Written by: Tai Shi James

Amid the atmosphere of "returning to Taobao," only the battle reports remind us that this shopping festival by Ali is called "Tmall 618."

In the past, Tmall was for branded goods, while Taobao was for non-branded items. However, in this year's 618 battle report, Taobao's hundred-billion subsidy has become a "new engine for brand growth," with transaction amounts increasing by 550% year-on-year as of 24:00 on June 17th. After more than a year of transformation, Ali has finally allowed small and medium-sized merchants to return to the center stage, and Taobao's value has also returned to its rightful place.

Besides Taobao, two other strategically innovative e-commerce platforms, 1688 and Xianyu, also emerged during this shopping festival.

These two platforms are a wholesale market and a used goods market, respectively.

If B2C cannot compete with Pinduoduo in terms of absolute low prices, then Taobao must find solutions from B2B and C2C.

Perhaps such a choice will bring a new storm.

01

Taobao: Changing the "Absolute Low Price"

Taobao tried to replicate Pinduoduo in the past year, adopting a search algorithm that caters to "thousands of orders." Generally speaking, only cheaper products will have higher order volumes, so this was an attempt to fully promote the "price competitiveness" strategy.

Taobao paid a price for this attempt: the growth rate of customer management revenue in the first quarter was only 5.48%, significantly lower than its competitors, while the adjusted profit even saw a year-on-year decline.

Mobile Taobao also underwent a major redesign before the 618 promotion, moving closer to Pinduoduo in terms of page design. The Taobao hundred-billion subsidy, which performed well during the shopping festival, was almost a replica of Pinduoduo's hundred-billion subsidy in terms of page design.

Interfaces of Taobao and Pinduoduo's hundred-billion subsidies

However, according to 36Kr, Taobao's algorithm has returned to the logic of "thousands of orders GMV" and continued to achieve double-digit GMV growth during the 618 period.

Taobao is no longer so insistent on "price competitiveness," reducing the free traffic supply for low-priced products and adopting a roundabout strategy against Pinduoduo. However, Taobao still recommends alternative products to big brand users and factory goods from Taobao Factory and 1688 to ordinary users.

It is reported that Taobao has begun to implement a "shop experience score" and a product experience index (PXI). This evaluation standard emphasizes positive review rates, shipping speed, customer service response speed, and the number of complaints, allocating traffic for scenarios such as Taobao search and "Guess You Like" based on these comprehensive results.

In the internet market, direct confrontation is never the solution to the problem. Whenever encountering problems, the giants still instinctively try this "magic versus magic" approach. Taobao's strategic shift during the 618 festival only reaffirmed the ineffectiveness of this approach.

If "Xinjiang Free Shipping" is still just following Pinduoduo, then the major changes of Taobao PC version after 7 years, including the upgrade of 88VIP rights with "unlimited returns and free shipping" and the "CEO who moves forward" live streaming sales project, have all bypassed the battlefield of "absolute low prices".

Since Taobao no longer pursues absolute low prices, new growth points have naturally changed. Data shows that in May, Taotian 3C Digital ranked first in the whole network with a growth rate of 90.1%, higher than Tiktok's 69.2% and JD's 30.2%.

The year-on-year growth of 878% in Taobao's billion yuan subsidy for 3C Digital also confirms the above data.

It is self-evident who 3C Digital belongs to. Looking at it this way, if several companies other than Pinduoduo avoid absolute low prices, the battle between them will be even more intense.

After answering the question of "low price", Taobao still needs to face the attack and defense caused by "content e-commerce".

The matter of "contentization" has been shouted about by Taobao for many years, with the latest move being the merger of Taobao live streaming and shopping at the end of last year to establish the Content E-commerce Business Unit.

Taobao Live can be said to be the best business of the entire Taobao platform. Last year, its overall user base increased by 44% year-on-year, and its user duration increased by 39%. On 618, the number of live streaming rooms on Taobao exceeded 100 million yuan, an increase of 53% year-on-year, reaching 81.

However, the goal of doubling daily purchasing users announced by Cheng Daofang, the general manager of content e-commerce, on March 28th is still quite difficult to achieve after the release of the 618 data.

Taotian has brought Taobao back to its core position, and at the same time, it has also found a strategic change to deal with the low price wave. At the same time, Taotian needs to find a spear and shield to deal with the new consumer battlefield.

02

1688: Becoming the king of no source of goods

There is also a significant difference between 1688 and Pinduoduo, which focus on "flat substitution".

The main consumers on Pinduoduo are those in the lower tier market, while the buyers in 1688 are mostly young people from first and second tier cities.

As President Yu Yong of 1688 said, "The two most popular apps for young women aged 25 to 35 in first and second tier cities are Xiaohongshu and 1688."

So, the supply chain of 1688 naturally connected to Xiaohongshu's traffic pool.

As the earliest B2B platform in China, Alibaba's "eldest son of the empire" still accounts for over 97% of the 2B business in 1688's current GMV. The factory goods on it are just matched with the non source sellers on Tiktok and Taobao.

Previously, Pinduoduo required merchants to carry advertising pages for Pinduoduo when they supplied goods to merchants without supply on other platforms, so it was blocked by Tiktok, and 1688 was recognized by Tiktok.

It can be said that there is no strong opponent in the two traffic pools of Tiktok and Xiaohongshu in 1688.

