Alibaba’s extensive adjustment – Taobao and Tmall will be fully integrated
On January 6th, 2022, Trudy Dai (Shan Dai), the new president of Alibaba’s Community E-commerce since March of 2021, sent an internal letter announcing a new round of organizational adjustments of Taobao, and at the same time he newly established three centers:
User operation and development center.
Set up industrial operation and development center.
Set up a platform strategy and operation center.
The most important change of this adjustment is that Taobao and Tmall will be fully integrated based on the three centers, which will form a unified platform mechanism.
‘All these changes are to focus on user experience, customer value, eliminate inertia thinking and encourage mechanism innovation.’ – Shan Dai
The adjustment was evaluated as a large-scale organizational restructuring. Ten years ago, online shopping had just become popular in China. Consumers initially adapted to online shopping, e-commerce platform was in the ‘barbaric growth period’. Users needed more standardized and specialized e-commerce services. On the business side, more and more enterprises saw the chances of e-commerce and started to transform from Brick and Mortar offline stores to sell their products online.
Reasons for merging Tmall and Taobao
The existence of Taobao and Tmall was the support and service to meet the needs of these customers. However, there is a difference between Taobao and Tmall?
A Taobao shop can be opened by anyone without a business license (real-name authentication of a personal ID card is required). It literally is a C2C shop. These quite easy-to-take hurdles to open a Taobao shop, brought this platform the image to literally sell anything a person (or company) could offer.
Tmall stores need to be registered by a company, which means the threshold for applying for Tmall stores is higher than that of Taobao. So literally a Tmall store is a B2C shop. The customer can always be sure that there is a real existing business behind a sale.
Compared with Taobao, Tmall’s excellence is its ‘high quality’. Taobao, which started with C2C at that time, was more like a ‘Market’. The ‘Market’ naturally has a dazzling array of goods, but it is inevitable that it sometimes feels messy. In order to meet users’ high-quality shopping needs, Tmall provides 100% quality guaranteed products, 7 days after-sales service with no reason to return, cashback of shopping points, and other high-quality services. This shows that Tmall and Taobao meet the differentiated needs of users.
Besides having more attractive services than Taobao, Tmall’s store owners must pay Alibaba a commission for every item they sell. Therefore, merchants are pushing Tmall sellers’ products. Invisibly, Taobao and Tmall have formed a competitive relationship.
However, after ten years, Taobao’s user experience is getting better and better, and its service quality is getting higher and higher. On the other hand, there is a rise of new shopping platforms such as Pinduoduo. It’s undoubtedly a signal: it is time to go to a new stage.
Nowadays, the battle for e-commerce is intensifying. Today, with the increasing convergence of Taobao and Tmall, the competition between those two has become a major drawback, that drags down the organizational efficiency of Alibaba.
Shan Dai merges Taobao and Tmall and sets up three centers, which releases the key signal of Alibaba’s changing path: unite and consolidate the position of e-commerce.
Benefit for both – users and businesses.
After the process has fully finished, Taobao and Tmall will be fully integrated. Consumers and businesses will benefit from it.
First of all, the consumer shopping experience will be greatly improved. Previously, although Taobao and Tmall belonged to the same app, they followed two different platform mechanisms, and the most intuitive performance was the rules of full reduction during the promotion period.
After this integration, the preferential rules will be simpler. The user operation and development center will be dedicated to providing a simpler, easier, and more comfortable shopping experience.
Furthermore, the growth path of small and medium-sized businesses will gradually become clear. Shan Dai specifically mentioned in her internal letter that ‘Providing small and medium-sized businesses with full life cycle consumer operation and commodity operation capabilities is important’. Compared with big businesses, small and medium-sized businesses are facing greater challenges. The platform service will further enhance the business confidence of small and medium-sized businesses.
To sum up, with the upgrade of business services and consumer experience, Alibaba will further consolidate, strengthen consumers’ minds and create greater predictable growth opportunities for different types of businesses.
In the future, Alibaba may also introduce more policies that are beneficial to the development of small and medium-sized businesses. From this point of view, small and medium-sized businesses will have a wave of development opportunities. Obviously, it is a good time to carry out an e-commerce operation with Jademond now. Develop your brand e-commerce, improve your brand awareness and get high returns. All Jademond’s clients will be guided and helped by their dedicated customer success manager with all changes this will bring to their business.