In the wave of Alibaba’s re-entrepreneurship, Xianyu is becoming an important pioneer in the group’s business expansion. This article provides an in-depth analysis of Xianyu’s great leap forward in business, from launching the “money-saving coupon” to enter the group buying market, to setting up a commercial team to strengthen monetization, and then to laying out offline circulation stores.
“Alibaba has no preservative in its genes, only creation. Ali people, return to the original intention and start a new business. ”
On May 9, Alibaba CEO Wu Yongming issued a letter to all employees, saying that two days ago, Alibaba unveiled a 1:1 replica of the lakeside cottage in Xixi Park and moved into the global headquarters, not for nostalgia, but to remind everyone that Alibaba is still starting a business today.
Under the wave of Alibaba’s re-entrepreneurship, Xianyu has rushed to the forefront of the group. On the eve of this year’s May Day holiday, Xianyu released a variety of consumer goods such as catering group buying, software membership, wine and travel ticketing, among which McDonald’s, KFC, Luckin, Starbucks and other catering in-store vouchers are Xianyu’s main products.
Entering the group buying market is just the tip of the iceberg of Xianyu’s business expansion. Recently, Xianyu has continued to expand, setting up a commercialization team to strengthen monetization efficiency, establishing a two-dimensional and pan-entertainment division to re-invest in the millet economy, and offline Xianyu circulation stores have entered an accelerated layout period, and so on.
The starting point of this change can be traced back to Alibaba’s fiscal conference call for the second quarter of fiscal year 2024, when Wu Yongming delegated 1688, Xianyu, DingTalk, and Quark as the first batch of strategic-level innovative businesses, and no longer limited its business scope by group positioning.
In February this year, when Jack Ma inspected Alibaba, he focused on the two major businesses of Xianyu and Quark, accompanied by Xianyu President Ji Shan and Alibaba Group CEO Wu Yongming, which was regarded as Alibaba’s military parade to the vanguard.
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Since then, Xianyu’s expansion has almost no boundaries, and after many years of silence in Alibaba’s word-of-mouth business, Xianyu has included the business of local platforms and OTA platforms in one go. This platform, which was once regarded as a Buddhist blood transfusion provider of Tao e-commerce, is exploring the business boundaries of the entire Alibaba Group.
01 Xianyu Leap Forward
Wu Yongming wrote in an internal letter: “The group will focus on several core battles with a saturated investment style. These battles will be involving multiple business parties, giving full play to their respective strengths and strengths. ”
Obviously, Xianyu has shown a saturated attitude of investment. Offline, at the beginning of the year, Li Shijie, vice president of Xianyu, shouted that the Xianyu circulation store format will open in 100 cities across the country in five years, radiating thousands of communities.
Group buying is the main scene of Xianyu’s great leap forward. During the May Day period, Xianyu, Ele.me, and Taobao flash sale vigorously issued coupons. According to official data, May Day Xianyu card and coupon orders increased by 140% year-on-year, of which catering orders increased by 170% year-on-year. tourism and leisure orders have doubled.
“I used to buy coupons in Xianyu.” Some users said to the “market phenomenon”. As an idle trading platform derived from Taobao, Xianyu has no shortage of coupon products before, but it is the first time to publicize the local life group buying mentality. At present, Xianyu has placed the money-saving coupon at the first-level entrance of the homepage and displayed it in bold red letters.
The Slogan of this money-saving coupon activity is “Eat, Drink and Have Fun on Xianyu”, which directly benchmarks Meituan’s early product Slogan “Eat, Drink and Play, All in Meituan”. Xianyu disclosed that the platform puts products with higher discounts at the top according to the merchant’s credit and product prices to ensure that they are viewed first by users.
Xianyu Hehuo Man is a supporting marketing campaign officially released by Xianyu. When users post consumer content with Xianyu discount information to Xiaohongshu Notes, and the content is evaluated and approved by the platform, they can “sit and wait to collect money”.
Platform cases show that the amount that can be obtained after each note is published is between 6 yuan and 21 yuan. Among them, catering group purchase coupons are the main promotion scenarios of Xianyu Hehuo people. In this case, Xianyu guided users to search for brand keywords such as Starbucks, KFC, and Luckin and place orders for group purchase coupons on Xianyu. A user posted a note on Xianyu ordering Starbucks coffee and received a bonus of 17.3 yuan.
