Alibaba Drives the Third Value Renaissance in E-commerce
Alibaba's organizational structure is evolving with the times.
As a company that can continuously draw strength from change, Alibaba understands the philosophy that "only change is constant." Currently, Alibaba Group CEO Wu Yongming has initiated a new transformation by sending an internal letter, integrating e-commerce businesses such as Taobao, Tmall, International Digital Commerce, 1688, and Xianyu into a unified framework. These businesses are now placed under the new structure of Alibaba's E-commerce Business Group, led by Jiang Fan, who reports directly to Wu Yongming.
Not long ago, the National Development and Reform Commission pointed out in an article in the Economic Daily that it is necessary to build a domestic large cycle dominated by domestic demand. In the digital age, the high-quality development of the e-commerce industry is an important part of expanding domestic demand. From this perspective, the integration of Alibaba's e-commerce business group is paving a new way for the value return of the entire industry—the second value return of e-commerce, driven by Alibaba, has officially begun.
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I. "Wild hunting" comes to an end, and the "outlet" is established
Alibaba's organizational change logic has always been traceable.
When encountering new opportunities or significant changes in the industry ecosystem, the group is willing to decentralize and empower frontline businesses to seek breakthroughs. Each time it tries to retract by merging and streamlining, it often means that new experiences have been refined and verified.
In layman's terms, it encourages teams to "wild hunt" in emerging tracks first, and then re-couple with the basic plate based on growth and situation.
The development history of Alibaba's International Digital Business Division fully proves this point. In the early stages of development, on one hand, it connected global buyers through Alibaba's international website and AliExpress; on the other hand, it connected with overseas e-commerce platforms through acquisitions and investments, combining e-commerce experience with localized operations.
From a financial perspective, this "wild hunting" resulted in short-term losses. Taking the first three quarters of this year as an example, Alibaba's overseas e-commerce losses were nearly 10.7 billion yuan. Even in the past few years, some overseas platforms that were "taken over" have also experienced fluctuations in market share. However, the logic of industrial investment often makes short-term data meaningless.
The strategic value of international digital commerce to Alibaba's e-commerce basic plate has been highlighted after years of accumulation.
On the one hand, it has cleared the path for the overseas track with low market concentration.
In the past few years, the issue of e-commerce going overseas has been a typical dumbbell style. Top companies have used their financial capabilities to frequently appear at top international events, while small and micro individuals have followed the selling and playing methods of Amazon, focusing on a steady brick-moving model.
However, a large number of midsection merchants have always been unable to arouse enthusiasm for going overseas. The reason is that the choice cost in this is too high: should they choose Southeast Asia or Europe and America as the destination for going overseas? Should they set up an independent station or settle on a platform? Should they operate by themselves or be fully managed? If these issues are not clear, going overseas can only be a "white give."
Fortunately, Alibaba has filled in all the deep pits. From AliExpress's dual-track empowerment model for self-operation and custody to the "0 return, 0 refund, 0 freight insurance" global free shipping plan for large clothing launched in July this year, it has greatly improved the connection efficiency between Chinese good products and global consumers.
Similar support measures have made e-commerce going overseas more and more smooth. The enthusiasm of merchants and the efficiency of goods supply have been improved. As of August 5, the overseas transaction amount of Taobao's clothing industry has increased by nearly 40% year-on-year, and the overseas sales amount of merchants participating in clothing-free shipping has increased by nearly 90% year-on-year.
In a sense, it is Alibaba's continuous expansion of product categories that have indirectly led to the inspiring story of "the four little dragons of cross-border e-commerce fighting Amazon" last year. Since April 2024, the number of new merchants on Alibaba has increased by 77.5% year-on-year.
On the other hand, the overseas market has become a fertile field for the landing of Alibaba's AI capabilities.
In the first half of this year, Zhang Kaifu, vice president of Alibaba International Digital Business Group and head of AI business, revealed at an event: in the past year, Alibaba's international AI team has tested AI capabilities in more than 40 scenarios, empowered 500,000 small and medium-sized merchants, and optimized 100 million products. The demand for AI from merchants is also growing, and the usage of AI by merchants is also increasing significantly.
Not long ago, Alibaba International Station successively launched: the world's first B2B AI search engine that provides a one-stop "purchasing consultant" service for overseas purchasers; AI Business Assistant 2.0, which provides AI intelligence empowerment for small and medium-sized enterprises in product release, reception, marketing, and compliance. It can be expected that these AI application scenarios will produce new chemical reactions with domestic e-commerce businesses, and also provide a solid base for this wave of high-quality "going overseas fever."
More and more results show that Alibaba e-commerce has the potential to become the "outlet" for Chinese manufacturing and Chinese brands.
