This year's "11.11", JD.com has made frequent attacks. Following JD e-commerce's break from the traditional pre-sale model and direct delivery of spot goods for after-sales service, JD's subsidiary JD Qixian Supermarket has also launched the "breakdown price, really cheap is not afraid of comparison" campaign, with multiple product prices discounted by 50% or even 9.9%.
It should be pointed out that on November 1, 2024, JD Qixian and its front warehouse will be fully integrated. When users purchase goods through the JD App's self operated grocery shopping portal, the fulfillment and delivery services will be provided by JD Qixian, and will no longer be serviced by JD's front warehouse business.
The above activities of JD Qixian Supermarket have been interpreted by the market as a price war against competitors such as Hema and Meituan Xiaoxiang. However, before this, JD Qixian had clearly stated that low prices are its long-term strategy and did not deliberately target anyone in the price war.
It is interesting that both the offensive and defensive sides have a good understanding, and Meituan Xiaoxiang Supermarket has not made a formal response to the promotional activities of JD Seven Fresh Supermarket. However, according to incomplete statistics, the prices of some products at Meituan Xiaoxiang Supermarket have been lowered, which may be a counterattack against JD Seven Fresh's price offensive.
In fact, whether it's JD Qixian launching promotional activities or Meituan Xiaoxiang lowering product prices, both are good things for consumers. Where to buy cheap and good products is more important.
Looking at the essence through the phenomenon, why do JD Seven Fresh Supermarket and Meituan Xiaoxiang continue to increase their focus on the instant retail market? The core reason is that the scale of the domestic instant delivery market has reached 341 billion yuan in 2023, which is undoubtedly a big cake that cannot be ignored.
In the instant retail market, JD Qixian Supermarket and Meituan Xiaoxiang each have their own advantages. The advantage of the former lies in its deep cultivation of offline stores, while relying on JD Group, which holds a huge supply chain resource, to generate good synergy within the group's retail, logistics and other sectors. The core advantage of Meituan lies in having 7.45 million riders and a decent number of active users.
It should be noted that JD Qixian Supermarket's move may have an impact on Meituan's innovative business. According to financial report data, in the second quarter of 2024, Meituan's new business revenue was 21.569 billion yuan, a year-on-year increase of 28.66%, and operating profit was -1.314 billion yuan. The loss amount significantly narrowed both year-on-year and month on month.
For the reasons for the improvement in performance of the new business division, Meituan provided the following explanations in the financial report: "Meituan Optimal Selection has improved operational efficiency, thereby increasing the average price and product markup rate" and "Xiaoxiang Supermarket has made significant progress in product, operation, and performance, with continuous efficiency improvement".
Therefore, Meituan Xiaoxiang's decision to follow JD Seven Fresh's price reduction promotion is bound to have a negative impact on its performance.
In contrast, the low price strategy has a weaker impact on the performance of JD Seven Fresh, due to JD Group's supply chain advantages. It improves supply chain efficiency through measures such as direct procurement from the source and direct supply from manufacturers, and transfers profits squeezed out from various links in the supply chain to consumers in the form of low prices.
The smoke of instant retail is rising again, and we will wait and see who can win between JD Qixian Supermarket and Meituan Xiaoxiang.