What is the best solution for the most difficult 618 in history?

This year's 618 e-commerce war is no longer just a price war, but a new competition for user experience and service dividends. This article analyzes the new strategies of e-commerce platforms and provides merchants and consumers with a perspective to understand market changes. It is recommended for e-commerce practitioners and market analysts to read.

As 618 draws to a close, people are finding that this year’s 618 is similar to and yet somewhat different from previous years.

The same is true for this year's 618 transaction volume. The reason behind the continued pace of no longer publishing "big numbers" is that after e-commerce consumption has passed its wild development period, the expansion of numbers is becoming meaningless.

What is different is that the competition for the C position in the big promotion has quietly shifted from the platform transaction volume to the small happiness of more consumers. Under a number of measures such as canceling pre-sales, offering full discounts, and various large-value coupons, major e-commerce platforms are striving to simplify the process and constantly emphasize the value orientation of "returning to users".

Take Tmall as an example. Under the clear "user-first" promotion strategy, on May 20, in the first hour of Tmall's 618 sales, 28 brands had transaction volumes exceeding 100 million yuan, and 216 single products had transaction volumes exceeding 10 million yuan; on May 31, the second wave of Tmall's 618 sales started. As of 9 p.m. that night, 185 brands had cumulative transaction volumes exceeding 100 million yuan, and 11 brands had cumulative transaction volumes exceeding 1 billion yuan.

Such first-half performance proves that this simple and direct 618 is impressing more consumers.

However, for merchants, many things that are beneficial to consumer experience may not be entirely good things. In this year's 618, e-commerce platforms and merchants must not only offer low prices, but also ensure the dual quality of products and services, as well as multi-dimensional efforts in event innovation and business strategies.

After all, pure price competition is never sustainable. For consumers, it is only meaningful if they can satisfy the demands of good products, good prices and good services at the same time.

With more competitive factors in mind, this 618 event, which was not a big competition, was a competition among e-commerce platforms to see who was better at managing their business and ecosystem, and who was competing for the user-centric consumer experience. For merchants, whether they can keep up with the changing trends of competition and gain dividends from it also determines whether they can get more certain operating returns.

1. 618 Beyond Low Prices

In terms of price, in order to regain consumers' attention, this year's 618 e-commerce platforms all offered more direct discounts.

Hundreds of billions of subsidies have become a standard feature of the platforms. At the same time, in terms of low prices, each platform has also given different preferential strategies. Taobao launched a 10 billion subsidy activity, Tmall launched two major gameplays: official instant discount and cross-store discount, and for the first time, the amount of Tmall and Taobao products can be combined during the promotion period; JD.com mainly promotes low prices and puts forward the promotion slogan of "cheap and good"; Kuaishou announced a 1 billion red envelope subsidy.

As the main theme of the big promotion, low prices and discounts remain unchanged.

However, compared with previous years, more changes are happening than just prices. In terms of activity cycles, this year many e-commerce platforms have adjusted the pre-sale system that has been used for more than a decade.

Taobao was the first to announce that this year's Tmall 618 promotion would cancel the official pre-sale phase, and the first wave of sales would start on May 20. Subsequently, many platforms followed suit, with JD.com starting spot sales on May 31, followed by the special sales period, climax period and return period; Kuaishou e-commerce officially started "spot sales" on May 20.

In the midst of constant low prices and changing cycles, this year's 618 promotion has obviously involved more competitive dimensions. In fact, in addition to the changes in the pre-sale system, e-commerce platforms have been in a changing stage in the past two years.

As the e-commerce landscape is reshaped, the focus of e-commerce giants has shifted back to users. If the essence of the pre-sale system is to reduce the risks in the middle and upper reaches of the supply chain in the early stages of e-commerce development, then canceling the pre-sale system means that when e-commerce enters the mature stage, it needs to pay more attention to the user's consumption experience.

In the era of stock competition, platforms and merchants are faced with the huge challenge of how to retain users. Judging from the current market trends, e-commerce platforms have begun to use strategies such as low prices, spot sales, shortened activity cycles, and increased added value of goods and services in daily sales and promotion activities.

It is foreseeable that price, service, and user-centricity will also be the keywords of the e-commerce industry in 2024, and the focus of all e-commerce platforms. When the concept of "user first" becomes the focus, e-commerce platforms will also reshape the interests of platforms, merchants, and consumers.

In other words, the platform needs to balance the interests of consumers and merchants: sacrificing consumer interests to gain merchant growth, or sacrificing merchant interests in exchange for improved consumer experience, is unsustainable and undesirable.

