Alibaba's new quarterly financial report was released, and Taotian Group won three doubles: GMV, orders, and 88VIP members all increased by double digits year-on-year.
These three North Star indicators with the highest gold content have made the e-commerce industry realize that things are changing.
In the past two years, Ali has been walking on thin ice, and the outside world has heard more voices than Ali's stalling and consumer loss, all of which seem to indicate that the golden age of this e-commerce giant has come to an end.
Surrounded by enemies, under the strong rise of competitors, even Ali himself admitted that something was wrong, from Jack Ma's intranet post "admitting mistakes" to Tsai Chongxin's public confession "We smashed our feet".
It is rare for a company to be seen by the outside world so much "self-criticism" from the top management, and behind the sense of crisis is a series of turns and changes started by Ali.
And the results of the transformation came quite quickly.
Recently, Ali's annual report and quarterly report have let the outside world see the "first brother of e-commerce" who has returned. Under this achievement, it is also necessary for people to re-examine the pattern and competitiveness of the e-commerce industry.
Gerstner, who once led IBM out of the trough, mentioned in his management book written by himself: "It is not a question of whether an elephant can defeat ants, it is a question of whether an elephant can dance." If the elephant can dance, the ants have to leave the stage."
Ali's report card now seems to be telling the outside world: Who said that elephants can't dance again?
01 The three highlights of "cleaning up the source".
After the announcement of Alibaba's Q4 of fiscal year 24 (that is, Q1 of the natural year, hereinafter referred to as Q1 of 2024), it is not difficult to find that Taotian Group has truly achieved "clean up the source", and there are three points worth paying attention to.
The first point to look at is that the inflection point of CMR growth may be present. CMR (User Management Revenue) is almost equivalent to commissions and advertising revenue from e-commerce platforms.
As shown in the figure below, after 9 consecutive quarters of performance, Taotian Group's CMR revenue in the 24Q1 fiscal quarter increased by 5% year-on-year, which not only ended the decline in the growth rate of the first two quarters and returned to accelerated growth, but also drove the data of the past 9 quarters, initially showing an upward trend.
As a leading indicator to measure whether Taotian Group can effectively empower merchants and reflect the operational efficiency of e-commerce platforms, focusing on its core capabilities such as service capabilities and conversion and monetization, CMR's performance directly refers to the "first principles" of e-commerce business, which is related to its underlying business logic for the survival and development of e-commerce platforms. CMR is more like a signal light that reflects the strength and weakness, which is closely related to GMV.
Judging from the actual data performance, the inflection point of CMR growth may have been established in the first quarter of this year, which simultaneously confirms the establishment of the marginal improvement trend of Taotian Group's e-commerce business, and the competitiveness of the platform is substantially stronger.
The second point of interest is that the double-digit GMV growth of Taobao and Tmall may mean that Taotian's market share in China's e-commerce market has rebounded.
Hua Chuang Securities released a research report saying that in March 2024, Taobao Tmall GMV increased by 14% year-on-year, surpassing Pinduoduo's 13% year-on-year growth.
At a time when the penetration rate of e-commerce is already so high, the GMV growth rate of Taobao and Tmall surpassed Pinduoduo in the first quarter of this year, and it has firmly sat on the "Iron Throne" of domestic e-commerce. At the same time, it also means that Taobao and Tmall are regaining a larger and larger market share, making a good start for the recovery of its market share in China's e-commerce market.
You must know that for more than 900 million monthly active Tao e-commerce, under the premise of such a large volume, it is not easy to achieve positive growth, especially under the background of fierce market competition with saturation and involution. In addition, there are no big promotion activities in the first quarter, which generally belongs to the off-season of the industry, which is difficult to produce good performance, but it is difficult to give Taobao Tmall the opportunity to seize the opportunity and effectively eliminate the off-season, so that "the off-season is not light", Taotian's beautiful turnaround battle is enough to show that positive changes have indeed taken place within the enterprise and changed to a stronger and better direction.
