"Jingxi" product analysis report!

As a social e-commerce platform that was launched not long ago, Jingxi has achieved gratifying results. This article analyzes in depth from seven perspectives how Jingxi stands out in social e-commerce. I hope it will be helpful to you.

In 2019, the operating profit margin of JD.com, its core business, reached 2.5%, showing a significant growth trend compared with 1.4% and 1.6% in 2017 and 2018.

On March 2, 2020, Beijing time, JD.com released its 2019Q4 and full-year performance report. The report shows that the number of annual active purchasing users in 2019 increased to 362 million, a significant increase of 27.6 million from the end of the third quarter. The number of new annual active purchasing users in a single quarter reached a new high in the past 12 quarters.

Jingxi has developed rapidly since its launch. Nearly a quarter of JD.com’s new users come from Jingxi, and more than 70% of them are from third- to sixth-tier cities. So how did Jingxi achieve its rapid rise? What is the current situation of the entire social e-commerce industry?

This article will analyze Jingxi's perspective and give you a deeper understanding of the operating logic of Jingxi and the e-commerce industry.

1. Industry Analysis

Traditional e-commerce is centered around goods and is a traditional sales platform centered around commodities and supply chains.

Social e-commerce is people-centered and is a form of e-commerce formed by social relationships. It does not use product search and display as a sales model, but is based on social media functions and built on social relationships. It acquires traffic at low cost through social activities, content sharing, etc., and ultimately achieves commercial monetization through an innovative e-commerce model.

The development of social e-commerce began in 2009 and went through a long period of exploration. It was not until 2019 that it began to gradually mature. So below we use the PEST analysis model to discuss the reasons behind this.

1.1 Politics

In 2015, the State Administration for Industry and Commerce actively carried out forward-looking research on the establishment of online market supervision mechanisms. Study the development and changes of business models and new business formats such as social e-commerce, cross-border e-commerce, group buying, and O2O, and propose targeted measures and methods for supervision in accordance with the law, and clearly include social e-commerce in the scope of supervision. As this model becomes more and more recognized, the country's policy attitude towards it has also changed from restriction to attention and support.

With the implementation of the "E-Commerce Law" in 2019, the state encourages the development of new e-commerce formats, innovative business models, and the promotion of e-commerce technology research and development and promotion and application. This is a major opportunity for the development of the platform economy. As a new form of platform economy, "social e-commerce" has thus gained a new foothold in thriving growth.

1.2 Economy

According to Nielsen data, the population size of my country's third- and fourth-tier cities is as high as 953 million, far exceeding the population size of first- and second-tier cities of 427 million. The sinking market covers nearly 300 prefecture-level cities, 2,800 county towns, and 40,000 townships.

At the same time, according to data from the National Bureau of Statistics, the per capita disposable income of urban residents in the first quarter of 2020 was 11,691 yuan, an increase of 0.5%; the per capita disposable income of rural residents was 4,641 yuan, an increase of 0.9%. As the income of urban residents increases, consumption demand is also rising.

1.3 Society

According to data from the Penguin Research Platform, lower-tier netizens have abundant leisure time, with the average daily mobile phone usage time exceeding 5 hours. At the same time, the gap in mobile phone usage time with first- and second-tier netizens is narrowing.

The average online shopping frequency of low-end netizens is 6.0 times per month, and 54% of them shop online once a week. More than half of them are influenced by recommendations from their friends, and their consumption is spontaneously formed through word of mouth.

According to data from the Penguin Research Platform: when shopping, 92.7% of low-end netizens mainly use mobile payments, and cash and credit cards are used less frequently.

According to the data from Penguin Research Platform: due to different incomes, more than 60% of low-income netizens pay more attention to cost-effectiveness. People with higher wages pay more attention to product quality and their price sensitivity is greatly reduced.

Through the data, we can intuitively see that it is precisely because the sinking netizens are more dependent on the Internet; they are accustomed to using mobile payment consumption behaviors; and they have huge consumption needs. They pay more attention to cost-effectiveness in consumption concepts, and they are willing to pay a premium for the quality of the products they like, which makes the effect of social e-commerce in the sinking market particularly obvious.

1.4 Technology

The continuous development and advancement of technology has brought many improvements and changes to the e-commerce industry.

In 2012, mobile Internet gradually became popular, and smart devices provided an important customer interaction portal for e-commerce, giving e-commerce the opportunity to connect directly with customers.

The rapid development of artificial intelligence and machine reinforcement learning can reduce the labor service costs of enterprises on the one hand, but more importantly, it improves the efficiency of e-commerce business operations: for example, in the future, machines can judge the future sales volume of goods and evaluate the current inventory status through learning, and thus provide e-commerce companies with an optimal inventory solution.

5G has brought tremendous changes to the Internet. For the e-commerce industry, if it wants to continue to develop social e-commerce in a more diversified way, a 5G network environment is indispensable. For more consumers, the intuitive feeling that 5G network can bring is not just "greatly improved network speed" and "life becomes smarter and more convenient."

All of the above factors have worked together to promote the vigorous development of social e-commerce. So what will be the development trend of this industry in the next few years? Is there enough market space?

