Ali "abandoned son"

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Word of mouth has once again fallen silent. In the more than ten years since joining Ali, the cycle of being valued and marginalized has occurred, and the reputation has always been that "child that the giant can't afford to support". What did word-of-mouth miss out on this?

This article totals 5574 words, about 6.4 minutes

Author | Chen Yangyuan Editor | Xing Yun

Source | Leopard change

In the past 2021, Alibaba's local life business has been constantly adjusted, and in the two months from July to August, the CEO of the local life company has been adjusted twice, from Wang Lei and Li Yonghe to Yu Yongfu.

Local life is a sector that Ali attaches great importance to, and this market carries Ali's ambitions for near-field retail, and Daniel Zhang, chairman of the board and CEO of Alibaba Group, has stated that "we will do our best to win this battle." ”

Although a heavy investment has been invested, resources and manpower have been integrated, in the adjustment in July 2021, Wang Lei, who has been in charge of the local life company for four years, has been replaced, and the framework of Ele.me and word-of-mouth as the main service body has been changed, and gaode and fliggy have been added, which is enough to see that this battle is not going well.

Personnel changes, business adjustments, all show that the surging undercurrents rise and fall, and it is extremely critical and expected that word of mouth has once again "disappeared".

In June 2015, Ali and Ant Financial joined forces to "resurrect" the word-of-mouth of "vacation" for four years, hoping to integrate the resources of both sides in the local life field, and alipay wallet with hundreds of millions of monthly active months opened a first-level entrance for word-of-mouth.

In September 2021, Alipay opened the grayscale test of the life channel, and word of mouth disappeared from the C position in the bottom column of the Alipay client and was replaced by the "life" channel. Today, although word of mouth still exists in the self-selected mini program at the top of Alipay, its status continues to be marginalized.

"Children that giants can't afford" have repeatedly become the associated words of word of mouth, enjoying the reputation of many resources and blood transfusions, why has it never become what Ali expected. In fact, this is not only a question about word of mouth, the choices of giants and the tricks of business are buried in the story of word of mouth.

01

New word of mouth is revived and grows in wandering

The Weibo profile of "Word-of-Mouth Network" also reads "I am back."

This is the official Weibo account used by Word-of-Mouth from 2015 to 2016. The profile comes from an open letter announcing its return published on June 23, 2015. This may be a rare "passion moment" with word of mouth.

The year of 2015, in terms of Wang Xing's speech at the annual meeting of the Us Group, was summarized as "the year of O2O's real and real showdown." BAT and emerging players have made various attempts, competing for consumption scenarios, superimposed on offline payments to grab the beach, and the battle situation under various vertical and horizontal is complex. The relationship between meituan and Ali was from near to far, and finally Ali restarted word of mouth into the battlefield in the middle of that year.

Originally a project of Alibaba entrepreneurs, Koubei was also an early group of websites involved in life search, and was included in Alibaba in 2006 and entered the 1.0 stage. However, Ali first merged Yahoo China with Koubei.

Until four years later, Ali Group and Ant Financial jointly invested 6 billion yuan to restart word of mouth, and Taodian was also stripped from the listing system and merged into word of mouth.

Looking back at the return of the "new word of mouth" in June 2015, it is not so much the joint escort of the two big hands to the word of mouth, but rather that the word of mouth is placed on two chariots at the same time.

A person close to Ali told Leopard Change that before the establishment of the "word-of-mouth" company in 2015, Taodian's team had been merged into Alipay's offline payment team. The biggest impetus for restoring "word of mouth" came from Fan Zhiming (later renamed "Fan Luyuan"), the number one person in Alipay at that time, who believed that offline payment would change the entire payment war, and in order to be more effective, a special independent team should be set up. Therefore, more than 300 people who have integrated Taodiandian and the original Alipay offline payment team have come out independently to form a "word-of-mouth" team.

Fan Chi, ceo of the newly established word-of-mouth company, is an old employee of Alipay, and has been responsible for the brand, marketing director, operation and product of Alipay's express payment, wireless payment and Alipay APP.

