The deep reason behind Ali's fall: he made four mistakes

Text/Wang Xinxi

Tsai Chongxin reflected on the "large-scale" of the whole network, thinking that Ali "forgot who the real customer is", and Ma Yun expressed Ali's determination to correct his mistakes in an internal letter.

Tsai Chongxin said that it is human nature not to like to admit mistakes. To admit one's mistakes is to confront this "nature". But for Ali, it is easy to admit mistakes, but it is difficult to correct mistakes, what mistakes did Ali make? Which ones need to be urgently changed? Where are the root mistakes made by Ali?

The pursuit of a huge ecology, thinking that e-commerce should be eliminated, did not deepen the basic market of e-commerce

The numbers don't lie. Ali's plate is bigger, but it doesn't make as much money as Pinduoduo, which generates 12.22 million yuan per capita, which is 4 times that of Ali and 7 times that of JD.com. What's the problem?

We look back to Alibaba's most glorious year in 2016, when Alibaba's full-day trading volume reached 120.7 billion yuan, breaking the world record for single-day trading volume at that time. That year, Alibaba's market capitalization was $266.4 billion, making it the No. 1 Alibaba market capitalizer in Asia.

At this time, Pinduoduo is an inconspicuous e-commerce company that may even collapse at any time in the eyes of most people.

At that time, Ali and Tencent were the only two supergiants of the domestic Internet, and the two sides launched an investment war, incorporating more and more companies into their own investment territory, and the battle between the two giants for the investment territory was the focus of attention of the entire Chinese Internet, and both were constantly investing in the layout to expand the scope of business.

At this time, Ali couldn't see his opponent with his glasses, and thought that the battle for e-commerce had been settled, and he no longer mentioned e-commerce.

At that time, Ma Yun proposed five new trends in social development in the next 30 years: new retail, new manufacturing, new finance, new technology, and new resources. believes that "the era of pure e-commerce will soon end, and e-commerce will be eliminated." In the next ten or twenty years, there will be no e-commerce, only new retail. ”

At that time, Ali tried its best to avoid talking about e-commerce, but focused on new retail and new ecology. Ali's focus on new retail is the integration of online and offline, but the later problem is that the handle is stretched out too long to the offline, the operating costs are getting bigger and bigger, and the unprofitable offline business is dragging down the main business of e-commerce.

In addition, when e-commerce is no longer discussed, Ali actually thinks less about the user experience and consumer needs and interests of e-commerce in the basic market. For example, we see that the product shopping page of Taobao APP has been criticized so far, and on the main page, consumers can't find the shopping category column. When Pinduoduo pursued a low-price orientation, Taobao did not realize that its price competitiveness was being lost.

did not follow up on tens of billions of subsidies, and did not treat Meituan and Pinduoduo as rivals

When Alibaba and Tencent are working together to expand the ecosystem, the businesses of Pinduoduo and Meituan are invading Alibaba's hinterland.

Pinduoduo has only had e-commerce in its eyes from beginning to end, and has continued to increase GMV and consumer shopping stickiness by lowering the threshold for merchants to enter and shop, and through tens of billions of subsidies. For novice users and small and medium-sized merchants, Pinduoduo's price-oriented simple and crude approach has lowered the threshold and operating costs, and constantly seized the low-price mentality.

And Ali has never regarded Pinduoduo as an opponent, Pinduoduo has been subsidizing tens of billions of dollars for many years, Ali has never followed up, when Jingdong used tens of billions of subsidies to "hard" Pinduoduo, Taobao quietly moved the homepage of the 10 billion subsidy entrance to the second screen. Snow Leopard Finance and Economics once hit the nail on the head: the tens of billions of subsidies war, Taobao watched the fire from the other side. On Ali's intranet, there have been many posts complaining about the 10 billion subsidy activity in the past: it is not close to the people enough, there are many routines, and it is not as simple and direct as competing products. Today, these discussions have largely fallen silent.

Because Ali's big brand burden is too heavy, many brand merchants on the Tmall platform, they want to have enough profits, if the follow-up of tens of billions of subsidies, disrupting the price system of these big brands, lack of sufficient profits, will affect a large number of brand merchants in Ali's marketing investment, therefore, based on the original interest pattern, neither the platform itself nor the big brands have enough motivation to follow up the tens of billions of subsidies.

Perhaps Ali was in line with the prediction of most industry insiders at the time, when Pinduoduo stopped or could not afford to subsidize, consumers would return to Taobao and Tmall, but to this day, none of this has happened. In Q3 of 2023, the market value of Pinduoduo once surpassed Alibaba after the release of its financial report, and Ali finally realized: "The unsightly one is about to become a big brother."

So far, WeChat Pay has not been supported

As mentioned earlier, Ali regards Tencent too much as an opponent, and has always been a defensive posture towards WeChat payment, Taobao has not fully supported WeChat payment until today, and in February this year, some netizens found that some Taobao orders can jump directly to WeChat payment. The customer service responded that it is gradually opening, and WeChat Pay is currently only gradually opening for some users, and it can only be selected when purchasing some goods.