Data shows that social e-commerce is developing rapidly and the market size is constantly expanding. In 2019, the national online retail sales reached 10.63 trillion yuan, of which the online retail sales of physical goods reached 8.52 trillion yuan, accounting for 20.7% of the total retail sales of consumer goods. Online consumption continues to release momentum through model innovation, channel expansion, cross-border e-commerce and other means, forming multiple highlights of consumption growth.

As of March 2020, the number of mobile online shopping users reached 707 million, an increase of 116 million from the end of 2018, accounting for 78.9% of mobile Internet users.

Data estimates show that as the integration of social traffic and e-commerce transactions continues to deepen, the proportion of social e-commerce in the online shopping market has continued to increase. From 2015 to 2018, the proportion of social e-commerce in the overall online shopping market increased from 0.1% to 7.8% of China's online shopping market.

Therefore, we can see that there is still a lot of room for this market, and it will continue to grow rapidly in the next few years.

2. Competitive Product Analysis

In the competitive environment where the cost of acquiring customers in the e-commerce market is getting higher and higher, social e-commerce, as an innovative business model, has more and more participants and competitors. In 2018, social e-commerce has exploded. From Pinduoduo, Yunji, Beidian to Jingxi, dark horses have appeared one after another, shaking the existing e-commerce landscape.

According to the data statistics of iResearch, Pinduoduo still has a clear advantage in monthly active scale and month-on-month growth rate; Jingxi quickly occupied a certain market share by leveraging the huge traffic of WeChat, and as an important player in the industry, it has a great influence.

Because Pinduoduo and Jingxi both adopt the group buying model and are direct competitors. The following analysis focuses on the growth paths and business models of the two products to understand the differences between the two companies.

2.1 Pinduoduo

In September 2015, Pinduoduo was officially launched.

In July 2016, Pinduoduo's user base exceeded 100 million, and it received US$110 million in Series B financing led by IDG Capital, Tencent, and Gaorong Capital.

In September 2016, Pinduoduo and Pinhaohuo announced their merger.

On July 26, 2018, Pinduoduo officially entered the U.S. capital market with an issue price of US$19 and a market value of US$24 billion.

In October 2018, Gome Electrical Appliances and Pinduoduo started cooperation, with the former providing electrical appliance product management business to Pinduoduo.

On October 25, 2019, Pinduoduo's stock price was US$39.96, up 12.56%, and its market value increased to US$46.4 billion, surpassing JD.com.

As of March 11, 2020, as of the end of 2019, Pinduoduo's number of active buyers reached 585.2 million, a net increase of 48.9 million in a single quarter, and a net increase of 167 million over the same period last year. In the third and fourth quarters of 2019, the number of active buyers on Pinduoduo increased by 102 million, and the coverage rate of users across the entire network is still accelerating.

On March 15, 2020, Pinduoduo released the "Annual Report on Consumer Rights Protection (2019)".

Merchant side: When the concept of consumption upgrade became popular in 2015 and 2016, Tmall and JD.com cleared out a number of small and medium-sized merchants in order to improve the overall product quality of the platform during the consumption upgrade period. These were Pinduoduo's early merchant resources. Duoduo's offline development of "factories" provides small and medium-sized manufacturers with sufficient demand information by aggregating consumer demand, focusing on the depth rather than the breadth of SKUs. Brands can concentrate their production capacity on 2 to 3 core products. Based on this, manufacturers can make rational plans for production resources over a certain period of time.

Approach: Hot-selling model of multiple single popular products every day.

Traffic side: In the early days of the sinking market, there were a large number of users who did not have WeChat payment or bound cards, but through behaviors such as grabbing red envelopes, a large number of users had a certain amount of cash deposited in their WeChat payment accounts, but they lacked ways to spend it. Pinduoduo uses the method of "sharing + group buying" (the price is better when buying in groups. At the beginning, it was group buying among acquaintances, and the social circles of acquaintances drove the buying. Now it can also be done by strangers) to carry out viral marketing. It obtains a high exposure rate for products at a very low cost, and the merchants on the platform can also obtain large-scale purchases in a short period of time.

Currently, Pinduoduo has established a firm foothold in third-tier cities and below, and is also developing interactive games. This model is almost entirely aimed at increasing user activity, increasing product exposure, increasing user purchasing desire and the number of orders, increasing user survival time on the platform, and even attracting new users.

Pinduoduo’s Duoduo Orchard is the best among all games and is also the most popular among users.

2.2 Jingxi

In 2014, JD.com launched its social e-commerce layout. JD.com reached a strategic cooperation with Tencent and entered the first-level entrance of WeChat and QQ shopping.

In 2016, the group buying business was launched, and the content shopping guide ecosystem - "Shopping Circle" was launched.

In March 2018, the first “JD Shopping Festival” was held.

In April 2019, the Pingou APP was launched for testing; in May, JD.com and Tencent reached a new round of strategic cooperation, and will use unique resources such as WeChat's first-level entrance and WeChat Market to create a new platform that is different from JD.com's existing scenarios and models; during the 618 period, JD.com Pingou promoted growth in the sinking market, and joined hands with Xinhua Credit to launch the "Factory Direct Premium Products" plan; in July, JD.com Pingou Business Department was renamed JD.com Social E-commerce Business Department, and its strategic position was upgraded; in September, JD.com Pingou was fully upgraded to "Jingxi", a social e-commerce platform with WeChat's first-level entrance as its main carrier.

