Recently, Alibaba, JD.COM, Pinduoduo and Aauto Quicker e-commerce, the "Big Four" listed e-commerce, released quarterly reports one after another this year.
In the first quarter of this year, all four companies showed positive growth in revenue, among which Pinduoduo’s revenue growth rate far exceeded the other three companies. In terms of net profit and R&D investment, there is a big difference among the four companies. Ali’s net profit has fallen sharply, and Aauto Quicker’s net profit has the fastest growth rate. At the same time, the four companies are paying more and more attention to user experience, and the number of active users in Ali and JD.COM has increased by double digits.
Source: provided by respondents
Pinduoduo’s revenue growth rate far exceeds the other three.
On May 14th, Alibaba Group released Q4 of fiscal year 2024 and its annual results, of which Q4 (the first quarter of 2024) revenue was 221.874 billion yuan, up 6.57% year-on-year. In addition, in the quarter ended March 31, 2024, the total transaction volume (GMV) and the number of orders of Taobao Tmall achieved double-digit growth year-on-year, and the number of 88VIP members exceeded 35 million, which also maintained double-digit growth. Driven by the strong growth in the number of users purchased and the frequency of transactions, Taotian Group achieved revenue of 93.216 billion yuan, up 4% year-on-year, and customer management fee (CMR) revenue increased by 5% year-on-year, exceeding market expectations in an all-round way.
On the evening of May 16th, a quarterly report released by JD.COM Group showed that from January to March, JD.COM Group achieved a total revenue of 260 billion yuan, up 7.04% year-on-year. Among them, JD.COM’s retail revenue was 226.835 billion yuan, a year-on-year increase of 6.82%.
On May 22nd, Pinduoduo released its financial report for the first quarter of 2024, with revenue of 86.812 billion yuan, up 130.66% year-on-year. According to the financial report, the revenue growth is mainly due to the increase in online marketing services and trading services. In terms of business, the revenue from online marketing services and other services was 42.4562 billion yuan, a year-on-year increase of 56%. However, more growth came from transaction service revenue, which was 44.3558 billion yuan, up 327% year-on-year.
On the same day, Aauto Quicker released its financial report for the first quarter of 2024, and Aauto Quicker’s revenue in the first quarter was 29.41 billion yuan, a year-on-year increase of 16.62%. In addition, in the first quarter, Aauto Quicker’s e-commerce business GMV increased by 28.2% year-on-year to 288.1 billion yuan. On the user side, the monthly active buyers of e-commerce increased by 22.4% year-on-year to 126 million, especially during the 2024 New Year Festival, the number of buyers increased by over 60% compared with the previous New Year Festival; On the supply side, the number of monthly merchants increased by about 70% year-on-year.
Live broadcast of helping farmers in Pinduoduo. (Source: Xinhua News Agency)
"From the data point of view, Pinduoduo still maintained a high growth in revenue and profits. JD.COM and Ali’s revenue growth rate has improved, but it is not significant. JD.COM’s profit growth has improved, and Ali’s profit growth is under pressure. " Zhuang Shuai, a special researcher at the Network Economic and Social E-commerce Research Center and founder of Bailian Consulting, commented.
Chen Hudong, a special researcher at the Network Economic and Social E-commerce Research Center, analyzed that although the revenue scales of several companies are not the same, they have maintained an overall growth trend. Ali and JD.COM have shown a relatively high growth trend through continuous empowerment of their overall business, and optimized their services on the original basis through digital strategy. Therefore, the empowerment characteristics of the two companies are manifested in the upgrading of the original infrastructure, and the effect is also emerging.
"Alibaba and Pinduoduo’s direct revenue still comes from advertising fees and service fees of the platform, while JD.COM directly comes from commodity sales. The business models of the three companies are different. Pinduoduo, by burning money in the early stage, seized the user’s mind, focused on attacking the city slightly, and then accumulated a lot of traffic. So far, it is a problem of traffic conversion. " Chen Hudong added.
"Compared with these three giants, Aauto Quicker’s revenue growth rate is at a medium level, with revenue of 29.408 billion yuan, which is higher than the expected 29.040 billion yuan, and its development is relatively stable. In particular, the GMV of e-commerce in Aauto Quicker increased by 28.2% year-on-year to 288.1 billion yuan, which led to other service income, indicating that it was effective to gradually open the traffic entrance of the pan-shelf scene from the fourth quarter of last year. However, the revenue of live broadcast business decreased by 8.0% to 8.6 billion yuan year-on-year, which may be related to factors such as fierce competition in the industry, changes in users’ viewing habits and insufficient innovation in live broadcast content. " Mo Daiqing, a senior analyst of the online retail department of the e-commerce center of the network economy and society, said.
Ali’s net profit showed negative growth, and Aauto Quicker’s net profit grew the fastest.
In the first quarter, Alibaba’s net profit returned to its mother was 3.365 billion, down 85.77% year-on-year.
JD.COM’s net profit in the first quarter was 7.13 billion yuan, up 13.88% year-on-year. Under non-GAAP, the net profit was 8.9 billion yuan, a year-on-year increase of 17.2%.
The net profit attributable to ordinary shareholders in Pinduoduo in the first quarter was 27.9978 billion yuan, up 246% year-on-year. Operating profit was 25.9737 billion yuan, up 275% year-on-year.
