Alibaba's new regulations have been fiercely criticized! A must-read for e-commerce professionals

As a national e-commerce platform, Taobao's every move affects most people's business. For example, the recently released "Interpretation of Tmall's Rules on Inducing Third Parties" stated that Tmall will strengthen the rectification of "inducing third parties" violations. And this "inducing third parties" has touched the foundation of many e-commerce people. Let's analyze it together in this article.

1. Alibaba’s new regulations sparked heated discussions

Recently, a piece of news released by Qianniu Toutiao, a subsidiary of Alibaba, has attracted widespread attention and discussion among e-commerce practitioners;

Here are some real comments from the message comment section, excerpted as follows:

• "I question the above rules, which are very unreasonable."
• “I learned all this from TikTok”
• "Tmall is doing this, let the bullets fly for a while. From ancient times to now, where can we hear that imitation can lead to surpassing? Alibaba now has no innovation at all. It no longer has the enthusiasm it had before."

There are more doubts and negative emotions;

In addition to the questioning emotions, there are also some rational criticisms:

• "Ali's wording defended itself, but it was actually intended to control the flow of traffic to other platforms."
• "This is illegal and violates Article 24 of the Interim Provisions on Anti-Unfair Competition on the Internet, which came into effect on September 1, which stipulates that the service agreement or rules shall be used to unreasonably set and deduct deposits."

We will not discuss here whether it is a violation;

So what exactly is the news that can attract such intense attention and discussion?

It turned out that on June 26, Qianniu Toutiao, a subsidiary of Alibaba, released the "Interpretation of Tmall's Rules on Inducing Third Parties", stating that Tmall will strengthen rectification of violations of "inducing third parties".

The violation of "inducing third parties" refers to publishing or pushing third-party products or information that may easily lead to transaction risks, or inducing consumers to jump to third-party websites or clients through other means.

The new regulations clearly state that merchants are not allowed to publish or push third-party products or information that may cause transaction risks in any aspect of interaction with consumers, such as store pages, product details, promotion channels, Wangwang chat, live broadcast interaction, and physical packages.

Strict! Really strict!

Moreover, starting from July, Tmall will impose a fine of 2,000 or 20,000 yuan on merchants who violate the rules, depending on the circumstances. Merchants with particularly serious circumstances (including three violations) will be cleared out.

(Picture from Qianniu Headlines)

In addition to increasing the severity of the punishment, another important reason for the heated discussion this time is that the authorities have singled out [package card diversion] as a typical violation type in the "common violation types";

What is a parcel card?

Package cards are a common private domain operation method, mainly used to attract users or increase user stickiness. When a user purchases a product and receives a package, the merchant will attach a card to the package. The card usually contains some additional discount information, event information, or QR code, etc., allowing users to scan and land in the merchant's own public account/WeChat and other private domain traffic pools.

as follows:

(Picture from Qianniu Headlines)

In the example diagram of the violation type given by the official, the WeChat logo is clearly revealed, and its targeting is self-evident;

Why did the ban on parcel cards cause such a strong reaction from merchants?

This requires explaining a typical e-commerce scenario first!

2. Public domain traffic diversion and private domain transaction and repurchase

After the new regulations came out, I talked to several business friends and asked them what they thought:

Merchant A, selling daily necessities:

"It is simply unaffordable to invest in traffic on Taobao. The cost of attracting a new user is much higher than his profit. If he does not make subsequent repurchases, then this business is a loss. In the past, we set up package cards in the products to guide users to add our WeChat group. We held activities in the group, and these users would continue to make repurchases."

Merchant B, doing whole house customization business:

"We do whole-house customization, and the average order value of our products is relatively high. In addition, it takes a relatively long period of decision-making from user demand communication to solution output and then to the user's decision to place an order. In the early stage, we guided users to add our WeChat. After that, whether in user service or follow-up of some subsequent issues, we can provide good service to users, and the transaction rate has been greatly improved."

