The Taobao Tmall 618 Merchant Conference in 2023 coincides with the 20th anniversary of Taobao. It is also the first appearance of the management and operation team after Ali’s “1+6+N” organizational structure reform and Taobao Tmall’s “independent” operation. In addition to the specific strategy of Taobao Tmall 618, what has attracted the most attention is the big change of Taobao Tmall—involving the platform direction and strategy implementation of Taobao Tmall.
The answer given by Dai Shan is that users are first, the ecology is prosperous, and technology is driven.
The most introverted track of China's Internet must be e-commerce. There is no decisive battle for e-commerce, but they are competing every day, and new platforms and models are always emerging. The market is forcing platforms to innovate continuously.
However, the competition between platforms now has a new connotation.
This year's 618 is the node of a new round of platform competition, and naturally it has become Taobao Tmall's "biggest investment in history". The data given by Taobao Tmall is: 60 million products will participate in discounts, 3 million new products will be launched, and 1.45 million merchants will participate. In addition to the unprecedented scale, Taobao Tmall has also provided various subsidies to motivate merchants and users.
However, the logic of Taobao Tmall's big change is not to compete with other e-commerce companies, but to race against tomorrow.
We might as well jump out of the 618 price war, and look at the e-commerce industry proposition behind the transformation of Taobao and Tmall from the perspective of the industry and the historical process of the industry, the industrial connotation of the new stage, and what kind of platform will Taobao and Tmall become?
1. From "flow" to "reserve"
The change in e-commerce in 2023 stems from the change in China's economy. In the long run, my country's population turning point has arrived, and China's economy is also transitioning from a demographic dividend to a talent dividend. In the short term, the immediate challenge facing e-commerce is the variables in the consumer market—three years later, our economy is recovering and consumption is picking up, but the cloud of weak demand is still hovering.
In a word, the market is full of uncertainties, and e-commerce companies need to embrace changes.
For the current environment, e-commerce platforms have all had accurate predictions. In fact, as early as March 2022, after China's annual active buyers reached 1 billion, Ali no longer disclosed the number of its users in its financial reports. Specifically, Taobao Tmall's annual active buyers were 903 million, local The number of active buyers in the year is 376 million, and it is 1.004 billion after deduplication. After Ali, JD.com no longer disclosed the size of its users separately. Also this year, the overseas strategy has also become one of the choices of e-commerce platforms.
The peak of the demographic dividend means that the focus of platform development has changed, and the battle for the scale of mobile e-commerce has been suspended. The prelude to the value war of e-commerce platforms is slowly starting.
In the more than 20 years of China's e-commerce development, the most important competition in platform competition is the number of users. Whoever has more users and who can cover more users quickly and efficiently has a chance to win. When the number of active buyers on Taobao and Tmall reaches 900 million, there is actually only one path before Taotian Group: from transaction to consumption, from traffic to retention.
From transaction to consumption, from traffic to retention is not only a challenge for Taobao Tmall, but also a proposition that other e-commerce platforms must answer. The price war of "10 billion subsidy" and the popularity of 618 are a footnote of "reserved" e-commerce. Every e-commerce company is trying to turn traffic into a more valuable "reserve".
The classic model of e-commerce can be abbreviated as, GMV=UV*conversion rate. From "traffic" to "retention" of e-commerce, it means that the most important thing on the platform is not UV (unique visitors), but DAU (number of daily active users). The e-commerce model has been switched to GMV=DAU*duration. In fact, DAU is also the basis for the two short video platforms Douyin and Kuaishou to cut into e-commerce, but they are still continuing the path of "GMV = traffic * conversion rate".
Chinese e-commerce has experienced several technological and media evolution cycles, from PC to mobile, from 3G to 4G, from graphic to short video and live broadcast. Many new e-commerce platforms at the right time have also been born in the changes of technology and media. At this stage, the real challenge, or call, placed on the major e-commerce platforms is AI technology. . At the beginning of this year, ChatGPT dominated by Microsoft swept the world, which also set off a wave of large-scale Internet models in China. If Taobao and Tmall’s information flow adaptation and personalized recommendations are just a small test of AI algorithms for e-commerce, then the transformation of large-scale AI technology for e-commerce is more like the first step in the Long March.
Large-scale model AI can be used to mine business data, maintain membership systems, facilitate product research and development, and also serve daily operations. It can be applied in rich media display, customer service, after-sales and other fields of products—AI is not only a future-oriented platform opportunity, but also a It may be the core cornerstone of future platform competition.
As Dai Shan said, "Under the background of technological changes such as generative AI and changes in consumer behavior and habits, new transformation and self-reform are not multiple-choice questions but must-answer questions."
In a sense, change is also a must-answer question for the entire e-commerce industry. However, the opponent should not be a friend, but himself.
2. Platform center and supply-side structural reform
Starting in 2019, the e-commerce price war of "tens of billions of subsidies" has intensified. But the price war is just an appearance.
