Xianyu "gives up" on Taobao

Xianyu "gives up" on Taobao

In the field of e-commerce, the positioning and strategy of second-hand trading platforms are crucial to their development. The article points out that although the introduction of small B merchants has brought GMV growth to Xianyu, this model is gradually drifting away from the original intention of Xianyu's second-hand trading platform. Therefore, Xianyu began to take measures, such as charging software service fees, to regulate merchant behavior and re-attract individual sellers to maintain its core C2C ecology.

Introduction: With 40 million daily active users, Xianyu has more capital to talk about ecology.

Xianyu finally turned his attention to someone again.

On September 1, Xianyu released the "Personal Seller Traffic Guarantee Plan", which guarantees the traffic of individual sellers from three aspects: "people" - adding comprehensive service labels for individual sellers, "goods" - adding personalized selling point labels for personal idle items, and "place" - launching a new entrance for personal idle items.

It is understood that this plan will not only give individual sellers a more prominent service label, but will also comprehensively consider the seller's credit status, membership level, transaction evaluation and other dimensions, so that individual sellers with better services will be more likely to receive corresponding exposure. In addition, new users will also receive additional exposure, shipping coupons and other exclusive benefits from the platform for their first release.

At the same time, at the product level, the personal idle items page will also have richer and more personalized display labels. Based on the product information released by the seller, the platform will automatically label the product with detailed labels such as purchase source and purpose, such as "for personal use", "bought in a physical store", "from the official website", etc., so that consumers can quickly and accurately obtain product information and reduce decision-making costs.

It is reported that the "Personal Idle" entrance is located at the top of the Xianyu APP user search page, which directly links to a large number of personal idle products. In addition, the personal idle entrance was also launched at the core position of the Xianyu web version homepage, which was launched in mid-July.

Why do we say that Xianyu has “again” turned its attention to individual sellers?

This is because Xianyu, which is well-known in the market for its positioning as a "second-hand trading platform", should have been the main battlefield for individual sellers to sell unused items. However, over a long period of time in the past, a large number of small B merchants have flocked to Xianyu, and have had a certain impact on the C2C ecology of Xianyu itself. Some consumers even lamented that "Xianyu is becoming more and more like Taobao."

You should know that before 2019, Xianyu did not welcome professional sellers. At that time, if you were found to be a factory direct sales manufacturer, an offline store merchant, or a "one-click delivery" player, your account would be directly blocked.

However, with the development of Xianyu's C2C business, the platform's users and traffic have become larger and larger. A group of merchants hope to flock to Xianyu, and Xianyu is also willing to let these merchants bring more abundant supply and traffic to the platform, and the two sides hit it off. In January 2019, Xianyu launched the Xianyu Premium Channel, allowing merchants who have been certified and qualified by the platform to publish products in the Xianyu Premium Channel. In 2020, Xianyu launched the Pro account and upgraded the seller's operating tools, which was later upgraded to "Fish Shop".

In other words, starting from 2019, Xianyu officially embraced B-side merchants and began to transform from a pure C2C business to a hybrid model of C2C and B2C.

Judging from the results, the GMV growth rate brought by professional merchants to Xianyu is indeed considerable. According to the financial report data released by Alibaba, the GMV of Xianyu exceeded 200 billion yuan in fiscal year 2020, an increase of more than 100% compared with 2019.

In the second half of 2021, Xianyu also introduced a PC management tool "Xianyu Butler" developed by a third-party service provider, which is specifically designed to help professional sellers connect Taobao and Xianyu and manage multiple Xianyu accounts.

However, Xianyu, which became famous for its second-hand idle goods, was impacted by the influx of a large number of professional sellers. The platform's original ecosystem of individual sellers was impacted and began to become more and more like the main site Taobao.

On the one hand, individual sellers’ latest perceptions of Xianyu can be seen on various social media platforms, and they cannot escape the words such as “no traffic”, “difficult to sell idle items”, and “no one is interested in individual sellers”.

