Original link: https://www.latepost.com/news/dj_detail?id=1712
“LatePost” exclusively learned that in late May, Alibaba founder Jack Ma called the business leaders of Taotian Group to hold a small-scale communication meeting. Dai Shan, CEO of Taotian Group, Wang Hai (nickname: Qigong), Liu Peng (nickname: Aowen), Liu Yiman (nickname: Yiman), three heads of the industry development department, and Cheng Daofang, head of Taobao Live (Flower name: Daofang) and others were present. It is also understood that Li Bo, CFO of Taotian Group, and Wan Lin, CEO of Cainiao Group, also attended the meeting.
In March of this year, Ma Yun appeared in public again after three years, and discussed future education with the principal of Hangzhou Yungu School as a teacher. In May, he was hired as a visiting professor by the University of Tokyo. But he has been concerned about Ali’s business.
It is understood that Jack Ma is still in retirement status. There is no clear theme for this communication meeting. In form, the participants sit in a circle and chat with each other. It is more like an exchange meeting for Jack Ma to learn more about business.
At the meeting, Jack Ma made some judgments of his own, and also encouraged executives to emancipate their minds and innovate boldly.
According to a number of Ali employees, Jack Ma believes that the current competitive situation facing Taotian Group is very severe. He used Nokia and Kodak as examples, and he believes that it takes half a year to a year for a company to go from industry benchmark to death. In the Internet industry, this speed may will be faster.
According to the calculation data obtained by “LatePost” from analysts and related companies, the combined order GMV (total sales) of Pinduoduo and Douyin e-commerce in 2022 has exceeded 50% of Ali’s domestic e-commerce business. On the revenue side, in the first three months of 2023, Pinduoduo’s revenue has reached 62% of Ali’s domestic e-commerce business revenue.
Ma Yun said at the meeting that the methodologies that Ali used to rely on for success may not be applicable anymore and should be changed quickly. He pointed out three directions for Taotian Group: returning to Taobao, returning to users, and returning to the Internet. In addition, Jack Ma believes that Taotian should be further flattened in organization. Many employees expect that after the end of “618”, the group will usher in a number of management system reforms.
The next opportunity is Taobao
In 2015, Zhang Yong became the CEO of Alibaba. At that time, he was optimistic about China’s consumption upgrade, so Taobao dumped a lot of traffic to Tmall to support the rise of brand merchants, and Ali also gained more commercial income. Until 2022, 70% of Taobao Tmall’s revenue will come from brand merchants.
But eight years later, the environment has changed. Ma Yun judged that the current domestic economic downturn and lack of consumer confidence will continue, so the next opportunity is Taobao instead of Tmall, and Ali e-commerce should “return to Taobao”.
“Returning to Taobao” means that Taotian Group will use greater efforts to support small and medium businesses in the future. Many employees judged that Taobao’s traffic mechanism may also change, from tilting back to Tmall to Taobao.
Just in April 2023, Taobao Tmall split off its industrial centers, and established three industry development departments according to the three major standards of richness, brand and high frequency. Among them, Wang Hai (nickname: Qigong), a partner of Ali and vice president of Taotian Group, is in charge of the industry development department 1 focusing on richness. The core task is to discover high-cost-effective products and expand more individual businesses. On May 10, the department took on a new name, the Small and Medium Enterprise Development Centre.
“Return to Taobao” will also bring a series of chain reactions. For example, after the traffic distribution method changes, Ali’s domestic e-commerce revenue model will also be adjusted accordingly.
Ma Yun mentioned Alimama at the meeting, which is an advertising and marketing platform under Ali. He believes that this business, which relies on selling traffic to brand merchants, has been making money lying down in the past.
“Alimama’s original intention is to enable even the smallest merchants to buy and sell advertisements, so they want to help small and medium merchants.” Ma Yun said at the meeting. He suggested that the team should do more product innovation in the future, such as combining AI to serve small and medium-sized businesses, “doing small business”.
This “618”, Taobao Tmall specially launched the “Taobao Good Price Festival” for small and medium-sized businesses. Liu Bo (flower name: Jialuo), the person in charge of Alimama, said in an interview with the media on June 18, This year, helping small and medium-sized merchants bill is an important assessment indicator for them. However, he also mentioned that in terms of traffic changes, they will not completely turn the gun, but will promote changes rhythmically.
Return to users, return to the Internet
The “returning to users” proposed by Ma Yun at the meeting is not a new concept.
At the beginning of 2022, Dai Shan, who just became the president of Ali China’s digital business sector, talked about “returning to users”. At that time, she stopped the development model aimed at GMV growth and emphasized the focus on user experience. In April of the same year, the primary focus of the Taobao User Development and Operation Center was changed from the number of annual active buyers (AAC) to the number of daily active users (DAU) .
The number of annual active buyers refers to the total number of buyers who spend at least once on the platform within a year, which usually reflects the total number of real users of a platform, which used to be one of the most valued indicators for e-commerce platforms. However, as the number of annual active buyers on each platform reaches its peak, how to improve the stickiness and repurchase rate of existing users has become the key to competition. The number of daily active users is a more suitable indicator for the current stage.
Over the past year, the number of daily active users of Taobao has not increased much, and it has even been surpassed by Pinduoduo, and the gap has stabilized at around 30 million. However, from March 2023, Taobao will overtake again, with an average daily active user of 377 million, 26 million higher than Pinduoduo.
