Original link: https://www.latepost.com/news/dj_detail?id=1595
On April 10, 2023, Taobao Tmall Business Group held a management meeting above the director (P9) level, announcing another adjustment to the domestic e-commerce business that had just been integrated a year ago.
At the beginning of 2022, the reorganization of the domestic e-commerce business was regarded by Ali employees as a sign of the comprehensive integration of Taobao and Tmall. Taobao and Tmall, the two most important business groups of Ali, were dismantled and reorganized into industries, users, and platforms according to their functions. The big center reported to Dai Shan, the big president who had just taken over the business at that time.
The above-mentioned personnel changes did not come to an end until the middle of last year. The employees had new leaders, new responsibilities, and formulated new goals and report content. More than half a year later, they may have to go through it all over again.
This adjustment disassembled the industrial center that was merged together a year ago, and divided it into three industry development departments according to richness, brand and high-frequency drive. They are no longer named Taobao and Tmall, but they can roughly correspond to Former Industrial Center and Local Retail:
- Industry Development Department 1: Driven by richness, the main business includes Taobao clothing, Xiaojingang industry (trend toys, pets, sports outdoor, jewelry, etc.), Taote, domestic wholesale 1688 and other businesses, led by senior vice president Wang Hai (flower name: Qigong) is responsible;
- Industry Development Department 2: Brand-driven, the main business includes Tmall apparel, fast moving consumer goods, consumer electronics, mobile Tmall, Tmall International, etc., and is in charge of Vice President Liu Peng (nickname: Alvin);
- Industry Development Department 3: High-frequency drive, the main business includes Tmall Supermarket, Taocaicai, Taoxianda, Fresh Food, etc., and is in charge of Vice President Liu Yiman (nickname: Yiman).
After the adjustment, the three industry development departments have become the most important business units of Taobao Tmall Business Group. The industrial center no longer exists, and the former person in charge, Vice President Yang Guang (nickname: Fuxue) confirmed that he is about to resign and may start a business.
At present, Wang Hai, Liu Peng, and Liu Yiman, the heads of Industry Development Departments 1, 2, and 3, as well as Yu Feng (nickname: Xuande), the person in charge of the previously established User Center, and Wang Mingqiang (Xuan De), the person in charge of the Platform Center ( Flower name: Sihan), all five of them report directly to Dai Shan, CEO of Taobao Tmall Business Group.
After the Taobao Tmall Business Group became independent, it has gradually added necessary functional leaders:
- The chief financial officer (CFO) is assumed by Li Bo, the former head of Taocaicai;
- The person in charge of customer service is concurrently held by the former head of the platform strategy and operation center and vice president Wang Mingqiang (nickname: Sihan);
- The person in charge of marketing and public relations is concurrently held by the person in charge of Alimama and vice president Liu Bo (nickname: Jialuo);
- The technical director will continue to be Yu Gang (nickname: Ruohai), the technical director of Taobao Tmall, and manage a part of the team that was spun off from the original Ali Group CTO line;
- The main teams of the former Ali Group’s supply chain middle stage and business middle stage were directly merged into Taobao Tmall Business Group.
This adjustment is a continuation of the latest structure of Ali Group’s “1+6+N” two weeks ago. At present, Ali Group’s middle and back office functional departments have entered the Taobao Tmall Commercial Group’s team. The first adjusted business group after Ali’s great change.
Many Ali employees predict that the next step will be a middle-level change of blood, and the impact will be transmitted in turn. Some employees are worried that the new person in charge will bring the original introverted working atmosphere in Taote; some employees feel that a new round of reporting will be required.
Frequent organizational adjustments are Ali’s habitual response to competition and changes. In the past, organizational adjustments represented new leadership, new strategies, and new imaginations.
Ali’s domestic e-commerce business is facing a dilemma: in a single mobile phone application, it needs brand merchants to place more advertisements on the platform to maintain profit growth and meet shareholder expectations; it also needs to introduce more and cheaper products and Pinduoduo, Douyin competition will inevitably cause conflicts with brand merchants – no brand wants to open flagship stores and Outlets stores together.
The challenge Ali faces today is the erosion of e-commerce business market share and declining revenue. An old Ali employee said that Ali’s adjustments in the past two years have brought more personnel turmoil than direct solutions to business problems. As the middle class, they have no permanent property, so they have no perseverance. For enterprises, organizational adjustment should be the result of business adjustment, not the other way around.
The e-commerce business has changed two core leaders
Wang Hai’s business map mainly includes Taobao clothing in the original industry center, pets, trendy toys, sports outdoors, jewelry and other “new four king kong” industries, as well as Taote, 1688 and other businesses. The internal interpretation of the division standard is around the commodity Improve “richness” at both ends of the business and merchants.
