B2C merchants win through logistics, merchants are heavily engaged in the "logistics battle".

06 Feb,2025

(China E-commerce Research Center News) The price war among major domestic e-commerce giants' online bookstores at the beginning of the year is still fresh in memory.

(China E-commerce Research Center News) The price war among several major domestic e-commerce giants' online bookstores at the beginning of the year is still fresh in memory. In fact, the logistics battle among these e-commerce giants has never stopped and is becoming increasingly heated.

Regarding the three major bottlenecks that restrict the e-commerce market: integrity, payment, and logistics, the first two have made progress in recent years, correspondingly, logistics has become a key area of research and a primary focus for several e-commerce giants. Establishing larger and more logistics parks is a hardware effort, while expanding product lines and functions using existing logistics networks is a proactive software strategy. Whether it is JD.com’s thousands of acres of logistics centers in major cities across the country, Dangdang’s continuous establishment of its own logistics bases, or the launch of the third-party seller platform by Amazon China, it all indicates that logistics has become a top priority for e-commerce giants. A logistics covert war is escalating. To some extent, whether B2C merchants can take the initiative in the e-commerce war depends on logistics, which plays a decisive role in the current situation.

 

Merchants are waging a "logistics war".

When it comes to representatives of domestic e-commerce, four companies must be mentioned, namely the three involved in the book war at the beginning of the year: JD.com, Dangdang, and Amazon China, along with another one, Taobao. The book war at the beginning of the year can be seen as each company’s initial exploration and trial of their logistics models. Originally focused on books, Dangdang, JD.com which focuses on large appliances, and Amazon China which centers on books and small appliances could operate independently, but years of investment have made each company’s logistics lines increasingly complete, and they all have ambitions to expand into other fields. Thus, by lowering prices, consumers experienced a taste of the competitive thrill of low-priced books, and each company’s logistics lines were tested with more logistics orders.

In the process of competition, the newly listed Dangdang gained experience, while the actively expanding JD.com developed better, and Amazon China, which replicates the foreign Amazon model while connecting locally, was tested. These three B2C merchants gained significant fame through this book war. They also deeply realized their shortcomings in e-commerce, which is logistics, leading to more investment and innovation in logistics.

 

E-commerce is continuously evolving, and logistics ultimately becomes a competitive advantage.

B2C is in a period of rapid growth, and at this time, the contradictions in logistics are particularly prominent. Looking at the history of domestic e-commerce development, it has gone through a low-key start of B2C, an expansion period of C2C, and a rapid development period of B2C, which includes the initial failure of the large merchant model, the growth of the small merchant model, and the rapid growth of the large commercial center model based on the small merchant model. The older generation of e-commerce representatives like 8848 are represented by B2C, but due to the early concept of B2C, they became detached, oscillating between B2C and B2B, essentially due to being constrained by issues such as integrity, payment, and logistics, ultimately leading to their demise. Subsequently, the vigorous development of C2C emerged, with Taobao being the best representative, deeply embedding the concept and transaction methods of e-commerce into the public consciousness, especially with the invention of its Alipay payment method, which effectively controlled the payment risks that plagued e-commerce transactions. At this time, the domestic logistics industry also saw initial development, ultimately achieving great prosperity in domestic C2C.

The prosperity of Taobao heralds the resurgence of B2C. This is primarily because Taobao has seen a large number of powerful sellers emerge, and according to the economic "80/20 rule", these 20% of large merchants account for 80% of the total transaction volume, which is also the reason why C2C was ultimately replaced by B2C. As consumer demands continue to rise and become more stringent regarding shopping quality, the rise of B2C merchants is a natural outcome.

At the same time, more and more foreign logistics giants are beginning to enter the domestic market, large domestic logistics companies are starting to grow, and e-commerce giants are also planning their own logistics models, establishing logistics parks or collaborating with third-party logistics companies to improve service quality and standards through various means. In addition, the development of C2C has established a payment and integrity system, especially with the advancements in electronic payment systems in recent years; the higher pursuit of product quality has allowed many B2C websites to stand out. In the competition among B2C merchants, logistics is the best way to reduce costs and expand the customer base, especially in the face of high logistics costs in the domestic market. Efforts to achieve lower logistics costs and higher quality services have become important means to attract consumers. As domestic industry experts say: without logistics as a guarantee, online transactions in e-commerce, especially for tangible goods, would be difficult to succeed. The logistics industry is the fulcrum of e-commerce; no matter how attractive e-commerce is, without a modern logistics system to support it, it is difficult to develop healthily. The logistics issue has become the biggest problem facing domestic e-commerce vendors, leading to numerous explorations of logistics models.

