On the 10th of January, Alibaba published an annual report on Intellectual Property Rights. One of the highlights is since Alibaba was a preeminent fight against counterfeit goods, a gaining adhesion of counterfeit sellers are moving their market towards mini-programs and Pinduoduo, an e-commerce platform. They even build an overseas webpage through Facebook to introduce a traffic flow into their local platform to sell fake goods. Despite the fact that Pinduoduo and Wechat never made an official statement regarding Alibaba’s published report, however since then, a competition between Taobao (Chinese online shopping website similar to eBay) and Pinduoduo was brought into the public.
With the help of WeChat’s traffic flow, Pinduoduo has totally immobilized Taobao in just two years. However, with WeChat’s enormous 980 million traffic, Pinduoduo may just be an unimportant might within the bulk of mini-programs.
Currently, Wechat can’t share its content to Taobao directly and vice versa, so users can only share their information through “Tao password”. When this was introduced, a lot of people thought that this was almost identical to Baidu’s strategy, but, its not.
Taobao didn’t want it’s users to develop the routine of purchasing straight in WeChat. Undismayed by their policy, they prefer utilizing only its traffic flow. Hence, they adopt hundredths of TaoBao promoters, who are responsible in creating traffic within the circle of Wechat sellers. According to an insider, the daily numbers of transactions from Wechat to Taobao is at least 1 billion.
Wechat is not in favour of this situation, defensively finds a way to block Taobao’s strategy. Even in the year 2017 itself, Wechat had made a few planned measures. Unfortunately, it doesn’t get to the core of the issue. Consequently, WeChat found a way to solve it. Instead of allowing Taobao to gain an upper hand, Wechat hit back by attracting the same group of people to do business on its own platform so that sellers, buyers and prompters can form a closed loop system, and that happened when they announced their mini-programs on the 9th of January.
This development from WeChat was not to be underrated. They enhance their product delivery speed from 3 days to 1 day, which reduce the user’s purchasing cost, a good strategy, thus causing a larger amount of purchasers to migrate to their own platform. Most importantly, this traffic is established by the business seller themself and allows an accumulation of traffic within the WeChat ecosystem. As for this, during WeChat’s public courses this year, Zhang XiaoLong (also known as the “father of wechat”) believes that Wechat’s search system will be the next entry gateway, and it proves by their high traffic.
As of now, Taobao is worried on Pinduoduo’s performance because it is currently the only e-commerce platform that does not share the same traffic system as Alibaba and is a premier platform for local online retailers.
In the e-commerce field, there are a lot of e-commerce platforms like Fanli, ChuchuJie, Mizhe, Juanpi and Mogujie etc. You can treat these platforms as a form of Taobao Coupon or a huge Taobao Promoter. Their platforms does not pose a threat to Taobao and has quite an influence on them. If it will produce a conflict with Taobao, it can easily take over and deliver a striking blow to them. In a way, Mogujie’s achievement today partly comes from one of Taobao’s defensive strategies. Because of the defensive measures taken, Mogujie has since found another way out to be independent.
However, Pinduoduo is different, it was linked to WeChat. Most of its original users enter this mobile e-commerce era directly without the needs of a personal computer. However, with the advantage of Wechat’s 9.8 million users pool, Pinduoduo becomes an envious target of Taobao, yet it has no power over the market.
Our parents can use Wechat to gain red packets, share, connect and pay using Wechat. In this case, mini-programs and Wechat provides a solution that suits our today’s users generation.
As of now, Taobao still hasn’t pit face to face in a battle against Pinduoduo. Of course, when that day comes, Taobao has no power against WeChat’s traffic at all. WeChat can easily overtake Taobao’s promoters with a move like the year before, preventing Taobao from overusing WeChat’s platform for their own usage.
Last January 15 2018, Zhang XiaoLong’s WeChat public lecture PRO became popular in the internet community. One of the important thing to take note of, is that WeChat’s DAU (daily active users) maintains at 800 to 850 million, while WeChat’s at 980 million, closely tipping to a billion.
According to WeChat’s current traffic, being on the top against its peers is not a problem. However, in the e-commerce field, WeChat has some imperfections. Certain people believes that Tencent company doesn’t have the skills yet to perfect the e-commerce spot. Hence, WeChat uses their flaw to their end. They only create a basic structure and provide a complete ecosystem, how the retailers come up with their business models.
When WeChat’s ecosystem improves further, Taobao’s retailers will slowly be attracted over and over. But in the beginning, most of them have no idea how to take this step of transition or transformation. Just like You An Mi mentioned, they should get a portion of that traffic with good retailers, and then they can start attracting more small business.
Taobao has its own brand, and in the near future, WeChat, I believe will have its own brand as well. Different from Taobao, these brands are born within WeChat has its own loyal consumers and fans, and have a direct pool that provides them their users. WeChat is optimistic in this, Taobao will slowly be grind down. And when that time comes, small and medium businesses alike will slowly transform into mini-programs in WeChat.
Very informative blog and useful article thank you for sharing with us,
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