Aauto Quicker’s net profit in the first quarter was 4.1 billion yuan (a loss of 876 million yuan in the same period last year), and its adjusted net profit was 4.388 billion yuan, a record high in a single quarter.
Jingdong express (Source: Xinhua News Agency)
Judging from the scale of net profit, Pinduoduo has taken the lead. In this regard, Liu Junbin, a special researcher at the E-commerce Research Center of NetEconomy & Society, said that the good growth of Pinduoduo may cater to the transformation of domestic platforms, deep cultivation of agricultural products, and the demand of overseas platforms for new "good quality and low price".
Zhuang Shuai also believes that on the one hand, Pinduoduo’s profits benefit from the in-depth promotion of high-quality consumption, high-quality supply and high-quality ecological "three highs" strategy; On the other hand, it is the high growth brought by cross-border e-commerce business in full custody and semi-custody mode.
However, the growth rate of Aauto Quicker’s net profit exceeded that of Pinduo by as much as 571.82%. Mo Daiqing said that the substantial increase in this data indicates that Aauto Quicker’s profitability is improving significantly, which will play a positive role in promoting the company’s future development.
Among the four companies, only Alibaba’s net profit declined by 85.77%. Mo Daiqing said that Ali’s net profit fell sharply, which he said was due to factors such as increasing investment in e-commerce business, granting retention incentives to rookie employees and declining market value of listed companies. However, this also reminds Ali to pay more attention to future strategic planning and business development and improve profitability.
Attach importance to user experience, and the number of active users in Ali and JD.COM has increased by double digits.
Ali’s financial report shows that the number of 88VIP members exceeded 35 million, a double-digit year-on-year increase. Since the end of December last year, Taobao has launched a series of measures, such as refund-only policy, postal service in Xinjiang, payment after use, upgrade of store experience scoring system and comprehensive transformation of web version, to comprehensively optimize the user experience. According to the financial report, Ali is increasing strategic investment in the fields of commodity supply, customer service, membership system rights and technology with competitive prices, aiming at improving the user experience, thereby increasing the consumer retention rate and increasing the purchase frequency.
JD.COM Financial Report shows that the number of quarterly active users has maintained double-digit year-on-year accelerated growth for two consecutive quarters, and users’ shopping frequency, NPS (net recommended value) and the number of users in low-tier cities have significantly increased. The significant increase in the number of active users and user participation in the quarter comes from the continuous innovation and upgrading of user experience in JD.COM.
Pinduoduo also stressed that in the first quarter, the platform continued to launch profit-making activities such as the New Year Festival and the Spring Festival without closing, and focused on the theme of "domestic products are trendy", optimizing quality agricultural products and good brands to subsidize resources, enriching supply, and solidly helping platform users to obtain benefits from both consumption and supply.
According to the financial report, the average daily active users and average monthly active users in Aauto Quicker reached 394 million and 697 million respectively, up by 5.2% and 6.6% year-on-year, and the average daily active users in Aauto Quicker spent 129.5 minutes. In the first quarter of 2024, the total usage time of users increased by 8.6% year-on-year.
Source: Xinhua News Agency
All four companies pay more and more attention to user experience. Zhuang Shuai pointed out that Pinduoduo firmly grasped the bottom-line city users through agricultural products and white-label products, and then targeted the needs of high-line users and the consumption upgrading needs of bottom-line users who have requirements for quality consumption by subsidizing brand products by 10 billion yuan. JD.COM increased the low-price promotion and live broadcast in the mode of purchasing and selling, consolidated users’ low-price mentality with 3C and household appliances, expanded the categories of clothing, beauty and household agricultural products, and improved the service level through self-built logistics. Ali focuses on Tmall Taobao platform through subtraction, strengthens brand consumption demand through Tmall, expands small and medium-sized businesses through Taobao, enriches low-priced goods, consolidates superior categories of clothing and beauty products, strengthens the expansion of 3C household appliances and agricultural products, and strengthens content construction. And increase investment in live e-commerce.
Liu Junbin believes that Ali, JD.COM and Pinduoduo all attach importance to low prices and user experience, which is in line with market demand. However, this wave of low prices is essentially different from the original "things are not beautiful and cheap", which requires an accurate grasp of the platform and a clear understanding of the stage and particularity of the wave market. JD.COM adopted the form of big sales promotion and factory e-commerce, and Ali was upgraded to 1688 to join the war. Pinduoduo had the advantage of low price, but all three companies had to do detailed work and could not simply deal with it.
Mo Daiqing added that Aauto Quicker’s user activity has been increasing, and the shopping experience has been continuously optimized through low-cost good goods supply and online sales hosting functions, and more and more attention has been paid to users first. In the first quarter, the usage time of users in Aauto Quicker increased by 8.6% year-on-year. With traffic, there will be a natural transformation, which will also help Aauto Quicker e-commerce GMV to continuously improve.
However, although the average daily active users and the average monthly active users in Aauto Quicker have increased, the growth rate has slowed down. This may mean that Aauto Quicker faces challenges in attracting new users, and it also needs to pay more attention to improving user stickiness and activity.
In addition, according to the complaint data of Dianv Bao, a well-known online consumer dispute mediation platform in China, Pinduoduo ranked first in the complaint list, Taobao ranked second, JD.COM ranked third and Aauto Quicker ranked seventh. This also reminds the four companies to pay more attention to user experience and after-sales service.