The platform needs to explore such an answer, even if the process is not easy.

2. Experience service dividend becomes a new outlet

Interestingly, around experience, Taobao proposed a complete closed loop connecting consumers, platforms, and merchants during this year’s 618.

Earlier, the Beijing News collected more than 3,000 valid questionnaires for this year's 618, showing that the comprehensive shopping experience of "product power + price power + service power" is being prioritized by more consumers. Changes in the supply and demand situation and the consumer environment are forcing e-commerce platforms to prioritize user experience.

Last year, Wu Yongming proposed internally: "Every penny spent on user experience has a higher ROI than attracting new customers." During the earnings call on February 7 this year, he reiterated: "Returning to users is the core of our strategy. We will increase investment in the core user experience to improve customers' shopping experience."

As a result, Taobao and Tmall began a top-down "user-first" transformation, and this year's 618 has become a centralized arena for the results of this transformation.

In terms of consumer services, 88VIP benefits were fully upgraded before 618. On the basis of unlimited returns and shipping fee upgrade in April, Taobao 88VIP benefits were further upgraded in May, and points can be exchanged for cash red envelopes. With greater user benefits, the scale of 88VIP users has reached 35 million, a double-digit year-on-year growth.

In addition to 88VIP, Taobao has also launched a series of measures such as full price protection and freight insurance to enhance consumers' full-process shopping experience. In addition to a series of service rights upgrades, as service dividends become a new competitive outlet, adjustments around user experience have also become the focus of product updates on the eve of 618.

First, in mid-May, Taobao launched the most drastic upgrade of the web version in seven years. A complete team was established internally to optimize and upgrade the Taobao PC version, and the first iteration was completed on the eve of "618". From browsing to shopping to ordering, more than 60 functions were launched online.

In addition to meeting the needs of the 100 million non-mainstream independent users when using the web version of Taobao, Taobao Mobile, a "mainstream player" with 900 million monthly active users, has also undergone a major revision.

In terms of interactive experience, the homepage sections have been greatly simplified. At the same time, according to different channel combinations, users can also customize the quick entry of the homepage to achieve a dual experience of simple and efficient page interaction.

In addition, Taobao has also made updates and optimizations in terms of startup speed and fluency. The screen opening and jump experience is smoother, and in some details of browsing Taobao, for example, users are no longer disturbed by the automatic playback sound when browsing stores and products. Users can choose whether to turn on the automatic playback function of videos and live broadcasts according to their preferences, and can even set Taobao to mute mode for specific time periods, which is more user-friendly.

88VIP benefits have been reorganized and launched online, the entire platform service process has been upgraded, the web version of Taobao has been revamped, the APP interface has been re-optimized, and a series of platform measures have effectively improved the consumer experience.

The new consumer experience has also begun to drive business dividends for merchants. For example, thanks to the upgrade of 88VIP benefits, the average daily transaction volume of Taobao consumer voucher merchants increased by 41% year-on-year on June 18, as of May 21. A Taobao clothing merchant said that this year, driven by consumer vouchers, the order volume of his store increased by 120% year-on-year.

In addition, under the user-first strategy, Taobao and Tmall were completely connected for the first time during the big promotion period, making it easier and happier for consumers to buy. Taobao's small and medium-sized merchants also gained more growth dividends by enjoying the same activity rights as Tmall merchants.

Relevant data show that during this year's Tmall 618, Taobao's small and medium-sized merchants have set off a wave of rapid growth. As of May 21, the average daily transaction volume of Taobao consumer voucher merchants increased by 41% year-on-year during 618 last year; many industries have seen many merchants with rapid transaction growth. On the first day of sales alone, 370,000 small merchants had transactions, an increase of more than 100% over the same period last year.

At the new quarterly earnings conference call on May 14, Wu Yongming commented on the results of this transformation: "Our investment in price power and user experience has received positive feedback from consumers, and we have seen obvious results and progress. The strong growth in the number of buyers and purchase frequency in the quarter has driven GMV to achieve strong double-digit growth, which also reflects the increasing consumer willingness and user trust on the platform."

Obviously, this consumer-centric reform movement is also turning services into real business dividends for businesses. Risks and opportunities coexist under change. With user-centric decisions, Taobao has become one of the first platforms to make changes and adjustments on the business side.

3. The Optimal Solution for Business Operation

The experience is better and the merchants are doing better business. However, Taobao obviously wants to go further after completing this closed loop.

For merchants, a series of actions to encourage merchants to provide a good experience have begun to appear. During the 618 period, some merchants and media broke the news that Taobao is fully implementing a new scoring system - "store experience score" and "product experience index" to replace the previous DSR (Taobao's previous seller service evaluation system). During the internal testing period, many merchants reported that after the recent experience score improvement, store traffic began to increase significantly.

