The fate of the enterprise acquired by Ali and the fate of the cross-border import e-commerce industry are intertwined in koalas.
Wen | Marcoshin
Editor| Guan Yiwen
A few weeks ago, on the cover of Ali's 2022 financial report, the ants in the "Ali Zoo" were gone, and the koalas were gone.
The disappearance of the former was presumptuous and high-profile, while the disappearance of the latter in the zoo was quiet, presumably for a simple reason: it was too small.
In 2021, Alibaba's business team of more than 400 people (excluding products and technologies) operates the "Koala Hai shopping" App that is opened by less than 1 million people every day and has an annual transaction volume of less than 3 billion yuan. In contrast, Tmall International, which also does cross-border import business, has a GMV (transaction amount) of more than 60 billion yuan in 2021.
"LatePost" exclusively learned that as of July 2022, the Koala Sea Purchase business team has shrunk from more than 400 people in 2021 to less than 20 people, focusing on the member e-commerce business based on mother and baby and beauty categories. Products and technologies are only maintained and no longer upgraded.
The contraction began in early October last year. In that month, the Mobile Tmall Division and the Koala Sea Purchase Division merged to form the FC Division, which was subordinate to the newly formed B2C Retail Business Group during the same period.
Liu Peng, the head of the business group, said in an internal letter that "FC's meaning is Future Clients For Customer", although no one knew what it meant at the time, but some employees soon understood that FC's core mission was to "do self-operation", specifically, to open a self-operated flagship store of a big brand on Tmall.
Since then, although the two apps of mobile tmall and koala sea purchase still maintain independent operation, but the status of koala sea purchase has declined, its resources have shifted to other departments of the FC business unit, products, technologies and part of the operation have been transferred to mobile phone Tmall, and the industry line responsible for communicating with brand owners has also invested more resources in the self-operated business "Cat Enjoyment", starting in February 2022, the digital industry no longer supplies to koalas, at the same time, the FC business department launched the self-operated electrical appliance business "Meow Suda Electrical Appliances".
One koala person compared koala sea shopping and mobile phone Tmall to "sky fire" and "Optimus Prime". In the movie Transformers 2, the elderly Autobot Tengoku dismantles his parts to Optimus Prime to help him win the final battle.
Looking back at the more than 1,000 days since koalas entered Alibaba, many employees said that the decline of koalas is inevitable, and this "fatalism" has two meanings: the fate of the enterprises acquired by Ali and the fate of the cross-border import e-commerce industry are intertwined in koalas.
Three years after koalas were acquired
On September 6, 2019, when Ali announced that it had wholly acquired NetEase Koala for $2 billion, employees at both companies were not too surprised. The rumors of the acquisition have lasted for several months, during which there have been various news that Pinduoduo participated in the acquisition and Ali and NetEase talked about collapse.
At that time, NetEase's Koala, which had been established for 4 years, was the largest cross-border import e-commerce platform in China. In 2018, koala GMV was close to $30 billion. According to the research report of Ai Media Consulting, in the first half of 2019, Koala ranked first in the market share of China's cross-border e-commerce platform with a market share of 27.7%, and the global share of Alibaba Tmall International and JD Hai hoard was 25.1% and 13.3% respectively.
The most important effect of the $2 billion sale is to block the possibility of other opponents buying koalas. At that time, Pinduoduo had just been listed for a year, with annual sales of more than 500 billion yuan, which was one-tenth of Ali's, but the growth rate was ten times that of Ali, and around the previous year (2018) Double Eleven, Pinduoduo had been listed by Ali as the first competitor, surpassing Meituan and JD.com.
After the acquisition, Liu Peng, general manager of Tmall Import and Export Business Group, succeeded Zhang Lei as CEO of Koala Haigou, and nearly 2,000 NetEase Koala employees packed up their things and moved from NetEase on the south side of Qiuyi Road in Binjiang District, Hangzhou to Ali Binjiang Park across the road. A week later, they got Ali's employee account.
