Taote and Taocai have 270 million users, running out of speed, bringing increments, and the future can be expected

On December 16, Alibaba dedicated its first 2021 Investor Day to the new strategy and phase results of the sinking market. Taote and Taocai focus on the M2C (producer direct connection to consumer) model, accurately matching high-efficiency, low-cost and good-service goods for the sinking market. As of the end of September this year, the annual active consumers after the deduplication of Taote and Taocai vegetables reached 270 million, an increase of 200% year-on-year; the average daily transaction order volume after the deduplication increased by more than 400% year-on-year.

Taote and Taocai run out of speed and bring increments, thanks to Ali's clear strategic blueprint and agile organization. Domestic demand, globalization and cloud computing are Alibaba's three major strategies for the future. Alibaba has always advocated the concept of "agile organization" and guided the adjustment of internal production relations to meet the needs of multi-trait business development. On December 6, 2021, Alibaba announced the upgrade of "diversified governance", in which Dai Shan will represent the group in charge of Taobao (including Taobao, Tmall, Alimama), B2C retail business group, Taocaicai, Taote and 1688 and other first-level organizations to jointly form a "China Digital Business Sector".

Alibaba is accelerating the integration of consumer Internet and industrial Internet, and strives to stimulate business innovation with two-wheel drive. Taote and Taocai are based on Ali's domestic demand strategy, relying on Ali's ecological synergy, and exploring the product of "BC integration". The introduction of two new businesses of Taote and Taocai on the Investor Day is also the first public appearance of Dai Shan since Ali launched a new round of organizational upgrading.

What is the relationship between the two new businesses with the surname "Tao" and Taobao? The answer to this question may provide insight into the tip of the iceberg of the future "China's digital business sector". Taocai cuisine continuously improves the stickiness of users by meeting the high-frequency needs of families for three meals a day. Users who have used Taobao, Taote, and Taocai at the same time have an average annual purchase of 1.8 times that of users who only use Taobao. At the same time, Taote and Taocai went deep into the place of origin to tailor cost-effective goods and services for the sinking market, meeting the consumption upgrade needs of a large number of new users. Compared with the Hand Tao APP, the proportion of Amoy's exclusive member DAU is close to 50%; more than 50% of Taocaicai users buy fresh food on the Taoji platform for the first time.

Some people in the retail industry believe that now that e-commerce has become a conventional social circulation channel, the difference between online and offline is no longer important, and consumers and merchants intersect in a variety of different channels. For example, Taocai cuisine brings together business flows, logistics, and information flows in the community, and integrates with Taobao online. Taote and Taocaicai meet the differentiated needs of the market, and then to the next level, there needs to be a (organizational) platform, multi-terminal (channel) linkage of the overall perspective. Alibaba has set up a unified "China Digital Commerce Sector", which will greatly reduce the cost of linking merchants and consumers.

More importantly, Alibaba's domestic demand strategy for many years has been scattered in different business units in the past and gathered to the main position of "China's digital business sector". The history of the Tao system and the B department has been fully opened up in the organization, and the "BC integration" and upgrading will help improve the adaptability of the supply system and the consumption structure, release a large number of unmet needs in the past through better and more complete supply, create huge new demand through technological innovation, and in this process, will also drive the evolution of related industries.

"The strategic starting point we develop is what kind of value we can bring to our customers on an ongoing basis." Dai Shan said.

From the perspective of consumption, Ali has more than 900 million consumers in China, with different consumption preferences, with two new businesses of Taote and Taocaicai, the "China Digital Business Plate" has completed the complete puzzle of serving different consumer groups, more in line with the quality, personalization and diversification of consumption trends.

From the supply side, the integrated service capabilities formed by "BC integration" will help manufacturers, farmers and merchants achieve high-quality development. For example, based on the Taote M2C model, a toothbrush factory sold an electric toothbrush for 199 yuan in a supermarket for 14.9 yuan, and the factory profit margin was still 13.5% while consumers saved money.

"The integration of industrial Internet and consumer Internet is the trend of the future and the unique ability of Ali." In Dai Shan's view, the sinking market has great potential, but its outbreak is by no means a day's work. Therefore, Ali chose long-termism and insisted on value creation. Through the unique M2C model, Taote and Taocai connect the people's livelihood security with the industrial transformation and upgrading of agriculture and small and medium-sized factories, and initially have the attributes of social infrastructure, which is bringing new life, business and employment. Tao Cai Cai "opened a warehouse for disaster relief" overnight in the flood in Henan, and insisted on "delivering vegetables in the snow" in the snow in Shenyang.

"Only through the innovation and creation of technology and models, the resonance and win-win of commercial value and social value, can we open up a greater imagination space for the future of the sinking market," Dai Shan said, "This is not only a business choice, but also a social responsibility." Next, Taote and Taocai will focus on two directions: one is to develop the industry through science and technology, to create more and more intelligent "Taocai Factory" and a demonstration "Taocai Vegetable Farm" in science and technology; the other is to build rural infrastructure, increase the construction of agricultural product production warehouses, and jointly land the "Thousand Counties Co-distribution Center" project with Cainiao.