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An e-commerce revolution triggered by the “moon black wind high”

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“Core Tips”

It has become a habit of many people to meet at 618 every year, but the birth of 618 is little known. Why would JD.com do something that seems to be losing money and making money for more than ten years? How did 618 evolve from an obscure date on the calendar into a nationwide shopping spree?

Author| Pan Tao

Edit| Liu Yang

The JD 618 e-commerce promotion has become a shopping festival for all people to participate in. Most people will “chop their hands” on time and empty their shopping carts on this day.

However, few people know how 618 was born.

In 2004, JD.com, which had just entered the e-commerce business, took June 18th, the day of the establishment of the company, as its store anniversary, and gave back to consumers through low-price concessions. In the following year, JD.com launched an event called “Moon Hei Feng Gao” to promote sales in the middle of the night. This event also made 618 officially out of the circle.

Zhang Qi, the trader of “Moon Hei Feng Gao” and the No. 1 employee of JD.com, once recalled that the price of many products was lower than the cost price at that time, and when he found Liu Qiangdong to confirm the price, the answer he got was, “Just press this. Sell ​​at a price”.

JD.com has been doing this for more than ten years since it seems to be losing money.

In 2021, Jingdong, who has reached the age of 18, handed in a latest 618 report card. On June 19, the data released by JD.com showed that from 0:00 on June 1, 2021 to 24:00 on June 18, the cumulative order amount of 2021 “Jingdong 618, 18th Anniversary” exceeded 343.8 billion yuan, refreshing historical data.

During the 618 period this year, the categories with the highest amount of orders were mobile phones, air conditioners, laptops, refrigerators, and flat-screen TVs; the categories with the largest number of products sold were biscuits, cakes, milk and dairy products, paper pumps, condiments, and casual snacks; the ones with the strongest purchasing power The provinces and cities are Guangdong, Beijing, Jiangsu, Shandong and Shanghai.

From an obscure date on the calendar to becoming a shopping festival for the whole people, looking back at the 18-year-old node of JD.com, how did 618 become 618?