The price war is a sign of intensified e-commerce competition, but behind it is a symbol of the return of the platform to the fundamentals of value—the multivariate trend of e-commerce platforms is irreversible. Jump, platform operators are answering a question, how should the platform retain users?
E-commerce is the Internet mapping and amplification of offline retail and retail markets. A national-level shopping platform like Taobao and Tmall is the digitization of the market. The market is stratified, and consumers are also stratified, with diverse needs. Some people give priority to low prices when shopping, others look at the brand, whether it is new or unique, and some people shop for the speed of delivery and after-sales service guarantee.
The diversity of user needs determines the diversification of supply-side merchants, brands and products.
Customers of e-commerce platforms are not only users and consumers, but also brands and merchants. This is also what Dai Shan said, "user first" and "ecological prosperity". Although the two have precedence, they are mutual cause and effect, and they are also a cycle of mutual promotion. The big change of Taobao and Tmall is a gradual process.
Before Taobao Tmall operated independently, Dai Shan started to manage Taobao Tmall in January 2022. In the past year, her focus was on improving the shopping experience of consumers. Today, the transformation of Taobao Tmall has reached the deep water area , That is - the structure and vitality of the platform supply side. That is, the structure and dynamics of merchants, brands, and commodity supply.
The transformation of Taobao and Tmall is more like the "supply-side structural reform" of the e-commerce platform. From the structure of Taotian Group, we can get a glimpse of it: Taotian Group is divided into three centers, namely "SME Development Center", "Brand Business Development Center", and "Supermarket Business Development Center". Aowen and Yiman are the presidents.
The "Brand Business Development Center" is brand-driven, which is what Tmall has been good at before; Specializes in, covering special offers, special offers and long-tail markets—it is worth noting that Qigong was the person in charge of Taote and 1688 before Taotian Group. The establishment of the two centers is not the "separation" of Tmall and Taobao. On the contrary, the integration of Taobao and Tmall is actually unprecedented.
The classic e-commerce theory divides the platform market into "2/8" and "long tail". Behind this division is a "commodity"-centric perspective. In the era of mobile and AI, the center of the platform is no longer "commodities", but "users". In life, we will buy brand new products, big brands, small brands, and luxury goods. At the same time, we will also buy special and novel products. The hidden logic of "users first" is that the central perspective of the platform shifts from products to users.
The vitality of the supply side comes from innovation and entrepreneurship. Innovation is for mature brands, and entrepreneurship is for small and medium-sized enterprises. A complete and healthy platform ecology can only be achieved by linking the two centers, the "SME Development Center" and the "Brand Business Development Center".
Supply-side structural reform is an eternal proposition for e-commerce platforms. Because the platform is the market. In fact, in addition to Taobao Tmall, other platforms are also making various attempts. For example, Douyin e-commerce has also made its own self-operated, Pinduoduo has begun to lean towards brands, and JD.com has announced that JD.com’s self-operated and POP comprehensive get through.
The healthy structure of the Taobao Tmall e-commerce ecology is that different tracks have their own highlights. Brands can continue to operate in certainty, and entrepreneurs can also find opportunities and continue to grow.
In fact, no matter how the form develops and how the media evolves, e-commerce platforms have always played the role of matching supply and demand, allowing merchants to find their own users and users to find their favorite products. Commodity is content, and content is commodity, which is why Taobao Tmall has always emphasized content. The AI large model provides the best link for the diverse supply and demand sides.
3. Value e-commerce VS traffic e-commerce
Although Zhou was an old state, his life was restored.
From the perspective of user scale, the development of China's e-commerce has reached the ceiling, but from another perspective, the development logic of e-commerce has undergone earth-shaking changes, and a new stage has just begun. A footnote in the new stage of e-commerce is that e-commerce platforms are becoming more and more similar. Whether it is interest e-commerce, trust e-commerce, or social e-commerce, they are all trying to become a comprehensive e-commerce platform like Taobao and Tmall. business. Everyone wants to be the "universal Taobao".
2023 is the end of traffic e-commerce and the beginning of value e-commerce. Traffic e-commerce, the competition of efficiency and speed in the incremental market, is a traditional e-commerce centered on user scale and traffic, and transaction-centered; value e-commerce is the value penetration in the stock market, user-centered, for Merchants provide deterministic ecological logic of sustainable development.
In other words, e-commerce is moving from transaction to consumption, from scene to life.
For merchant brands, value e-commerce is no longer how much traffic a simple platform can give you, but on the basis of traffic, sustainable operation, from buying and selling to business - how to design good products, how to do marketing well, How to do a good job in brand value-added, in a word, for value e-commerce merchants and brands, the completion of the transaction is not the end of the operation, but the starting point of the operation.
For consumers, value e-commerce means good prices, good products, good content, and good services.
Traffic e-commerce is "GMV=UV*conversion rate", and value e-commerce is "DAU*duration". Serving users well and businesses well, GMV is actually a natural result.
Everything in the past is a prologue. All the future can be expected.