There have been speculations that Alibaba will once again launch its in-store group buying business, but now it is finally here. A reporter from "Kechuangban Daily" learned that today (20th),Taobao’s in-store group buying business for flash sales was officially launched in Shanghai, Shenzhen and Jiaxing. "This is the result of the natural evolution of the business." A relevant person in Taobao's flash sales told reporters that the business launch will cover the core commercial areas of the three cities in the first batch, including tea, desserts, dinners, buffets and urban specialty snacks and other catering categories.
It is reported that this business is not only launched on Taobao flash sales, but also simultaneously on the shelves of multiple Alibaba portals such as Alipay and AutoNavi APP.
Taking advantage of multi-platform traffic, Alibaba officially launched an all-round “encirclement and suppression” campaign against Meituan’s core business.
Taobao, Alipay and AutoNavi launch online group buying
It is worth mentioning thatAutoNavi fired the first shot for Alibaba to increase its in-store group buying business.
On September 10, the new function "Amap Street Sweeping List" was launched on the homepage of the Amap Map APP, allowing users to comprehensively rate and rank merchants. The list covers a variety of business types. The top list includes must-eat food, must-visit attractions, and must-stay hotels, while the street-sweeping list includes fireworks shops, local snacks, etc.
According to reports, the Amap Street Sweeping List is calculated based on 1.3 billion navigations by 51.32 million people in the past year, totaling 22.8 billion kilometers of data. It is screened through 1.18 million stores that users have visited many times and combined with real reviews calculated by Sesame Credit. At the same time, AutoNavi launched the "Fireworks Good Store Support Plan" and issued more than 1 billion subsidies to encourage users to shop in stores.
At the press conference that day, Amap CEO Guo Ning declared: "The Amap Street Sweeping List will never be commercialized. Authenticity is the core vitality of the list, and its core goal is to truly reflect the choices of users."
According to data disclosed by Alibaba on its official public account,In the first week since the Amap Street Sweeping List was launched, the traffic of the fireworks shops on the list increased by 187%.At present, the number of users of Amap’s Street Sweeping List has exceeded 40 million.
However, in terms of entrance settings, unlike Taobao flash sales which have independent traffic entrances on the APP homepage, currently users need to manually search for merchants on the AutoNavi platform to enter the group purchase details page; on the Alipay side, they need to click on the card package and enter the coupon interface to find the relevant entrance.
(Group buying business page of AutoNavi APP)
Cui Lili, deputy dean of the Institute of Digital Economy at Shanghai University of Finance and Economics, analyzed that the street-sweeping list itself is to attract traffic to stores. In Alibaba’s in-store group buying business, in addition to attracting traffic, Amap’s street-sweeping list is like Meituan’s Dianping list. This move is a clear signal for Ali to re-invest in the in-store business and will reshape the competitive landscape in the local life service field.
In fact, Taobao’s in-store group buying business has long been known in the industry. At the recent Alibaba financial results meeting, when investors asked whether there were plans to strengthen the in-store business in local life services, Alibaba China e-commerce group CEO Jiang Fan responded that given the scale of the instant retail (flash sale) business, the channel currently has 150 million daily active users, and these users have needs for in-store pickup and group buying. Based on the considerations of meeting user needs and synergizing with Daojia business, Alibaba has launched testing and exploration in some cities.
In Cui Lili’s view, from April 30 when Taotian’s instant retail business “Hourly Delivery” was upgraded to “Taobao Flash Sale”, to September 10 when AutoNavi released the Street Sweeping List, and now to the launch of in-store group buying business, Alibaba’s layout in the local life field has gradually become clearer, and the puzzle has become more complete. Obviously, increasing the in-store group buying business is a key step in Alibaba's local life strategy. Its core goal is to build a complete ecosystem of "home + store", directly hit Meituan's core profit areas, and at the same time open up new growth paths for the main e-commerce business.
What is Alibaba’s confidence in in-store group buying?
Faced with Meituan, the industry leader in in-store group buying, where does Alibaba’s confidence come from for this attack?
At the latest Alibaba financial results meeting, Jiang Fan explained Taobao’s flash sale strategy in detail for the first time. He pointed out that Taobao’s flash sales have exceeded expectations in terms of order scale, user scale, merchant supply and transportation capacity. Delivery orders have already led the industry. The phased goals in terms of scale and mentality have been achieved beyond expectations. In the long term, it will achieve industry leadership in efficiency.
It is reported that in August this year, the daily order peak of Taobao flash sales reached 120 million orders, and the average order volume on Sunday reached 80 million orders, driving the overall number of monthly flash sales buyers to 300 million, an increase of 200% compared with April this year.
From the merchant supply side, Jiang Fan revealed that with the rapid growth of business scale, a large number of new merchants have joined Taobao flash sales, especially high-quality supply has reached the industry-leading level. For Taobao’s core e-commerce business, food delivery is also a good business. In the first three weeks of August, the monthly active consumers of Taobao app increased by 25% year-on-year.
Jiang Fan predicts that with the arrival of millions of brand stores in the next three years, flash sales and instant retail will achieve an increment of 1 trillion transactions on the Taobao platform.
Jiang Fan also said,Ele.me has made great progress in the past few years. Although it is not reflected in market share, it has made significant improvements in basic capability building.Taobao's flash sales can achieve such rapid progress in a short period of time, thanks to the capabilities accumulated by Ele.me over the years. Now that Ele.me is integrated with Taobao, it has Taobao's massive active users, Ele.me's merchant base, and logistics capacity system. The investment logic is also different from the past. It does not look at the food delivery business in isolation, but considers its overall incremental benefits to the entire e-commerce business in the short, medium and long term.
Cui Lili, deputy dean of the Digital Economy Research Institute of Shanghai University of Finance and Economics, analyzed to a reporter from the Science and Technology Innovation Board Daily that Alibaba has a deep foundation in the local life field. Its subsidiary Ele.me has abundant merchant resources and instant delivery capabilities. Hema has a mature business in the field of fresh food, providing a foundation for in-store business. AutoNavi has long been seeking breakthroughs in the commercialization of local life. This time it has taken a different approach, using objective evaluations to link up with Ele.me merchant resources. Moreover, the early-stage instant delivery subsidy strategy expanded the market size, and now Alibaba is able to compete with Meituan in the local lifestyle field. In Shanghai, Jiaxing and other places, Ele.me and Hema have obvious advantages; in Shenzhen and surrounding areas, Alibaba invested heavily in the first half of the year and achieved outstanding results in the competition for market share.
but,Alibaba also faces challenges in promoting its in-store business. According to Cui Lili, the biggest problem is changing user habits.Meituan has been deeply involved in the field of in-store group buying for a long time, cultivated many loyal users, and formed solid consumption habits and brand awareness in the hearts of users. If Alibaba wants to seize share, it needs to guide users to change their consumption paths and choice preferences. This is destined to be a difficult and protracted battle.