Tmall controls “outward traffic”, how do merchants react?

Recently, Tmall clarified the relevant rules of "inducing third parties", prohibiting the inclusion of third-party information, that is, it is not allowed to smuggle package cards through physical objects. For merchants, it is not allowed to accumulate private domains through goods.

Recently, Tmall released the "Interpretation of Tmall's Rules on Inducing Third Parties", which clarified the definition of "inducing third parties". According to the examples, guiding consumers to add WeChat or phone contacts on Tmall, guiding them to jump to Xiaohongshu, and carrying third-party platform information in physical packages are all violations.

According to the interpretation, "inducing third parties" refers to the publication or push of third-party products or information that may easily lead to transaction risks in scenarios that interact with consumers, such as store pages, product pages, promotion pages, Wangwang, live broadcasts, physical packages, etc., such as publishing the names, LOGOs, QR codes, hyperlinks, contact accounts and other information of third-party websites or clients such as social networking, shopping guides, group buying, promotions, and shopping platforms; or inducing consumers to jump to third-party websites or clients through other means (such as inducing consumers to provide third-party contact information such as telephone and WeChat, through telephone, text messages, etc.); which may result in harassing consumers, affecting consumer transaction security, and other acts that damage the legitimate rights and interests of consumers.

Tmall mentioned six examples of violations in its interpretation of the rules. In addition to displaying WeChat accounts on product and Wangwang-related pages, and guiding users to place orders by direct transfer without going through the platform, it also includes setting up a guiding entrance to Xiaohongshu in the store, or inserting WeChat QR codes in physical packages to guide the addition of items.

It is reported that Tmall has issued the "Rules and Implementation Rules for Inducing Third Parties" as early as 2021. This rule change mainly involves several aspects:

1. Specific scenarios of violations have been refined, such as inducing consumers to provide third-party contact information such as phone numbers and WeChat, and inducing them to go to third-party websites or clients through phone calls or offline packages;

2. Different levels of violations are clearly defined;

4. The penalty method for violations has been adjusted, and payment of liquidated damages has been added to the original penalty method.

It is understood that the rule prohibiting merchants from directing traffic to third parties has almost become a standard feature of e-commerce platforms. Since 2021, Pinduoduo, Douyin, Tmall and others have successively introduced relevant rules.

Faced with Tmall's strengthened control over outward traffic, merchants' feelings and feedback are different.

"Communicating with consumers over the phone is a necessary step for many categories." Some merchants pointed out that the rules are too unfriendly to categories that focus on service scenarios. For example, whole-house customization requires detailed communication with consumers over the phone in advance before the service can begin. They hope that the platform can make differentiated treatments based on categories when formulating rules.

Merchants of large furniture, industrial products and other categories also gave the same feedback.

What a wider range of businesses are more concerned about is that “it is no longer possible to accumulate private domain through product packaging.”

"Sending a corporate WeChat code with the package, creating a group, and allowing new members to receive awards are very common private domain operations, especially for categories like ours with high repurchase rates." A fast-moving consumer goods merchant admitted that the new regulations have a greater impact on their category, but he believes that they can continue to observe the platform's actions, and that after regulation, new paths may be provided to merchants.

"Although we are doing very well in our private domain, the new regulations will more or less have an impact on repeat purchases," said another merchant.

However, some merchants pointed out that not all high-repurchase categories rely on private domain diversion. "Some tea drinks and light luxury products may need to divert traffic to the private domain. But for beauty products, users are generally more aware of platforms and live broadcasts, so platform placement is actually enough."

"Tmall was the last to 'take action'. Some platforms closed stores as soon as they found out. After all, the merchants' private domain operations were too good, which would affect the platform's advertising revenue." The above merchant added.

Some food industry merchants also pointed out that "package cards" are not an efficient means of attracting private domain traffic. "We have done it before, but most users leave the group after receiving the coupons, and it requires manpower to operate, so we stopped doing it before the rules were changed."

In fact, an important basic function of the platform to prohibit merchants from directing external traffic is to avoid transaction spillover. The current stock competition environment is an important reason for the platform to strengthen control and direct external traffic.

At present, in addition to high-growth platforms such as Pinduoduo and Douyin "dividing" the e-commerce market, WeChat, which is mostly used by merchants to accumulate private domains, is also quietly changing. Some industry insiders pointed out that Tmall's strengthening of control at this moment is both a need for its own development and a defensive measure.

In the early days of video account live broadcast, when merchants directed private domain users to the live broadcast room during live broadcast, the platform would push the same amount of free traffic to the live broadcast room. Although the traffic ratio is gradually decreasing, the commercial value of private domain in video accounts cannot be ignored. The ability of video account e-commerce, which has begun to take shape, to compete for the market, combined with other scenarios in the WeChat ecosystem, cannot be underestimated.

Keeping users on the platform also means keeping transactions on the platform. Tmall hopes that merchants can operate "brand membership", an important asset that drives repeat purchases.

In 2023, 114 brands on Tmall had more than 10 million fans, and 56 brands had 10 million members. At this year's TOPTALK, Tmall emphasized that it would pay more attention to acquiring and accumulating more user assets for brands through marketing and omni-channel operations. For example, the "Tmall U-first" omni-channel sampling platform will launch a new warehouse sampling model to help brands expand the scale of new customers and reduce customer acquisition costs.

"What we are actually more concerned about is how to revitalize the business after attracting new customers." Some merchants pointed out that except for e-commerce platforms with the logic of large single products, other platforms are helping merchants develop private domain operations. However, at present, the advantages of each company in operating tools are not very obvious. Merchants can only choose places to operate private domains based on the nature of the platform.

A relevant person in charge of Taotian Group on TOPTALK said that Tmall is very willing to continuously connect the platform's high-quality user assets with merchants, allowing merchants to form user assets that can be used sustainably and reached at a high frequency in the long term, allowing merchants to better save commercial liquidity budgets.

To this end, Tmall plans to return the service capabilities of real-time operation of all aspects of the store to merchants, including product recommendations, price reduction systems, etc., and will also allow more marketing methods to be implemented in the store, such as group orders or full discounts. It is revealed that the platform has launched member upgrade challenge plans, member draws, in-app purchases and other gameplay for brand members, and has also launched brand group member weeks, etc., so that merchants can provide members with more abundant rights and interests.