Today's Taobao is even more popular than Pinduoduo

This article mainly discusses the competitive relationship and development trends of China's two major e-commerce platforms, Taobao and Pinduoduo. The article points out that Taobao has recently begun to take a series of measures, including launching a "refund only" function and strengthening price discounts, in an effort to cater to and imitate Pinduoduo's model.

Just looking at the two pictures below, can you tell which is Taobao and which is Pinduoduo?

(The left picture is Taobao, the right picture is Pinduoduo)

If you can't tell the difference, it's not your problem, but Taobao and Pinduoduo are indeed becoming more and more similar.

Not only are the UI designs similar to each other, but judging from the labels, the two even seem to have swapped identities - Taobao on the left emphasizes "ten times compensation for fake products" and uses a huge "grab" character to fill the entire screen with gold coins; while Pinduoduo on the right emphasizes "quality insurance", "shipping from bonded warehouses" and "free shipping by SF Express".

Perhaps, they both want to live like each other.

However, with the recent hotly discussed news that "Pinduoduo's market value once again surpasses Alibaba", Silicon Stars discovered that in this mutual imitation competition, Taobao seems to be the more anxious party.

First, in terms of price power, Taobao is trying to make up for the low-price mentality that was snatched away by Pinduoduo a few years ago. Compared with the crazy level of Pinduoduo's 10 billion yuan subsidy at that time, it is even more than that. For example, in the categories of beauty, daily necessities, and food, Taobao's "huge subsidy" is cheaper than Pinduoduo's skin care products, and the prices are so low that people doubt their lives.

From a strategic perspective, the "user first" strategy proposed by Taobao Group last year was itself very "Duoduo-like". Especially in the process of implementation, Taobao stood out among a group of "apprentices" with clear problem-solving steps such as only refunds, free shipping in Xinjiang, cancellation of pre-sales, and single product logic, becoming the one most like Pinduoduo.

Big sales have always been a great opportunity for e-commerce platforms to innovate. During this 618, Taobao's series of actions, whether in terms of price, users or strategy, are worth pondering.

1. More extreme than Pinduoduo

Trying to imitate something in appearance is just like "the ugly woman imitating the beautiful one". Taobao imitates not only the appearance but also the core.

One piece of evidence is the “refund only” function launched by Taobao - a typical “Pinduoduo rule”.

At the end of last year, Taobao announced the implementation of new regulations: "When a user applies for a refund, Taobao will use AI + big data capabilities to quickly make a decision on refund only or return and refund", which is basically similar to Pinduoduo's "refund only".

Behind this rule is the platform's preference for users and its dominance over merchants.

In the very early stages of Pinduoduo's development, Huang Zheng once said that Pinduoduo was doing "demand-side reforms", that is, with users as the main body. Whether it was group buying, canceling the shopping cart or flash sales and other mechanisms, they essentially changed the way of interacting with users.

This is nothing in itself, but in many interest disputes between businesses and users, it has gradually evolved into "ignoring the life and death of businesses."

Born in this context, the "refund only" policy has allayed users' concerns, but it is also deeply hated by merchants. When Pinduoduo opened its first self-operated store last year, it was besieged by resentful merchants for "refund only". In less than four hours, the self-operated store was directly shut down.

Previously, Taobao, unlike Pinduoduo, was more likely to stand from the perspective of customers (merchants). Alibaba’s mission and values ​​emphasize: “Customers first, employees second, shareholders third.”

(Picture from "Taojianghu")

This is also the difference between Taobao and Pinduoduo.

The former was founded in 2003, when China's e-commerce market was just starting out, and the platform needed to attract a large number of merchants to settle in and enrich the product supply in order to attract users. Therefore, Taobao in its early days was more inclined to protect the interests of merchants in many policies; while Pinduoduo, as a latecomer, appeared in the context of competing for users in the stock era, and was more inclined to satisfy users.

Nowadays, with the changing times, Taobao's position seems to have changed.

Perhaps Taobao had anticipated this situation, and it had no choice but to double down on its position in order to win back its users.

In addition to the refund only, another essence of Pinduoduo, "group buying", has been evolved by Taobao into a more difficult version. Users must forward the link to invite others and make successful payments before the goods can be shipped and the "group price" can be obtained.

When it comes to the purchasing stage, the increasingly smaller “Add to Cart” button design seems to imply that Taobao wants to simplify this funnel and allow users to enter the purchasing stage directly.

So, looking back at the year of Taobao's reform, the most obvious changes are:

In terms of price and corresponding supporting facilities to attract users, Taobao is even better than Pinduoduo.

2. Taobao, the omnipotent brand, is waiting for innovation

Seeing this, you may believe that Taobao’s various initiatives are using Pinduoduo as a “benchmark”, but in fact, all these actions are just a shell - no matter how much Taobao cares about its users, it is all for the ultimate service to merchants.

From the perspective of Taobao's business model, its customers are always merchants. Alibaba's financial reports over the years show that Taobao's core revenue comes from "customer management income", that is, merchants' traffic and advertising fees.

The essence of putting users first is to get merchants’ business flowing again by activating the C-end.

Many e-commerce merchants have told Silicon Stars: "Nowadays, to open a new store, you either use Douyin or Pinduoduo. It's too difficult to open a store on Taobao." In recent years, Tmall's brand incubation ability has also declined. Social media such as Douyin and Xiaohongshu have become new places for brands to rise. They have not only become the soil for the rise and fall of new consumer brands, but can even help Taobao brands that have already fallen, such as Three Squirrels, to rise again. This is also the reason why Taobao decided to make itself more and more like Pinduoduo. Old Taobao brands have lost growth, but new merchants will always have a demand for advertising, and they need new users.

In addition, Taobao is also actively supporting new merchants under the surface, launching various new merchant policies, such as free store deposits, free traffic, etc. On the platform, Taobao is constantly creating traffic depressions by changing the gameplay.

In terms of search weight, the traffic search presentation was first changed from GMV to order volume, promoting the exposure of high-frequency, low-priced products, similar to Pinduoduo. In March of this year, many merchants reported online that they had re-converted to GMV ranking, and finally only retained the price power exposure of some products with a strong low-price mentality, returning to the priority exposure of high-order products.

In terms of advertising strategy, we have shifted our budgets to big brands, explored new advertising needs among small and medium-sized businesses, and introduced AI one-click advertising functions such as site-wide promotion, in order to improve traffic monetization efficiency and lower the entry threshold for advertising.

An operations practitioner told Silicon Star, "Now Taobao's advertising is getting easier and easier. Basically, you only need to click three options and it will start running. I feel like my position will be cancelled by my boss at any time."

However, almost all e-commerce platforms have launched strategies similar to full-site marketing. Since the delivery rules are a black box, it is difficult for merchants to perceive the differences between them.

In fact, for Taobao, which has been established for 20 years, the way of playing seems to be only divided into "complex" and "simplified", and only divided into "like competitors" or "like the past self". This is the epitome of the biggest problem it faces today. Just as the success of Pinduoduo and Douyin lies in not copying the powerful Taobao and JD.com, but reopening an incremental market - the former chose the sinking market, and the latter chose content e-commerce. Taobao, which is eager to make a comeback today, may also be more importantly "returning to the entrepreneurial era."

Perhaps AI is a bigger opportunity for Taobao to "be itself".

Author: summer
This article is written by [Pinwan], the author of Operation Party, WeChat public account: [Silicon Star Pro]. It is originally created/authorized to be published on Operation Party. Reproduction without permission is prohibited.

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