Fan Chiqi has been described as a "Li Yunlong-style leader", with excellent ability and quick thinking, but his management style is straightforward and relatively strong. He was once a subordinate of Fan Zhiming, and he emerged in the Alipay express payment project, and then followed Fan Zhiming to achieve the operational goal of "100 million users" of wireless Alipay, becoming famous in the first world war, and Fan Zhiming's resolute style is in line.

The sense of urgency of the "O2O Armageddon Year", word of mouth needs to have a strong trader. At this time, Wang Xing insisted on the merger of Meituan and Dianping, and the relationship with Ali was broken. Alibaba needs word of mouth to have more achievements in takeaway, store and other businesses to fill the vacancies of Taodiandian and Meituan. Fan Chi's strong style of personality is more convenient to promote business acceleration to compete with the fight of "old players" in the local life field and catch up with the four-year progress of word-of-mouth.

But at the same time, the joint venture advantage enjoyed by Word-of-Mouth has forced Word-of-Mouth to take into account both of its roles in the "payment campaign" and "consumer scene snatching".

At that time, Fan Zhiming was feeling the pressure from WeChat Pay. After being attacked by WeChat with the "red packet" function to sneak up on the online share, in 2014, Didi, which wechat invested, accessed WeChat Pay, and Alipay felt great pressure, and more importantly, the introduction of offline business to payment traffic began to show the impact of changing the war situation.

"Local life" or "payment" first has become a difficult question for word of mouth to answer.

In 2015, the word-of-mouth team proposed to use POS machines to cut into local life businesses. At that time, the offline POS machine had not yet been networked, there was no large player in the field of POS machine, and more and more merchants accessing the online platform were facing the problem of backward POS machine system and had extensive iteration needs.

It seems that the word-of-mouth team came up with a good idea. Pos machine replacement is not easy, B-end business decisions often need to be carefully considered, a chain brand with hundreds of stores to replace a POS machine may spend half a year for equipment debugging and staff education, Alipay's strong technical team is fully capable of letting word of mouth lock the POS machine first, local life marketing means, coupon issuance, etc. can use pos machine share to exert force.

But word-of-mouth's plan was just put on hold. After all, during the paying war and close-quarters combat period, any "desertion" behavior may reduce the output efficiency of the main battlefield.

In this case, word of mouth shows constant wavering and hesitation, which directly leads to the deformation of the action and affects the experience of related businesses and consumers.

In this sense, the travel route of "word of mouth" is more like a puzzle that is constantly adjusted under the general pattern. Although there was financial support from Ali and Ant at any cost, the development route of word-of-mouth has never been truly independent, let alone long-term firm.

02

Lonely again, become a supporting role for Hungry

In 2018, word of mouth ushered in a relatively large adjustment.

This year, Alibaba incorporated word-of-mouth into its new retail layout. Ali hopes that the four-way army of new retail will achieve restructuring and promote efficiency upgrades in industries such as clothing department stores, electrical appliances, food fresh and fast-moving consumer goods, and catering, and word of mouth is naturally responsible for new retail of catering.

On January 9, 2018, Alibaba announced the adjustment of the word-of-mouth business reporting line from ant financial reporting line to Alibaba Group reporting line. Fan Chi reported directly to the Daniel Zhang.

At this time, the dispute between Alipay and WeChat's payment share has been relatively stable, and the word of mouth that launched an independent APP in September 2017 has finally been able to devote itself to the local life field. According to the plan, mobile Taobao and word of mouth will be interconnected at multiple levels such as card coupons, commodity systems, marketing activities and offline word-of-mouth codes. Word-of-mouth will receive traffic support in the two super apps of mobile phone Taobao and Alipay, and together with the word-of-mouth APP, it will become the main entrance for service users.

However, word of mouth failed to seize this hard-won "window period", the lack of "word of mouth" brand effect and the extensive front-end service system for a long time, the collection of Alibaba's overall traffic advantages did not allow the rapid growth of APP user scale, and the platform synergy effect was not obvious.

At the same time, Ali's acquisition of Ele.me is underway, and the seemingly independent development period of word-of-mouth actually hints at its possible future of integration.