Therefore, this means that Taobao has not fully supported WeChat payment so far, so how does Pinduoduo do it? Some netizens have concluded that Pinduoduo can be QQ payment, bank card payment, WeChat payment, UnionPay payment, use first and pay later. As long as consumers can shop, how convenient is it.

In the past, many middle-aged and elderly people experienced mobile shopping for the first time, they all had WeChat, and they would pay WeChat, but many did not have Alipay accounts and did not know how to open Alipay, so a large number of users were cut away by Pinduoduo.

However, we have seen that Taobao Tmall has not fully supported WeChat payment until today, because it is worried that once WeChat payment is introduced, it will break the closed loop of its own business ecology and have an impact on Alipay, so it does not follow up the subsidy of 10 billion yuan and does not support WeChat payment.

This is also why it is easy for Ali to admit mistakes, but it is difficult to correct them.

Ma Yun made a mistake in employing people: misused Daniel Zhang and drove Sun Tongyu away?

Behind Tsai Chongxin's reflection, the industry believes that this is a complete denial of Daniel Zhang. Daniel Zhang's achievements as CEO in the past few years have been very controversial.

When Daniel Zhang took over Alibaba in 2019, Alibaba's market value was as high as $600 billion, and when he cedes Alibaba in 2023, the market value is only $200 billion.

The industry believes that there are no strategists in the accounting room, and the management with financial background generally likes to stare at the financial statements and does not have a comprehensive view of the company's overall control. Nor can this view be entirely wrong.

Of course, whether to misuse Daniel Zhang, we need to look at it more comprehensively and objectively, on the one hand, in the past few years of Daniel Zhang, Alibaba Cloud has become the undisputed first cloud service in China. DingTalk has become China's No. 1 enterprise office software, Hema Fresh, China's No. 1 Internet fresh supermarket!

But Daniel Zhang's biggest problem is that he did not keep the basic plate of e-commerce, allowed Tmall to suck Taobao traffic, and did not follow up on tens of billions of subsidies. This may also have a kind of inertia of financial background in the pursuit of profit maximization.

Daniel Zhang's last earnings report before leaving office was still bright, when Alibaba's profits rose by more than 40%. However, the market value has been shrinking, and now it is less than 180 billion US dollars, which has been surpassed by Pinduoduo many times before, and Alibaba's e-commerce share has slipped to 48%.

In addition, there is also a view that Sun Tongyu left Ali and finally went to Pinduoduo, which is also a big mistake of Ma Yun, because Sun Tongyu is a technical genius, once known as the father of Taobao, and one of the founders of Alipay, it was Sun Tongyu who saved Alibaba from the quagmire of losses, and in 2015 Sun Tongyu went to Pinduoduo, so Pinduoduo has today's achievements.

Of course, this statement is too false, and it is difficult to conclude whether Sun Tongyu has a dominant voice in Pinduoduo, the rise of Pinduoduo is a strategy that wins in the business model and comprehensive openness, and Ali in the process of the investment war with Tencent, pays more and more attention to the closed ecology, and pays attention to the profit pursuit of brand merchants and platforms.

Epilogue:

Ali's situation today, the source may have to return to Ma Yun's "no longer mention e-commerce", which is essentially despising the basic plate of e-commerce, thinking that the e-commerce business has peaked, to expand Ali's market value and business scale, Ali can not limit himself to the plate of e-commerce, to pursue a greater sea of stars.

Since then, Ali has begun to focus more on the grand ecology, new retail, new manufacturing, new finance, support Li Jiaqi and Wei Ya, and engage in live broadcasting, a prosperous scene, while Pinduoduo has fully focused on e-commerce, taking tens of billions of subsidies, and playing the card of cost performance to the extreme.

Ma Yun no longer mentions e-commerce, behind or thinks that Ali e-commerce moat barrier has become a moat, the wrong thing about this idea is that the e-commerce platform is not a social platform, the social platform has migration costs, but the e-commerce platform does not, when the goods are greatly rich, the problem of authenticity is solved, and Alipay no longer has a monopoly effect, the e-commerce platform actually has no moat. Where it's cheap, consumers go.

Therefore, when e-commerce is no longer mentioned, e-commerce is despised, and the moment the grand strategic territory and ecology are pursued, Ali's crisis has been buried, and it has not supported WeChat payment for a long time, not engaged in tens of billions of subsidies, APP shopping experience has been criticized, and excessive pursuit of profits and ignoring changes in market share have confirmed that Ali has lost its sensitivity to consumer demand and industry changes. If there are no consumers, businesses will choose to close stores and run away, where is the value of ecology? This may be the root cause of Ma Yun's mistake, never look down on the belongings you eat, and always have a sense of crisis and awe for your core basic plate, which may have left people a very profound lesson.

Author: Wang Xinxi, Senior Reviewer of TMT This article is not reproduced without permission