1. The moon is black and the wind is high at night, when the spike is in progress The birth of 618 was quite accidental. After failing to open a restaurant during his university career, in 1998, Liu Qiangdong came to the Zhongguancun Haisha Market to start a business selling optical discs and optical disc recorders with the 12,000 yuan he saved from working in a Japanese company. The store was named “JD Multimedia “The day the store opened was June 18th. Clearly priced, authentic and licensed products, and providing services better than others, JD.com soon came out in the chaotic market environment at the time. In 2003, JD.com had 12 chain stores. When it was thriving, it happened that SARS happened, and the goods stored in the hands suddenly fell into a situation where no one could sell it. “Since we dare not meet with customers, why don’t we sell things online? Then there is no need to see customers, and there will be no SARS problems.” A colleague’s inspiration came to light and woke up anxious Liu Qiangdong. At that time, it was the era of forum promotion. Including Liu Qiangdong, JD employees posted marketing in major forums, and even put advertisements under the news of portal websites such as Sohu and Sina. After officially switching to e-commerce, Jingdong only began to have the concept of 618 in 2004. But at this time JD is just a small fish in this market, and 618 is just as JD’s own store celebration day. It has no more meaning or influence to give back to consumers through discounts and low prices. What really made the concept of 618 “out of the circle” was its predecessor-the “Moon Black Wind High” that began in 2005. This year, the forum is still an important promotion position for JD.com. Liu Qiangdong found that there are always many users who like to post in the evening asking about shopping, which allows him to capture an opportunity. In order to capture these users, JD.com soon came up with a low-price promotion at night, and named it “Yueheifenggao”. “Moon Black Wind High” Event Page Except for Liu Qiangdong’s accidental discovery in the forum promotion, in fact, this is more or less due to the state of JD.com at that time. At that time, JD’s size and influence were far less powerful than it is now. In the process of communicating with manufacturers , The company is not the one who has the right to speak, and it is not easy to do sales promotion. However, e-commerce naturally has the characteristic of being open 24 hours a day-this leaves room for JD.com to operate. Manufacturers were caught off guard by unpreparedly cutting prices in the middle of the night. The characteristics of low price and high quality have enabled JD.com to gain many users soon after its transition to e-commerce. Seeing the effect was good, after that, the “moon black wind is high” gradually evolved into the tradition of Jingdong, specifically selecting a certain day in June for activities. Starting from the “moon black and high wind”, JD.com has established at least two core competitiveness. One is trust. Due to the insufficient infrastructure at that time, if you are not careful, oversale will occur during the event. At this time, Jingdong will first communicate with users, and then find ways to find the source of goods, even if it loses money, it must complete every order. When e-commerce first appeared, the trust between merchants and users was very low. JD’s approach has not only attracted users, but also gained their trust. Another core competitiveness that continues to this day is service. Everyone knows that Liu Qiangdong attaches great importance to service. He once said: “Whenever people talk about JD.com, they have to say JD.com’s service is the best.” Customer service has always been the core department of JD.com. Liu Qiangdong once mentioned in “The Story of a Floor Alarm Clock” that at the beginning of his business, in order to save money, he slept in the office for four years. As the company’s No. 1 customer service, in order to deal with forum complaints, Liu Qiangdong set the alarm clock to 2 hours, “As long as the alarm clock rings, it feels like an earthquake, and the entire board is ringing.” More than ten years later, fast delivery and good service have become the core competitiveness of JD.com. The logistics and customer service teams are the two moats built by JD.com in terms of user experience. 2. From shopping spree to broadening the imagination of future retail From a counter in Zhongguancun at the beginning of the business to a listed company with a market value of hundreds of billions of dollars; from focusing on electronic products to opening up all categories of goods; from Jingdong’s “self-entertainment” to the world today Jingdong 618… No matter from which level, Jingdong has undergone earth-shaking changes. And 618 is the most vivid clue that runs through the years of JD.com’s development. Its changes can undoubtedly provide us with a unique perspective for observing the changes in JD.com. In January 2009, Liu Qiangdong would not have imagined that JD.com could surpass Dangdang and Zhuoyue so quickly. This year, JD.com, which received venture capital, had sufficient ammunition, and for the first time began to promote 618 from the marketing concept on a large scale. The theme of the promotion is “Red June, 11 Years of Jingdong”. Due to the 11th anniversary, JD.com launched many 11-yuan low-priced promotional products at this event, such as CPUs, cameras, memory, and even laptops. At 618 in 2009, JD.com’s turnover on that day exceeded 30 million yuan, and effective orders exceeded 45,000. Regardless of the cost, regardless of the price, let alone making money, Jingdong’s reputation gradually started. By the end of the year, JD.com really surpassed Dangdang and Excellence. The 618 event was adjusted in 2011. The promotion time was changed from 1 day to 30 days, and the categories participating in the promotion were further enriched. In addition to 3C products, food and Japanese white products also participated. Douban, Tianya, and Weibo also began to discuss the 618 promotion activities. 618 has gradually become a hot spot on the Internet from JD’s own store anniversary. On the day of 618 in 2011, JD.com’s sales exceeded 200 million yuan, which not only achieved 500,000 orders, which was more than three times the previous year, but also set a single-day sales record for domestic e-commerce. With the gradual expansion of 618’s influence, in 2012, platforms such as Tmall, Dangdang, Suning, and Kuba launched 618 promotional activities. JD 618 began to truly become a mid-year promotional event jointly participated by the industry from its own store celebration activities. JD.com’s clothing and book categories have also joined 618 from then on, starting a full-category promotion. Driven by the joint efforts of various platforms, 618 has become more and more influential, and a “poster war” even broke out in 2013. On the same night that JD.com released the “Don’t Make Trouble” posters, Gome, Suning, Dangdang, Yihaodian, etc. also released the same posters. The copywriting was full of gunpowder. Poster wars Behind this battle for attention is the rapid development of JD.com. But for JD.com, the significance of 2014 may be even more extraordinary. This year, JD.com reached a partnership with Tencent in March, listed on the Nasdaq in May, and then gained a first-level entry on WeChat. At the preparation meeting in June 2014, Xu Lei proposed that the theme of 618 should be