This summer, Jingdong has continued to export the “coin-spreading” subsidy strategy, especially in the field of takeout and wine travel frequently. Previously, Jingdong and Meituan, hungry in the takeaway market fierce competition, from time to time on the news headlines. “One dollar milk tea” and other subsidized war is to make many consumers rush. However, this continuous marketing investment, but also let consumers such as this “poor evaluation of the gentleman”, in the enjoyment of the benefits at the same time, but also on the weight and the scale of consumption is doubly worried.
The numbers on the scale may all be a quiet reminder.
Recently, Jingdong is a high-profile announcement for the hotel merchants to launch “up to three years zero commission” policy, the official entry into the wine travel market. The action is selected in the summer season, that is, from the end of June to mid-August, is the golden period of the tourism industry, Jingdong this move is aimed at seizing the opportunity to quickly open the situation of the wine travel business. At the same time, in the 618 shopping festival before and after the intensive layout, but also able to follow the trend for the main business of e-commerce to attract more traffic attention, appears to be premeditated.
This operation reveals that Jingdong wants to fully expand its determination.
From the merchant side, Jingdong offered a commission-free killer mace; while on the consumer side, it launched a substantial subsidy, and emphasized the “unbundled” booking experience. The reporter personally experienced found that the user in the Jingdong App into the wine and travel plate, the first will receive a new customer gift package, if the closure of the exclusive red packet will pop up, the strength of the visible, for fear that the user misses the offer.
In order to more intuitively understand the price competitiveness of the Jingdong wine travel, the reporter randomly searched for different price points and types of hotels. Take the All Seasons Hotel as an example, the price of Jingdong travel is 334 yuan, compared with the price of the same type of platform is 10 to 50 yuan higher. In terms of high-end hotels, such as Hangzhou Xixi Shili Fangfei Resort Drop, the price of the Jingdong platform is 1,077 yuan, compared with other platforms is cheaper by 142 to 200 yuan. However, in the actual search process also found that some of the hotels in the Jingdong platform shows no room can be booked, while in the same period in other platforms can be booked normally, which shows that, although the Jingdong in the price has the advantage, but in the richness of the source and the availability of the room is still there to improve the space.
In addition to price subsidies, Jingdong also made a commitment to “no bundling” in the booking of air tickets, and clearly marked in the product name and booking process. Although most online travel platforms (OTAs) support unbundled sales, but in practice, some platforms may require users to carefully screen, a little inattention will be additional packages, compared to the Jingdong in the user experience and transparency to do more in place. 
So why is Jingdong making a big push into the wine travel business at this time? Does this mean that Jingdong is aiming to incorporate all areas of life services into its huge App ecosystem? In fact, Jingdong’s involvement in the wine travel business is not a one-day cold. As early as 2011, the airline booking service was launched, and in the years since, the launch of the travel channel, investment in Toutiao, and cooperation with Ctrip. Since this year, it is intensive recruitment of professionals in the field of wine and travel, showing its strategic ambitions in the field. From the perspective of Jingdong’s overall strategy, the expansion of the wine travel business and the previous layout of the takeaway business, logically closely linked. Jingdong has a huge local life service traffic base, the expansion of the takeaway business, although less profitable, but can reach users at high frequency, accumulating user stickiness. The wine travel business as a high-margin segment, and takeaway to form a complementary, can effectively enhance the overall profitability of the platform, and through the PLUS membership and other systems, to further precipitate the user, perfect its “local life, instant retail” strategic closed loop. While the frequency of takeout is extremely high, the profit is really limited. Beginning in 2021, Jingdong will no longer separately disclose specific revenue figures for its takeaway business.
Compare this to Meituan’s core business, which covers food and beverage takeaways, in-store wine tours, and new retail (e.g., Meituan Preferred, Little Elephant Supermarket). Jingdong on this basis, has Jingdong takeaway, seven fresh supermarkets, and now the addition of wine travel business, so that it is more complete in the local life service map. Although on the surface, Jingdong’s move is directly facing the traditional OTA giants such as Ctrip, but at this stage, its more direct competitors, in fact, has been the takeaway and wine travel business depth integration of Meituan. As Wang Ke, a senior analyst at Yi Guan, said: “Meituan is the use of takeout to cultivate user habits and stickiness, so that users in any life scenario think of Meituan, open Meituan. Jingdong’s layout from takeout to wine travel, but also to drive the overall development of local life services, so that consumers may also be the first time to think of Jingdong when traveling.”