Merchant side: In order to promote the development of group buying business, JD Group Buying (before the upgrade to Jingxi) held several investment promotion conferences in 2018 and used preferential policies to attract merchants to join. Jingxi was the first in the industry to launch the "corporate store investment promotion" to help more high-quality manufacturers connect with social users, break through growth bottlenecks, and create greater market value together. Paying more attention to starting from user needs, merchants dig deep into consumer demand data and use the data to reversely infer consumer pain points. Jingxi’s reverse customization based on the C2M model can help brands gain deep insights into market demand, discover gaps in industry development, achieve product innovation, and promote industry transformation and upgrading.

Approach: high quality and low price.

Traffic side: JD.com and Tencent have had a 6-year strategic partnership, and WeChat’s huge traffic portal is an important tool for Jingxi to tap into the lower-tier markets. Currently, with 320 million active users, it occupies an important market share in the industry.

The similarity between the official launch of Jingxi and Pinduoduo is that it focuses on users in the sinking market, and both place orders through group buying. There are also certain similarities in the column settings of social fission and apps.

Summary: From the above analysis, it can be seen that Taobao cultivated the online shopping habits of the Chinese people in the early days. Subsequently, e-commerce platforms such as JD.com quickly rose with excellent product quality and efficient logistics services, promoting the overall development of the industry towards standardization and quality. After the initial online shopping experience was completed with the group-buying model, the consumption upgrade demands of users in the "downstream market" were thoroughly stimulated.

Pinduoduo's merchants mainly come from the early tail merchants of Tmall and JD.com, while Jingxi's merchants are mainly introduced through investment promotion; in terms of market entry methods, Pinduoduo focuses on promoting low-priced popular products, while Jingxi focuses on low prices without low quality; finally, in terms of traffic, both platforms were mainly based on WeChat in the early days.

Although there are many similarities, Jingxi still has certain differentiated advantages. There is a "factory direct supply" channel in the homepage column of its APP, which means that the products not only have price advantages but also have guaranteed quality. This also reflects that Jingxi is creating high quality and low prices. In addition, the supply chain advantages accumulated by Beijing over the years have also brought more gameplay and market opportunities to the sinking market.

In the future, when the Internet penetration rate increases further and when the natives of the "mobile Internet" become more mature, the "digital divide" between different groups will eventually be slowly filled. The "downstream market" will surely evolve from competing on price to competing on quality, so Jingxi's prospects are full of possibilities.

3. User Value Analysis

In the e-commerce market, there are five main participants: consumers, merchants, platforms, logistics, and suppliers. Jingxi’s business logic is as follows:

If a platform wants to grow rapidly, it must meet the needs of consumers (active consumption and consumption driven by sharing), merchants, and suppliers, and balance the interests among them. (Because logistics is a third-party service, we will not analyze it in detail here)

Next, we will explore the needs of the following three aspects and how Jingxi can better meet their needs.

3.1 Consumers

The demographic dividend of the Internet in the best markets (first- and second-tier cities) has now reached saturation, but the Internet is developing at a faster pace. Based on the popularization of the Internet ecosystem, it has covered a large number of small and medium-sized cities and counties.

Factors that netizens in the sinking market pay more attention to:

1. Cost-effectiveness demand: Cost-effectiveness has always been what consumers pay more attention to, and price discounts and discounts are even more important factors in the consumption decisions of low-end netizens.
2. Recommendations from friends: With the diversification of commodities, the same commodity has many brands and merchants. If the commodity is recommended by friends, consumers will have a higher degree of recognition of the commodity.
3. Diversity of commodities: Food and daily necessities are the two main consumption items of lower-tier netizens. Young netizens who are moving towards the lower levels generally focus on personal consumption, while middle-aged netizens who are moving towards the lower levels generally focus on family consumption. If the platform and merchants cannot meet the needs of multiple consumer roles, it means losses.
4. Convenience and speed of purchase: As the pace of life accelerates, people hope to obtain the goods they want through more convenient and efficient purchasing methods.

After the above consumption demands are generated, the main consumption methods of sinking netizens are as follows:

3.1.1 Physical Retail

There are many types of physical retail stores, and the main way to shop is to go shopping and select products. As the times change, the limitations of physical retail have begun to emerge:

• The types and quantities of merchandise in physical stores are somewhat limited and cannot meet the shopping needs of people of all ages.
• Audience range: Physical stores have fixed business locations and a relatively small audience range. Specific products need to be purchased in corresponding shopping malls or specialty stores, which increases users' time costs.
• High prices: Since stores require costs, the prices of goods are higher than those on social e-commerce platforms, and it is not possible to frequently offer price discounts or promotions on goods.

3.1.2 Traditional e-commerce

Traditional e-commerce has been developing for nearly 20 years. Although it occupies a large market share, consumers' personalized needs are becoming more and more diverse, and the shortcomings of traditional e-commerce are beginning to emerge:

1. Interactivity: The interaction between the platform and consumers is limited to text and pictures, which does not allow for good communication and experience.
2. Asymmetric product information: Because consumers can only understand the products through pictures and text descriptions, coupled with the chaos of fake orders on online shopping platforms, it becomes more difficult for consumers to make choices and judgments, which reduces the consumption experience and thus reduces the desire to consume.

Both physical retail and traditional e-commerce retail are constantly upgrading and updating to meet the personalized needs of consumers, but they cannot fully meet the needs of consumers.

