In the past, Alibaba e-commerce seems to have lost its aura gradually under the pursuit of new platforms such as Pinduoduo and Tiktok e-commerce.
Ali, who could not find a rival even with a telescope, had just undergone drastic organizational changes last year, and the Internet giant turned around abruptly in 2023.
Once, in order to compete for low-priced customers, Alibaba cultivated Taobao in the year, benchmarking Pinduoduo with "clear swords and clear guns". Last year, Taobao focused on "price power" as one of its key strategies, and fought fiercely on the battlefield of low prices.
However, the situation seems to have undergone some changes since the beginning of this year. At the beginning of the year, Alibaba launched its first attack on Taobao, closing the entrance to Taobao's newly opened store. At the same time, Taobao has shifted its focus from "price power" to "service power", improving its service system around consumer experience, and providing various traffic and rights support to high-quality merchants who perform well in service.
At the same time as strategic transformation, Alibaba's e-commerce has also played a comeback in its old business. On the one hand, Alibaba's old business 1688, which was already behind the scenes, has quietly become stronger, seizing the pockets of young people through the "flat economy" model of "B2 small B" or "B2C"; On the other hand, as a veteran of live streaming sales, Taobao is making further efforts to establish a new MCN company to cultivate anchors and provide genuine financial support to the shopping influencer ecosystem, in order to attract more merchants and influencers to join and help the platform retain users.
"Adhere to a low price strategy, improve service levels, and increase the application of AI on e-commerce platforms. Finally, strengthen the linkage between live streaming e-commerce and shelf malls to form a more efficient collaborative effect." summarized Zhuang Shuai, a special researcher at the Network Economic and Social E-commerce Research Center and founder of Bailian Consulting.
It can be seen that in the new year, Alibaba has wielded its "three axes" to recover lost traffic. At the beginning of the year, Alibaba Group Chairman Cai Chongxin stated in a media interview that after a period of pressure, Alibaba has returned to the track of China's top e-commerce enterprises. With the restructuring of the architecture and the arrival of new management, Alibaba is more confident in becoming one of the top e-commerce enterprises in China.
Although Alibaba may not be as confident as before, it is possible that Alibaba is returning.
From price competition to service competition?
In the first three months of the year, Alibaba's e-commerce business has undergone frequent adjustments.
At the end of February, Taobao reported that it would fade out of the historical stage and all merchants and products on the platform would be relocated back to Taobao. According to rumors, this adjustment began one year ago.
The Taobao Special Edition (predecessor of Taobao) was launched in March 2020, aiming to serve the low-priced market and attract factories to settle in through zero entry barriers and traffic support. Due to its low price model, Taobao was once considered by the outside world as Alibaba's "secret weapon" against Pinduoduo.
Although Taotian Group responded to a reporter from Time Weekly that Taobao will continue to develop and increase the full supply of hand Taobao to serve Taobao's existing market users. But currently, the entrance to the Taobao merchant version has been closed. The platform customer service stated that Taobao closed the entrance to its newly opened store on January 15th this year, and it is not yet known when it will reopen. Originally, the store on Taobao can still operate normally.
Screenshot from Taobao Merchant Edition
After the news of Taobao gradually merging with Taobao was exposed, a reporter from Time Weekly learned from a merchant that previously, more of their customers in Taobao stores had been attracted from Taobao. The original model was for customers to shop on Taobao stores, and Taobao attracted customers to download the Taobao app through price subsidies, facilitating transactions. But this also indirectly shows that Taobao has only diverted Taobao's price sensitive customers, and has not brought too much growth.
The withdrawal of Taobao seems to have become a turning point in Taobao's low price strategy. The Time Weekly reporter learned from multiple merchants that Taobao's "Five Star Price Power" strategy has also undergone adjustments recently.
"The 'five-star pricing power' has weakened, and the focus is still on improving services," said a Taobao merchant.
Taobao launched the "Five Star Price Power" business tool in March last year. This tool can provide merchants with price power ratings for their store's products, which are divided into 5 levels of price power star ratings. Depending on the level of rating, Taobao will implement different search traffic recommendations for products.
In fact, over the past year, Taobao has undergone significant reforms in recommendation algorithms and exclusive entry points, guiding traffic towards lower priced products and encouraging merchants to lower product prices.
From the beginning of 2023 when Taobao's management determined that price power was one of Taobao's five major strategies, to the launch of the 99 special sales channel in April, and the subsequent "618" and "Double 11" events, Taobao has all touted itself as the "lowest price on the entire network". At the end of 2023, Taobao cancelled the "Double 12" and renamed it "Taobao Good Price Festival", intending to strengthen the platform's low price mentality.
However, at the beginning of this year, Taobao seemed to be intentionally taking a temporary break from the low price vortex and rethinking how to maintain the platform's background while providing cost-effectiveness.
