In the social networking war again, why is Alipay poaching customers from Xiaohongshu and Douyin?

Alipay has always focused on payment transaction functions. Why is it now entering the social field and recruiting employees from Douyin and Xiaohongshu?

At the beginning of the year, Alipay launched a grayscale test of the "interest community", which aroused people's attention to "Alipay's return to social networking". Recently, the topic of "Alipay recruiting a large number of Douyin and Xiaohongshu employees" has made the specific movement of Alipay's return to social networking dream more clear.

According to media reports, Alipay has poached many employees from Douyin and Xiaohongshu in operations and advertising positions since 2023. From this, it can be judged that Alipay is preparing for the content layout of the "interest community". In the view of some industry insiders, Alipay's "interest community" is not really to highlight social attributes, but to achieve the purpose of increasing daily activity and user time by strengthening the content ecology.

According to Alipay's long-standing product positioning as a "payment tool" and its strong market impression of financial attributes, the analysis of "using content to increase user data" is not without reason. However, in the current Internet social environment, Alipay is not without opportunities to regain its social dream.

1. Traffic has peaked, and even top traffic is worried

As one of the two largest payment platforms in the Chinese market, Alipay has hardly ever worried about user data in its nearly 20 years of development.

Data from the China Internet Network Information Center shows that the number of mobile Internet users in China reached 500 million in 2013. In November of that year, the number of Alipay mobile payment users exceeded 100 million. As of December 31 of that year, the number of Alipay real-name authenticated users had exceeded 300 million.

In other words, 10 years ago, at least 3 out of every 5 people with mobile phones were Alipay users. At the same time, Xiaohongshu had just been established in Shanghai for less than half a year, and Douyin was still 3 years away from its establishment.

With the widespread popularity of mobile Internet, the scale of Alipay users has also increased. By January 2019, Alipay announced that its global users exceeded 1 billion. As of June 2023, the scale of Internet users in my country is only 1.079 billion.

Whether in terms of user scale or coverage, Alipay is a well-deserved top-tier application, and the growth ceiling of Alipay is the upper limit of the overall market development. However, the "good" surface data cannot cover up the anxiety of the former top-tier application.

QuestMobile data shows that among the apps with an average daily traffic of more than 50 million during the seven days of the 2023 Spring Festival, the user usage time of Weibo, Xiaohongshu, Toutiao, and Douyin were 48.8 minutes, 69.2 minutes, 77 minutes, and 102.7 minutes, respectively, while the average daily usage time of the Alipay App was only 7.8 minutes.

The fact that Alipay has 1 billion users but cannot "retain" them not only reflects the users' habit of "use it and leave", but also reflects that Alipay's long-term product strategy of developing products based on functionality is deviating from the direction of market growth.

An obvious question is that Alipay, as a third-party payment tool, can serve both users and merchants, and has effectively solved the payment needs of daily bills and online and offline shopping scenarios. Later, the launch of the Yu'ebao function also met user needs with financial services, achieving two-way growth in user scale and cash flow. But when users do not have clear needs, how can Alipay reflect its own user value?

In response to this problem, Alipay chose to add social functions to extend the usage scenarios. Therefore, in addition to payment and financial management scenarios, Alipay added red envelopes, five blessings and other functions and activities that can generate traffic effects during important marketing nodes during the Spring Festival. At the same time, in combination with the theme of public welfare, Alipay also launched Ant Forest, Ant Manor, Baba Farm, Ant New Village, and Magic Ocean.

Rich functions and activities can indeed have a positive effect on increasing user time, but they cannot solve the fundamental problem of user retention.

According to the 2023 Alipay Annual Discovery Report, nearly 20% of young users steal energy from their friends all day, every day, and nearly 15 million users and their friends have assumed joint custody of their chicks. 15 million is a lot, but it is just a drop in the bucket compared to 1 billion users.

Product functions and activities can be infinitely stacked, "stealing" energy today and "delivering" feed tomorrow, but even if users "steal" energy three times a day, it is only a short stay to achieve a certain goal. These social functions are also "discarded" by users like payment tools, and have not generated real social value and have not been deposited as user assets.

In fact, from the various product functions and financial attributes that Alipay has continuously iterated, we can see that it has never positioned itself as just a payment tool, but a digital life service platform. However, the product idea of ​​focusing on services makes Alipay better at solving specific needs. When users do not have clear needs, Alipay becomes at a loss. Product functions and activities like "mini games" can promote activity in the short term, so Alipay has more and more functions and gradually has everything, but users are only interested in it for a short time and are unwilling to stay for a long time.

2. It’s not too late to fight for social networking again in 8 years

Alipay is not without a sense of content. In 2016, Alipay launched "circle social networking", which was similar to Douban Group and Baidu Tieba to create a new social circle. However, due to the overly radical product strategy, which directly linked rewards with content, a large amount of vulgar content appeared on the platform and was urgently taken offline.

Looking back at Alipay's "social circle", we can find that the product logic at that time already had the ability to gather users from different circles with differentiated content, and to use user feedback to stimulate the internal closed loop of UGC content production. If Alipay could have promptly curbed vulgar content and incubated a group of KOLs to form a driving effect, it would have had a high probability of catching a new round of growth in "content seeding".