In another year, they will be able to move into ali xixi park and be neighbors with Taobao and Tmall. Many employees did not wait for this day. Within six months after the acquisition, the original management of Koala left or transferred jobs one after another, and many grass-roots employees also left.
Unlike Hungry, Gaode and Youku, Koala failed to add a new business form to Ali, and it highly coincided with Tmall International. An Ali person concluded that NetEase has only a lot more e-commerce capabilities ali, talents, e-commerce infrastructure, cross-border supply chains, bonded warehouses, etc., Tmall International has.
Ali also needs to solve the historical problem of koalas. For example, in more than 4 years of NetEase, Koala has not established a standardized supply chain audit standard and mechanism. Supplier settlement must be personally reviewed by the supply chain director, the cycle is as long as one or two months, while Ali and JD.com only need one or two weeks.
A former koala employee recalled that in 2018, every time a new supplier was introduced, he had to hold the computer and take the materials to the director who was two levels higher than him for approval. Sometimes the director verbally passed, but did not reply to the email, the warehouse is almost out of stock before the staff dare to ask, the director can only slightly apologize and say: "Sorry, forgot to reply." The employee said that this seems to be a human problem, but in essence it is a mechanism problem, and all decisions are pressed on one person.
For Alibaba, the biggest value of Koala is the brand and users. It brings an independent app with a certain user mentality, a cute animal image, and a group of "black card member" users with high unit price and high repurchase rate. This may also be the reason why Ali retains the koala brand to operate independently.
During the NetEase period, koalas swung strategically. At a meeting in 2018, Zhang Lei, then CEO of Koala Haigou, said that she "hopes to make Koala a small and beautiful platform." In the middle of the year, Koala Haigou changed its name to "NetEase Koala" and removed the word "Haibao", intending to enter the larger comprehensive e-commerce market, "which can be understood as wanting to benchmark JD.com at that time." A former koala employee said. Half a year later, koalas began to seek acquisitions and investment opportunities in the market.
After entering Ali, the name of the koala was changed back to "koala sea purchase", in Ali's many e-commerce layouts, the role of koala only needs to refocus on the sea purchase business. A year later, Koala's strategy shifted to focusing on member e-commerce, and Liu Peng said at the time that Koala should target China's 300 million new middle class, "We don't need Koala to become the second Tmall International." ”
In Liu Peng's planning at that time, he deliberately distinguished between koala and Tmall International - in terms of operation, koalas were mainly self-operated, and Tmall International was mainly third-party merchants; On the user, Koala Sea Purchase does depth, and Tmall International pursues user scale. At that time, an important assessment index for the depth of users within Koala was the transaction amount of black card members.
By 2021, Koala COO Lu Jianmei (Menggu) was promoted to CEO. She continued the strategy of member e-commerce. Lu Jianmei is well recognized internally, she served as the deputy general manager of Tmall Apparel, and was the head of the Tmall women's apparel, underwear, and jewelry industry. Koala Sea Purchase is mainly based on beauty and mother and baby products, and beauty contributes more than 50% of GMV. An Ali person commented that Lu's experience fits the user positioning of koala "high net worth women", and she has created a unique tone of the koala app in terms of visuals and products.
Koalas are becoming more beautiful and smaller, and the scale of business and users is shrinking year by year. A koala person said that in 2021, every time the koala does an activity to set GMV and DAU targets, it will not say how much year-on-year growth, but how much the year-on-year decline is less.
In mid-2021, Alibaba Group's chairman of the board of directors and CEO Daniel Zhang promoted the "operational responsibility system" that had been piloted the previous year to more businesses. The management responsibility system requires the president of BG (business group) to be responsible for the business, but also to manage finance, legal affairs, human resources, public relations, etc., similar to an independent company, independently calculating profit and loss. Koalas are no exception.
In October of this year, Zhao Kun (Emptiness), the former head of the intelligent service division of Ali Dharma Academy, took over the koala from Lu Jianmei as the head of the FC business department, and at the same time took charge of the mobile phone Tmall division; Lu Jianmei was transferred to the head of Tmall International.