A Taotian employee told LatePost that although many people have realized the importance of daily active users and daily active buyers (DAC) in the past year, a comprehensive consensus has not yet been formed.
For example, the user development and operation center was the first to make adjustments, and set up a home page and recommended product team. By adjusting the weight of the algorithm, it focused on recommending products with a higher browsing conversion rate and higher user stay time. However, in the industrial centers responsible for connecting merchants, sales and commercialization income are still their top priority goals. In the “Double 11” in 2022, Taobao and Tmall are generally still pursuing to let consumers buy more and buy more expensive.
It will not be until April 2023 that all departments will finally agree on the target direction. The consensus was also fully formed at this time – the turnover should be the natural result of the increase in DAU/DAC; the commercial income is ranked last, and it is also considered to be a matter of course after users return to Taobao.
The transformation was more evident in this year’s “618”. For example, in the consumer electronics industry, Taobao and Tmall used to focus on products with high unit prices such as Apple mobile phones for total turnover. This year, they canceled related subsidies and put money on products that can bring active users, such as mobile phone cases. , film, charging cable and other low-priced products that can bring repurchases.
Employees have different understandings of Jack Ma’s “return to the Internet”. Some people think that this means that Taobao needs to bring shopping surprises to users again. Another mentioned that returning to the Internet means paying more attention to the growth of user time and scale. For example, the current basic volume of Taobao Live is still too small to have an Internet effect.
An Ali source told LatePost that he thought Jack Ma’s emphasis on “returning to the Internet” might be influenced by Charlie Munger’s remarks.
In February 2023, the American investor stated at the Daily Journal’s annual shareholder meeting that investing in Alibaba was one of the worst mistakes he had ever made, “I was fascinated by their position in China’s Internet industry, but I Without realizing it, they’re still just a damn retailer.”
The above-mentioned insider said that Jack Ma has never believed that what Ali does is traditional retail, and Munger’s evaluation has turned Ali from a myth into a retail company that is not “sexy”.
Alibaba was one of the first companies to combine the Internet with commerce. Ma Yun put the factory information on the Internet and created the wholesale business website 1688; after that, he transformed and founded the consumer-oriented Taobao.com, an e-commerce platform that only matches transactions and does not involve traditional retail links such as supply chains and logistics. In the mobile Internet era, Taobao and Tmall have always maintained their No. 1 position in the industry.
However, starting in 2018, with the gradual saturation of domestic e-commerce users and the growth of competitors such as Pinduoduo and Douyin, Taobao’s platform effect advantage has gradually been lost. In order to win the competition, it began to continuously expand its business territory and invest more and more in traditional infrastructure. In some industries, such as home improvement, home furnishing and other fields, Ali must also go deep into the supply chain to solve the problem of smooth transactions. In order to grow, Ali also had to involve in self-operated businesses, and even had the idea of ”recreating JD.com” in 2022. From these perspectives, the business of Taobao and Tmall is indeed getting closer and closer to what a retail company has to do.
Exactly how Taobao will “return to the Internet” is unclear. After Ma Yun’s speech was communicated to the internal team, the front-line employees felt that the bosses mentioned innovation more often, and other things were not obvious.
Organization should be flattened
At this meeting, Jack Ma pointed out the direction of “flattening” for Taotian’s organizational adjustment, reducing reporting levels, encouraging younger people, and allowing senior employees to take more responsibility. According to the predictions of many employees, the group will adjust various systems such as ranks, assessments, and promotions after “618”.
A senior executive of Ali believes that Jack Ma is more sensitive to changes, but his retirement once left a vacancy in corporate governance.
Before retirement, Jack Ma’s decision was the rule. Later, he further abstracted these rules into “culture”-for example, when there is a conflict of interest on the platform, “customer first” should be adhered to; “Because of trust, it is so simple” is to hope that the cooperation and communication within the organization is sincere and transparent; “embrace change” It is a business requirement. It’s just that as the founders retire and the partners gradually retreat to the background, this “culture” is gradually diluted and cannot become an effective governance method.
After 2020, Ali faced conflicts of cultural values many times. First, an intranet post “To Ali” pointed out that Ali’s senior management did not understand the post-90s and post-00s. This group of young employees could no longer accept that their work was driven by mission and values; Discussions on ice-breaking culture, organizational feedback mechanism, value dilution, etc.
An employee once witnessed with his own eyes that a certain P9 (senior expert or director) clearly saw a problem in the project, but he shied away at the management meeting that he did not know about it, and finally the responsibility was dumped on the front-line executive staff.
However, since the establishment of Taotian Group, some keen old Ali employees have observed that changes are taking place: the top management has begun to have a sense of crisis, and they regard this business as their own business-they hold frequent meetings, and after the meeting Make actionable decisions now.
Some employees of Taotian Group have been able to feel that Jack Ma is exerting his influence in specific businesses. For example, internally, the importance of small and medium-sized businesses has been frequently emphasized recently, and Ali e-commerce should return to the original Taobao ecology, etc.
This non-public meeting between the founders and executives spread word of mouth among employees that they should be bold and innovative. This is the signal they received, and everyone has a hunch that a change has arrived. “Whoever has resistance, Mr. Ma said he will handle it. It is very domineering.” An employee of Taotian Group said.
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