Jingdong in this track layout for many years, why choose this year to vigorously invest? Currently China’s Internet industry is experiencing inventory competition, and major platforms are generally facing growth bottlenecks and are eager to find new growth points. Therefore, Jingdong is not the only giant that is actively expanding its side business, and many flow platforms are utilizing their own advantages to expand their business boundaries. Even cross-border phenomena are commonplace, such as drone manufacturers involved in sweeping robots, home appliance giants into the catering industry.
It can be said that the wine travel business is a logical path for Jingdong, but this path is also full of challenges, whether it can successfully break out remains to be seen.
Hotels can be broadly categorized into three main types: single hotels (such as small business hotels), branded hotel chains (such as Yado, Huazhu, etc.) and high-star hotels (such as Marriott, etc.). The commission-free strategy proposed by Jingdong precisely captures the pain point between hotels and OTA platforms in terms of commission sharing. However, this strategy may be more likely to attract price-sensitive single hotels, while for branded hotel chains and high-star hotels, in addition to commission-free, they value the stability of cooperation.
From the official promotional information released by Jingdong, its target customers also seem to include high-star hotels.
The so-called stability not only includes whether the technical interface of the sales channel is smooth, but also involves whether access to the new platform will affect the sales of the existing OTA channel, and whether the platform can continue to stably digest a large inventory of listings (i.e., bookings). This is a key point that must be overcome for Jingdong, which hopes to enter the wine travel market on a large scale.
It’s not enough to ensure stability, it’s just an “entry ticket”, the real challenge is how to seize market resources afterward. Jiang, a veteran of the wine and travel industry, pointed out that the hotel as an upstream supplier, in addition to cooperation with the OTA platform, will retain a portion of the inventory for self-managed channels, distribution channels, etc., and the need for day-to-day allocation of inventory as a unit of refinement. For new entrants, hotels usually only tentatively release a small number of rooms and gradually adjust according to the sales performance of the platform. With limited resources, new platforms often face the problem of scarcity of rooms, especially during the peak travel season, and may even have no rooms to book.
Meanwhile, mature OTA platforms have long made a lot of investments in the upstream and downstream of the industry chain.
For example, Ctrip has invested in branded hotels such as Travelodge, Huazhu, and Shouyou; and Tongcheng has acquired Hainan Yanoda Scenic Spot as well as Wanda Hotel Management Company. Therefore, Jingdong will directly face the strong competition and deep resources of these traditional OTA platforms on the wine and travel track.
From Jingdong CEO Liu Qiangdong’s statement, “Jingdong does all business around the supply chain”, which indicates that Jingdong carries out takeaway, wine travel and other businesses, the ultimate purpose is to build its supply chain system. However, regarding the specific model and supply chain services of the wine travel business, Jingdong did not explain in detail. But to build a supply chain, it is vital to directly integrate a large number of hotel resources, and this threshold is much higher than imagined. This requires long-term accumulation, and the pioneers have long laid a solid foundation.
With the intensification of the game between hotels and OTA platforms on the issue of commissions, more and more hotels have begun to actively develop direct sales channels, including the launch of their own small programs. These direct sales channels usually offer the most competitive prices and services. Data shows that in 2022, hotel groups such as Huazhou Group and Shouyou Ruijia are both steadily increasing the proportion of nights stayed in their own channels. But despite this, OTA platforms remain a powerful attraction for hotels through their large user base and extensive traffic coverage. 
In recent years, not only Jingdong, including Jitterbug, Xiaohongshu, Meituan, fast hand and other platforms have tried to share the wine travel market, but at present, the traditional OTA platform still dominates the position, has not been completely shaken. As industry insiders have said, to plumb the hotel industry from the supply chain perspective, it may take 3 to 5 years to see the initial results. Of course, with its large corporate user base and high spending power of the user base, Jingdong is not without opportunity. But for every player who wants to challenge the wine travel giants, the key to success may not lie in the speed of disruption, but in the ability to have enough patience to carry out deep plowing.