3.2 Merchants

The merchants’ goal is to sell the most goods at the lowest cost and earn the biggest profit.

Internet technology and equipment are undergoing tremendous changes every day. Internet marketing is constantly developing towards precision, convenience and timeliness, and traditional retailers are facing huge challenges.

• Input costs: Opening a physical store requires decoration, procurement, personnel, etc., and the initial costs are high. Locations with high operating costs and high traffic volume have higher rents.
• Competition among peers: The same products are comparable, and peers directly lower prices, affecting profits.
• Peak and off-peak seasons: The purchased goods are seasonal or popular. Improper investment can easily lead to capital drag, especially during the coronavirus epidemic this year, when a large number of physical retailers and enterprises announced closures/bankruptcy.
• Poor service: Except for the specialty stores on the market that focus on user experience and service, most businesses are simple in terms of service.
• No marketing closed loop: The online and offline operating rhythms, marketing goals and sales products are different, resulting in an experience without a brand image.

We can clearly see that merchants have many pain points and needs. If they want to change the status quo, the time, energy and money costs that individual merchants have to pay are undoubtedly huge, and there are still many uncertainties.

3.3 Suppliers

As a supplier, the first line of demand is larger and more stable commodity orders, followed by in-depth exploration of consumer preferences, then saving on R&D costs for new products, and finally creating products that customers like. Control production volume through actual understanding of the market.

As suppliers, they can develop online and offline cooperation channels at the same time. However, whether online or offline, as long as they go through middlemen, their profits will be reduced. If they do the sales themselves, the risk cost is too high and they dare not get involved.

3.4 Platform

Through the above analysis, we understand that consumers, merchants and suppliers all have their own demands and the current solutions do not meet their pain points well. At the same time, merchants and manufacturers are eager to understand the needs of users and sell goods. So how does Jingxi, as a platform, better meet their needs and attract them to this platform?

3.4.1 Multiple social modes + offline stores

Jingxi is a product that JD.com promotes in the lower-tier markets. It leverages the advantages of various social modes, the WeChat online community and JD.com's millions of offline stores to meet consumers' demands for diversified products.

Currently, Jingxi's social marketing tools have been expanded to 60 types. Marketing tools such as industry belt live broadcasts, online celebrity product promotion, and Jingtiaoke enhance the depth of social interaction and build richer and more diverse social shopping scenarios for users. Ultimately, they open up the merchant's marketing closed loop, reduce costs, improve the brand sales experience of offline stores, and reduce the merchant's operating costs.

Public data from iResearch shows that a comparison between the traffic models of traditional e-commerce and social e-commerce can reasonably explain how Jingxi has built a win-win golden triangle for users, brands, and platforms by stimulating users' multi-level sharing, enabling merchants to attract low-cost traffic and convert users, and saving users money and worry.

3.4.2 Low Price Strategy

Jingxi uses subsidies as the core in its low-price processing. JD.com's advantage lies in the fact that it has achieved profitability for 14 consecutive quarters, with a net profit of 3.5589 billion yuan in the second quarter. The continued profitability of JD.com's main site can provide capital injection to Jingxi, supporting it in seizing the lower-tier markets through price wars.

The low-price attribute is also intuitively reflected on Jingxi's main page, with free shipping for 9.9, 1 yuan welfare and 1 yuan shopping. It is worth mentioning that the categories of free shipping for 9.9 cover eight categories: food, clothing, home life, mother and baby toys, etc., allowing users who pursue cost-effectiveness to slowly choose. The categories and number of products for the 1 yuan welfare and 1 yuan shopping packages are relatively small, and most of them are small daily necessities. Consumers can still save some money compared to shopping in physical stores.

Of course, there are also entertainment methods such as "Get fruits for free" and "Make good things for free". The difficulty is not too great, giving consumers hope. At the same time, the entertainment method has greatly increased the activity of consumers. Moreover, all its products have subsidized prices and rebate red envelopes. To obtain rebate red envelopes, you need to share the bargaining experience. You can directly connect to WeChat and share with friends to help bargain and get rebate red envelopes, which shows the powerful social attributes of Jingxi.

Through low-price policies and the group-buying model, Jingxi has successfully solved consumers' demand for cost-effectiveness, and helped merchants acquire customers at low cost and reduce operating costs.

3.4.3 Directly connect to the industrial chain, restructure the supply chain + decentralize, and control quality

According to data from the Ministry of Commerce, my country's total foreign trade imports and exports in January and February 2020 was 4.12 trillion yuan, a decrease of 9.6% from the same period last year. With the further spread of the international epidemic, the resurgence capacity of my country's foreign trade enterprises will further deteriorate. Not only foreign companies but also many domestic small and medium-sized enterprises have been severely impacted.

As an enterprise, the only advantage is manufacturing, while the rest of the marketing, transactions, and even delivery and after-sales services are blank. JD.com, as a retail infrastructure service provider, happens to have strong support capabilities in these areas.

According to Xu Lei, CEO of JD Retail Group, JD has established 100 industrial belts across the country, thereby achieving direct connection between factory goods and the sinking market, building a "highway" for direct supply of factory goods for users in the sinking market, and helping Jingxi establish a stable supply chain competitiveness that matches the sinking emerging markets. By linking with the industrial belts, Jingxi can control quality, so that Jingxi will not repeat the plight of other e-commerce companies with counterfeit and shoddy products, and at the same time solve consumers' pursuit of product quality.

