The Birth of Taobao and Alipay
In April 2003, Ye Feng, a little girl who had joined Alibaba for less than a year, was suddenly called to Jack Ma's office.
Ye Feng came in and saw that Ma Yun, Cai Chongxin, Guan Mingsheng, Peng Lei and other big bosses were all there, and he was shocked.
Ma Yun said to her:
Now there is a secret mission for you, which requires you to leave this company and go to another place to do it. You can't tell anyone about this, not even your parents, family, or boyfriend. Would you like to?
Ye Feng said yes. So Ma Yun handed her a thick contract and asked her to sign it.
The contract was all in English, Ye Feng didn't even read it, just turned to the last page and signed his name.
There are 6 people who have experienced the same experience as her, and the leader is Sun Tongyu, who followed Jack Ma during the China Yellow Pages period and was already the general manager of Alibaba's investment department at that time.
They moved out of the office area and returned to Alibaba's entrepreneurial sanctuary: Lakeside Garden. Start doing that secret mission day and night.
On May 10, the project was successfully launched, and Ye Feng named it "Taobao".
Ma Yun and his team of 6 people each found 4 items from home to sell, and bought 28 items in total, completing the first batch of transactions. Jack Ma rummaged through boxes and cabinets but couldn't find 4 things, and finally put all the watches he was wearing on them.
The moment Taobao was connected to the Internet, Jack Ma was not watching. He was at his home, holding a glass of wine, and wished to the air: bless Taobao with a smooth journey.
In June, an employee of Alibaba posted an article on the company's intranet, saying that a very powerful company might become a competitor of Alibaba, reminding the company's top management to pay attention.
That post got a lot of retweets, and everyone looked at the competitor's website with a heavy heart.
Many companies used to claim to be Ali's competitors, but Ali never took it seriously, but this time, everyone felt scared for the first time.
It was not until more than a month later that Ma Yun announced to all employees that this competitor named "Taobao" was a secret product of his company. Everyone cheered and let out a sigh of relief.
Unlike Alibaba's B2B (business-to-business), Taobao's positioning is C2C (person-to-person).
The reason why it is so mysterious is that there is a huge shark stalking in the C2C field - eBay, an American retail website giant, has occupied 90% of China's Internet C2C market.
Jack Ma doesn't want Taobao to be known as Ali's product before it has a firm foothold. When he sees that this model is feasible and can stand up, he will announce it.
Ms. Whitman, the president of eBay, immediately noticed Taobao, but after some research, she said disdainfully: Taobao could not last for 18 months.
At that time, internationally popular shopping websites had to pay to upload product information, and eBay's entry into China was no exception.
Ma Yun announced the policy of "Taobao is free for three years", so that no fee will be used to burn money. With Taobao's financial strength, it will not be able to support it at all.
Although eBay despises Taobao strategically, it attaches great importance to it tactically, and has adopted fierce tactics to contain Taobao.
Taobao's free policy makes merchants flock to it, but without buyers, the website will still die. However, if the nascent website wants to attract traffic, it needs a lot of advertising.
Whitman saw this, and directly allocated a market budget of 100 million US dollars to eBay China, signed exclusive advertising agreements with all major Chinese portals, and listed keywords related to "Taobao" on Google and Baidu. Buyout.
In the PC Internet era, this kind of ban is almost fatal.
Ma Yun, who is familiar with Mao Zedong's tactics, adopted the classic idea of "encircling the city from the countryside" to deal with it.
One is that if you can’t go online, you will go offline. Taobao will place advertisements everywhere on TV, street signs, subways, and elevators;
The second is that large websites cannot get through, so they go to small websites. Taobao has established cooperative relations with thousands of small websites;
And another more important move finally helped Taobao establish a victory, and later hatched a towering tree as big as Taobao.
One day, Sun Tongyu, the person in charge of Taobao, came up with an idea while reading user feedback, and he asked a young man who just joined Taobao in June to implement it.
This young man is called Ni Xingjun. He is a graduate of Zhejiang University of Finance and Economics majoring in accounting and informatization. He is a self-taught programmer. He originally wanted to join Ali, but was fooled by Ali's HR into Taobao, which was just established.
Ni Xingjun quickly finished writing the program by himself, and Ye Feng named the program "Alipay".
This very inconspicuous little program, which can be done by a half-way programmer alone, solves a big trouble in online transactions because it provides a guaranteed transaction function, which greatly improves the user experience of Taobao.
Under such a combination of punches, in just one year, Taobao's traffic has entered the top 20 in the world, and its transaction volume has already been evenly divided with eBay.
However, if there is not enough financial support, free Taobao cannot escape Whitman's prediction, and will eventually die of burning money.
Since Taobao does not make money, almost all of its operating expenses come from Ali. But as Taobao got bigger and bigger, Ali gradually couldn't afford to burn such a large amount of money.
Two years later, although Taobao crossed the 18-month death line predicted by Whitman, it has also reached the abyss.
The one who saved his life this time was Jerry Yang from Yahoo, a friend Ma Yun met in Beijing in 1997.
At the age of 28, Jerry Yang gave up his Ph.D. from Stanford University and founded Yahoo. The company quickly became a Silicon Valley giant. However, due to a series of strategic mistakes, Yahoo gradually declined. In the global market, it was defeated by Google, and Yahoo China, which was established in China, was also defeated by Baidu.
In 2005, Yahoo had only about $3 billion left on its balance sheet. But Jerry Yang made a shocking decision: use 1 billion US dollars, plus all the assets of Yahoo China, in exchange for 40% of Alibaba's shares.
Once the money is settled, everyone knows that Taobao is saved and eBay is dead. eBay made a decisive decision and immediately gave up the Chinese market. It sold eBay, which it acquired two years ago, to TOM, and completely withdrew from China.
So far, Taobao has occupied 80% of the market share of China's retail e-commerce, becoming the absolute overlord.
And Yahoo's $1 billion deal has become the most successful deal in the company's history.
A few years later, Yahoo has completely declined and was forced to sell its core business to Amazon. Its Ali shares were injected into a company called Altaba. The market value of these shares in 2019 exceeded 100 billion US dollars.