Merchant C, early childhood education:

"What we sell is early childhood education boxes. The sale of the boxes is just the beginning of our service. We need to pull users into the WeChat group, where our early childhood education teachers provide daily guidance to students. We usually place cards in the early childhood education boxes or use AI voice to guide users to add the early childhood education teachers' WeChat."

It can be seen that due to the increase in traffic prices and the internal circulation of homogeneous products, the profit margin of businesses in the public domain of Taobao has become smaller and smaller, and even loses money; therefore, many merchants conduct traffic diversion in the public domain and conduct transactions and repurchases in the private domain; in this way, the overall ROI can be balanced;

Alternatively, the private domain itself is an indispensable part of fulfilling contracts for many businesses, such as the early childhood education business mentioned above;

In such a scenario, merchants often spare no effort to accumulate private domain users, and [package cards] are often a very effective way to attract private domain users.

At present, Alibaba has issued a notice to ban all parcel cards, which has caused complaints from many merchants, so it is not surprising.

Behind this, it actually reflects the platform's anxiety about traffic;

3. Platform Anxiety about Traffic

As the growth of the number of Chinese netizens has peaked, the competition has shifted from competing for incremental users to competing for existing users. This is a consensus among almost everyone.

In this big context, every platform wants users to stay on its platform;

So it’s not just Tmall!

As early as a few years ago, Douyin had issued similar regulations, deducting points from merchants who lured users to third parties, and taking measures including but not limited to public warnings, product removal/banning, and search demotion depending on the specific circumstances.

Pinduoduo has also issued similar regulations: as long as merchants engage in illegal inducement behavior, they will face penalties such as increasing the store deposit (an increase of 50,000). Even if the violations occur twice or more, the merchants may face the serious consequences of having all deposits deducted and being forced to withdraw from the store.

It can be said that Tmall has actually done a lot of things that e-commerce platforms have already done!

4. Tmall’s traffic defense

As a national application, WeChat has built a complete closed-loop transaction infrastructure with its huge user base and strong social attributes. Some people prefer to shop on Taobao, some prefer to shop on JD.com, but few people do not use WeChat.

Therefore, in e-commerce, whether it is Pinduoduo or JD.com, WeChat’s private domain is an unavoidable traffic black hole;

This [new regulation] can be seen as Tmall’s further defense against WeChat traffic;

In addition to prohibiting third parties from inducing traffic, Tmall has also made a series of upgrades and innovations in its private domain operations!

At the TopTalk 2024 Tmall Super Brand Private Conference in April this year, Tmall executives repeatedly mentioned the concepts of private domain, public domain and global domain, showing their high attention to private domain operations.

Tmall has made it clear that it will return real-time operational service capabilities to brands and merchants, and carry out large-scale upgrades to multiple areas within the store, including price reduction reminders, new customer coupons, promotional prices, etc.

At the same time, brands can independently build store frameworks and page displays to create diverse store spaces and personalized store frameworks for thousands of people.

In this upgrade, Tmall has given merchants great freedom in their private domain operations, allowing them to set prices and make decisions freely.

Brands can independently define different membership categories and set different membership benefits to build closer customer relationships and loyalty.

Overall, Alibaba’s traffic defense policy can keep more traffic on its own platform. At the same time, the upgraded private domain operation policies and tools can help brands and merchants better operate their own member users. The two complement each other!

5. Brands in the vortex

However, for any brand, there will be more or less path dependence problems. After the policy of [Tmall prohibits inducing third parties] was officially implemented on July 1, a large part of the links leading to private domains were cut off. The model of [public domain investment-private domain transaction] will definitely encounter considerable challenges.

In the face of new policies, while doing a good job of operating existing private domain users, brands can continue to expand their private domain traffic pool through fission and other forms;

At the same time, we must actively respond to the platform's policies and embrace change, as bonus periods often occur during periods of change;

After all, a single brand has no say in facing the platform, and in the current market environment, it is impossible to form a unified merchant alliance to bargain with the platform!