The news that Ali will acquire Ele.me has been coming out since the beginning of 2018, and in the increasingly fierce competition for local life "home", Ali needs a subordinate with more scale and combat effectiveness. According to Ai Media Consulting, in the first quarter of 2018, Ele.me and its Baidu takeaway acquired a year ago accounted for a total of 55% of the Chinese takeaway market, and Meituan's market share was 41%, while the fourth-ranked word-of-mouth takeaway share was less than 4%.

In April, the news of the acquisition of Ele.me landed; in May, the equity delivery was completed. Five months later, Alibaba Local Life Service Company was officially established, and Ele.me merged with the word-of-mouth platform to undertake takeaway and in-store business respectively. During this period, Xinmeida has successfully landed on the Hong Kong Stock Exchange.

Alibaba's new local life service company is served by Kunyang (Wang Lei), the former CEO of Ele.me, and Fan Chi, the head of word of mouth, reported to Kunyang. This also means that the previously underperforming word of mouth has given up the "core position" of local life to Ele.me.

This is the loneliness of word of mouth as an independent product again, but it is also the sacrifice that word of mouth must make.

According to the late report, as early as the Spring Festival of 2016, Ali and Ant Financial had a dispute, Fan Chi and Peng Lei supported the use of word-of-mouth takeaway to compete with the Meituan, Ali Investment Department supported the acquisition of Ele.me and word-of-mouth takeaway to fight together, the internal later compromise plan is that both sides do it at the same time. But Peng Lei believes that this is the most undeserved plan, if the two sides compromise, then both sides will die, if you want to invest in hungry, you have to hand over the word-of-mouth takeaway.

The final result of this controversy was revealed in 2018 when Ali acquired Ele.me, and after Ele.me and Ali cooperated, all the takeaway merchants who had been cultivating word of mouth for a long time were transferred to Ele.me, and the word-of-mouth takeaway was closed. At that time, the vitality of the takeaway business in local life was undoubtedly revealed, which could almost be regarded as the "self-severed arms" of word-of-mouth as a product, but it did allow the overall strategy of Ali's local life to avoid many unnecessary chaos and internal friction.

This is closer to the real scene under the impression that the outside world is valued and supported by word of mouth, and the word of mouth under the group's grand strategy has had the glory of "no upper limit for investment", but it is always facing the uncertainty of "can be sorted and can be abandoned".

In 2017, it received a $1.1 billion boost as an independent company financing, with a valuation of $8 billion. According to the convention, if word of mouth develops brightly, it will continue to raise funds independently, or even go public independently. However, the capital expansion moment enjoyed by word-of-mouth since then has largely been brought about by Hungry Mo.

After superimposing Ele.me, the new company where Koubei is located received $3 billion in financing in the first round, and the valuation has nearly tripled. During this journey, word of mouth once again sent itself to a supporting role.

Cai Chongxin once compared Ali's investment logic to the game of Go, the chessboard is the foundation, and the strategic layout of chess players is particularly important. Ali is more concerned about whether the acquired or controlled companies gain an advantage in their own territory than whether they can join forces to eat more sunspots and help the company achieve an overall victory.

In the process of coordinating the overall situation, the flexibility and acceleration of individual products are sometimes sacrificed. From 2018 to 2021, when Wang Lei was the president of the local life company, the outside world believed that "integration" was Wang Lei's biggest achievement. Before Wang Lei, Alipay, Word of Mouth, Ele.me systems are their own, merchants want to carry out a marketing campaign, often need to go through the program three times, the data of all parties are not connected, to estimate the overall marketing budget and effect, often need merchants to rebuild an additional system. Except for Starbucks, which is the special office of the No. 1 project, it is difficult for other businesses to feel the energy of Ali's local life matrix.

Wang Lei aligned the underlying systems of each platform and standardized the overall planning process and system, in this process, the interests of many backbone employees in the local life business were affected, and many personnel adjustments were caused. The "integration" process has taken a long time, the speed of business such as word-of-mouth and Ele.me has been affected, and the gap with Dianping and Meituan has widened, but for Ali, this is still a necessary step for business collaboration.

