The battle for the route to the sinking market.
Editor’s note: This article is from the micro-channel public number “goods play” (ID: pinwancool) , Author: mysterious rather.
For a long time, regarding the competition for the sinking market, Alibaba was “led by the nose” by Pinduoduo on the route: Faced with the sudden emergence of Pinduoduo and its group gameplay and tens of billions of subsidies, Alibaba has revived Juhuasuan and also targeted the brand “Ten billion subsidies” on the line-even this name directly “pays tribute” to the opponent.
This “passive” now seems to have changed. The key to the change is that the Taobao special edition officially launched this year finally figured out its own way.
Starting from October 10th, Taobao Special Edition will start the “1 Yuan Fragrant Festival”. 100 million factory shipments can be delivered home for only 1 yuan each. The event will continue until the end of Double 11. Of course, in the specific purchase process, the rules are also more complicated: basically, everyone has the opportunity to buy 1 yuan once, and there are restrictions on the categories of participation, and then they can get more qualifications for 1 yuan purchase through social sharing.
Whether it is the name “Fragrant Fragrance Festival” or the time chosen on October 10th, people immediately think of “True Fragrance Festival” and Pinduoduo, which was established on October 10th. But Wang Hai, vice president of Alibaba and person in charge of Taobao special edition, said in an interview with Pinwan and other media that “that is all your guess.”
Although I do not admit it, in fact, Taobao special editions are increasingly playing a role in direct resistance to Pinduoduo in Alibaba’s strategy in the battle for the sinking market. It’s just that its method is no longer the initial stage of mirror reproduction.
“It’s no longer what you do and I do it.” Wang Hai said in an interview with Pinwan. “We are really doing C2M. We will definitely make this road smooth. We have strategic determination to make factories and consumers profit at the same time.”
The so-called C2M (CusThe tomer to Manufacturer model is simply to omit the intermediate links of traditional product sales and allow manufacturers to sell directly to consumers. The key is based on data and other technical capabilities, allowing consumers to directly determine the manufacturer’s product design, sales cycle and inventory arrangements.
But this model is easy to think of as personalized customization.
“Our C2M is different from other competitors, because C2M itself is actually an economy of scale-not personalized customization, but mass customization, based on massive demand.” Wang Hai said. “And Ali has a strong ability in this area. We have the most consumers here, so we can segment the market segments, both accurate and large in scale.”
Wang Hai gave an example of an electric toothbrush. On the Taobao special offer platform, this electric toothbrush is priced at 9.9 yuan without subsidies. In the production process, the Taobao special offer platform first provides data analysis and research consumer behavior, while the factory only needs to concentrate on how to produce and reduce costs.
“We analyzed the market size and consumer preferences, and found that they pay more attention to the brush head of the electric toothbrush, the power of the motor, the feel of the facade, the color, etc., and the rest may be unimportant. Save costs.” Wang Hai said. This is an ideal process for Taobao’s special C2M.
However, to find this way, Taobao specials also took a detour.
Taobao specials were actually launched as early as 2018, but at that time the impression was that it was just another Taobao that might be able to squeeze more wool, and the news soon disappeared. During the same period, Juhuasuan became a direct target position for Alibaba and Pinduoduo, and more often used similar subsidy strategies.
“The biggest problem with Taobao specials at the beginning was that there was no difference in the supply of goods on Taote and Taobao platforms. Now they are completely different merchants, and the store product system is also independent.” Wang Hai analyzed Pinwan.
He said that on April 1, 2019, he opened a daily special shop on Taobao, all of which are factory goods. “This store has hundreds of millions of shoppers a year.” Wang Hai believes that this verifies the acceptance of this model among consumers. And this has become the predecessor of the current Taobao specials, and the positioning of Taobao specials has gradually become clear, which is to focus on factory goods. In March of this year, Taobao specials were “officially launched” again.
In this process, the integration of various resources of Alibaba Group played a key role. Taobao special offers have opened up 1688 and other B2B platform resources, including Wang HaiMany members of the team come from the B2B business group, and a separate C2M business department has been established. In addition to reporting to Jiang Fan, the person in charge of Taobao Tmall, Wang Hai also reported to one of Ali’s “Eighteen Arhats”, Dai Shan, president of the B2B business group.
Dai Shan, President of B2B Business Group of Alibaba Group
Alibaba is a company obsessed with building closed loops. Taobao specials are part of the long-awaited one. The B-end resources such as 1688 and the C-end users such as Taobao Tmall have been able to get through. In the story told to merchants, in addition to the platform to provide store operation, after-sales service and logistics services, there are also Alibaba CloudHe Lingxi Manufacturing and even Ant HeOnline business banking solution.
And this mode of providing multi-service resource support also allows Taobao Specials to have a stronger leadership and voice in cooperation with manufacturers.
One of the most typical Taobao special C2M model is this: the platform is based on Taobao TmallA large amount of consumer behavior data of China predicts what kind of products in a certain category can be sold, and then finds factories that can produce such products, and starts to talk about cooperation.
“One way of cooperation is the platform-directed store. That is, the platform is operated, responsible for planning, joint marketing, etc., and together with the factory to determine the product, customer, attribute specifications, and then make an overall sales plan around the product. This It is suitable for factories with no operational capabilities but strong manufacturing capabilities.” Wang Hai said. “We will charge an overall commission, and there will be different proportions for different services. What we can provide includes customer service, logistics marketing, etc., and our warehouse distribution has been established.”