I remember that after Wu Yongming took office as CEO of Alibaba Group, he clearly defined "user first, AI-driven" as the two strategic focuses. Overseas e-commerce business is undoubtedly the "top student" in these two directions. Whether it is the infrastructure results of the "outlet" or the strategic fit with the direction of AI, it makes this time's overseas "wild position" return to the main force seem natural.
II. Correcting the value balance and promoting the industry to return to the right path of growth
In recent years, there have been many innovations in the e-commerce industry, but many things have changed their taste in the process of creation.
Attempts like "only refund," which were originally intended to seek benefits for users, have spawned many wild paths. For example, on some platforms, merchants are supported to quickly increase the weight of their stores by tactical losses, and then abandon the store and start over by substituting the good with the bad to complete the harvest. This has turned an industry that focuses on experience into a quantitative financial model. On many media platforms, merchants can be seen complaining about similar issues, calling for "don't let honest and honest entrepreneurs pay for unscrupulous merchants."
Some merchants do not want to bear the unreasonable losses of "only refund" and will falsely claim that the goods were damaged or lost during transportation through freight insurance and other methods, thus turning the contradiction to the post station and the express side. For some goods that are not expensive but difficult to obtain evidence, they become express brothers who pay out of their own pockets after "only refund."
On the surface, such models can bring more revenue to the platform - frequent triggering of only refunds is a breeding-style advertising trigger, merchants bear the loss, but the investment flow costs are still paid. Users do not get the desired goods but get a refund, and they are willing to continue browsing products. This creates space for the exposure and clicks of similar products. The result is that one or even 0 real sales conversions bring multiple advertising revenues.
But such results damage the long-term business enthusiasm of merchants. To ensure a good harvest in both drought and flood, merchants will reserve the compensation cost from the pricing level, and the quality of the goods that users buy will become more and more uncontrollable, forming a double loss spiral.
Unconsciously, merchants are tied to a burning chariot. Jumping off the car means losing opportunities. Continuing means enduring the high-intensity operation and losses brought by internal volume. This "bad money drives out good money" model has also allowed the wool party of the past to make a comeback, using various "0 yuan purchases" to break the last line of defense for merchants.
Regarding the measure of "only refund" to protect consumer experience, Alibaba will also follow up and judge the value of this model through practice. At the same time, Alibaba has also taken the lead in adjusting and loosening the industry. In July this year, Taobao and Tmall announced the optimization of the "only refund" strategy, hoping to create a more just e-commerce environment with the experience point system. In just one month, the proportion of merchants with a score of 4.8 and above on the entire platform under the new system exceeded 30%, and unreasonable "only refunds" have sharply decreased, with the merchant appeal completion rate exceeding 95% within 7 days.
Regarding disputes that may arise from return and exchange issues, Taobao actively introduces platforms, logistics, and insurance companies to create a return treasure product for reasonable hedging. While reducing the return cost for merchants, it also makes the return and exchange model healthier. Under the new model, merchants have also shifted from rolling low prices without considering the consequences to being driven by quality and price ratio.
Considering the marketing pain points of merchants, Alibaba's mother released a new product "full-site promotion" in the first half of the year and fully accessed the search and recommendation resources of the Taobao system, breaking through the barriers between the natural and paid traffic pools of the Taobao system. During the Double 11 period, Alibaba's mother's "multi-wave collection," "brand effect joint investment," and "payment exemption linkage" and other dividend strategies have allowed a large number of merchants to leverage explosive products to drive brand power and penetrate groups, achieving high-quality growth in GMV.
It can be seen that when the value balance is corrected, the enthusiasm of merchants will also be fully mobilized. With a good business atmosphere that encourages internal cultivation and allows the excellent to stand out, merchants who are liberated from internal volume will also have more motivation to "go out." Alibaba's overseas e-commerce has created the "outlet" can also play a greater role in helping the industry return to the right path of growth.
III. The third value return of the e-commerce industry
In the adjustment and change process of Alibaba's e-commerce, you can always see some microcosms of industry development. From the results, these changes have distinct altruistic characteristics, continuously leading the industry from chaos to value return.
In the early stage of e-commerce industry development, the lack of a third-party payment platform greatly increased transaction risks. The emergence and independence of Alipay accelerated the arrival of the "credit business" era, which is also the first value return in the industry.
The division and integration of Taobao and Tmall have accelerated merchants' understanding of consumer diversity and provided direction for them in the digital business era, which is another value return.
Alibaba's current major integration of e-commerce business allows merchants to regain their original intention of e-commerce, to extricate themselves from internal volume, and to have the ability and confidence to root in the global market to seek high-quality growth and join the great era of e-commerce going overseas.
This third value return has just begun.