03

It didn't look like Ali expected

Starting in September 2021, word of mouth disappeared from the C bit in the bottom bar of the Alipay client.

Some employees are pessimistic about the future of word-of-mouth on social platforms. At that time, some employees said on the pulse that after "double 12", adjustments would be made. Double 12, once an offline carnival shopping festival deeply bound to Alipay word of mouth, compared with the bustle of previous years, the word of mouth in 2021 is unusually calm.

Prior to this, Fan Chi, who has been in charge of word-of-mouth for many years since 2015, was transferred to Fliggy in mid-2019, and a year later, he was transferred to the Ali entertainment sector where Fan Zhiming was president, and finally left Ali on May 1, 2021.

In the ups and downs of word-of-mouth, what runs through all the way is Ali's sense of traffic crisis.

A person close to Ali told Leopard Change that the disappearance of word of mouth from the C position at the bottom of Alipay should have happened earlier. As early as 2018-2019, The issue of open ecology was discussed internally by Ali, but in 2020, Hu Xiaoming, who was then CEO of Ant Financial, was also the chairman of Alibaba's local life service company, and local life delayed this discussion.

Poor results in the number of word-of-mouth users are the most difficult for Ali to accept.

Ali needs word of mouth and even local life, in essence, it is necessary to recall the payment traffic and the extension of the consumption scene, and Tencent's "social" and byte "content" can bring traffic regeneration model, as an e-commerce platform, Ali's essence is to sell its own traffic and purchased traffic to merchants through various forms, bringing traffic transfusion to Ali is the first meaning of many Ali products, and it is also the underlying logic of Ali's operation of "Youku" and other businesses.

The loss of word of mouth is precisely because of this, after many years of "cultivation" of the main traffic entrance of Taobao and Alipay, word of mouth has not brought too much help to Ali's traffic demand, and even remains in the stage where Alipay brings traffic to word of mouth. According to Analysys Qianfan data, the number of active people in April 2019 was 20.1516 million, and by June 2019, this number dropped to 18.3144 million.

Cancel the central entrance of "word of mouth" in the bottom bar of Alipay, replace it with a "life" channel under the further opening of the ecology, and leave more space for creating and outputting content to the merchant, so it becomes a choice that is more in line with the overall interests of the merchant and the company.

At the same time, Ali is pulling out another card to replace the "store" business of word of mouth, and the engine of local services is being "taken over" by AutoNavi. Quest Mobile report shows that in March 2021, the monthly active users of AutoNavi Map mobile terminal have exceeded 599 million, basically achieving full coverage of car owners across the country and gathering "car owners" with strong consumption power.

In July 2021, In the new round of organizational structure adjustment, Ali announced that Li Yonghe of JD.com background replaced Wang Lei as the CEO of a local life company, and Yu Yongfu was in charge of the life service sector including local life, Fliggy and AutoNavi on behalf of the group.

After a month as CEO of Local Life, Li Yonghe quickly resigned, and Yu Yongfu urgently took over as CEO of Alibaba Local Life. On December 8, 2021, yu Yongfu joined the local life for 100 days, released an internal letter reflecting on "what is the essence of the current problems encountered". The letter bluntly said that the essence is the problem of ability, and the head and foot of the organization have not grown from "single business capabilities and single business organizations" to "advanced scale business capabilities and advanced scale organizational capabilities".

And the word of mouth that has been circling around Ali's local life business is actually the first to face this kind of questioning.

It is reported that Li Yonghe's next stop is the US group, which has not yet been confirmed from the official.

Today, Ele.me and AutoNavi have become the main user portals for Alibaba's local services "home" and "to the destination" respectively, and Daniel Zhang hope that at least 100 million users in fiscal 2022 will complete destination-based service transactions in AutoNavi.

At this point, the baton of Alibaba's local life "to the store" user entrance has been completely passed to AutoNavi. Although it is unknown whether AutoNavi can carry the ambition of Ali's local life, for word of mouth, in the fifteen years of Ali's system, the feeling of going to the edge has long been familiar.

END