On the evening of November 16, Wu Yongming participated in the quarterly financial analyst meeting for the first time as the CEO of Alibaba Group, and introduced Alibaba's future direction, important priorities and implementation path in detail. Among them, 1688, along with Xianyu, DingTalk, and Quark, was listed as the first batch of strategic innovation businesses of Alibaba.
Wu Yongming said that 1688 is Alibaba's longest-standing business, serving the mainstream manufacturers of China's manufacturing industry, with a solid foundation and great potential for a second venture, and is expected to extend from B2B business to small and medium-sized enterprises and consumer procurement, while having the ability to support cross-border transactions.
"Second entrepreneurship", "SME and consumer procurement" and "service capability of cross-border transactions" have become the key words of 1688. According to public information, 1688 takes wholesale and procurement business as the core, and at present, the business has covered 16 industry categories such as raw materials, industrial products, clothing and accessories, household department stores, and small commodities.
Behind this, as a support is 1688's unique ** chain ability, which also makes 1688 stand out from within the Alibaba system. For the future development, Wang Qiang, general manager of 1688 Merchant Development Center, said: "The new supply after the upgrade of 1688 is the strongest digital ** chain in China, which will support the imagination of 1688 in the three major tracks of class B, consumer and cross-border. ”
All data hit a new high.
In fact, the data performance of 1688 on the business side may better show its development potential.
Recently, 1688 has frequently set new highs in the company's 24-year history in many business indicators. Platform data shows that in mid-December this year, the number of users who actively opened the 1688 app broke through a record highAt the same time, the number of merchants in 1688 exceeded 1 million, hitting a record high. Among them, 600,000 are source factories, which is also a record number.
Younger people are supporting this impressive performance. Judging from the internal review of 1688, the wave of replacement consumption set off by young buyers (focusing on the two major groups of Generation Z and the new middle class) is attracting more and more source replacement supply to settle in 1688, and promoting the supply of 1688 to become a new supply for young people. In turn, these young new supply of 1688 has led to an influx of more young buyers. Advanced supply and advanced buyer, these two advanced states in 1688 are complementary to each other.
It is worth noting that before the record high data was obtained, 1688 had begun to promote the upgrading of the ** chain, and replaced the non-source stores, black and gray infringement stores, small workshops, etc., with a replacement rate of about 30%, and at the same time, more attention was paid to the factory's ability to serve the flexible ** chain and overseas procurement needs to meet the purchase needs of small B and large C procurement buyers.
Wang Qiang said: "In other words, the number of merchants we have now is not simply a year-on-year increase of 5%, but a large-scale supply increase after replacing part of the supply." This is equivalent to a major change and upgrade of the entire supply of 1688. "This also creates the ultimate 1688 ** chain capability.
*Chain is the core competitive barrier.
*What does the chain mean for 1688?Wang Qiang's answer is: "Supply is the core competitive barrier of 1688, and it is also the foundation of 1688. ”
The strategy of 1688 was basically centered around supply. "From the perspective of 1688's business logic, in the field of supply, 1688 was the first to do online supply, matching buyers and sellers to reach a transaction, and then the second step is to carry out digital transactions, the third step is to build a digital ** chain, and the fourth step in the future is to become an industrial Internet platform.
Wang Qiang said: "Now we are in the process of moving rapidly from the second to the third step, and at the same time in the layout of the fourth step. One of the main strategic threads based on this grand strategy is supply. ”
On this logical main line, what 1688 needs to do is to make the long board long and make up for the short board.
The shortcomings are in the **?The shortcomings are in the "picking" of buyers and the "performance" of merchants.
Buyers are looking for source goods and source factories on 1688, and the focus is on improving the efficiency of selection. Therefore, 1688 has created 1688 Strict Selection, selected super factory member merchants, and has achieved sales of 30 billion yuan in one year. At the same time, AI technology will be launched to match people, goods and yards, replacing the past industry junior two. The frequency of use of AI image search services, represented by AI technology, has increased by 100% in 2023.
For factories and merchants, the difficulty lies in the ability to fulfill the contract. Therefore, 1688 hopes to build a digital ** chain to help merchants ensure their performance capabilities.
If there is only one strategy in 1688, it is supply, which is our main channel. Wang Qiang said: "The supply strategy of 1688 has been upgrading, from rich supply to high-quality supply, and today we have clearly proposed to do digital ** chain." In the next three years, if 1688 only does one thing, it is to do a digital ** chain. If there is one more thing, it is the membership store. Our goal is not to be the largest digital chain in China, but to be the best digital chain in China. ”
According to Wang Qiang, in the past few years, 1688 has been deeply cultivated in the field of industrial belts. Next, there will be a deeper involvement in the commercial, product, ** and inventory aspects.
Wang Qiang revealed that we plan to digitize the 1,000 industrial belts we are deeply involved in as soon as possible, analyze the changes and new product trends of each industrial belt, and provide digital empowerment for each enterprise, including R&D, design, inventory, payment, trading, finance and logistics. 1688's goal is to create the largest digital map of China's industrial belt. This work has been going on for about a year, with more than 100,000 users per day and more than 10 million API calls per day. In the future, we will become the largest concentration of digital industries.
Build barriers to competition.
After becoming one of Alibaba's strategic innovative businesses, 1688 will invest more money, resources and traffic in user growth to win common users and a common replacement mentality for merchants. Wang Qiang said that by 2024, 1688's resource investment will be six times that of 2022.
In addition to investing in user growth, 1688 has two key investment directions. The first is technology, 1688 will use artificial intelligence (AI) to help merchants digest and chew on technology, so that it can truly become a part of merchants' business.
The second is to strengthen the first chain, go deep into the industrial belt, and provide in-depth empowerment for businesses. The specific implementation path is to aggregate specific demand, combine it with the stratification of supply, and then use the capabilities of algorithms, especially AI, to achieve accurate supply and demand matching and efficient buying and selling in some fields.
Wang Qiang said that in the past, 1688 provided advertising solutions for merchants, but today we call it a digital marketing solution, which is essentially intelligent delivery.
In the future, 1688 aims to penetrate into 1,000 industrial belts in China and penetrate into 68 industrial belts of 10 billion yuan. To this end, 1688 has about 1,000 employees in the industrial belt, with about 1There are 60,000 channel partners, and the entire ecosystem has about 40,000-50,000 people, and the scale of investment far exceeds that of other platforms.
Wang Qiang believes: "Although some e-commerce platforms may be stronger than us in terms of user operation capabilities, no one is stronger than us in terms of deep penetration of the industrial belt. Grip in the industrial belt is our core advantage on the supply side. ”
From the perspective of Alibaba's overall business positioning, for the first batch of strategic innovative businesses, it will be operated as an independent subsidiary organizationally, and the business will break the previous positioning restrictions within the group, and Alibaba will continue to invest in a cycle of 3-5 years. This will also help 1688 to obtain the group's resource support. 