E-commerce platforms are crazily raising funds

Author | Liu Baodan

Editor | Zhou Zhiyu

Under the theme of reducing costs and increasing efficiency, e-commerce platforms have become the core battlefield of enterprise marketing.

Recently, QuestMobile released the semi-annual report on the Internet advertising market in 2024. In the first half of the year, the advertising scale reached 351.4 billion yuan, an increase of 11.8% year-on-year. At the same time, in the first half of the year, over 60% of advertisers maintained or increased the number of media placements.

After three years, Internet advertising has resumed double-digit high growth.

As a transaction platform connecting consumers and merchants, e-commerce has taken advantage of this wave of growth in Internet advertising.

QuestMobile data shows that in the first half of 2024, about 55% of traditional industry advertisers placed ads within e-commerce. Here, e-commerce advertisers mainly refer to Taobao, Tmall, and JD.com.

A senior market professional told Wall Street News that the biggest feature of advertising within e-commerce is direct conversion. Money spent on ads can directly lead to revenue, reflecting the demand of enterprises for performance growth. "For enterprises, e-commerce platforms have become the main battlefield for revenue."

This trend is particularly evident during major promotions. According to QuestMobile data, during the 618 promotion in 2024, as a typical comprehensive e-commerce medium, the advertising costs on the Taobao APP increased by 6.7% month-on-month, and on the JD.com APP by 7.9%.

Apart from advertising, brands are increasingly focusing on content marketing, including KOL marketing, drama and variety show marketing, short drama marketing, IP marketing, and various innovative methods emerging one after another.

In particular, short dramas have become a key means for major platforms to attract traffic. Currently, both Taobao and Pinduoduo have dedicated sections for short dramas, and JD.com has also added short dramas to its recommended content. During the 618 promotion, brands tried to reach target users through short dramas, such as the collaboration between Taobao and Midea on the short drama "Us Who Reverse Life".

Brands are shifting their budgets towards Internet advertising, especially towards e-commerce platforms, which has greatly contributed to the performance growth of e-commerce enterprises.

Taking Alibaba as an example, the core revenue of Taobao mainly comes from e-commerce advertising. As of the quarter ending March 31, 2024, Taobao Group's revenue increased by 4% year-on-year to 93.216 billion yuan, with customer management revenue growing by 5%, mainly driven by strong revenue growth from search and recommendation.

JD.com also performed well. In the first quarter of 2024, JD's platform and advertising service revenue reached 19.3 billion yuan, a year-on-year increase of 1.2%. Although the growth rate was lower than last year, this was mainly due to JD's construction of the platform ecosystem, providing traffic-related benefits to merchants.

However, if e-commerce platforms want to take on more advertising growth in the future, they still face many challenges. On one hand, in the first half of 2024, China's total social retail sales increased by 3.7% year-on-year, indicating that the consumption environment still needs to recover. On the other hand, as Internet user growth peaks, e-commerce platforms need to focus on user engagement and other aspects.

Fundamentally, Internet advertising is a traffic economy. Whoever can attract users will gain more exposure. The Internet has begun to enter the era of stock, and a war to grab attention has already begun