Wang Hai’s future work will focus on finding more cost-effective products on the commodity side and expanding more individual businesses on the merchant side. User-side will lead the team to achieve Taobao’s goal of 350-500 million daily active users this year. “LatePost” learned that last Friday (April 7), the heads of various departments of the user center had reported to Wang Hai the current status of users.
Wang Hai is 44 years old this year. He graduated from Hangzhou Dianzi University and joined Ali in 2003, which has been 20 years. He started as a DBA (database administrator) of Taobao, and in 2017 he independently led the CBU business unit and became the president of 1688. In 2020, he took the initiative to invite Ying to set up a C2M business department and launched the “Taobao Special Edition”. In the following year, due to the rapid growth of Taote’s business, he was promoted to be a partner of Ali. But the growth only lasted for two years. Last year, Taote laid off 20% – 30% of its employees as a whole, and a considerable proportion of employees and business were transferred back to Taobao.
This adjustment proves that Wang Hai has not been affected by Taote’s business, and he has reached a key position in Ali’s core business.
We understand that the traffic of the Taobao app will shift from the official flagship store of the brand in the past to the low-priced products of the brand. This is also an important measure of the “price power” campaign, one of the five major battles of Taobao and Tmall this year. .
Ali is the most merchant-friendly company among the big e-commerce platforms. Taobao Tmall directs a large amount of traffic to the store, places a striking store entrance on each product page, and provides multiple tools for the store to operate the traffic. In contrast, Pinduoduo chooses to highlight products and downplay the presence of stores.
Liu Peng will be responsible for solving the profit problem of the new business group next. The original B2C business group he managed in the past was split, and businesses including Tmall Supermarket, Taoxianda, Fresh Food, etc. were assigned to the local retail industry development department. After the split, Liu Peng is also in charge of businesses including Maoxiang Self-operated, Tmall Luxury Products, and Tmall International.
In addition, industries such as Tmall apparel, fast moving consumer goods, and consumer electronics, which were originally industrial centers, have also turned to report to him, and the business is driven by brands. Some Ali employees speculated that the business of Tmall investment promotion and rules in the platform center may also be handed over to Liu Peng in the future.
The income of Taobao Tmall is composed of customer management income and commission, that is, the commission of advertising fees and business turnover, which has been maintained at a 2:1 level for many years. After the third quarter of 2020, Ali’s financial report only announced the sum of the two revenues.
It is understood that by 2022, 70% of Ali’s advertising revenue will come from Tmall brand merchants.
Liu Peng is under a lot of pressure. In the past two years, due to the external environment and competitive pressure, the revenue growth rate of Taobao and Tmall has continued to decline, with a year-on-year decline of 9% in the last quarter of 2022.
Liu Peng graduated from Nanjing University of Science and Technology and also holds an EMBA degree from University of International Business and Economics. He has served as an executive in well-known retail companies such as Haier, Suning Appliance, and Metro Group. He joined Alibaba in early 2015 as the general manager of Tmall International Business Department, and was promoted to the president of Tmall Import and Export Business Group four years later.
Ali employees commented on Liu Peng as rigorous, upright, and not putting on airs. An Ali employee who had a meeting with Liu Peng commented that he did not like the “empty talk” communication method.
Wang Hai and Liu Peng are currently the most core business executives in Taobao Tmall Business Group. The business they are in charge of contributed almost all the profits and nearly 40% of the entire Ali Group’s revenue in the last quarter of last year. At the same time, it contributed to Taobao’s Almost all of the revenue of Tmall Business Group.
Taobao Tmall integration road
Tmall (originally named Taobao Mall) was originally a subset of Taobao, which gathered a group of merchants with better quality and services. In 2009, Zhang Yong, then CFO, COO and general manager of Taobao Mall, split the merchants on Taobao into brand merchants and individual sellers, and settled in Taobao Mall and Taobao respectively.
In 2011, Tmall officially became independent from Taobao, with its own positioning and domain name. Zhang Yong believes that Taobao and Tmall can have different business models. Taobao earns advertising fees, and Tmall earns commissions. Customers have not developed the habit of advertising on e-commerce platforms.
But the mobile Internet makes it impossible for Tmall to become an independent product. In 2014, Ali used the power of the group to turn Taobao into the shopping application with the most users in China. Tmall has also developed an independent application, but the products it provides are only a subset of Taobao. Consumers have no incentive to install a separate application and face fewer product choices.