Such operating results are not surprising. Taobao has already clearly pointed out in the "Store Experience Points Specification" that "the higher the store's comprehensive experience score, the better the search ranking results that can be obtained." This means that store and product traffic will be directly linked to the experience score, and good service will directly bring new growth to merchants.

Not only that, Taobao is also conducting internal testing to fully apply the experience score to store management scenarios such as Taobao Mobile search, homepage guess what you like, Alimama-related advertising, event registration, etc., to achieve a direct drive of good service for front-end consumers = good growth for back-end merchants.

By equating good service with good traffic, businesses will undoubtedly be more motivated to improve their service experience.

In the past year, with the changes in the market competition environment, under the user-first strategy, compared with other platforms, which often focus on changes and adjustments on the user side, changes on the business side often lag behind. Taobao's changes focus more on the integration of consumption and business, and changes on the user consumption side are often accompanied by updates to business tools.

In fact, in addition to service experience, changes in more aspects are also taking place.

Taking AI as an example, on the eve of 618 on the consumer side, Taobao Wenwen launched the MBTI AI test for shopping, which helps discover users' shopping personality traits and corresponding recommended items, and create personalized shopping lists; combined with the big promotion sales nodes, it improves the discoverability and interactivity of the shopping guide link.

On the business side, on the eve of 618, the official website of Taobao merchant AI tool Quick product was quietly launched and opened to Taobao Tmall merchants for free.

According to the official website, Taobao Quick Tools is a super productivity tool customized for e-commerce sellers. It covers multiple sub-brands such as Zhitu, Zhiwen, and Zhishu, helping users to improve operational efficiency in multiple scenarios such as selling point extraction, copywriting summary, product image generation, and price power analysis.

In addition, many merchants said that Taobao Qianniu platform has launched the official self-developed agent - Quick Butler. This product integrates multiple capabilities such as data analysis, graphic design, store operation, etc., and can act as an agent for merchants' daily operations. It has been in internal testing for Taobao Tmall merchants for several months.

If AI on the consumer side is about personalized experience, then the core of AI tools on the business side is to reduce costs and increase efficiency. For example, during the 618 period, Tmall's pet health care product merchant Meng Huwei used Taobao Qianniu's "AI Smart Photo" tool to produce photos in 3 seconds. The pet model photos that once cost 600 yuan now only cost 1 yuan.

In addition to cost reduction through AI mapping, the Alimama site-wide promotion tool, which was newly launched this year, has become a powerful tool for merchants to leverage the 618 transaction explosion.

Data shows that tens of thousands of merchants achieved an average growth of 701% month-on-month on May 20 through full-site promotion and sales. More than 10,000 brands, including Midea, Lenovo, Gree, OPPO, and Dreame, accounted for more than 30% of their single product sales through full-site promotion. Among them, brands such as Tineco, Dreame, and TCL achieved multiple single products with sales exceeding 10 million.

With this pace of change, dividends in private domains, AI, and full-site promotion are constantly emerging. For merchants, Taobao's operations are the most certain, and the dividends that Taobao's shelf model can bring are also the most certain. This is crucial to the current industry situation.

In addition to reducing costs and increasing efficiency, helping small and medium-sized businesses reduce their burdens is also a focus of Taobao. On the eve of 618, important business services including Business Advisor, Dian Xiaomi customer service robot, and photo space will be provided to merchants free of charge. This series of measures will benefit tens of millions of merchants on the Taobao and Tmall platforms, helping merchants, especially small and medium-sized merchants, to significantly reduce their operating costs.

Taobao's series of changes around user experience have brought new opportunities, and small and medium-sized businesses have made a series of operational adjustments based on the platform dividends. Brands and small and medium-sized businesses have continued to grow on Taobao. This year's 618, Taobao merchants had a good start. The latest figures show that 370,000 small businesses had a sales increase of more than 100% on the first day of sales compared with the same period last year.

After a successful start, more than 300,000 Taobao and Tmall merchants signed up, unwilling to miss the biggest business growth opportunity in the first half of the year. Among them, the number of Taobao merchants registered increased by 24% year-on-year, setting a new record.

Obviously, the 618 shopping festival is not peaceful without the "big numbers". Although the industry situation is already quite complicated, more merchants are constantly seizing new opportunities and gaining new growth through their own efforts.

Author: Gu Er; Editor: Yi Ye; Source public account: Xin Entropy (ID: 826811)