highlighted, “Promotions can be done for 20 days, and traffic can also be guided by the rhythm of marketing, but consumers must remember a symbol. It’s Jingdong’s 618.” Driven by Xu Lei, 618 began to be branded. The 30-day “Red June” has since become 20 days and has continued to this day. In order to expand its momentum, JD.com has “broadcast hero posts” in 618, inviting friends and businessmen to join the promotion. As more and more players joined, since then, the concept of 618 has long surpassed the meaning of JD store celebrations, but has evolved into a “shopping carnival for the whole people.” During the evolution of 618, JD.com has gradually approached keywords such as “unbounded retail” and “technology” from the beginning of “e-commerce”. In 2017, Liu Qiangdong proposed the concept of unbounded retail. He said in an interview: “The core of unbounded retail, from the back-end perspective, is the integration of the supply chain. The supply chain, products, inventory, and goods are all upgraded into one. The system reduces the difficulty of operation for brand owners. From the front-end point of view, the core of Unbounded Retail is to meet the needs of consumers anytime, anywhere. These two cores have never changed.” Solving retail problems through new technologies has also become the core of JD’s future development. JD’s intelligent supply chain decision-making can reduce inventory turnover days to 31.2 days through intelligent operation, warehouse network optimization, omni-channel performance, and C2M reverse customization. This supply chain system is the guarantee for the efficient operation of 618, enabling the realization of “minute-level distribution” in over 200 cities across the country. In the past few years, JD.com’s R&D investment has far exceeded revenue growth. This is because JD knows that technology can play a huge role in improving the front-end customer experience and the efficiency of the back-end supply chain. “Technology-oriented, committed to a more efficient and sustainable world” is also the latest mission announced by JD.com in 2020. In the “Letter to Shareholders” released on June 18 this year, Liu Qiangdong once again mentioned JD’s supply chain and technical capabilities. “Using technology and supply chain capabilities to help partners reduce circulation costs, improve operating efficiency, and lower the application threshold of advanced technologies, so that small, medium and micro enterprises lacking technical capabilities can also have advanced resources and capabilities.” This is JD’s new development in the next ten years. the goal. 3. JD’s future test “Looking back at the history from starting a business to experiencing setbacks and going out of the darkest moments, it makes me more clear what is the constant of JD.com and what is the difference of JD.com.” In 2020, a letter about “Who is JD.” Liu Qiangdong thought about it in his internal letter. In fact, this description is not only suitable for JD.com, but also the 618 that grew up with JD.com. In this process, significant changes have taken place in 618. These changes are both external and internal. More importantly, after these changes, what has been abandoned? Which ones have been upgraded? Which ones have been continued? In these constantly emerging changes, 618 looks for its own coordinates and meaning. For users, the 618 promotion is a carnival of low-cost sweeping goods, but for JD.com, it is an out-and-out test, testing JD’s logistics capabilities, management capabilities, and even technical capabilities. In 2011, JD.com experienced server downtime due to a popular promotion. In the last half hour of this event, the shopping cart and order page were either slow to open or could not open at all, causing many users to be unable to place orders. Liu Qiangdong was very angry, and apologized to everyone on Weibo for this, asking the company to triple its servers, threatening to invite colleagues in research and development to “drink tea”-the picture shows a knife on the table. After the architecture upgrade, at 618 in 2012, JD’s server was considered to have a firm foothold. Similarly, there is Jingdong’s logistics. With the increasing growth of JD.com, outsourcing logistics has been unable to keep up, whether it is speed or service quality, especially during the 618 period when the number of orders has skyrocketed. Such problems have been infinitely magnified. “At the end of 2007, I found that 72% of the complaints in the whole year came from logistics. The products we sold were too high-valued, and the risk of being stolen and dropped packages was also high, so I said I must do logistics.” Dissatisfaction with outsourcing logistics, Let Liu Qiangdong make up his mind to build logistics by himself. But investors are not optimistic. “In 2008, almost all investors opposed it.” Finally, Liu Qiangdong made a bet against them, “If you lose money in the future, I will compensate you with my shares. If you make a profit, After that, everyone enjoys the company’s benefits in accordance with the proportion of shares.” Time proved that Liu Qiangdong got this multiple-choice question right. With its advanced layout, today, strong logistics capabilities have become one of JD’s core advantages. During the 618 period of JD.com this year, more than 200 cities across the country achieved minute-to-minute delivery, and 92% of districts and counties and 84% of townships achieved same-day and next-day delivery. The data also shows that the daily order processing volume of JD Logistics’ smart warehouse receipts has increased by more than 100%, and the business volume of smart express delivery vehicles has increased by 24 times year-on-year. Jingdong has just grown up, his body is still developing, and his abilities are still improving. This is part of the change, but there are some things that should continue. According to Xu Lei, CEO of JD Retail, he entered the ranks of adults at the age of 18. “Never forget our responsibilities, values, and the meaning of existence.” “Doing the industry’s hardest, most difficult but also the most valuable thing.” Since the start of the business, this sentence has always been the compass of Jingdong retail, and 618 also retains this tradition, and the difference is that today’s 618 has been No longer stop at the consumer side, but also play an increasingly important role on the industrial side, creating more social value. During the 618 promotion period this year, JD.com will boost the turnover of more than 120,000 small and medium-sized brand merchants to increase by more than 100% year-on-year, and more than 230 brands will achieve orders exceeding 100 million yuan. JD Smart City launched the “City Carnival·Yunshang Market” event, linking nearly 60 cities across the country and 7 urban characteristic industrial belts, and the order volume of the industrial belts increased by 68% year-on-year. JD.com has also attracted more than 500 million people into offline stores through activities such as the “Real” Benefit One Million Store Program, which has provided more than 200 industrial belt factories and farmers and merchants with broader business opportunities across the country. Today’s JD 618 is very different from many years ago. It is not only a consumer event that the whole society pays attention to, the whole industry participates, and the whole people share it, but it is also a test of the value created by the entire JD system

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