"Roll King" Taote

Image source @ Visual China

Text | Financial Storyteller

Today, there seem to be not many new stories to tell in the domestic e-commerce industry.

Tut is an exception.

Today's Ali is like a famous family, and the accumulation of wealth and fame has reached the top. And 2-year-old Taote, like a young knight in this family, attacked the city and was full of spirit.

However, the "shining teenager" grabbed the enemy's territory on the one hand, and also robbed his own territory on the other hand - in fact, Taote's users were originally the intersection of Ali Tao users and Pinduoduo users.

The "10 yuan store" and "100 yuan big name equalization" that have just been launched are not only fighting for more than one lot externally, but also grabbing territory with Taobao Tmall internally.

One side of the outer volume, the other side of the inner volume, is the only way for Taote, the king of Taote, essentially is the product of the high degree of internal volume of the e-commerce stock market.

Officially listed in March 2020, the "Taote" that changes its face once a year is also a window to peek into Ali's sinking market situation.

Taote came "late"

As China's largest e-commerce platform, It may not be seen as a respectable competitor until Pinduoduo is listed.

Otherwise, Taote will not postpone it until March 2020 before it is officially launched.

At the beginning of the launch of Taobao, it was called "Taobao Special Edition" - this is not surprising, in the Ali system's business map Zhong, Taobao is the matrix, Taobao Mall independently transformed into Tmall, also as the "Taobao second generation" of Taobao special edition, taking advantage of Taobao is not enough and strange.

However, the initial interface and temperament of the Taobao Special Edition are like Pinduoduo - when Taobao was just launched, its mission was to "attack", and copying and benchmarking Pinduoduo was a "shortcut".

In fact, Pinduoduo started from the five rings outside the market, Ali entered earlier - but earlier shot, but did not get it earlier.

Before 2014, the sinking market and users were in a state of natural growth in Ali.

2014 is a key node, that year Ali was listed in the United States, and the rural market was positioned as one of the three major strategies, which was the starting point of Ali's structured layout sinking market.

Ali's sinking 1.0 era began at the end of October 2014, when the first rural Taobao service station landed in Tonglu, Zhejiang, and the launch of the rural Taobao APP, with great fanfare, rural "brushing walls", "Taobao villages" and "Taobao towns" have emerged, at this time, Pinduoduo has not yet been officially launched.

However, the above hilarity did not last long, on June 1, 2017, the rural Taobao APP went offline, becoming a sub-module in mobile phone Taobao, more like a transitional product, and the sense of existence is not strong.

At this time, Ali ignored the difference between the urban and rural binary markets, and provided an undifferentiated service to the sinking market - this strategy, obviously not in line with reality, also gave Pinduoduo an opportunity to take advantage of.

For rural users who have just learned to use smart phones, Taobao's interface is undoubtedly too complicated, compared to Pinduoduo, which was listed two years ago, which is easier to use.

Ali's loss and loss of the sinking market is not surprising - in 2016, Ma Yun threw out the concept of new retail, and the focus of Ali's e-commerce business was also on the integration of online and offline, as well as consumption upgrades.

Pinduoduo, which was launched in 2015, took advantage of the void.

The characteristics of users in the sinking market are that there is no money in time - the full sinking of the Supply Chain of Pinduoduo, the attraction of a few dollars of free shipping, the fun of asking relatives and friends to help cut a knife, and the rapid fission of the WeChat platform and other measures, just right for the appetite of the sinking market.

In the latest release of Pinduoduo's financial report, Pinduoduo's annual active buyers have reached 869 million. At the time node of Taote's birth, it is March 2020, and the number of active users disclosed in Pinduoduo's 2019 financial report has reached 585 million, with a net increase of 102 million active users in the last two quarters alone.

Ali in 2020 needs a new role too much to conquer the battle of sinking the market.

Although Taobao, Juhuasuan, etc. have some accumulation in the sinking market, on the one hand, they are not born for the sinking market, and they cannot help but scratch the itch of their boots, on the other hand, Taobao itself is also difficult to turn around.

On the supply side, Taobao has formed the existing rule system, business competition is extremely fierce, grassroots factories or village and town sellers, to open new stores on Taobao to survive, these "factory goods", village goods presented in the search list of Taobao users, it is too difficult.

It is also based on this consideration that Taote, who took office two years ago, is responsible for a heavy responsibility - Wang Hai, general manager of Taote's business department, claims that Taote's name focuses on "special", which first refers to "special simple".

The "growth" desire of "1 yuan free shipping"

With Pinduoduo to grab the turf, what is the most direct trick? Low price!

When Taote was launched, he engaged in the "1 Yuan More Fragrant Festival" just before the Double Eleven. When colleagues at The Financial Story Club also bought 50 masks for 1.9 yuan free shipping, they were surprised at the time.