Blindly lowering prices or making it difficult to shake Pinduoduo's position. Many businesses have reported to Time Weekly reporters that many of Taobao's traffic cakes have been taken away. "If it's all about low prices, why don't everyone choose to open a store at Pinduoduo?"
In the view of Jiang Yu, who runs Taobao, 1688, and Pinduoduo stores simultaneously, compared to Taobao, Pinduoduo knows better where the merchant's bottom price is and is more able to suppress prices.
Beyond price, focus on service or Taobao's new ways to break through. At the 2024 Taobao and Tmall Merchant Service Conference held in early January this year, Taotian Group announced a service system focused on improving consumer experience, and provided various traffic and rights support to high-quality merchants who have performed well in their services.
It is reported that the new comprehensive store experience rating standard will pay more attention to indicators related to consumer assistance, including "refund rejection rate" and "platform assistance rate"; High quality services such as return shipping insurance that affect consumer shopping decisions can also become a bonus for businesses.
Jiang Yu told Time Weekly reporters that since the beginning of this year, his Taobao store has indeed felt various support from the platform, including traffic, and the order volume has increased.
At the same time, the after-sales process has also become a necessary area for improving service capabilities. On March 1st, the Taobao Rules Platform released a public notice titled "Taobao's" Non Love Food Refund "Service Specification", stating that in order to improve the shopping experience of buyers, it plans to add a "Non Love Food Refund" special service. Sellers and products that meet the admission requirements can apply to display the "Non Love Food Refund" service logo, which will take effect on March 8th. This is a further strengthening of Taobao's after-sales service of "refund only" after the addition of the "refund only" rule at the end of last year.
Veteran 1688 charges again
However, it is the trend for e-commerce platforms to enter the era of "cost-effectiveness".
Besides Taotian, Alibaba has another strong player in the sinking market. As Taobao gradually retreated behind the scenes, 1688 was stepping forward.
Last November, 1688 was promoted to first level business. This year, the importance of the platform has been further emphasized.
According to insiders from 1688, the company will focus on investing in upgrading the buyer experience this year, with an investment amount three times that of last year and six times that of the previous year. At the same time, subsidies will be provided to businesses to encourage them to upgrade their services. It is reported that 75% of the traffic in 1688 this year will be inclined towards merchants and products that can improve services.
As a direct sales platform for factory goods at the source, 1688 accompanied Alibaba through its first turbulent years. After 2012, B2C emerged, and the image of 1688, mainly B2B, gradually became blurred within Alibaba.
Until 2023, 1688, relying on its "factory price" advantage and taking advantage of the "stingy economy" and "flat economy" trend, once again "gained popularity" and seized the new increment of "B2 small B2C".
In the early days, merchants engaged in wholesale business on 1688, and at that time, the sales of goods were set with high minimum quantities. She observed that since 2018, there have been orders for consignment on the platform, and many C-end users have entered.
Gradually, the trend of starting a batch of one or two items became increasingly evident on 1688, and has now evolved into a mandatory requirement. "Previously, we received orders that were relatively uniform, such as 1000 sets and 500 sets. Now, there are more scattered orders, but the number of orders has also increased." Yun Yun told Time Weekly reporters that the proportion of customers with scattered orders has increased from 20% to 40%, and now it is 50% -60%.
With the transition from 1688 to ToB or ToC, there are also requirements for the delivery time of merchants.
Starting from March 8th this year, 1688 will upgrade its seller service, including placing an order for 0 yuan, free shipping for one item for two to three days, and return shipping fees.
"Our own experience is quite obvious in terms of delivery time. Our products are mainly customized and have a delivery cycle. In the past, we could try to ship within 72 hours, but this year, the assessment of delivery time has been changed to 48 hours." Yun Yun said.
From a price perspective, this year's prices are indeed generally lower than previous years. However, some of Yunyun's products are in the form of customization, where customers do personalized design and factories produce and serve them separately, resulting in slightly better profits for these types of products.
Yun Yun observed that with the expansion of 1688 to the ToC end, many Taobao customers have flocked to 1688 in recent years, and the positioning difference between the two sides is not as obvious. But compared to Taobao, the product category of 1688 is more comprehensive. "1688's pallets are larger than those on Taobao. When opening a store on Taobao, every link needs to be done, making it difficult to list thousands of products. However, there is no problem with thousands or even tens of thousands of products on 1688."
At the same time, Jiang Yu felt that another change in 1688 this year is that the marketing strategy of 1688 has been improved, and promotion has become more extensive. "For example, on Xiaohongshu or other self media platforms, you can see" 1688 Grass Planting ", which mentions that you can both wholesale products and purchase individual items at a discounted price."
This promotion also aligns with the portrait of buyers on the 1688 platform - the "Z generation" represented by the "post-2000 generation" and the young new middle class in first and second tier cities. The average age of buyers is 25 years old, with the majority being women.