On the other hand, compared with other e-commerce platforms, Xianyu has a lower entry threshold, and there are still a number of small B merchants who "pretend to be individual sellers". Many of these profit-seeking professional sellers have problems such as concealing the true situation of products and taking advantage of asymmetric information on goods to make a profit. These have brought challenges to Xianyu's ecological governance.

Therefore, for quite a long time, Xianyu had to choose between rapidly growing GMV or building an ecosystem dominated by second-hand goods.

The reason why small B sellers were introduced in the first place was inseparable from the strategic shift in focus brought about by the change of the platform's helmsman.

Xianyu's founder, Chen Weiye, once believed that the core of Xianyu is "community". Xianyu's "fish pond" is similar to an interest community, which brings people together. In the first two years of Xianyu's establishment, 41% of users bought things while chatting.

In the following four years, Chen Lei (nickname: Wen Zhong), then senior director of Taobao Live and Content Ecology Division, and Jin Ke (nickname: Tang Song), then leader of Taobao’s daily special sales business, successively took over the baton of Xianyu. Xianyu’s positioning has changed in the past few years: a large number of small B sellers have driven the growth of GMV; the “fish pond” that carries the social gene of Xianyu and is regarded as the core function of Xianyu has been offline.

It seems that, at least at this stage, the balance of power for Xianyu has tilted towards GMV rather than ecology.

However, becoming the next "Taobao" does not make much sense for Xianyu. Most users are willing to use Xianyu because they value its differentiated competitiveness in second-hand replacement. After a period of rapid growth in GMV, Xianyu, which has 500 million users and 40 million daily active users, began to reorganize the platform ecology.

The biggest change is that Xianyu has started charging software service fees.

In June 2023, Xianyu officially implemented a charging policy for some merchants. The charging targets were limited to "sellers who conduct high-frequency and high-value transactions on the platform", and the software service fee continued to be waived for other sellers and all buyers. In August this year, Xianyu announced again that it would charge all sellers a basic software service fee of 0.6% (up to 60 yuan per transaction). The new regulations took effect on August 9 and were officially implemented on September 1.

Yilan Business believes that if the charging policy adopted for some merchants last year was to raise the transaction threshold for merchants and regulate their transaction behavior, then the collection of basic software fees from all merchants this year can be understood as Xianyu accelerating its commercialization.

From the perspective of the industry, Xianyu’s move to charging seems inevitable. After all, second-hand trading platforms including Zhuanzhuan and Paipai will charge sellers or buyers a certain fee. Moreover, Xianyu was positioned as one of the first strategic innovation businesses by Alibaba last year, and it is responsible for the important task of “making money”.

Therefore, Xianyu’s biggest differentiating advantage, the second-hand idle ecosystem created by individual sellers and buyers, must be well maintained. Since information service fees are charged to individual sellers, they should be given due traffic support and exposure, and buyers and sellers should be guaranteed a better transaction experience.

First, standardize the business ecology of small B merchants, and after having more GMV and daily activity, unify the fees to accelerate commercialization, while improving the transaction experience of individual buyers and retaining user stickiness. Xianyu does not want to lag behind in making money and ecology.

Based on this, Xianyu has launched a series of long-term plans to help individual sellers sell their products better. The one mentioned at the beginning of this article is just one of them. In addition, Xianyu has also opened an offline circulation store this year to provide consignment services for all categories of idle items for users in the surrounding communities and the same city.

As e-commerce enters the second half of slow growth, differentiation is the best card for companies to play, not to mention that Xianyu itself has a good second-hand trading ecosystem. However, after bidding farewell to the free era, Xianyu needs to start considering user experience more and find a balance between platform ecology and commercialization.

Xue Xiang丨Edited by This article is written by the author of Operation Party [Li Yan], WeChat public account: [Yi Lan Business], original/authorized to be published on Operation Party, any reproduction without permission is prohibited.

The title image is from Unsplash, based on the CC0 protocol.

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