Visual China.
Text |A Look at Business, Author |Yan Li, ed. |Wooden fish.The 24-year-old 1688 was once again "weighted" by Taotian.
In the past November, Wu Yongming, CEO of Alibaba Group, for the first time comprehensively explained the strategic plan of the group's new development stage. 1688, along with Xianyu, DingTalk, and Quark, was announced to become Alibaba's next batch of strategic innovation businesses. Alibaba will continue to invest in its plan on a 3-5 year cycle.
One View Business learned that just recently, the number of merchants in 1688 exceeded 1 million, of which 600,000 were source factories. Both figures hit record highs.
As one of Alibaba's oldest businesses, 1688 has always been positioned as a procurement and wholesale field launched by Ali for small and medium-sized enterprises. In the eyes of outsiders, 1688 is more like a first-class trading platform that matches the business of factories and sellers. So, why did such a platform re-enter the public eye this year and become Ali's "key area"?What are the strategic changes?
On December 21, at a first-class communication meeting of 1688, Wang Qiang, general manager of 1688 Merchant Development Center, gave an answer to the next development direction of the platform. It has been revealed that next year, 1688 will focus on three directions: users, ** chain, and AI.
In the past, 1688 relied on the resources of the source of the platform's Shanghai quantity factory, and for a long time, it was like a "wet nurse", which not only solved the problem of supply for "compatriots", but also became the seller procurement base of many e-commerce platforms such as Pinduoduo.
Because of this, almost all the buyers on 1688 are merchants who do e-commerce or physical business, that is, B-end users. However, this user has changed a bit in recent years.
According to the data, on Xiaohongshu, a total of 1.8 million notes related to 1688 were gathered, and 640,000 users gathered in the Douban Women's Federation group, and more than 2,000 grass posts mentioned 1688. Breaking the stereotype that only merchants were looking for business opportunities on 1688 in the past, many netizens spontaneously became buyers on 1688.
The current 1688 buyer structure is very similar to Xiaohongshu, and the largest user group of 1688 is.
The second largest user group of young women aged 25 to 35 in the first and second tiers is:
Young males between the ages of 25 and 35 in the first and second tiers. Only 1% of people over the age of 60 in 1688. In response to the current user portrait of 1688, Wang Qiang gave a different answer from the past.
In 1688's view, although he is still doing TOB's business, he is the big C in B. The data shows that at present, the monthly customer consumption amount of big C on 1688 is about two or three times that of other C-type e-commerce platforms, and the consumption of these big Cs has the characteristics of scenario-based, price comparison, mass sales, and periodicity.
Wang Qiang told Yilan Business that through an interview with the platform's big C, 1688 also learned that there are generally three reasons why such consumers come to 1688 to shop:
Because 1688 is a wholesale platform, the factory price is the factory price, and the wholesale price is rubbing. Grass was planted on Xiaohongshu and other social platforms, and the grass was mowed on the 1688 platform. Because 1688 many merchants' ** are 5 to 10 pieces of what is **, 10 to 20 pieces are **, it is a ladder price, and some big Cs are pulled over to make up orders. At the same time, the supply of parity focusing on cost performance has become more and more abundant with the continuous excavation of various e-commerce platforms in recent years, so more young people who are good at digging flat products have begun to choose 1688.
Just last year, 1688 made corresponding adjustments to cater to the new needs of users.
For example, 1688 launched the 1688 Yanxuan business in September 2022, which is committed to building an online version of the white label supermarket. The so-called 1688 strict selection is actually a cheap supermarket made of a batch of goods that are more high-quality and more in line with the user's trading preferences on 1688. If 1688 is a platform for matchmaking, 1688 Yanxuan has evolved into a "factory direct sales platform".
In terms of service, 1688 can be regarded as a full mobilization of "compatriots" resources. Wang Qiang said that 1688 will next cooperate with Cainiao to use its logistics capabilities to make the fulfillment time more certain and guaranteed. At the same time, in order to improve the procurement experience and performance ability, 1688 will deploy hundreds of 1688 origin digital warehouses across the country before March 31 next year.
With the change of user portraits, a series of measures taken by 1688 can be seen as the embodiment of Wu Yongming's user-first and AI-driven strategic focus. It is precisely in order to undertake more user needs that 1688 starts from the source of the first chain and integrates it.
The change of users will inevitably bring about the change of demand, and finally lead to the change of the ** chain.
The advantage of 1688's ** chain is the industrial belt. Over the years, 1688 has laid out about 1,000 employees in the industrial belt, and there are about 160,000 people, the entire ecosystem is about 4-50,000 people, and the scale of investment far exceeds that of other platforms. Not to mention the e-commerce channels that have risen in recent years, such as Pinduoduo, Douyin, and Kuaishou, the time for the layout of the industrial belt has not been a few years.