The vast market space and multi-level market demand in the domestic market determine that a comprehensive and diversified logistics model is the key to a company's success. More importantly, different types of e-commerce companies must also have their own characteristics.

 

1. Taobao

As the leader of domestic C2C, Taobao is thriving. In recent years, its B2C attempts and logistics innovations have been ongoing, placing great importance on Taobao Mall, investing more financial resources, policies, and efforts to support large customers, which can be seen as a barometer of the e-commerce industry.

In terms of logistics construction, it actively implements its big Taobao strategy by holding logistics companies and closely cooperating with large logistics companies, allowing for more say in logistics construction and innovation. Compared to Taobao's logistics model, B2C specialized companies have their own characteristics, which is also the driving force behind their rapid growth. In contrast to Taobao's moderate strategy, Dangdang and Amazon are quite proactive in logistics, using a dual approach of hardware and software to make logistics a driving force for business growth.

 

2. Dangdang

Dangdang's model focuses on enhancing its book logistics network to achieve more efficient book delivery while also providing comprehensive delivery for other items. Therefore, in addition to actively establishing its own logistics centers, it also focuses on software by forming a delivery service company controlled by Dangdang to create an independent and efficient logistics open platform, providing COD (Cash on Delivery) services for e-commerce companies for product storage, sorting, and packaging. This means that in order to meet its logistics needs, it accepts more e-commerce vendors to share platform benefits, enhancing the logistics system and reducing its own delivery costs.

 

3. Amazon

Amazon has taken it a step further. In early July, it officially launched the "I Want to Open a Store" and "Amazon Logistics" services, which means that Amazon has officially opened its third-party seller platform. Amazon states that the launch of "I Want to Open a Store" and "Amazon Logistics" aims to provide consumers with more product choices and more competitive prices, while helping a wide range of sellers further expand their businesses. Amazon itself is a product of the merger between domestic Amazon and Amazon, with the greatest credit for the success of foreign Amazon being its efficient and low-cost logistics. Although foreign experiences cannot be fully replicated domestically, further exploration of information, such as predictive response menus and efficient warehouse management systems, is worth learning from for other peers. Comparing Dangdang and Amazon, it is not difficult to see some similar ideas: creating a first-class multi-level logistics system, achieving logistics victory through sharing with more e-commerce companies, and further promoting the company's e-commerce development.

 

4. JD.com

Compared to Dangdang and Amazon, JD.com is the most obsessed with logistics. The founder of JD.com even compared his company to an online version of Walmart, directly pointing out that the actual development of B2C companies is essentially a logistics company. Therefore, "the largest logistics company in the world today is Walmart, not DHL."

From the very beginning, JD.com, which implemented large appliance delivery, emphasized the construction of logistics centers, as this is the most effective way to reduce the delivery costs of large items. JD.com founder Liu Qiangdong has repeatedly emphasized that JD.com has two major costs: warehousing costs and delivery costs. The profit margin for home appliances is not high, and sometimes the delivery fee even exceeds the profit of the product itself. Therefore, to achieve profit, it is necessary to spare no effort and invest heavily in establishing its own logistics centers. Compared to the rapid development of e-commerce, the domestic logistics system is far behind, so the best approach is to establish high-standard logistics bases, which will also leave competitors far behind, "making delivery the core business of e-commerce companies." JD.com's super enthusiasm and willingness to invest heavily in logistics can be seen as a high recognition of logistics by e-commerce companies, especially B2C companies, and it reflects the decisive role logistics plays in the growth of a company.

Currently, there seems to be a consensus in the industry regarding the importance and value of logistics. The essence of a B2C enterprise is no different from that of traditional retail; logistics is the most important link in its value chain. Whether it is Jack Ma's Taobao strategy focusing on B2C, Dangdang and Amazon's self-built logistics and shared logistics platforms, or JD.com's high-profile logistics investment and construction, the investment and emphasis on logistics by major e-commerce giants are unprecedented. The rapid development of B2C enterprises has spawned a more complete and efficient logistics industry, and a more efficient and complete logistics system is also a symbol of whether an e-commerce company can succeed and face its competitors. (Source: "Information and Computer" magazine, by Zhao Yuyong)

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