Jingxi takes advantage of the trend and relies on JD.com's strong infrastructure service capabilities. Those manufacturing and OEM companies that used to work hard and hide deep in the back-end have come to the forefront through Jingxi, gaining direct insight into consumer demand in the sinking market and providing new ways out for the companies. Jingxi taught companies the gameplay and value of marketing, and also taught companies how to better understand consumers, allowing large-scale C2M to become popular. It solved the stability of supply chain orders, directly helped suppliers to open up the marketing loop, and improved merchants' control over commodity inventory in peak and off-seasons.

Summary: Through the above four aspects of analysis, we can find that compared with others, Jingxi explains why it can develop rapidly.

4. Commercial Value

As a social e-commerce platform, Jingxi's core business is transactions. GMV (gross merchandise volume) is the core indicator to measure the competitiveness of the platform (market share). Here we analyze whether Jingxi's core business is healthy.

GMV=number of users*conversion rate*average order value. Any improvement in any of the indicators, such as the number of users, conversion rate, and average order value, will have a positive impact on the overall revenue growth, so the following focus will be on analyzing how Jingxi improves these three key indicators.

4.1 Increase the number of platform users

In order to achieve sustained growth in revenue, a steady stream of new registered users is the most basic guarantee. So how does Jingxi attract new users?

There are mainly two ways: advertising traffic inflow + word-of-mouth fission.

The first one is the advertising traffic inflow.

Jingxi directly adopted a "hot start" approach after its launch, with WeChat as the main traffic entrance, based on six major mobile channel entrances including mini programs, QQ Mobile, M Station, APP, and fan groups. Give full play to the advantages of social e-commerce and meet users' social needs.

The second is excellent product reputation.

As a shopping app, word of mouth is very important in attracting new customers. As the cost of acquiring customers becomes increasingly high, consumers can purchase products on any platform, so recommendations from friends become very important.

In order to build a good reputation, Jingxi is constantly improving consumers' shopping experience, such as:

Scenario 1: Because online shopping involves uncertainties in logistics and delivery time. JD.com has never stopped developing logistics technology.

Scenario 2: Jingxi’s “factory direct premium products” have brought great benefits to customers in terms of both price and quality of goods. This also lays the groundwork for building word-of-mouth reputation.

Through the sharing-assisted rebate model, good logistics and delivery experience, and high-quality and low-priced goods, the user's consumption experience can be greatly improved.

4.2 Improve conversion rate

After guiding users to the platform through various means and channels, users are mainly divided into two categories. Clear users focus on speeding up the decision-making process for payment, while unclear users rely more on the operation side (activities, discounts, atmosphere, etc.) to guide users to generate a desire to buy.

Only when users make purchasing decisions, that is, when they become paying users of the platform, will the platform be valuable. So how does Jingxi improve its conversion rate?

First, let’s understand the following purchase paths of traditional e-commerce and social e-commerce:

Social e-commerce has a simpler and clearer shopping path. Secondly, it can improve conversion efficiency based on acquaintance relationships by leveraging the trust between acquaintances. The logic of social e-commerce using goods to push people also greatly shortens consumers' purchasing decision-making time and improves conversion rates.

People looking for goods:

During online shopping, after searching and entering the product list page, which product should the user choose from the dazzling array of products? The first thing that helps you make a decision is the big price card, which allows you to quickly choose the product that meets your desired price.

Therefore, in the design, we can find that the main factors for quick decision-making are: price, appearance, and popularity.

On Jingxi's product display page, there are orders that are being group bought. By comparing the original price with the group buying price, consumers will feel that the purchase is cost-effective, and they can also save the process of starting a group and then finding people to buy together. This also takes into account some consumers who do not like to share to their friends all the time, and tells customers through a countdown that if they miss it, they will need to spend more time on the group purchase.

Secondly, in terms of price, use the price advantage of group buying to gain greater purchasing willingness.

Finally, through discounts and rebates, users are guided to buy multiple items instead of a single item, which increases their willingness to make additional purchases and makes them feel that it is a good deal after the purchase.

By promising free shipping for online payments and refunds if the group does not meet the quota, users can buy with confidence and without worries.

Through a series of display designs, users have been successfully attracted to add products to the shopping cart. When products are discounted or on sale, they will be displayed in the shopping cart, allowing users to feel the cost-effectiveness. The principle of hunger marketing is used to highlight the small quantity and stimulate consumption.

In order to get the rebate after group buying, you need to help bargain, and there is no limit on the number of times each account can help every day. As a result, WeChat groups and QQ groups dedicated to helping with rebates were born. These consumers are basically deep users of online shopping, so the products shared in the group will often get higher conversion rates.

4.3 Increase Average Order Value

The average order value is affected by two factors: the single purchase amount and the purchase frequency. So let us first analyze how Jingxi increases consumers’ average order value from the perspective of single consumption amount.

The first is: pay attention to consumer attributes and carry out corresponding activities.

After clearly understanding the attributes of consumers, Jingxi launched a variety of practical daily necessities and rebate activities on the homepage;

Secondly, various coupons for full discounts are launched. On the homepage, we can see red envelopes in the scrolling advertisements every day, such as "Share 100,000 yuan in red envelopes". After obtaining red envelopes through sharing, the coupons can be used when a certain amount is met during consumption, which indirectly increases the amount of single consumption.