In addition, 1688 has already begun to test the waters of "AI e-commerce". Yunyun has received an AI toolkit gifted by the platform, which includes functions such as AI customer service, automatic production of titles, and automatic generation of main images.
In the past year, 1688 has topped the Apple App Store free list several times. Public data shows that as of early October last year, there were nearly 1 million sellers on 1688, with factories and traders accounting for half each; Every year, about 60 million buyers "purchase wholesale" and "find factories to customize" from 1688, and then sell them through Taobao, Pinduoduo, Tiktok, WeChat, offline stores and other channels. Over the past year, there have been over 20 million new buyers. It is reported that after excluding all GMVs without buyer data in the past 90 days, the annual GMV for 1688 is currently around 800 billion yuan.
During the 17 days of this year's Spring Festival, the number of 1688 buyers increased by over 90% year-on-year, and the average number of visitors, buyers, and GMV of 1688 merchants achieved double-digit year-on-year growth.
Reshaping the content ecosystem
On the one hand, it competes with Pinduoduo in terms of price and service, and on the other hand, Taobao adds short videos and live broadcasts, with content oriented layout and Tiktok, Little Red Book "higher".
Initially, it was Taobao that led to the popularity of e-commerce live streaming. In 2016, Taobao officially launched the "Taobao Live" feature, becoming an important milestone in e-commerce live streaming, which is also known as the "Year of E-commerce Live". In the following years, e-commerce live streaming flourished, but Taobao gradually lost its competitiveness in this field.
Over the past year, live streaming has been identified as one of the five major strategies for Taobao e-commerce, and its status has continued to rise. Taobao has released multiple supportive policies to attract more influencer and store anchors to join.
In February of this year, Taobao "personally stepped down" and established a live streaming e-commerce company to provide "nanny style" full custody operation services for celebrities, KOLs, and MCN institutions interested in joining Taobao for broadcasting.
It is understood that this service is mainly aimed at novice players who are new to Taobao, providing them with refined hosting and operation services to help them quickly get started and adapt to Taobao's ecological gameplay. The live streaming e-commerce company is operated by the Taotian live streaming operation team and adopts a flexible cooperation model of guaranteed or profit sharing with anchors, helping them achieve deep and full custody services such as account cold start, full cycle planning, business docking, official inventory, marketing planning, and even financial management and venue support.
At the same time, Taobao continues to explore the content of its short video channels. In 2020, Taobao launched the "Strolling" section, initially positioned as a grass planting platform, but later transitioned towards pan entertainment content such as short videos.
In order to encourage and attract merchants and influencers to join and create short video works, Taobao has offered tempting rewards.
"I earned 200000 yuan in two months through the task reward of Taobao shopping." The shopping influencer "Dong You Mei Yuan" has 169000 fans on the Taobao platform. She told Time Weekly reporters that when the shopping was first set up, shooting short videos provided great traffic support. Although the traffic share has decreased with the influx of more influencers recently, there are still profits of tens of thousands or even tens of thousands of yuan per month. ".
In addition to creating short videos, these influencers may also develop into native Taobao influencers. Some experts who also operate platforms such as Taobao and Tiktok analyzed the similarities and differences of several platforms to reporters of the Times Weekly: Tiktok is more entertaining, the turnover is not stable, the return rate is also high, but the traffic is high; Xiaohongshu mainly relies on fan stickiness for live streaming, with high unit prices of goods and customers; The advantages of Taobao live streaming rooms mainly lie in stability, high conversion rates, and a fixed and accurately matched group of people coming to purchase every day.
Recently, Taobao's strong support and rewards for broadcasters have also allowed many influencers to see the dividends of live streaming. For example, at the "Taobao Clothing Spring/Summer Double Selection Conference" held on March 12th, Taobao waiters announced on site that they will be able to enjoy the incentive policy of "million traffic support+680000 yuan cash reward+20000 yuan official investment red envelope rain" by the end of March when selling goods live on Taobao.
Real gold and silver have achieved results. According to a reporter from Time Weekly who learned from Taobao, the number of short videos on Taobao's clothing short video channel alone increased by 200% year-on-year, and the video completion rate increased by over 90% year-on-year. The short video channel has also been effective in attracting traffic, with a year-on-year increase of over 81% in the total number of people introduced. In this year's key live streaming channels, Taobao's traffic and transaction contribution have increased in both directions. The number of viewers in the clothing category of live streaming has increased by over 51% year-on-year, and the total viewing time in user live streaming rooms has increased by over 28% year-on-year, guiding transaction amounts to increase by over 70% year-on-year.
However, in this battle for traffic in e-commerce live streaming, Taobao's advantage is not yet clear enough. Compared with Tiktok, Kwai, Xiaohongshu and other content platforms, Taobao still has a long way to go, while Pinduoduo, JD and other old rivals are also eyeing. Taobao, we can't just relax for a moment.