In the process of mobile transformation, Taobao explored user products and platform rules; industry development, brand marketing and other practices closer to business were almost completed by Tmall. At the end of 2017, the Taobao business group and the Tmall business group each had presidents, the former being Jiang Fan and the latter being Jing Jie.
However, the problem of separate operations of Taobao and Tmall has gradually become apparent. For example, it is difficult to unify the resources of the industry, and accumulate industry products and operation plans in terms of marketing and contract performance experience; in terms of traffic distribution, the highest price wins, and Tmall will gradually squeeze the living space of Taobao sellers and damage the richness of the ecology. Merchants can also feel the problem of fragmentation. They do not have an effective growth channel. If they want to upgrade from Taobao to Tmall stores, they can only open another store at the risk of losing old customers.
At the beginning of 2019, half a year after Pinduoduo went public, Jiang Fan was promoted from the president of Taobao to the president of Taobao and Tmall, and began to centralize the deployment of traffic and supply; change.
After Dai Shan takes over at the beginning of 2022, the industry will be thoroughly integrated to realize the category general manager responsibility system.
Before this round of adjustments, Taobao Tmall had split some businesses . For example, in the clothing industry, Tmall clothing is driven by brands, while the operation logic of Taobao clothing is related to the frequency and characteristics of new products. At the end of last year, the apparel industry that was merged in early 2022 was split again. Among them, Tmall Apparel was handed over to Chen Xi (nickname: Jiyun), the person in charge of Tmall Auto, and Chen Lina, the original person in charge of Taobao Apparel, continued to manage it. The target industries were merged into “Characteristic Centers”.
It is understood that Wang Hai and Liu Peng do not distinguish between Taobao and Tmall in each industry, but according to user needs and category characteristics. For example, consumer electronics, fast moving consumer goods, and Tmall clothing in charge of Liu Peng are all Brands are stronger; while Wang Hai’s Taobao clothing, trendy toys, pets, sports and outdoor, and jewelry pay more attention to the richness of merchants and products.
Standing at the current node, Taobao Tmall has a similar appeal to that of 6 years ago – to regain the motivation to make money and user growth through a clear division of labor.
In 2017, Taobao and Tmall had separate presidents. Jiang Fan led Taobao to continue to develop in the direction of productization, cultivate content ecology, and create new sources of traffic; in the direction of the industry, it began to explore new and unique long-tail products; Jingjie led Tmall regards serving merchants and achieving ultimate commercialization as its primary goal. This almost corresponds to the current goals of Wang Hai and Liu Peng.
The difference is that 6 years ago, Ali’s market value doubled year-on-year to nearly 500 billion U.S. dollars, making it the undisputed number one in China’s e-commerce industry. In 2023, that number will be half that. Today, the new Taobao Tmall business group that has removed its burden needs to regain its former combat effectiveness.
The status of local retail is improved, a business segment that is 3 years late
Another important change in this adjustment is that the importance of businesses related to local retail has risen, and for the first time it has become an independent sector and brand-driven business (Tmall, Maoxiang self-operated, etc.), richness-driven business (Taobao, Taote, etc.) tied.
Including Tmall Supermarket, Taoxianda, Taocaicai, and the fresh food industry under the original B2C business group were integrated and reported to Vice President Liu Yiman. Liu Yiman joined Tmall in 2012, starting from the operation of key accounts in the Tmall Marketing Department, and became the head of Tmall International Business 8 years later. He will be in charge of Tmall Supermarket in July 2021.
Now she is taking over a business that Ali has explored for nearly ten years, but has never formed a joint force.
Tmall Supermarket was born in 2011. It is an online supermarket that provides consumers with half-day delivery and next-day delivery services. It just launched the latest half-day delivery service in March this year, and it will cover 20 cities across the country by the end of the year; Launched in 2017, it will synchronize some products from offline supermarkets such as RT-Mart and Hema Xiansheng to online, and provide consumers with one-hour delivery service; Taocaicai will start in 2021 as a community group-buying model. The order will be picked up at the self-pickup point the next day, focusing on the sinking market; the fresh agricultural products sold in the fresh food industry under the original B2C business group will be transported by express delivery and delivered within two or three days.
The above-mentioned services are all to meet the consumption needs of users for three meals a day and daily life, and are classified as “high-frequency drive” services in this adjustment.
Zhang Yong said internally at the beginning of this year that in the past, Ali’s main business was “one network in the sky, sales without boundaries”. Through the epidemic, Ali deeply realized that the Internet has no boundaries, but riders and electric vehicles (delivery distance) have boundaries. “We need to grasp these dynamic things. In many fields, Ali has not done a good job, but has not even touched it.”
To some extent, integrating Ali’s local retail-related high-frequency consumer business is what Ali wanted to do three years ago.
