The long-rumored adjustment of the Fliggy organization was finally settled.
Alphabet list learned that Fliggy President Zhuang Zhuoran today issued a letter of full staff, starting the organizational structure adjustment, Ali will provide more space on the basis of injecting funds and strategic resources into Fliggy, Fliggy will gradually complete the reform of the management system and job restructuring, build an employee stock ownership plan, and "be fully prepared for the future independent face of the market."
At an internal meeting held recently, for this round of adjustment, a senior person at the level of Fliggy made an analogy - Fliggy used to be like a continent on earth, the earth out of the sun, the flying pig is also out of the sun, the earth is windy and the flying pig is also windy. "Now we want to become the moon, with a rhythmic orbit and our rotational orbit."
Fliggy, which has more autonomy in operation and management, will be able to rebuild the organization suitable for the tourism industry. Zhuang Zhuoran proposed in the internal letter to adjust the direction, sea, land and air (typical post portraits are customer service, BD, technology) arms to carry out a game of chess construction, to build a service-oriented and contract-oriented organization, not just a pure air force organization.
Although Zhuang Zhuoran did not use the term "establishing an independent company" in his internal letter, it is not difficult to see from the new changes such as Ali providing more space for Fliggy, unifying the personnel structure at the organizational level, and building an employee stock ownership plan, that after Hema, Fliggy has become another business of Ali that operates independently, calculates independently, and bears the results of profit and loss.
In the past ten years, either internal incubation or through investment and acquisition, Ali has established a large-scale group army with a complete business system, and the advantage of this model is that the various businesses are closely linked and can work together.
But the problem is that the so-called synergy must be divided into priorities and subordination. There is no doubt that the protagonist in the Ali system is definitely e-commerce, Taobao Tmall is like a star in the galaxy, other businesses are in a subordinate position, they are like planets orbiting the stars, obtaining traffic from the group's mature business at the same time, but also to serve the group's grand strategy; and the group's unified strategy and organizational structure, obviously can not accurately guide and adapt to all specific businesses.
Alibaba is not unaware of the restrictions on the development of diversified businesses by the great unification. Daniel Zhang has previously argued that "our organization must become more agile in the face of a rapidly changing and highly competitive market." The construction of an agile organization must start at the top of the group."
Taote, local life, and Hema have successively become the forerunners under this business idea. Today, Fliggy has also taken this step, to become the moon in a large galaxy, and even to become its own star in the future.
According to the alphabet list, Fliggy's current round of management system reform and post restructuring will be completed within the year, and after the adjustment is completed, Fliggy will gain more autonomy in business strategy and organizational structure design. But it is not easy to become a "moon" or even a "star" at present, and in today's repeated epidemics, Fliggy needs a change from the inside out.
A
Alibaba's earliest involvement in tourism was in 2008, alipay set up aviation tourism business department, and at the same time, Taobao began to appear on the airline's flagship store. In 2010, Taobao Travel was launched, in 2014 it was renamed Ali Travel Go, and operated as an independent brand the following year, and in October 2016, Fliggy was officially named.
The background of Tao and Alipay has put Fliggy and OTA on different paths, which has led to a dispute between the industry's OTA and OTP models.
OTA is the model adopted by most companies engaged in online travel such as Ctrip and Meituan, using the procurement and marketing + operation model to obtain commission income from hotels and airlines; OTP is the model of Fliggy, which is mainly based on airlines, hotels, and third-party merchants settling on the platform to open stores.
Fliggy takes the platform route is related to its growth background, born in Taobao, Alipay application ecology of Fliggy, has obtained abundant traffic supply of the platform, such as in the hand Tao homepage, Fliggy travel enjoys user entrance, Fliggy in sharing the traffic of the Taobao platform at the same time, but also in its own scenario of the traffic into Taobao Tmall to complete the conversion, while enriching the platform supply, further push up ali active buyer ARPU.
Fliggy also inherited the platform trading and marketing system from Ali. During the epidemic period, Fliggy packaged hotel rooms and related services into a single product in the form of a package, sold online first, and then booked, operating with the idea of explosive products.
The epidemic has also exposed the fragile side of the tourism industry, and its vulnerability to Fliggy, which was born out of e-commerce, is precisely related to this.
The tourism industry is an industry that re-delivers and fulfills contracts, testing the service capabilities of the platform and the stability of the supply chain. However, the disadvantage of the platform model is that the service quality of the merchants operating on the platform is uneven. "The inertia of the past can be summed up in three points: heavy trading and light performance, heavy platform light industry, heavy scale and light operation, which is nothing to avoid." Zhuang Zhuoran pointed out in an internal letter.
In essence, doing e-commerce and doing tourism are somewhat screwed. E-commerce pursues high frequency, while the normal state of tourism is low frequency; goods are relatively static, services are relatively dynamic; commodity performance cycle is short, service performance is longer, if you completely follow the solution of e-commerce, it is difficult to solve the problems of consumers in the tourism process.
Alibaba's business transformation has always begun with organizational adjustment. Zhuang Zhuoran mentioned in the letter that the market and demand of the tourism industry are completely different from e-commerce. The starting point of this reform is to "respect the market", "solve the problem of adapting organizational design to market demand and strategic development", and "many of our systems and processes must be redesigned beyond the previous model for the industry and consumer experience".
The China Tourism Research Institute expects that the number of domestic tourists and tourism revenue in 2022 can recover to about 70% of the same period in 2019, and the tourism industry is still facing a severe test.
Ctrip entered the online travel industry in 1999 and is the leader in online travel in China. But even with 20 years of accumulation, the devastation caused by the epidemic is also obvious. According to Ctrip's latest financial report, in 2021, its net revenue was 20 billion yuan, recovering to 56% in 2019.