The platform even preset the topic of Xiaohongshu for users, and the “City Elephant” experience found that in order to get the commission of Xianyu Hehuoren, it is necessary to copy the release materials prepared by the platform, and the content of the notes is more than 50 words, and the specific content of the material is “#神奇的闲鱼, human development of Xianyu is really less than 1%”.
This means that Xianyu is launching a traffic siphon war against Xiaohongshu. According to the price of Xiaohongshu’s basic amateur business order, Xianyu has to pay at least tens of yuan per note, but in the Xianyu Hehuo Ren plan, the basic reward for users is only 1 yuan/article, and the number of likes on the note can only participate in the prize pool of 20,000 yuan total. To meet the full sharing standard, the number of likes on the note needs to exceed 30,000.
At the same time, Xianyu’s self-positioning is also changing.
Last year, Ji Shan, president of Xianyu, said in an interview that Xianyu must go beyond the scope of C2C e-commerce, transform into an interest platform, and respect the creativity of young people:
“Previously, users made money on Xianyu by selling goods, and it will be more diverse in the future. The direction that young people are interested in is the direction we want to focus on, which is our clear attitude. ”
For Xianyu, the great leap forward in business means completely abandoning the positioning of second-hand Taobao and being an interest platform for young people, from group buying to figures to services, after gaining an independent status from the Alibaba system, Xianyu’s business no longer has boundaries.
02 The burden of radicalization
Compared with 1688 and DingTalk, Xianyu and Quark, which Jack Ma inspected in February this year, obviously have more in common. In addition to the same to C business, due to the relative restraint of commercialization in the past, both have accumulated a large and highly active user group and have a solid user base. Compared with highly functional products such as Taobao and Tmall, Xianyu and Quark obviously have more room to go from idle chess and cold pieces to strategic breaking the circle.
However, in terms of business development paths, the directions of the two are completely different. Quark chooses top-down product innovation and invests fully in the direction of AI search. The transformation direction of Xianyu is bottom-up, so that new business can follow user interests.
The slogan that Xianyu Hehuo people must bring “Human development of Xianyu is less than 1%” shows this tendency – Xianyu emphasizes the creativity and immersion of community users, hoping to move towards the interest community of young users like Bilibili and Xiaohongshu.
Although business innovation has accelerated significantly, from the internal perspective of Xianyu, its business is still conservative, and the tiger sniff report disclosed that at the beginning of this year, Ji Shan asked the team why Deepseek could break the past cognition and try things that others dare not think of:
“Our innovation is far from radical and daring enough.”
In Ji Shan’s view, the primary obstacle for Xianyu to move towards 100 million DAU products is insufficient business supply and the frequency of users’ transactions is not high enough. According to the “Late Latepost” report, last year Alibaba asked Xianyu to double the number of users within three years.
This has become the underlying driving force for the great leap forward of Xianyu’s business, before that, Xianyu was a low-key, Buddhist second-hand + social platform, as the long-tail ecology of Alibaba e-commerce, to continue to do traffic transfusion to the Tao platform. Chen Weiye, the head of Xianyu in the early days, once said that Xianyu will stick to its C2C positioning and not do a second Taobao; Chen Lei, former general manager of Xianyu Division, also mentioned that Xianyu is positioned as a traffic generator, not a traffic consumer.
All of this is changing, and in Alibaba’s fiscal second quarter conference call of fiscal year 2024, Wu Yongming proposed the concept of “almighty Taobao”, requiring Taobao to prioritize user purchase frequency over GMV as the core goal of platform operation. For Xianyu, Wu Yongming also has more expectations:
“We believe that the future of Xianyu is far more than that, it is a lifestyle platform that can carry the hobbies and fun of the majority of consumers.”
However, the sudden increase in business has also made some users feel uncomfortable. Some users reported that they felt that Xianyu was no longer a second-hand idle trading platform, and the content pushed on the homepage was very different from before, and there was a lot of uninteresting content.
In addition, Xianyu also stepped on the accelerator in commercialization. In September last year, Xianyu charged a service fee of 0.6% of the turnover to all users, and a 1% service fee for users with more than 10 monthly orders with a cumulative amount of more than 10,000 yuan.