Even with a good industrial belt foundation, in the past, 1688 was only engaged in wholesale business. Cheap, volume, is the main label of the first businessmen. As for whether the quality of goods is stable and whether the channels for contacting merchants are smooth, it has always been the main problem that 1688 has been criticized.
With the change of 1688 user portraits, buyers who prefer the C-end need for flexible customization capabilities also have higher requirements for quality.
There is a good foundation for the layout of the industrial belt, but the first source cannot catch up with the needs of users. Therefore, 1688 naturally had to eliminate low-quality supplies and replenish fresh blood.
According to Wang Qiang, in the past two years, 1688 has carried out a round of replacement of stores without supply, stores that are biased towards black and gray infringement, some traditional small workshops and ** merchants, and 30% of the supply has been completely replaced. And launched a double insurance plan to add fresh blood to the ** chain by giving new merchants certain business opportunities.
Under a series of new measures, the new supply is dominated by young and dynamic suppliers in the industrial belt, including cross-border and brand OEM merchants. The common feature of these merchants is that they are friendly to small B and big C buyers, and have the ability to customize flexibly or return small orders.
Generally speaking, 1688 eliminated a large number of low-quality ** that was traditionally oriented to the B-end, and the supply that was supplemented was biased towards younger people and had the ability to do C-end business.
Since 1688 meets the needs of users by replacing a large number of ** chains, it is natural to consider two issues: how to bring more business opportunities to ** merchants?How to provide users with more personalized services?
Therefore, in the mode of cooperation with ** merchants, 1688 made adjustments. In the past, the 1688 business model was more inclined to commercialize the platform attributes that only charged membership fees to ** merchants. And now, 1688 has found a new model of cooperation with the best businessmen: distribution and win-win.
According to Wang Qiang, in the current industrial belt, 1688 has found more "chain masters" to cooperate.
The so-called "chain master" refers to the core or dominant enterprise in the industrial chain, which is irreplaceable, and they have the ability to select, price, operate, service, and warehouse distribution in the entire industrial chain. However, chain owners are still facing the anxiety of insufficient product richness and lack of traffic.
Many chain owners put huge traffic on various platforms and then distributed them to factories for orders. The role of 1688 here is that in the future, 1688 will promote the cooperation with the chain owner on the pallet, that is, to give the OEM pallet to the chain owner to meet the needs of their front-end orders.
At the same time, since the chain owner has a very strong control over the back-end cooperative factory, 1688 will also help it to do distribution together to achieve a win-win situation for both parties.
In terms of providing users with personalized customization needs, 1688 has started a first-class chain of "supplying from the existing needs of users".
Digital ** chain is not a new word for a long time.
Just this year, SHEIN successfully occupied a place in the U.S. market through the digital flexible ** chain of "small orders and quick returns".
The most significant advantage of this model of SHEIN is that it is passed through the test marketing of a small number of orders for different styles"Test"to judge the market demand, and then flexibly adjust production and inventory according to market feedback, increase the output of hot-selling styles, and stop production immediately for unsalable styles, which not only reduces inventory risk, but also improves market response speed and operational efficiency.
The main purpose of 1688's digital ** chain is to supply goods from the user's determined needs, and refers to the concept of digital goods.
The operating logic of digital goods is that 1688 uses AI to provide virtual digital goods, and quickly deduces them to the entire industrial design and demand capture at the front end, so as to reverse the R&D and production of the entire manufacturing industry.
Specifically, buyers enter the platform with demand, and physical goods will have spot and inventory differences after the transaction, but digital goods can solve both the problem of money and inventory.
For example, we carefully select and sell military coats, but the entire product book headline advertising space is set by AI, AI designs a military coat based on the outside consumer trends, and there are many buyers who will consult us about this military coat, but in fact this military coat is not available in China, it is a number, a virtual thing. ”
According to Wang Qiang, the platform sees the demand, and gives this demand to the factory with flexible manufacturing capabilities, the factory can design the same model in the short term, and the 1688 platform has a clear order volume that can be reversed to promote the flexible production of the factory, and the factory with a certain production capacity can do sales and production, to help merchants solve the problem of inventory in the past.
In this process, 1688 will also use the capabilities of DingTalk and Alibaba Cloud to help factories realize the digital transformation from OEM to large order customization.
Therefore, in the past, 1688 only faced domestic TOB merchants, and with the support of more certain needs, the future users will cover domestic B-end merchants, domestic C-end merchants and cross-border B-end merchants.
Facing more merchants, naturally, is to capture more growth possibilities. So, will 1688, which has repositioned its user portrait and the source of the ** chain, become Ali's "main force" next year and snatch back the lost users from Pinduoduo?It will take time to prove.