In 24Q1, Taotian's GMV growth is higher than revenue growth, so it can be deduced that the take-rate is going down, and Taotian, which has given up the take rate, obviously pays more attention to the improvement of revenue indicators than before, including GMV growth, overall revenue growth and CMR revenue growth, etc., Wu Yongming said in the analyst conference call, returning to the consumer experience, and bringing about GMV and consumption frequency growth from the improvement of consumer experience, thereby driving CMR back to growth. Consumers are back, and businesses will follow suit, which is the result of the joint improvement of both ends of supply and demand.
The third point of interest is that in the 24Q1 quarter, Taotian Group's GMV, order volume, revenue, and 88VIP number have achieved positive year-on-year growth, indicating that Taobao Tmall has been on the right path, and the strategic direction it adheres to has also proved right.
This year, the reformed Alibaba launched the "user first" strategy, and the performance growth in this quarter is more a direct result of Taotian's treatment of large companies and upgrading the user experience since the beginning of this year.
This time, it is not only the first report card handed over by Wu Yongming after he took full charge of Taotian Group, but also the first battle for Taobao Tmall to win back user confidence and market share under the full implementation of the user-first strategic core.
Taobao Tmall returned quickly as a winner, which is of great significance to Alibaba in the reshaping at this time, playing a miraculous effect of "fixing the heart of the army", and truly playing a blessing role in the continuation of the next good momentum.
Taotian has always been the foundation of Alibaba, as the core business of Alibaba, if it can continue to maintain stability, it will help play a fundamental role and consolidate its position as a "cash cow".
Taotian has returned to the core and continues to maintain its first position in GMV in China's e-commerce market, which will provide an important guarantee for Alibaba's competitiveness to rebound and return to the upward channel. After three full quarters, from awareness, organization, strategy to action, Ali has gone through a baptism from start to finish.
With Taotian's GMV returning to double-digit growth as a signal, the familiar Ali is back.
02 Face the problem, Ali recreates "Ali"
In recent years, in the face of the strong expansion of competitors, Ali has not found an effective way to contain it, which also makes Ali's sense of crisis as an "e-commerce big brother" continue to be amplified by the outside world.
But there's no denying that it's still the undisputed leader of the track.
In terms of MAU (monthly active users), according to the latest data from OuestMobile, as of March 2024, Taobao topped the list of e-commerce apps with 928 million monthly active users, significantly ahead of the second and third places (monthly active users) of 677 million and 507 million.
Despite standing on the top of the industry, the covetousness of countless climbers for this position has challenged Ali's competitiveness. In particular, as the development of the enterprise enters the initial stage, the management matures, and the scale continues to expand, it is inevitable that a series of problems will arise internally, which is also known as the disease of large companies.
In the final analysis, the essence of the cause of this disease is the loss of the entrepreneurial mentality.
Ali has a keen understanding of this problem and has started a step of self-innovation with the tip of the knife inward.
A subtle change is that on the occasion of Taobao's 21st anniversary, Alibaba recently relaunched the Taobao forum - "Taojianghu".
And a 04-year-old post by Jack Ma on the "Taojianghu" forum was also republished, when Taobao had just been established for 9 months. In the post, Jack Ma said: "I firmly believe that the biggest beneficiary of a real, great, and outstanding e-commerce website should be users, and the biggest builder should also be users!! ”
In fact, on April 10, Ma Yun also made it clear in Ali's internal letter: "The core change this year is not to catch up with KPIs, but to recognize yourself and return to the track of customer value." We're going to go from being a slow decision-making organization back to efficiency, market, and simplicity and agility again. ”
Joe Tsai, chairman of the board of directors of Alibaba Group, also mentioned earlier that "Alibaba has forgotten who its customers are". In the past, Alibaba's mission was to "make it easy to do business in the world" to provide platform value for enterprise-end merchants. However, the times have changed, and today's e-commerce environment has gradually become a consumer-led buyer's market, and the neglected consumer users are Alibaba's "forgotten customers".
This series of statements by the company's core figures provides a window into the direction of its future change.