According to some manufacturers, Pinwan said that these in-depth cooperation products will naturally receive the support of platform traffic and other resources. Because to some extent, it is also a product that the platform participates in sales.
This model makes Taobao’s special offer subsidies very different from Pinduoduo’s tens of billions of subsidies.
The focus of Taobao specials is how to accumulate and deeply transform the B-side. And Pinduoduo started from social e-commerce, and his logic on C2M also started from the C-side: The amount of orders formed after a large number of social diffusion on the C-side can help factories reduce costs, thereby directly allowing the C-side to take advantage of the price.
So in the process of educating users with subsidies, the purpose is obviously different. Pinduoduo will focus its subsidies on branded goods such as the iPhone, in order to attract new users to complete the purchase and build consumer’s platform from the purchase experience. Trust, it is related to user growth, so as to ensure the sustainability of C2M starting from the C-side. The Taobao special offer is to make more people aware of such products as “factory goods”. As a member of Alibaba, Tmall has resolved the issue of building platform trust.
In other words, if the “beneficiaries” of the subsidy are different, the people who bear the bulk of the subsidy are also different. Under the influence of the epidemic this year, when factories urgently need to sell their products directly to consumers, participating in activities such as one yuan purchase is an opportunity for manufacturers to directly popularize the concept of factory goods to consumers. In the C2M model of Taobao specials, the data provided by the platform is the most critical link, and many merchants are determined by the data provided by Taote when preparing for shipments. And these data can only be provided by the platform. So, according to TaobaoIntroducing the special edition, many manufacturers are voluntarily signing up for the 1 yuan purchase.
Taobao Special Edition did not disclose the subsidy sharing mechanism. However, the person in charge of the manufacturer who signed up for the 1 yuan purchase said: “It will definitely not make money in the short term. What I look forward to is a long-term payback.”
This kind of in-depth participation and control over core resources are easily reminiscent of Amazon. Amazon has been criticized the most because it is both a referee and an athlete. It has the most comprehensive data to determine the best-selling and profitable categories, and then leads sales by itself. In the C2M model that claims to remove the intermediate links, the Taobao special edition seems to replace these intermediate links to some extent, and plays a very important role in the entire link. There are also factory owners who are also worried that this may cause anxiety to brand owners and cause a rebound.
When asked this question, Wang Hai said that Alibaba and Amazon are genetically different. “Amazon is a retailer, Alibaba has never been a retailer. We have always served B-end customers, and our business model is different from Amazon.” He said. “Moreover, on our platform, the brand is still a factory. After they gradually form a brand, they can choose to operate on Tmall, which has more support for the brand.”
Wang Hai hopes to emphasize the platform attributes of Taobao specials. He even described Taobao specials as creating a “planned economy”.
“Actually, I think that C2M is essentially a planned economy in the data age.”
It is true that in each individual case, it is true that only Alibaba can achieve such in-depth cooperation, but the entire model and business must be worthy of the term “planned economy”. Can it be scaled and how big The large-scale is the key. At present, Taobao specials are still in the early stage, so the cooperation and support factories have obvious characteristics: more are some factories with certain strength that have limited export business during the epidemic period, but have relatively stable order capacity in the past. Those smaller factories do not seem to be suitable for Taobao’s special C2M model. In addition, the statement that “C2M is more suitable for brand-insensitive standard products” has not been broken. In addition, Wang Hai also said that agricultural products have not been involved at the moment, and this is also a key area of Pinduoduo.
Wang Hai believes that they are thinking more from “quality and price”. “Foreign trade factories have been trained for many years and can produce stable output. This can be regarded as a kind of hardware capability. And how software capability really makes products that Chinese consumers like is what we are good at as a platform.” Taobao Special Edition What we are doing is how to achieve betterCombination of software and hardware.
In fact, C2M, at least for now, cannot completely replace the current e-commerce “market economy” model. It is more like a partially applied “planned economy”. Therefore, the key is to find out which segments are more suitable.
“Seven months is still a short period of time for the development of the C2M model, but in the past 7 months after the official launch, one of our gains is to better understand which market segments we can reach.” Wang Hai said. “We are mainly studying the needs of who should be around, how long the cycle should be, how big the market will be, how to improve the efficiency of the supply chain, etc. So the key lies in technological progress.”
According to Wang Hai, the current Taobao special edition can provide data in addition to the massive data of Taobao Tmall, and also integrates Xiaohongshu and other various grass-growing platforms to analyze consumer trends and new category needs.
In this logic, an interesting conflict has appeared: these new products predicted by data that have greater room for cost reduction are often products that are familiar to those with higher consumption levels, such as electric Toothbrush, water floss, etc. This is an interesting misalignment with the general positioning of the “sinking market”.
“So this is also a very important direction for C2M.” Wang Hai said. “It’s the first time in the life of a young man in a small town.” He said that in terms of consumer groups, Taobao’s special edition will be more aimed at the “people who pursue cost performance.” “Many first- and second-tier people are also Taote users.”
In other words, Wang Hai believes that the future will be more of a “consumption grade” business. The route of Taobao’s special price is finally clear. It means that Alibaba has decided to dismantle the sinking market from the supply side and break it down for subdivision. If Juhuahuan depends on subsidies to attack the sinking of brand goods, it is still some kind of benchmarking. Duoduo’s move, then Taobao’s special price route is to “draw the line” with Pinduoduo, and a battle for the route to seize the sinking market has begun.