At a time when the traffic dividend has peaked and the e-commerce pattern is stabilizing, why can Taobao flash sales emerge and become the “super consumption entrance” that Alibaba is betting on? It is not only a channel revision, but also an in-depth game about user mentality, product efficiency and platform strategy. This article will dismantle the product logic and business intentions behind Taobao flash sales, and take you to see how it tries to reconstruct a new consumer order beyond the “low price”.
In the field of e-commerce, “the world’s kung fu, only fast and not broken” is often just a misunderstanding, and “the world’s kung fu, only to better meet the needs of users without breaking” is the correct answer. User needs are diverse, but they can be summed up in four words: how fast and easy to save.
In the past many years, e-commerce platforms have formed differentiated user mental anchors by virtue of their respective advantages in “how fast and how easy to save”. Users often use different platforms to meet the needs of different dimensions.
However, for countless consumers, they are always looking for the optimal solution in the combination of “how fast and easy to save”, and what they want is not to use platform A when they need to be “more” and platform B when they want to be “fast”, but to meet their own needs in the supply category of goods and services, cost performance, and performance timeliness at the same time.
Some time ago, Alibaba announced the merger of Ele.me and Fliggy into Alibaba’s China e-commerce business group, bringing the “big consumption platform” strategy into the public eye.
The “big” of the big consumer platform should be reflected in the great commercial potential. Whether it can leverage the new consumption volume is the best litmus test for the potential of large consumption platforms.
Can its potential be realized? Taobao flash sale has opened the order volume data for more than 2 months, which provides a peep incision for this. After the official announcement of the launch of the 50 billion subsidy plan on July 2, Taobao’s daily orders for flash sales have now exceeded 80 million, which is about a week after its daily orders exceeded 60 million.
From the full launch on May 2 to the order exceeding 80 million on July 5, Taobao Flash Sale took only more than 2 months to complete the order volume target that many platforms took many years to achieve.
Above the sea, there is a single volume growth rate that sets a new industry growth record, and below the sea is the creative release of market capacity by the “big consumption” model, the in-depth exploration of service consumption potential, and the in-depth reconstruction of merchant ecology and user experience. The steep growth curve is just the “fruit” of many causes and one effect.
01
What is the concept of daily orders exceeding 80 million? There are several data available for reference.
First, before JD.com’s high-profile entry into the game in April this year, the total daily order volume of Meituan and Ele.me, the main players in China’s food delivery market, was about 100 million (including about 80 million orders from Meituan and about 20 million orders from Ele.me).
Second, combined with the daily order volume announced by Meituan (more than 120 million), the current daily order volume of the track has exceeded the 200 million mark. In other words, the daily order volume has increased by 100 million.
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Simple calculations, Taobao’s flash sale daily orders increased by about 60 million (minus Ele.me’s original daily orders), accounting for about 60% of the incremental market. This is undoubtedly an unprecedented change in the market pattern of the large consumer market, and it also means that Taobao flash sales have become the main engine of market expansion.
Why can Taobao flash sales achieve explosive growth? The fundamental reason is that “big consumption” as a new business model can bring a large number of new scenarios that have not existed before and create many new experiences that were rare before.
From the perspective of e-commerce, changes in the form of e-commerce are often accompanied by the reconstruction of the logic of “people-goods-field”.
The “big consumption” model breaks the limitation of traditional instant retail that only focuses on catering takeaway, deeply integrates the richness of goods in remote e-commerce with the timeliness advantage of near-field delivery, and creates a new consumption scenario where “everything can be flash sold”.
Under this framework, consumers (people) can change from “receiving goods a few days after placing an order” to “buy and get on demand”, commodity warehouse distribution (goods) will change from “standardized shelves” to “localized supply + national warehouse deployment”, and the scene (field) can be expanded from “single shopping” to “instant service + multiple experiences”.
The essence of the “big consumption” model seems to be fast, but in fact it uses fast as a catalyst for scene innovation and experience innovation.