In addition to receiving red envelopes, in order to increase the frequency of consumption, Jingxi has also launched a money-saving card: every month, you can receive a 52 yuan full-category coupon, a 20 yuan special coupon (a 5 yuan coupon, usable for purchases over 5.01 yuan), and you can get a free order (up to 40 yuan) for every 15 purchases per month (actual payment for a single transaction is more than 18 yuan).

The key point is that the first-time activation offers a special discount of 3.08 yuan per month. As an intensive consumer, this is really a great benefit. With so many discount coupons, consumers' consumption frequency is naturally boosted.

Jingxi has established more than 100 industrial belts across the country, which has enabled Jingxi to have a more comprehensive control over product quality and at least has rapidly developing core competitiveness in the same field.

Summary: From the above analysis, we can find that Jingxi has done a lot of detailed work to continuously improve its revenue model, from attracting new users to improving conversion rates and increasing average order value. At present, the overall situation is still good. Jingxi can also achieve overtaking in the long-term development through the above methods. Therefore, in the latest financial report of JD.com Q1 2020, it is still in a profit trend, which is inseparable from the boost of Jingxi.

5. Product Iteration Analysis

In order to deeply analyze the version iteration rhythm of Jingxi and explore the product iteration logic, its main version iteration contents are summarized as follows:

According to the above figure and the direction of functional iteration, the development of Jingxi can be simply divided into two stages:

Phase 1: Product hot launch, improve basic functions

Before October 2019, in the V1.0-V2.0 versions, "JD Pingou" was officially renamed "Jingxi", which was the hot start stage of the product. The main purpose of this stage was to improve basic functions and polish user experience. For example: optimizing the startup loading function, optimizing the login process, adding user startup guidance and other functions are all aimed at reducing the user's learning cost. As Jingxi officially connected to six major traffic channel entrances such as WeChat, the business developed and the number of platform users increased, Jingxi's business was also separated from JD.com, preparing to provide users with a better service experience.

The development of Jingxi is backed by the mature industrial chain of JD.com's main site, and it has relatively mature business support in basic functions as well as logistics, after-sales and other aspects. It took only half a year to complete the official launch and was fully prepared for operational activities.

Phase 2: Continuously optimize basic functions and enrich online activities

From October 2019 to the present, the version has increased from V2.2.0 to V3.5.0, which is Jingxi's rapid growth period. Expanding users has become the focus of product iteration. During this stage, which is also the explosive period of promotional activities in the e-commerce industry, Jingxi focused on adding activities such as first-order benefits for new users and cash back red envelopes for inviting new users, reducing operating costs and achieving user growth by actively attracting new users.

With the continuous increase in the number of users, it is particularly important to improve the conversion of consumption. In order to make the user experience smoother, the login, search function and settlement process were first upgraded and optimized. These changes increased the experience of new users. In addition to a large number of cash back and activities at this stage, the platform’s live broadcasts also have a variety of live broadcast content with goods.

For example: the "Anchors Go to Factories to Select Goods" on Double 11 in 2019 and the ongoing "618 Traceability Live Broadcast (to Support Agricultural Products)" provide users with more diversified consumption scenarios and are also a means to attract new registered users.

Jingxi is also constantly establishing stable industrial belts with enterprises across the country to bring more direct discounts and high-quality products to users, and help enterprises establish their reputation. Similarly, Jingxi is also consolidating its brand image of "low price but not low quality" in the minds of consumers.

Overall, Jingxi has a good grasp of the rhythm. In the early stage, the focus was on polishing the product, and there was not enough promotion. Due to the imperfection of the product, even with corresponding promotion, it was impossible to retain customers and it also affected the reputation.

After the product upgrade, it entered a period of rapid growth. Jingxi's business segment was also separated from JD.com. After connecting to large traffic platforms such as WeChat, what it needs to do is to establish word-of-mouth and influence and gain a firm foothold in traffic entrances such as WeChat. Otherwise, no matter how much traffic is provided, it will be useless, so there is no strong promotion at this stage.

Up to now, by looking at the download trend chart of Jingxi in the past six months through the Kuchuan database, it can be seen that Jingxi is still in its growth stage. Judging from JD.com’s current performance report, its performance is still good and the future is worth looking forward to.

6. Product structure analysis

In the analysis, we analyzed the iteration pace of Jingxi's product functions. Next, let's take a look at what user needs these functions meet and how they are distributed in the entire App.

The following figure is the product structure diagram of Jingxi V3.5.0:

To facilitate analysis, the author reorganized Jingxi's product structure according to users, scenarios, needs and functions to obtain the following table:

Because the platform's main target is consumers, the focus is on meeting consumers' potential needs. There are four scenarios in which they use the platform: before placing an order/during shopping (browsing decision stage)/after placing an order/after delivery.

Scenario 1: Before placing an order

Before placing an order, there are two types of consumer behaviors. The first type is netizens with consumption purposes. This type of consumer can directly search for the products of their interest through Jingxi’s search bar and product classification column.

