well as risks such as inventory backlog and logistical overload due to deviations in sales forecasts.

To address this concern for merchants, the two giants have announced a focus on both service and low prices.

Regarding service, Taobao has equipped consumers with a series of measures such as full-price protection throughout the process, optimized shopping procedures, and Taobao 88VIP unlimited return with free shipping, making it easy and reassuring for consumers to buy. JD.com, on the other hand, has lowered the free shipping threshold for self-operated goods from 99 yuan to 59 yuan for ordinary users, expanded the scope of one-click price protection, and launched synchronized theme activities such as "Hundred Billion Subsidy Day," "9.9 Free Shipping Day," and "Super Live Broadcasting Day" to further strengthen the platform's low-price and affordable labels.

Regarding low prices, it is reported that JD.com has established a separate price comparison team for certain product categories to benchmark prices against Taobao. If a lower price is found on a competitor's platform, they must adjust their prices accordingly. They also constantly monitor competitors for new products to determine whether to introduce them to their own platform.

Test, then Verify.

In today's market, despite myriad reluctances, e-commerce mega promotions have to return to the essence of low prices and service. The spark of live-streaming e-commerce can no longer serve as the "bargain" gimmick. The trend of "consumer downgrading" has brought about a simplification movement, and the cancellation of pre-sales, possibly under the current trend, could benefit both merchants and consumers. It's about low prices, not price wars.

A related professional believes, "The cancellation of pre-sales will definitely affect the final GMV scale, but now major platforms no longer prioritize GMV as their core demand. 'Low price' and 'simplicity' have become the core of this 618."

In the past year, both JD.com and Taotian Group have made a series of adjustments to their businesses and organizational structures. Xu Ran, CEO of JD.com Group, also declared that JD.com will invest the most in three major areas: traffic ecosystem, AI technology, and service capabilities, and strive to achieve a year-on-year increase of over 50% in GMV for over 150,000 small and medium-sized merchants during the 618 period, with the number of merchants exceeding one million increasing by over 100%.

As for Taotian Group, both Alibaba founder Jack Ma and Taotian Group CEO Eddie Wu have proposed that "putting users first" is Alibaba's strategic core for the next three years. After several rounds of major "blood transfusions" in the senior organizational structure, who can win over users is the best time to verify the effectiveness of this 618.