Cotton Times expanded the store distribution range to 0-8 kilometers, and the transaction volume increased by 200% month-on-month during the 618 period; Decathlon combined “store pick-up” and “hourly delivery”, and the average daily orders during Tmall 618 increased by 2.2 times month-on-month…… Behind this is the new scene brought by Taobao Flash Sale’s integration of Taobao Tmall commodity pool, Ele.me’s supply of distribution resources, and Alibaba’s AI technology, with the full-link optimization measures of “demand forecasting-inventory front-intelligent scheduling” and the hierarchical fulfillment system of “30 minutes for fresh food, 1 hour for digital, and 2 hours for clothing”.
After the leading brand in the bicycle industry opened the “store pick-up” service in Taobao flash sale, the daily sales exceeded 3 million yuan on the fourth day of launch, and the daily order volume exceeded 1,000 orders…… Behind this is the integration of “online price + offline experience” used by Taobao flash sales, which solves the pain points of traditional e-commerce “after-sales lag” and offline retail “price opacity”, and brings a new experience that can be obtained with online discounts and offline instant installation and commissioning services.
In essence, the “big consumption” model creates not so much a “faster e-commerce platform” as a “full-scenario consumption ecology that better understands user needs”.
Taobao flash sales created tens of millions of incremental orders in more than 2 months, which is the market’s verification of the effectiveness of this model.
02
“Big consumption” is an adjective and a verb – integration is the original meaning of its title. What the big consumption platform focuses on building is a comprehensive consumption center that spans physical goods and services, and will integrate physical consumption and service consumption.
Whether it is immediate demand products such as emergency medicines and fresh food, or planned demand products such as digital products and large home appliances, they can usher in a doubling of sales in “online ordering + nearby stocking + instant delivery”.
According to the data, among Taobao’s flash sale physical orders, the 3C digital category increased by 179%, the sports shoes and clothing category increased by 150%, and the flower and green plant category increased by 200%. These physical goods limited by display space and radiation range in offline retail have reached new customer groups through LBS-based instant delivery services, and have been opened up by Ren Du Ermai.
What needs to be seen is that among the more than 80 million daily orders of Taobao flash sales, more than 13 million non-catering orders, which include a large number of service consumption. This shows that “big consumption” covers immediate retail but exceeds instant retail, and the corresponding “physical transaction” of retail is a narrowing of its connotation. It also shows that large consumption platforms can play an important role in the context of the upgrading of consumption structure and the development of the service industry as an important support for the transformation of the national economy.
Li Daokui, a well-known economist and professor at Tsinghua University, believes that expanding domestic demand needs to increase the frequency of service consumption, “There is a ceiling in physical consumption, and the update of durable consumer goods seems to be relatively low-frequency, but service consumption can increase the frequency. ”
These days, many restaurant operators have ushered in the phenomenon of exploding orders: under the temptation of large full reductions and free red envelopes, many users have opened the “additional meal” mode. On July 2, Taobao flash sales orders for afternoon tea scenes such as coffee and drinks increased by 170%, supper scenes increased by 190%, and the business of small and medium-sized catering merchants increased by 140% month-on-month.
There are also many low-frequency life services that have increased geometrically. For example, the search volume of “housekeeping services” on Taobao flash sales increased by 80% month-on-month, and the orders for “home appliance maintenance” increased by 55%.
The play of “online discounts + in-store experience installation and debugging” highlights the growth space brought by the integration of goods and services. The connection between physical consumption and commodity consumption under the “big consumption” structure can also arouse more people’s willingness to consume.
When the frequency of service consumption is combined with the expansion of physical consumption, the driving effect on domestic demand will increase geometrically.
Li Daokui calculated that Taobao’s flash sale subsidy of 50 billion yuan can at least leverage the incremental consumption of 100 billion, and the incremental space and employment opportunities created for the service industry are even more amazing.
