On May 24, Taocaicai's official WeChat public account "Taocaicai Supermarket" announced that Taocaicai and Taoxianda merged and changed their name to Taobao to buy vegetables. Previously, Taocaicai was merged into Tmall Supermarket and Taoxianda, and Li Bo, the former president of Taocaicai, was transferred to the CFO of Tmall Taobao. (For details, see the online economic and social feature: Taocai and Taoxianda merged, "Taobao to buy vegetables" is coming http://www.100ec.cn/zt/tcchb/)
Produced by|NetEconomics Network Retail Department
Author|Zheng Yufei
Reviewer|Shu Shu
First, "brothers" are of the same heart and their profits are broken?
Yesterday, Taocai Cai (self-picked up the next day) merged with Taoxianda (home immediately) and changed its name to Taobao to buy vegetables. According to the official introduction, "Taobao Grocery Shopping" will provide users with two different forms of fresh food purchase services: "1-hour home" and "next-day pick-up" in more than 200 cities across the country.
(Image collected from: Taobao App homepage)
According to the official website, Alibaba Group's community e-commerce brand was upgraded to "Taocaicai" in 2021. Taocaicai is a community business platform for Chinese consumers to provide daily necessities and fresh food pick-up services through pick-up points near consumers.
Taoxianda is an integrated online and offline service solution for FMCG brands and third-party food retail partners, which facilitates retailers' digital operations, helps them open online stores, and provides customized marketing advice. The head of the business said that the core starting point of this upgrade is to make it cheaper, fresher and more worry-free for consumers to buy vegetables on Taobao.
Mo Daiqing, director of the online retail department and senior analyst of the e-commerce research center of NetEconomics, said that the development of community group buying has entered a period of adjustment and has fully entered the competition between giants. Taocai is backed by Ali, but at the same time, it has to face the competitive pressure of Meituan Preferred and Duoduo to buy vegetables. Taoxianda's advantages in the real-time retail track are not prominent, it can be described as competition, and competitors include JD Dajia, Meituan, Ele.me and so on. The two chose to merge under such circumstances because they wanted to form a joint development.
Bao Yuezhong, a special researcher at the E-commerce Research Center of NetEconomics and chairman of Baum Enterprise Management Consulting Co., Ltd., said that Taoxianda and Taocai have been engaged in various fields for many years, but they are still in the process of exploration. In this case, the merger of the two is still to explore the entire business model.
Second, the competition is surrounded by mergers are advantages or disadvantages?
On March 28 this year, Daniel Zhang, Chairman and CEO of Alibaba Group, issued an all-staff letter announcing the launch of the "1+6+N" organizational change, of which "1" is Alibaba Group, "6" is Alibaba Cloud Intelligence, Taobao Tmall Business, Local Life, International Digital Business, Cainiao, Dawen Entertainment, and "N" is Alibaba Health, Sun Art Retail, Yintai Retail, Freshippo, Quark, etc.
With the adjustment of Alibaba's business, Taocai Cai also ushered in a transformation, and it is reported that Taocai and Taoxianda were merged into Tmall Supermarket.
In addition, community group buying has begun to move downhill since last year, the "middle road collapse" of the Shihui group, the transformation of the orange heart preferred procurement and marketing platform "orange dispenser", the layoff of Xingsheng Youxuan station, even the head Meituan Youxuan is difficult to escape the doom of shutting down the business... As a representative of the community group buying model, Taocai and Taoxianda belong to instant retail, and the merger of the two is still a double sword.
(Image collected from: Taobao grocery Weibo)
Zhuang Shuai said that the advantages lie in Taobao's user scale (traffic advantage), brand awareness and platform operation capabilities, and the challenge lies in the need to strengthen offline and urbanization operation capabilities, including physical store expansion, real-time warehouse delivery fulfillment, and urbanized merchant management.
Bao Yuezhong believes that from the overall development of recent years, the retail industry is in a relatively rapid development trend, in this case, these e-commerce platforms are doing some retail models in the grocery shopping scene. However, on the whole, Taocaicai's instant retail advantage is not particularly obvious, and its delivery capacity is relatively weak compared to Meituan.
"Today, with the full addition of other platforms such as Meituan, Taobao is also facing very big competitive challenges." Bao Yuezhong added.
Third, the pattern of the fresh food track is undecided There will still be major changes in the future
"Burning money to expand" and "making profits difficult", this is the label that the fresh e-commerce industry cannot avoid and tear off for a long time in the past. In 2022, with the successive withdrawals of Daily Fresh, Orange Heart Preferred, and Xingsheng Preferred, the storm will continue, and the overall pattern of the track is still undecided.
Mo Daiqing, a senior analyst at the E-commerce Research Center of NetEconomics, said that fresh e-commerce is a branch of retail e-commerce, with vegetables, fruits, meat, poultry and eggs and other fresh products as core commodities, using the Internet to distribute fresh products through traditional express delivery methods such as e-commerce warehouses, or through in-store, home-to-home, community group buying, cycle shopping and other modes to reach consumers.
At present, the fresh food e-commerce model includes traditional fresh e-commerce represented by Tmall, Jingdong, Pinduoduo, etc., the O2O model represented by Jingdong Daojia, Meituan flash sale, Taoxianda, and Duodian, the pre-warehouse model represented by Dingdong Grocery and Pupu Supermarket, the in-store + home-to-home model represented by Hema and 7Fresh, and the community group buying model represented by Xingsheng Youxuan, Duoduo Grocery and Meituan Youxuan.
"In the development stage of fresh e-commerce, many fresh e-commerce companies use burning money to cultivate the consumption habits of the market and consumers, but after experiencing a large amount of financing and rapid expansion of money, some platform operation problems are gradually exposed, and they cannot form "self-hematopoiesis" and achieve sustainable development without forming core competitiveness. Mo Daiqing added.
In Zhuang Shuai's view, the fresh e-commerce model has not yet formed a standard, and it needs to be constantly explored, and there will not be much change in the short term.
In addition, Bao Yuezhong also pointed out that fresh food e-commerce is still in the early stage of development, from the current point of view, the pattern is not determined, the model is not determined, the future will inevitably undergo great changes.
In the face of the economic downturn, the brand premium, minimal, the brand is worthless, the low-price game is king, and the fight of the low-price game, but also the so-called big brand to the ground, especially sinking the market, cost-effective is the core, I don't know if this new Taobao grocery shopping can withstand the test of the general environment and kill the encirclement.