It is too early to talk about the recovery of the tourism industry this year, and the repeated outbreaks of the epidemic since the spring have been a heavy blow to the tourism industry. This means that it is timely to make adjustments in the current window of changes in supply and demand.
B
Judging from the internal letter sent by Zhuang Zhuoran, this round of organizational readjustment mainly includes: First, adjusting the organizational thinking, moving from a "pure air force" to emphasizing service and performance, and unifying the structure of personnel of different types of work to play a greater role. Second, it plans to issue separate Fliggy options and is designing an employee stock ownership plan; third, return to the entrepreneur mentality from large factory employees.
Therefore, Fliggy's subsequent employee structure may be different from the online platform-based business. Fliggy will include employees who are responsible for business promotion and supply chain construction offline, employees who provide customer service services, and professionals who have a hard job in the tourism industry and look less "Internet".
In the short term, Fliggy is almost inevitable. The supply of tourism is highly dispersed, and the degree of informatization is uneven, and the organization of supply will inevitably require a ground force with strong execution, and configure corresponding products or technical personnel according to different scenarios such as hotels, scenic parks, aviation, and train tickets.
According to the alphabet list, Fliggy plans to expand the size of the technical and ground operation team. The number of employees on its technical team has now doubled from the beginning of 2020 and will continue to increase this fiscal year.
The deeper challenge is mindset. The flying pig with a high starting point may lack the most hunger to live. At the same time, any industry that emphasizes offline supply chains and services requires the ability to do dirty work and patience longer than the consumer Internet.
In the early childhood, the parent company invested a lot of money and centralized management, but when the business gradually grew, although it was convenient for market expansion under some conditions, it was easy to consume the combat effectiveness of the business, and it was in line with the essence of business when it was operated independently.
In Zhuang Zhuoran's internal letter, he has given a preventive shot for some welfare reductions because of "adapting to the needs of the industry and the stage of entrepreneurship."
Correspondingly, Fliggy will launch an employee stock ownership plan. Compared with large mature companies, a small company that has been repacked is risky and has more room for growth, and if it goes to the capital market, it may form new wealth growth opportunities.
"Management actions must be less tricky and focused on business growth. Good business and high returns are the biggest value-added of the team. Zhuang Zhuoran said in the letter.
C
Despite the emphasis on strengthening supply chain capabilities and service capabilities, and disclosing data on the increase in the hotel direct connection rate, it does not mean that Fliggy wants to become another super intermediary.
"Fliggy is not interested in repeating an OTA", Daniel Zhang reiterated again in October 2018 that Fliggy should take the platform model and use technology, products and tools to help merchants and make merchants go digital.
After Zhuang Zhuoran took over Fliggy, he explained his understanding of the advantages of the Fliggy model in an interview with 36kr. He pointed out that in the first stage of the development of the Internet tourism industry, because merchants do not have online sales capabilities, they choose to cooperate with OTAs, but in the process of cooperation, they will find that their independent management ability and right to speak will decline;
In the second stage, merchants have built their own official websites and apps, but the cost of customer acquisition is higher;
In the third stage, merchants began to cooperate with the platform to build a second "official website", such as doing business in an open platform like Ali.
This is the unique advantage of the platform model for enterprise customers, and the operating rights of enterprises on the platform and the accumulated digital assets belong to themselves. However, at the same time, the platform itself has greater public domain traffic than the merchant's independent app, and the operating cost is lower.
In the platform-based model, Fliggy has made efforts in the training of two legs of supply and service.
According to Fliggy, Fliggy's revenue growth rate in 2021 is higher than that of domestic peers, of course, this is also related to the low income base of Fliggy. In addition, before the outbreak of the epidemic, consumers bought a large number of services from Fliggy from channel providers, and more than 80% of the hotel turnover has come from direct direct signing, and Fliggy is gradually completing the structural transformation from the traffic platform to the service platform.
During the May Day period in 2021, major online travel platforms have ushered in a long-term drought and Ganlin-style performance recovery. Fliggy's rebound is very conspicuous, and its airfare, hotels, homestays, tickets, and car rental bookings have not only surpassed the pre-epidemic situation, but also reached an all-time high.
This set of data verifies the effectiveness of its strategy of focusing on supply chain capacity building. If we still try to advance in the mode of pure third-party supply of sales platforms, Fliggy's service capabilities will face great challenges in the context of the devastating blow of the epidemic to tourism businesses.
The purpose of Fliggy's current round of organizational reform is also obvious. Rationalize the organization, unite people's hearts, dig their own trenches and granaries, and undertake the outbreak of the recovery of the epidemic to the greatest extent.
The optimistic side is that Fliggy itself is not small in scale, and still has stable funds and strategic resources from Alibaba, especially the advantageous traffic of Alipay owned by Taobao, AutoNavi and Ant. In addition, its commission level has always been at a low level compared with the industry, and there is still some potential for revenue growth.
A Fliggy insider told alphabet list that after the adjustment of the organizational structure, the general direction of Fliggy has not changed at all, and it is still multi-terminal development, strong supply, deep service, and globalization. "At this point in time, if Fliggy falls into the endless user products or traffic innovations on the C-end, this matter is highly uncertain." The easiest way is to make good use of the nearly 1 billion active buyers in the Alibaba ecosystem. ”
But at the same time, Fliggy can not treat each basic disk as traffic, but should do the user's scene, and highlight the Fliggy service according to the scene.
For Fliggy, in a way, this may also be the best time to bottom out.