The pursuit of profitability has become the main goal of koalas. After Double Eleven, Koala began to control the difference between the goods of members and non-members, trying to recall the lost non-member users; At the same time, increase the proportion of third-party merchants with higher gross margins. By May 2022, Koala's own transaction volume with third-party merchants will account for nearly half of each.
After the Spring Festival of 2022, an unconfirmed rumor circulated within koalas: koalas must break even by the end of September or they will be shut down. Contractions came to employees earlier and more violently than expected. In May, Ali contracted overall, and Koala also began to lay off employees. Employees were called into the conference room by HR and supervisors, a small number of people were transferred, and more people left the 4th floor of Building 7 of Alixixi Park. Two months later, a small conference room that could only accommodate more than a dozen people would be enough to hold all of koalas' current employees. "No one expected it to be cut to the scale it is today." A koala employee said.
The Koala Haibu App is still running, but the products and technologies are no longer upgraded. Its official Weibo has not been updated since June 1.
An industry that cannot exist on its own
In early July this year, the mother and baby e-commerce platform "Honey Bud" announced that the app will be shut down in two months, it was established in 2011, initially just a Taobao store, in 2014 transformed into an imported mother and baby e-commerce platform. 2014 was a lively year for the cross-border import e-commerce industry.
The cross-border e-commerce policies issued successively have given enterprises a number of benefits for tax rebates, and the industry has moved towards legal compliance. This year, Ali, JD.com, Suning, and Vipshop have successively launched cross-border import business. Honey Bud received 3 rounds of financing in 2014, and the 60 million Series C financing led by H Capital set a record for cross-border e-commerce industry financing. More than a month later, that record was broken by $100 million in Series B funding from overseas shopping platform "Ocean Terminal". At that time, Liu Nan, the founder and CEO of Honey Bud, also lamented in an interview that the industry was "too hot" in 2014.
In 2016, cross-border import e-commerce companies that have taken off due to policy trends have ushered in policy restrictions. Known as the "April 8 New Deal", the new cross-border retail tax policy was introduced, cross-border imported e-commerce products are no longer taxed according to postal tax, the tax amount of less than 50 yuan is cancelled, and the annual transaction limit of individuals is 20,000 yuan, resulting in an increase in the tax burden of important cross-border imported goods such as mother and baby, food, and health care products.
In addition to policy changes, there are many uncertainties in the business of cross-border imports: supply chain instability; Prices are affected by exchange rate fluctuations; After-sales issues are more complex and so on. The return rate of e-commerce platforms is generally 10% to 20%, cross-border imported goods and domestic general trade goods are different, involving cross-border tax issues, can not be repackaged for secondary sale, processing returns means a lot of capital loss.
An Ali source said that if the cross-border import e-commerce platform wants to establish a "genuine" image, it must do its own business. But everyone gradually found that doing self-operation is like walking into a dead end. The bigger you do, the more you lose, and there is no scale effect.
At Miya's media communication meeting in August this year, Liu Nan said: "The golden age of vertical e-commerce has passed. She believes that when the integrated e-commerce platform pushes the products that consumers need through algorithms, the advantages of vertical e-commerce disappear.
Cross-border import e-commerce is a phased product. There are few startups left, and cross-border e-commerce has become a piece of business on integrated e-commerce platforms.
In the view of a cross-border e-commerce entrepreneur, the anchor point that China is the world's largest consumer market in the future will not change. He said that in the winter, those who freeze to death are all of poor physique, and if they pass the winter, they will have to have the appearance of winter, and it is an inevitable choice to break hands and feet or lose weight and lose weight.
China's cross-border import e-commerce industry by the policy favorable, entrepreneurial boom began eight or nine years ago, now the environment is turned upside down, "China buy global" market has been very mature, "China sells the world" is facing a huge market opportunity, yesterday, "LatePost" exclusively reported that Pinduoduo will be launched in September cross-border export e-commerce platform, entering the global market is the best choice for Pinduoduo and almost all other Chinese Internet companies.