Unfortunately, in 2013, Alibaba acquired the then-top social application, Weibo, and WeChat public accounts successfully opened up a self-media ecosystem with "content + social" as the core. Alipay's attempts in the social field were only superficial. What's even more tragic is that the "Circle Social" caused a big mess because of the out-of-control content and had to be shut down.

Compared with the initial demise of “circle social networking”, what is the difference between Alipay’s return to social networking eight years later? The biggest difference is that the times have changed.

In the early stages when information apps controlled the traffic entrance, the "fragmentation" of user time was reflected in the competition among different applications for limited online time. However, the content waterfall and content recommendation mechanism made users' attention increasingly shift to a single platform, and users' media preferences triggered a shift in content supply positions.

From news media to vertical KOLs, everyone is rushing to short videos, live streaming platforms and communities. Emerging platforms also have the ability to break the boundaries of content. In the past, users read global information on news apps and discovered new things on the Internet on Weibo. Now, everyone is watching news live on Douyin and reading industry insider information and searching for local information on Xiaohongshu. The shock brought by media preferences to the content industry has gradually caused the first-mover advantage of a group of early social platforms such as Weibo to be equalized by latecomers.

The success of Xiaohongshu and Douyin has confirmed the traffic effect of high-quality content in the new media environment. Under the new trend, Alipay did not hesitate. In 2022, Alipay was revised, adding "Life Account" in the center of the bottom menu bar, adding short videos and live broadcast content, and introducing MCNs with content types such as pan-finance, life, and leisure.

In July last year, Alipay launched the "Alipay Creation and Profit Plan", which provides incentives to influencers based on comprehensive calculations such as video playback time, content quality, and fan activity. In November, Alipay's "Life Account" fully opened the UGC entrance, supporting users to post short video content in the third column of the App homepage.

Based on these preparatory actions, it is easy to understand that Alipay recruited a large number of Xiaohongshu and Douyin operation and advertising staff, largely to prepare for subsequent content operations. So is Alipay's return to social networking just an over-interpretation? The answer is not entirely.

3. The shift of social scenarios creates a new traffic “lowland”

For Xiaohongshu and Douyin platforms, people discuss their content attributes much more than their social attributes. This is because from a product perspective, the main value of the platform is to attract users to stay with content such as pictures, texts, short videos, and live broadcasts.

Therefore, for a long time in the past, the value of content social platforms was only understood as using content to attract users to form a traffic pool, and the relationship between users was more of a weak one. However, as users' online time continues to increase, the social value of content platforms is also constantly emerging.

In the comment section of Xiaohongshu, you can often see "momos" @ing each other to share their own notes or products. Under the popular videos of Douyin, you can often see users @ their friends to "eat melons". This reflects that users' sharing of high-quality content is no longer limited to sharing outside the site through the forwarding button, but are accustomed to using the @ function to share with friends on the site.

To some extent, this phenomenon means a shift in social scenarios.

Another example that also reflects the transfer of social relationships is that in the second half of last year, "Don't contact if the spark is gone" became a hot topic on the Douyin platform. According to the Jingzhe Research Institute, as long as Douyin users chat for three consecutive days, the "spark" logo can be lit in the dialog box status bar. The longer the number of days of continuous chatting, the different "spark" levels will be unlocked. Therefore, Douyin "spark" has become a manifestation of the closeness of the relationship between friends in real social relationships.

In terms of stranger social interaction, Xiaohongshu shows greater social value.

In the past year, the "friendship" culture popular on the Xiaohongshu platform has become a microcosm of the development of interest-based social networking among young people. Through topic operations, the platform has divided young people with different interests into different circles. At the same time, as a bridge, the platform helps young people with the same interests to establish connections and build trust, and has established a social "utopia" centered on interests on the Internet where everyone is in danger.

In addition, Xiaohongshu and Douyin have also upgraded their functions by opening chat groups, providing an effective path for users to import private traffic from public domain traffic. While consolidating internal traffic, they have also added new social scenarios. Based on these operating methods, Xiaohongshu and Douyin are becoming the secret social bases for some users. Therefore, Xiaohongshu and Douyin have each built a foundation for building strong social scenarios in the two major sub-segments of acquaintance social networking and stranger social networking.

In addition to the content's appeal to users, the social value of a content platform also comes from the migration of users' own social needs.

In daily work and life, WeChat's irreplaceable position determines that it can still occupy the C position in the social application market. However, users are not satisfied with the current situation where all their attention is consumed by a single platform, so some users have a social demand to "escape" from real relationships - more and more young people are eager to establish pure social relationships outside of work and family, and the traffic generated by these new demands has flowed to interest-driven content platforms.

Judging from the achievements of Xiaohongshu and Douyin, interest content not only contributes to new traffic growth points, but also creates a new social space. This may not be the main reason why Alipay poached employees from the former, but it is foreseeable that when Alipay catches up with Xiaohongshu and Douyin and truly makes up for its shortcomings in content, it will not only solve the traffic problem, but also have the real strength to fight in the social field again.

Author: Yugu

WeChat public account: Jingzhe Research Institute