When it comes to low price + instant delivery, many people will instinctively think of involution competition. Over the years, the involution has caused many parties to be burdened: merchants are forced to reduce prices and quality in order to obtain traffic, users are trapped in the consumption quagmire of “low price and low quality”, and the platform faces the risk of merchant withdrawal and user outflow.
The 50 billion subsidy of Taobao flash sale provides an involution solution of “supply-side concessions + demand-side volume” based on the principle of “rolling yourself and not rolling up merchants, and supplementing users and making up for merchants”.
It is a two-way increase to help the supply side with store subsidies, commodity subsidies, distribution subsidies, commission exemption and commission reduction, and activate the demand side in the form of fixed price, free single card, large red envelopes, etc. In the end, the active investment of the platform can guide the focus of enterprise competition from “competing for stock” to “creating increments”, and from “price involution” to “value competition”.
What is certain is that when merchants are no longer tired of price fighting, the business ecology will be healthier; When the consumption threshold continues to be lowered, the potential of domestic demand can be truly released; When online and offline integration into a new scenario of “opening up goods and services + minute-level delivery”, the consumer market can open up an incremental blue ocean.
03
Winning 60% of the incremental market in a short period of time is a stamp on the commercial potential of Taobao’s flash sale “big consumption” model.
As we all know, in recent years, the e-commerce industry has become a mess. Volume is a sign that incremental expansion has entered a bottleneck.
The big consumption platform is to rely on the global ecology to open up and create a new sea in the red sea: through the cross-form integration of “far-field e-commerce + near-field distribution + global ecological collaboration”, it brings multi-touch conversion entrances to merchants and brings one-stop satisfaction of multi-faceted needs to users, so as to realize the structural reshaping of e-commerce and create real new consumption increases.
Because of this, many leading platforms are gearing up to build a super consumption entrance covering the whole life scene.
But this is destined to test the platform’s closed-loop ability of the whole life scene and the ability of global ecological collaboration.
From the perspective of industry competition, several major platforms have their strengths and weaknesses: Meituan has the advantages of takeaway mentality and near-field delivery, but the supply of physical goods still needs to be improved; JD.com has supply chain capabilities, but local life services are still being cultivated.
Taobao deeply integrates the advantages of Taobao Tmall’s far-field e-commerce and Ele.me’s near-field delivery capabilities, and then it is necessary to strengthen the user’s instant consumption mentality on the platform – to some extent, the 50 billion subsidy is also a way to “strengthen the mind”.
It is also the seamless connection of “far field + near field” based on the integration of data, traffic, supply chain, etc., so that Taobao not only retains the characteristics of “richness”, but also meets the needs of “immediacy”, forming the dual competitiveness of “full coverage of life scenarios + instant performance”.
With these two advantages, Taobao Flash Sale has been able to open up the positive enhancement loop of “empowering the platform for offline merchants’ sales flow, and allowing platform e-commerce to gather traffic to empower offline merchants”, becoming a veritable comprehensive consumption platform.
More than 80 million orders are the iconic node of Taobao flash sale, but it is obviously not the end. It is not difficult to foresee that with the continuous release of 50 billion subsidy energy, the “big consumption” model of Taobao flash sales is expected to leverage more chain reactions.
In the short term, it can continue to promote order growth and user habit development; In the medium term, it can give birth to more new scenarios where goods and services are integrated under the series of “flash sales”, such as “home flash sale + installation service”; In the long run, it may reconstruct the retail infrastructure and promote the integration of online and offline to a deeper level to meet the needs of “unbounded” user needs.
Subsequently, the domestic demand of large consumption platforms will become more and more obvious in driving value and consumption.
At least for now, it is not a big consumption platform that is not rushing to divide the cake (seize the stock) but to make the cake bigger (create increments), and at a time when boosting domestic demand and expanding consumption has become a key factor in the economic recovery, it has stacked a thick layer of buffs to “help release consumption potential”.