At first, colleagues thought that this ultra-low price might all come from platform subsidies.

In fact, this is not entirely the case.

Ah Hai, a cosmetics merchant, told Financial Story Club. He previously operated Taobao stores and Tmall stores, and in the first half of 2020, after hearing that Taote was going online, Ah Hai actively participated, "in order to make a drink" - to push up single product sales, accumulate evaluations, improve store levels, and increase search weights.

At that time, the sales and evaluation on Taote can also be synchronized to the Taobao store, "invest a few thousand yuan, you can get hundreds of real sales and evaluations", "1 yuan package mail, users almost closed their eyes to buy, do not need to think and make decisions, such a purchase action, can accumulate a large number of sales and evaluations for merchants in a short period of time."

Moreover, the deposit for Taote to open a store is also very low, "Tmall 50,000 yuan, Taobao 5,000 yuan, Taote as long as 1,000 yuan, the threshold of trial and error is particularly low."

At that time, Ah Hai put hundreds of SKUs in Taobao stores, one-click shop to Taote, and the unit price ranged from a few yuan to hundreds of yuan. But users buy it, only 1 yuan free shipping and 4.99 yuan free shipping men's lipstick.

"So cheap, of course, is not a good thing, the product factory cost is only one or two pieces, logistics costs are about 2.5 yuan, so selling 1 yuan is definitely losing money, but selling 4.99 yuan, basically flat."

The data proves that the ultra-low price strategy is quite effective. Taote used 9 months to achieve more than 100 million users, and 21 months of users exceeded 280 million.

At that time, data from questMobile, a third-party organization, showed that as of June 2021, 78% of Taote users coincided with Pinduoduoduo.

This data is regarded by Taote insiders as the "battle record" of grabbing the territory - in the long run, Taote's battle will not be easier than Pinduoduoduo, Pinduoduo is from 0 to 1, such as entering the no-man's land to find an increment, and Taote is to grab the stock from the opponent's territory. In the latest released data of Ali's fiscal season, Taote net increased annual active consumers by 39 million, lower than the peak of 50 million net increase in the first quarter.

In addition to the outer volume of Pinduoduo, will Taobao be rolled inside Taobao Tmall? How many users of Taobao and Taobao Tmall coincide? This involves whether Taote's positioning is "spear" or "shield" - a most perfect Taote should try to roll out opponents as much as possible, and try to roll brothers as little as possible.

In May 2021, at the press conference where the Taobao special edition was upgraded to "Taote", when the media continuously forced the above questions, Wang Hai was silent, "Overlapping data (can not be said), because this affects the stock price." I can only say that from the first day, it has been around the sinking crowd, and the overall strategy of user growth is different from Taobao. ”

But in fact, from Ali's latest quarterly financial report data, it is not difficult to infer the coincidence rate.

For the 12 months ended December 31, 2021, Alibaba's China commercial business had an annual active consumer of 882 million, with a net increase of approximately 20 million in a single quarter, mainly due to the increase brought by Taote. For the same period, for the 12 months ended December 31, 2021, Taote had 280 million annual active consumers, an increase of 39 million from the previous quarter.

It may be assumed that according to the financial report, the net increase of 20 million yuan mainly comes from Taote, assuming that 15 million of them are from Taote, which means that of Taote's 39 million users, at least 24 million overlap with Ali's other businesses, according to this ratio, the coincidence rate is about 60%.

In fact, the above speculation can also be confirmed———— as early as 2018, Ali found that 70% of Taobao's new 120 million users came from low-tier areas, which is equivalent to the population of first-tier cities and key new first-tier cities combined.

In other words, before Taote, most of the new additions of Taobao itself also came from the sinking market, and the entry of Taote accelerated this process.

A user who claimed to be a consumer downgrade told Caijing Story Club that her consumption trajectory in the past five years was "Amazon - Vipshop - Tmall Taobao - Taote 1688", "I used Amazon when I studied abroad, and then used domestic e-commerce after returning to China, I am a standard sample of consumption downgrade." ”

For Taote's inner volume, Wang Hai kept calm, "A user both buys things in Taobao, but also buys things in Taote is also very good, the overall consumption amount of the whole Ali is upward, for example, if you buy a mobile phone, you will choose Huawei and Apple, but you want to buy a fruit, you use Taote's direct supply is very appropriate; you want to buy a hair dryer, you don't have to buy Dyson's, you buy a good look, quality is good, the quality of various certifications have also passed the Chinese brand, it is also very good." ”

The implication behind it is that although Taote has pried part of its own market, it is better than watching users flow to opponents.

This is also in line with the statement of the Daniel Zhang at the investor communication meeting to "create more opportunities for digital user groups to spend more in different categories to expand our wallet share".