It is not difficult to see that Alibaba is honest in admitting mistakes and willing to reinvent itself.
In the past year, especially this year, we can also see that Taotian Group has also made many changes, Taobao has completed the upgrade, and the user experience has been continuously activated, including shortening the delivery cycle, launching "refund only", launching free shipping in Xinjiang, and upgrading 88VIP rights.
Many of these measures are "pure investment" that are not motivated by short-term returns, such as the annual support of tens of billions of rights and interests for 88VIP members. Even with so much investment, Taotian has achieved positive growth in both revenue and many other important data, which can show that users and merchants are generally returning rapidly. More importantly, for the former, it can be seen that the user's purchase frequency and unit price have increased simultaneously, which also shows that the high-purchase users are becoming more and more sticky to Taotian.
The platform's determination to make drastic changes has allowed the outside world to see an Ali who has the courage to change. The financial report data released this time further verifies that Taobao and Tmall have gained new growth drivers from a series of business actions that return to users.
It can be seen that winning back users and their confidence is not an empty word.
03 What is Ali's confidence in sitting firmly on the "Iron Throne"?
It is not difficult to see from the financial report data that the momentum of Taobao and Tmall is returning to growth. This growth is reflected not only in the solid performance of its core business, but also in its rapid response and strategic adjustment to market changes.
Now, Ali has also guided a new direction from the strategic level, and the future potential is expected to be further released.
From the perspective of industry development trends, e-commerce is also returning to tradition. The craze for live streaming e-commerce has gradually cooled down, and more attention has been paid to the stability and sustainability of e-commerce platforms.
Previously, some analysts believed that compared with the uncertainty and instability of live broadcast e-commerce, Taobao Tmall relies on search traffic, which has a certain degree of certainty, and its refund and return rate is relatively low, which provides a more controllable and predictable operating environment for merchants.
It is undeniable that the first priority of any business is to put risk first. In contrast, the relatively stable business environment provided by the Taobao Tmall platform, as well as its own advantages of abundant supply and mature shelf e-commerce system, are important factors for Taobao Tmall to win the trust of merchants and consumers.
In addition, in terms of professionalism and coverage capabilities, Taotian Group's natural e-commerce genes and long-term deep cultivation and field coverage, compared with other emerging e-commerce companies facing problems such as commodity and supply chain shortcomings, industry "bias", limited shopping scenarios and demand scenarios, Taobao's "all-round" advantages also determine its unshakable and irreplaceable position.
At present, with the increasingly fierce competition in the e-commerce industry, Taobao and Tmall are also continuously improving the user experience through continuous innovation and optimization of services, which will further consolidate its leading position in the e-commerce field. In particular, the active exploration of emerging markets and potential growth points, such as cross-border e-commerce, rural e-commerce, AI e-commerce scenarios, etc., will also bring new growth opportunities to Alibaba.
Judging from the store opening data released by Tmall in the first quarter of 2024, the number of new merchants increased by 60% year-on-year, and fields such as sports and outdoor, smart home, health and wellness, pet exquisite care, trendy clothing, and advanced skin care have become new growth hotspots, with the year-on-year growth rate of new merchants exceeding 100%. From this series of data, it is not difficult to see the vitality and vitality shown by Ali.
Overall, with its deep accumulation in the field of e-commerce, the spirit of continuous innovation and forward-looking strategic layout, it is undoubtedly expected to continue to sit on the iron throne of the e-commerce industry.
04 Epilogue
It is undeniable that there are no big enterprises in this world that do not have problems, and even at every stage of the enterprise life cycle, there are more or less such problems, and it is crucial to identify the problems and solve them.
Darwin's theory of evolution expounds the nature of the evolution of species – those that survive are neither the strongest nor the most intelligent, but those that are the most adaptable to change.
When a mature company puts mistakes in front of the stage and repeatedly emphasizes them, and actively changes, it shows the most simple side of the enterprise. For such a pioneer in the e-commerce industry, the pattern of e-commerce competition has now turned a new page, and there is reason to give Ali more expectations.