By April this year, Xianyu raised the software service fee for the mobile phone category, and sellers who sell more than six mobile phones a year will add 1% to the original 0.6% basic software service fee; or sellers who sell 10 mobile phones in a month with a cumulative amount of more than 10,000 yuan, Xianyu will charge an additional 1% service fee for the excess.
A Xianyu merchant told “Shixiang” that after the increase in service fees, Xianyu’s individual sellers began to feel the pressure, and the handling fee had been paid nearly 100 yuan when the profit was originally thin.
This year, Xianyu has established a new commercialization department, which means that Xianyu has begun to strengthen the efficiency of monetization in the field of advertising or value-added services. Regardless of the feedback from users and sellers, Xianyu has taken a key step in commercialization.
03 Exploring the way for Ali? Or stuck in internal horse racing
From the perspective of self-positioning, Xianyu is no longer a simple C2C idle trading platform, but has taken the initiative to break through the boundaries of second-hand business and intersect with Alibaba’s product business.
For Alibaba, under the years of competition in the e-commerce market, Taobao’s positioning has been highly mature, and the strategic significance of re-building Xianyu into the second Taobao is not great, and Alibaba pays more attention to the trend attributes of Xianyu – there are many young people, users are highly active, and the user base is concentrated in second-tier cities and above.
Take the two-dimensional category as an example. If you want to buy limited products or just want to buy your favorite character in the set, users often choose to find a purchasing agent to join the group, and each person takes what they need.
In this process, Xianyu has become a must-have trading platform for two-dimensional enthusiasts, and two-dimensional has also developed from user interest to a strategic business of the platform. Obviously, Xianyu hopes to create more special categories similar to the second dimension and tap the consumption trend of young people.
The expansion of Xianyu has not only changed its own business boundaries, but also invisibly reshaped the overall layout of Alibaba’s ecosystem.
For example, catering group purchase coupons were once the business scope of Alibaba’s word-of-mouth and Taobao, and Xianyu’s entry into group buying not only competes with the two in business, but also forms a competitive relationship with Ele.me and Taobao flash sales in the catering takeaway scene.
When Taobao flash sale vigorously promoted inviting users to drink 100 million cups of milk tea, Xianyu was promoting “eating, drinking, and having fun first”, and placed Nai Xue’s tea, Luckin Coffee, Starbucks and other beverage brand coupons under the entrance of the homepage. The “City Elephant” experience found that a cup of Nai Xue’s tea cheese strawberry, which was originally priced at 23 yuan, was only 8.68 yuan for idle fish.
The same is true for video and other platform members and the wine and tourism ticketing business, the former is the inherent position of Taobao for many years, and the latter is the basic business of Alibaba Fliggy.
After Wu Yongming designated the list of the four tigers of Alibaba’s innovative business, Alibaba’s traditional business and innovative business formed a clear offensive and defensive front, Taobao’s traditional business should do deep transaction frequency, while Xianyu’s innovative business is also responsible for user growth and Alibaba’s strategic innovation.
On the positive side, Xianyu is taking the initiative to expand the group’s business boundaries, competing with Meituan and Douyin for the local life market, and competing with Ctrip and Tongcheng for the wine travel market. But to some extent, Alibaba has inadvertently built an internal horse racing system – Xianyu is competing with Alibaba products such as Ele.me and Fliggy for user bases.
Within Alibaba, the user growth rate of similar products is currently weaker than that of Xianyu. According to Quest Mobile data, the number of monthly active users of Xianyu reached 209 million in March this year, a year-on-year increase of 19.36%, ranking first among domestic e-commerce apps. Externally, Xianyu has not yet set off a large-scale subsidy war like Taobao flash sales, but is still using Xiaohongshu amateur drainage to promote the group buying mentality, which makes it lack a decisive competitiveness when facing Meituan and Ctrip.
“All-in-one” is becoming a major trend on Alibaba’s e-commerce platform. Following Taobao, Xianyu has explored the “magical” positioning, but it is not very meaningful to continue to compete with Alibaba products for positioning, and Xianyu needs to expand outward to fight for Alibaba’s market that has not been beaten in the past, rather than taking the lead and “cutting off” all the consumer needs of young people.