What's more, Douyin e-commerce, Kuaishou e-commerce is also around - a passion to Taote's Ahai, and finally found that the high-end price of goods in Taote can not be sold, and, after the Taote account is independent, "praise can not accumulate Taobao store", so he decisively quit Taote.

Now, he has turned to the fast hand to sink the market deeply, and in the best live broadcast, the sales volume reached more than 300,000 yuan, "removing the pit fee, you can also leave some profits."

At the beginning of March, Kuaishou officially raised its knife, and the Taobao Alliance commodity link will not be able to publish the product and service link in the Kuaishou live shopping cart, short video shopping cart, business detail page, etc. - which means that Ali reached the external tentacle of the sinking market and broke one.

The business world has no eternal partners, as long as Taote can bring growth, it is good, whether it is "spear" or "shield" does not seem to matter.

Solve commercialization

Ah Hai, who has been wandering around Taote for several months, has now concluded that the players who can be handy in Taote are "the source factory of our outsourced production of the OEM brand, it is not ok at all, spelling low prices, can you spell it?" Relying on low prices, when is it a head? ”

His observation may be the "footnote" of the Taote 10 yuan store and the Taote 100 online. Taote's move, in the final analysis, is to make up for the shortcomings of the supply of goods. One-dollar free shipping uses the universal human nature of "taking advantage" to quickly pull new, but the uneven quality of goods has also attracted a lot of criticism and complaints from the user side.

One of the major challenges facing Taote at present is how to achieve a balance between quality and low price - low-price platform, it is difficult to attract large and medium-sized brands to settle in, and it has become a must-have option to personally go down.

Compared with the strong interest in "farming" in Pinduoduoduo, taote's differentiated feature is "industrial products" - which is also based on practical considerations.

Under normal conditions, it can be found that in the overall richness and cost performance of agricultural products, Taote, as a latecomer, cannot compete with Pinduoduo. Therefore, it is relatively feasible to rely on industrial products to get on the top; not to mention, Taote also has the assistance of the big brother 1688 platform - the latter data shows that the latter covers 172 first-level industrial belts, accounting for about 70% of the number of first-level industrial belts in the country.

In the layout of industrial products, Taote has also undergone many adjustments.

At the beginning of the launch, Taote told the story of "the world's first new platform with C2M customized goods as the core supply". "C2M customization" can not only distinguish it from other businesses of the Ali department, but also highlight the personality in public opinion.

However, at that time, Taote needed to quickly seize the market, to run the traffic, where is the time to go to the intensive cultivation factory end? The top priority is to recruit merchants first, and the products are online first. Moreover, it is too unrealistic to tell the story of "personalized on-demand customization" under the reality of "one dollar free shipping".

Shortly thereafter, the C2M was reclassified to M2C, albeit in alphabetical order. But it reflects the real business scenario of Taote - no longer emphasizes personalization, but highlights the improvement of link efficiency and the shortening of circulation links, compared with C2M, the order of magnitude is lighter, and the body is more flexible.

Today's so-called "ultra-low and affordable" 10 yuan store, as well as the "big brand equal replacement" Taote 100, in essence, is Taote's solution to a sustainable business model.

First, whether it is a 10 yuan or 100 yuan product, it is a non-brand factory positioning, trying to open a gap with Tmall and Taobao products to reduce the internal roll.

"Even brands with relatively low prices like ours can't play in Taote, and big brands can't be stationed in Taote", Ah Hai has communicated with many cosmetics brand merchants and came up with this round.

Second, Taote's "factory direct supply, full inspection of the warehouse, one-stop purchase, a parcel delivery", is the exploration of the self-operated model, from the past experience, in the past, whether it is Jingdong, NetEase Yanxuan and other platform practices, the self-operated model puts forward higher requirements for quality, inferior goods face higher risks, must be suitable for relatively high customer unit price products, in the cost of more room for maneuver - from this dimension, 10 yuan, 100 yuan positioning, compared to the previous 1 yuan package of money to sell, In fact, taote's return to the essence of business.

Third, as mentioned above, taote's growth rate in the latest fiscal season has declined, taote to continue to maintain growth, just by pulling people's heads is not enough, must increase the per capita GMV.

According to Wang Hai, the 10 yuan store is positioned in small items and small commodities covering various life scenes, which can realize N yuan N pieces, factory direct supply, full inspection of warehouses, one-stop shopping, and one parcel delivery.

"Financial Story Club" has also experienced several "official direct" channel products, at present, it is not all a parcel delivery, which proves that Taote will take time to straighten out the supply chain.

In short, for the current Taote, inner volume and outer volume will be the norm for a long time in the future, which is the only way to go under the stock competition and zero-sum game.