Then, netizens who have no consumption purpose can still be divided into two categories: price sensitive and price insensitive. Therefore, in the page design, the scrolling advertising column on the Jingxi homepage can be used to view the recent discount activities; of course, in addition to the large-scale discount activities held regularly, Jingxi’s long-term "1 yuan benefit" and "9.9 free shipping" channels can greatly meet the needs of price-sensitive consumers.

As the number of commodity categories increases, consumers have a wide range of choices, whether they shop purposefully or without a purpose, which increases consumers' time costs to a certain extent.

Live streaming sales solves this problem because the hosts have selected relatively cheap and high-quality products in advance. Unlike TV shopping, the host and consumers can have good interactivity during the live broadcast. The live broadcast method has driven brand promotion, brought more discounts to consumers, and satisfied the curiosity of consumers. Jingxi has placed such an important function in a prominent position in the middle of the bottom navigation bar.

Jingxi’s homepage is rich in content and highlights the key points. Consumers with different needs can find channels that interest them.

Scene 2: Shopping

A simple and convenient operation method is necessary. After solving the problem of quickly finding the product category, what many customers want to know most is the price of the product and the quality of the product. This part can be directly understood through the product details page. Any product has an original price and a group purchase price (the group purchase price is relatively lower). Because group purchases are made up of two people, the number of comments in the product comment area will not be too low, and the reference value is also high.

When shopping online, comparing prices from different stores is very important. When you select a product category, multiple products of the same type will appear for you to choose from. You can also sort them by price or sales volume and other variable attributes, and then make actual references and final purchasing decisions based on price comparisons and buyer reviews.

Sometimes the information displayed by buyers' comments may not be very accurate. For example, when purchasing clothing, the store has a better understanding of its own products, and the size of the goods and the corresponding body shape can be well matched. In this case, consumers can contact the store owner to avoid buying the wrong thing.

Because digital products are updated quickly, various home appliances have brought convenience to our lives. In addition to daily necessities and clothing, a large part of them will buy these products. Therefore, the price of purchasing home appliances or digital products is relatively high, and many young people have limited cash flow.

In order to solve these problems, Jingxi also provides a way to purchase installments, reduce early financial expenditures, and allow consumers to enjoy the high-quality experience brought by new products in advance. In addition, both home appliances and digital products use JD Logistics, which can greatly shorten consumers' waiting time.

The most time-consuming thing in shopping is to view the detailed content of each product and compare it. Jingxi also uses simple and elegant design to highlight the focus and allow users to compare in the shortest time.

Scene 3: After placing an order

Of course, during the shopping process, consumers may not necessarily choose to buy immediately because they need to control their amount. At this time, it is particularly important to collect the products they intend. Then the shopping cart is set up at the first-level intersection in the bottom navigation bar, and you can directly enter the home page.

After placing an order, consumers are more concerned about the logistics of the goods. At this time, they can monitor the logistics of the goods in real time through orders, and they have a thought about when they will arrive.

When the product is received, the system will also prompt the consumer to receive the goods and encourage evaluation. If there is damage during the transportation process or the product quality does not meet the product description, we can also apply for a return and exchange in time. Of course, the products on each platform have different focus, and there will be certain gaps in after-sales service. Then Jingxi's after-sales service also takes time to verify and improve.

From the above analysis, we can find that Jingxi's functional design basically meets the needs of users in different scenarios from before placing an order, during shopping browsing, after placing an order, and after arrival. At the same time, the high-frequency functions required by different users are also highlighted and distributed reasonably in the product structure, which is considered a relatively complete product.

7. Operational Path Analysis

JD.com has had a long time in its group purchase business, until it held the first "JD.com Group Purchase Festival" in March 2018, and officially established the group purchase business department in December 2018.

In April 2019, the Pingo APP was launched for testing; in May, JD.com and Tencent reached a new round of strategic cooperation, and will use unique resources such as WeChat first-level entrance and WeChat market to create a new platform that is different from JD's existing scenarios and models; in July, JD.com Pingo Business Department was renamed JD.com Social E-commerce Business Department, and its strategic position was upgraded; in September, JD.com Pingo was fully upgraded to the social e-commerce platform "Jingxi", which uses WeChat first-level entrance as the main carrier.

This article only summarizes the operational activities after Jingxi’s official launch, and is divided into two categories (because the detailed data of the operational activities cannot be obtained, and the news is summarized as follows for your reference).

Method 1: Platform activities

During Double 11 in 2019, Jingxi invested huge subsidies to launch one-yuan hot products under the framework of JD's super 10 billion subsidies and 100 billion subsidies.

In order to further strengthen the quality of goods, the "Thousand-Person Product Review Team" composed of Jingxi Products Team and mysterious users during this Double 11 period also escorted the money-saving shopping experience for consumers. From the massive direct supply of good goods, the final hot products are screened and checked in multiple dimensions such as merchant production qualifications, stocking strength, product quality, price, service experience, etc., to ensure that high-quality hot products are good and good, breaking through the industry's bottom price.

Data shows that since Jingxi connected to the WeChat first-level entrance on October 31, on November 11, the number of orders entered the WeChat first-level entrance on month-on-month, the average daily growth of 400% in the previous week (October 24-30), and the number of new users increased by 747% month-on-month.