On May 23rd, Taotian released the "Guidelines for Compliance Management of Non source Merchants", encouraging non source merchants on the platform to choose the 1688 source channel. This also further supports 1688 in the C-end channel docking.

1688 is indeed expanding into the C-end market.

1688 has already opened three stores on Taobao: strictly selected Taobao stores, enterprise self selected Tmall stores, and industrial experts selected Tmall stores. It may be integrated into a large channel similar to Tmall supermarket in the future.

This method means that merchants on 1688 do not need to open separate stores on Taobao to connect with Taobao's traffic, and only need to give half of the management to the 1688 official.

Prior to this, 1688 supported a seven day no reason return policy for all categories in February of this year, and launched a free shipping policy for one item and free return shipping in March.

In fact, there are also many 1688 merchants who are unwilling to join Taobao. Because joining Taobao means they have to compete with their own customers on the same platform. The existence of such conflicts of interest poses a risk of not only not being able to earn more money, but also potentially losing customers.

But 1688 will definitely keep trying on the C-end, after all, the market here is much larger than the B-end.

Alibaba's first quarter report for the 2024 natural year showed that Taotian's revenue from Chinese retail business was 88.26 billion yuan, but the year-on-year growth rate was only 3%; Although the revenue of China's wholesale commerce, which mainly represents 1688, is only 495 million yuan, the growth rate is as high as 20%.

So it seems that the 2B business of 1688 is doing quite well, and the next step is to try the "Ping Ti" food sharing C-end cake.

This approach is particularly effective in today's increasingly differentiated middle class consumption.

According to the "2023 New Middle Class Survey" report released by Wu Xiaobo Channel, among the group with a monthly income of over 20000 yuan, 26.8% of people are committed to maintaining flat replacement as a way of life, rather than simply trying it out.

Although this 618, 1688 did not take the initiative to launch a campaign, it also released a report on replacement consumption during the 618 period and held the "Happy Endless Conference" and "Poor Happy Night". Obviously, 1688 will continue to follow the trend of replacement created by social media and the younger generation for itself. For the entire Taotian, this long hidden imperial "eldest son" will return to the strategic main track after completing the rejuvenation task, further robbing Taotian and killing enemies.

03

Xianyu: Community Atmosphere Packaging "Low Price"

Alibaba's e-commerce layout revolves around "low prices", in addition to "flat replacement", there is also "second-hand", supported by the C2C platform Xianyu incubated by "Taobao Second hand" in 2014.

The "Little Knife" feature launched by the second-hand e-commerce platform Xianyu on this 618 is an interesting idea. This kind of "knife" culture is very common in traditional offline transactions, which is actually "bargaining".

However, B2C online shopping is like shopping in supermarkets, representing standardized transactions, and the culture of "bargaining" has disappeared. Now, the C2C platform Xianyu has revived it.

Xianyu has also turned "Little Knife" into an interactive game, where players can freely draw a knife within 5 seconds, accelerating their discounts.

This interactive mini game, which is in line with traditional Chinese shopping culture, is expected to become a must-have feature of C2C, just like "grabbing red envelopes" in the past.

The official Xianyu also paid for the "Dragon Slaying Knives" on June 18th, June 18th, and June 18th, providing ample discounts for the shopping festival.

In addition to the fun of the shopping process, "low price" is another powerful weapon for leisure fish.

Isn't it true that Taobao has just shifted from "absolute low prices" to "absolute low prices"? That's right, but Xianyu usually sells second-hand goods, which originally bypassed the comparison with new products.

In the 618 season of "idle fish bottom fishing", packaging of flawless products, big brand clearance products, and 99 new products are all breaking through the bottom price, which may be cheaper than Pinduoduo.

Of course, some netizens have found that the prices of some products on Xianyu are even higher than those on Pinduoduo, and one netizen's answer is good: "You can find treasures at low prices on Xianyu, but buying them at low prices on Pinduoduo is definitely garbage.".

Upon careful consideration, what is said is quite reasonable.

In addition to market culture and low second-hand prices, Xianyu also has the opportunity to expand into local life.

Xianyu has recently developed offline service scenarios such as recycling stations and markets, and has a full opportunity to enter the local retail market. The once popular pet detective of Xianyu on Xiaohongshu is an example.

Although Ali already has an independent local life group, it may be the most effective way to explore new Internet businesses by following the natural growth of business, without assigning tasks or buying more.

Like 1688, Xianyu also held onto young people. The post-95s are the most active age group on this platform, with an average net profit of 2723.5 yuan per person last year; The proportion of post-00s has also reached 22%.

1688 and Xianyu respectively meet the needs of young people for making money and socializing. These are the key to capturing consumer demand beyond absolute low prices.

"Why did 618 suffer so badly this year?" This is a hot topic spread across multiple social media platforms. The platform cannot provide impressive data, big anchors continue to report a cliff like decline in performance, and merchants are repeatedly struggling to make money. Although Taotian still leads the market with a large share, it cannot stop attacking and defending for a moment.

Even though the road ahead is difficult, Taotian still has to walk steadfastly.

To some extent, the shopping festival model nurtured by consumerism has become difficult to continue with the enlightenment of the middle class and young people.

The post-95s and post-00s are increasingly unwilling to pay for big brands and advertising effects. Before the big promotion effect bottoms out, it is a battle against time for all established e-commerce platforms.

Fortunately, Taotian still holds a sharp spear and a hard shield, and the "legitimate lineage" that has been passed down for 25 years are also building new fortresses.