In April 2020, the Tmall Supermarket business group was upgraded to an intra-city retail business group , integrating Tmall Supermarket and supermarket ecology (Taoxianda, Ele.me New Retail) and other businesses.
In the vision of Li Yonghe (nickname: Lao Ding), the president of the business group at the time, Ali’s intra-city retail business was called “Tmall” by him. From the point of view of naming, this is a company with the same huge imagination as “Tmall”. The battlefield of space.
An Ali insider said that at that time, the intra-city retail business group was one of the No. 1 projects that Zhang Yong, Chairman of the Board of Directors and CEO of Ali, focused on.
In July 2021, the same-city retail business group was split into two: the Tmall supermarket business was separated and merged with the import and export business group. Three months later, the two businesses were upgraded to the “B2C business group” and Liu Peng was in charge. Report to Zhang Yong; the same city retail business group retains the new retail teams of Taoxianda and Ele.me, and Li Yonghe will continue to be in charge. Li Yonghe also took over the local life business (Ele.me, Koubei, etc.) from Wang Lei. Report to Yu Yongfu, partner of Alibaba.
According to an Ali source, after taking over the local life business, Li Yonghe hopes to further expand “Dmall”, using Tmall and Ele.me as the traffic entrances. It also connects with other delivery teams, allowing consumers to deliver daily necessities, clothing, digital and other commodities purchased on Tmall and Ele.me within one hour or half a day.
However, the idea of ”Landmao” has not been further implemented. After only one month as the CEO of the local life company, Li Yonghe resigned due to the black swan incident of Ali female employees, and Yu Yongfu took over urgently.
The above-mentioned Ali people said that even after taking charge of Ali’s local life, intra-city retailing still takes up a lot of Li Yonghe’s energy. With a retail background, he will use the imagination of a retailer to do retail vigorously; but for Yu Yongfu who holds multiple positions in Ali As far as he is concerned, he will not put too much effort into intra-city retail, which accounts for less than 10% of the entire plate.
Slowly, the term “intra-city retail” was less and less mentioned within Ali, and the plan for “Landmao” was temporarily shelved.
Ali’s community group buying business has also undergone several rounds of changes. Ali used to have four teams (Ele.me, Retail, Cainiao, and Hema) exploring community group buying at the same time. In March 2021, Ali integrated these teams into an MMC business group, led by Alibaba partner Dai Shan , when it was first established, Dai Shan announced that there would be no upper limit on the investment in community group buying, and set a goal of completing 120 billion yuan in GMV in one year, but by the end of 2021, the actual transaction volume was only 20 billion yuan.
In mid-2021, Li Bo, the former director of operations and finance of the B2B business group, took over as the channel of the MMC business group, and was actually responsible for the daily management of the MMC business, reporting to Dai Shan. In September 2021, the MMC business was renamed Taocaicai. At the beginning of this year, in the cities covered by Taocaicai, “Caicai Supermarket” appeared in the beta version of the Taobao app, which became the three major entrances on the homepage of the app along with Taobao Live and “99 Special Sale”, corresponding to the local market of Taobao and Tmall this year. The three major battles of retail, live broadcast and price power.
“LatePost” learned that in the past year, Taocaicai completed a GMV of about 60 billion yuan, less than half of that of Meituan Youbao and Duoduomaicai, ranking third in the industry.
The local retail business is slow and heavy, which is not in Ali’s DNA. Coupled with the frequent personnel changes and the limited energy of the team leaders, this has led to the slow progress of Ali in the local retail business. Ali’s investment in local retail is not firm enough, and has not been able to form a joint force.
Throughout Ali, several businesses related to local retail have been scattered in different business groups for a long time—Tmall Supermarket, Taoxianda, and the fresh food industry belong to the B2C business group led by Liu Peng, and Taocaicai is led by Li Bo , Hema is led by Hou Yi, and the new retail business of Ele.me belongs to the local life company led by Yu Yongfu.
After this round of adjustments, the local retail sector (Tmall Supermarket, Taoxianda, Taocaicai, etc.), local life (AutoNavi, Ele.me, Koubei, etc.) and Hema still belong to three different companies. It will be listed independently in the future.
They have their own traffic entrances and distribution teams, and it is difficult to form a scale effect, so it is difficult to minimize the cost of distribution and commodity procurement, and there will be competition between them in the future.
At the end of March, the “1+6+N” large-scale reorganization of the entire Ali Group took place. Only two weeks later, the Taobao Tmall Commercial Group took the lead in completing the adjustment, and the adjustment of other business groups will continue.
Title map source: Visual China
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