Method 2: Strategic cooperation

On January 15, 2020, Xinhua 99 (guided by the Ministry of Agriculture and Rural Affairs, the Ministry of Commerce, the Ministry of Culture and Tourism, the State Council Poverty Alleviation Office, the All-China Federation of Industry and Commerce, the State Council Development Research Center and other units. Co-organized by the China Agricultural Economics Society, the China Charity Federation, etc.) reached a strategic cooperation with JD Group. The two parties will work together to promote the standardization, greening and branding of agricultural industries, assist rural revitalization, and promote supply-side reform; and Xinhua 99 Pinzhu flagship store took the lead in Jingxi, jointly opening the "Jingxi-Xinhua 99 New Year's Goods Festival Special Session".

Jingxi released the data for the 2020 New Year’s Goods Festival from January 1 to January 17, and the platform sold more than 1 billion pieces of goods in total.

On March 11, 2020, the "Spring Thunder Plan" was launched to formulate the "100 Integrated Assistance Strategy for the Integration of Top 100 Industrial Belts", which supported support policies in four aspects: capital, settlement, operation and manpower, and helped merchants who were more affected by the epidemic to quickly open up business flows and solve the problems of unsalable sales and inventory.

According to Jingxi, the "Spring Thunder Plan" has been released for 28 days, and the overall order volume has increased by more than 150% compared with before the epidemic. Among them, the order volume of industrial goods has increased by more than 250% compared with before the epidemic. Jingxi's "Sales for Sales in Origin" live broadcasts of nearly 10,000 games, and more than 300,000 goods were promoted, with sales volumes increasing by more than 7 times compared with before the epidemic.

On April 20, 2020, Jingxi officially launched the "factory direct premium product" plan for the industrial belt: that is, through special cooperation between local governments, comprehensively promote new retail infrastructure in the industrial belt and source production areas, helping to build a new digital industrial belt to help the industrial belt and source production businesses resume work and production, and can also connect with the consumption demand of the domestic sinking market to fully release production capacity. The first stop is located in the Chenghai Toys Industrial Belt in Shantou, Guangdong, and the first "Jingxi Industrial Belt Cooperation Demonstration Base" is built in Chenghai.

On May 18, 2020, the Baigou New City Management Committee gathered efforts from the entire district to hold the first "China Baigou 5.18 Online Packaging Expo" with the theme of "Using global trade shipment prices to define fashionable and popular new coordinates". Baigou New City signed a strategic cooperation agreement with Jingxi.

8. Conclusion

• The common factors of policies, economy, social culture, technology and other factors show that the social e-commerce industry in group shopping is growing rapidly now and there is still a lot of room for growth in the future.
• In the Pinzhu e-commerce industry, Pinduoduo still has obvious advantages in terms of revenue and user scale, and it also occupies the most market share. Relying on JD.com's infrastructure service capabilities, Jingxi connects with products at first-level traffic intersections on WeChat platform, and its future development is worth looking forward to.
• In the general environmental market of e-commerce, there are mainly five participants: consumers, merchants, platforms, logistics, and suppliers. If a platform wants to achieve rapid growth, it must meet the needs of consumers (active consumption and being shared to drive consumption), merchants, and suppliers, and balance the interests therein.
• Jingxi’s current main business is group purchase consumption, and important revenue indicators are inseparable from three factors: number of users, conversion rate, and average customer price. First of all, Jingxi connects with six major traffic portals to ensure the growth of users; at the same time, through the advantages of social e-commerce, live streaming and various discount activities to improve user conversion rate; in order to increase the average customer price, various discount coupons, JD.com money saving cards and red envelope benefits were launched to stimulate consumers' consumption behavior.
• Jingxi has been developing for two stages since its establishment. So far, it is still in its growth stage. Judging from the recent performance reports of JD.com, its performance is still good and the future is worth looking forward to.
• Jingxi's target users are consumers in the sinking market. Its functional design basically meets the needs of users from different scenarios before placing an order, during shopping browsing, after placing an order, and after arrival. At the same time, the high-frequency functions required by different users are also highlighted and distributed reasonably in the product structure, which is a relatively complete product.

Jingxi's predecessor was "JD Group Shopping". In 2018, JD began to restart its group shopping business; in April 2019, the group shopping APP was launched for testing; in September, JD Group Shopping was fully upgraded to the social e-commerce platform "JD" with WeChat's first-level entrance as the main carrier. With JD.com’s blood transfusion and C2M business model, we cooperate with enterprises across the country to establish industrial belts.

Finally, we use SWOT analysis to analyze and summarize the advantages, disadvantages, opportunities and threats of Jingxi's development.

• Advantages (S) analysis: accurate consumer group positioning (third and fourth-tier markets); Tencent traffic intersection; good corporate image, focusing on product quality; relying on JD.com’s strong logistics management; strong technical support.
• Disadvantages (W) Analysis: The model is easy to copy; the development time is short; the profit margin decreases after improving the quality of the commodity.
• Opportunity (O) analysis: government support; market structure optimization; Internet penetration rate increases; huge consumption potential in the sinking market.
• Threat (T) analysis: There are many competitors; relevant laws and regulations are not perfect, and consumer rights protection is limited; offline markets are also constantly optimizing and innovation occupying market share.

The above is an analysis report for the purpose of being familiar with the industry, so I did not give any suggestions on the direction of product optimization. I hope it will be helpful to everyone.

Due to personal abilities, there must be some inadequate analysis. The boss is welcome to give me some thanks.

Author: 🇨�Tong Lin

Source: 🇨�Tanglin