Author |Liu Baodan.
Edit |Zhou Zhiyu.
Inadvertently, 1688 became Ali's hope for the future.
Affordable consumption" arose, and "young people began to consume in reverse, pouring into 1688". 1688, which used to be a supply-supported business in the Ali system and contributed less to the overall revenue, has become a hole card for Ali to fight against Pinduoduo and JD.com's low-price strategy, and has been given different expectations in the new era.
Recently, Yu Yong, CEO of 1688, said on many occasions that the three strategic priorities of 1688 in the future are: user first, AI-driven and stronger. He emphasized that 1688, the second entrepreneurship, will integrate into the new world of the industrial Internet with a more open mind.
Yu Yong's vision is to make 1688 a company comparable to consumer Internet giants in the field of industrial Internet. In his view, the scale of China's entire industrial Internet should be much larger than that of the consumer Internet, and 1688 will strengthen investment and accelerate the pace of business.
This means that 1688, Alibaba's oldest business, will enter the fast lane of development.
In the past, 1688 was only an online platform for matching transactions, focusing on B2B, and in the future, 1688 will focus on both consumption and supply. In particular, it is necessary to make efforts in the three directions of B-end ** chain business, consumer business and cross-border transaction services.
In terms of B-end business, there are three types of objects that 1688 wants to cooperate, one is an enterprise with users and traffic;The second is to do a very deep job in the vertical category, which has opened up the upstream and downstream, and there is no shortage of professional and technical enterprises;The third is an enterprise with special capabilities for productive services in the entire industrial chain.
Zhuang Shuai, an expert in the retail e-commerce industry and the founder of Bailian Consulting, believes that the industrial Internet is more of a service role, facing 2B enterprises, with low profit margins but stable orders, and 1688 can further integrate with Taotian's 2C to form a complete industrial chain, and independent development can also have a stable large-scale customer base and income.
Yu Yong believes that the replacement business and cross-border will be good business in the next 3-5 years, which is also a double opportunity for 1688.
In terms of cross-border business, the core of 1688 is to help enterprises go overseas. Yu Yong said, "The merchant puts the goods in the ** chain, and we are responsible for selling them." "The core is that the merchant gives 1688 the lowest **, and 1688 leaves a reasonable profit margin for the merchant while helping the merchant to do industrial upgrading.
In terms of consumers, 1688 chooses to do online Costco, that is, the membership store model. According to Afterwell's plan, the SKU of 1688 will be much higher than Costco, and it will be two to three percent cheaper than Sam and Costco, and the chain will be the same.
Behind the new strategic direction, there is an implicit insight into the trend of 1688's social consumption and the Internet industry.
Yu Yong believes that the competition of the consumer Internet is already a red ocean, and the blue ocean may be in the industrial Internet, and it is a greater opportunity to connect the consumer side and the industrial side.
According to the Research Report on the Development of China's Digital Economy (2023), in 2022, the scale of China's digital economy will reach 502 trillion yuan, of which the scale of industrial digitalization reached 41 trillion yuan, accounting for 81 trillion yuan of the digital economy7%, accounting for 33 percent of GDP9%。The Industrial Internet is an important force driving the digital economy.
In the field of industrial Internet, there has been no consumer Internet giant such as ** and Pinduoduo, and 1688, which has its own 2B gene and ** chain capabilities, has the potential to become a giant.
According to official data, 1688's annual online GMV is nearly 1 trillion yuan, offline private domain customization is 2 trillion yuan, and the overall GMV is 3 trillion yuan. Yu Yong said, "We just got on the table, and there are **, Tmall, Pinduoduo and Douyin at this table. We rank fifth in terms of volume, and if we add offline matchmaking volume, we can rank third or fourth. ”
In Yu Yong's view, in essence, 1688 should not be ranked first in e-commerce with others, "the most important thing is that we must rank first in the industrial belt."
Since Ali ushered in the biggest organizational change in history last year, the importance of 1688 in the Alibaba system has been significantly improved.
In November last year, Wu Yongming, CEO of Alibaba Group, first comprehensively explained the strategic plan for Alibaba's new development stage, and at that time also announced the first batch of strategic innovation businesses, ranking first 1688.
Wu Yongming said that the innovative business will be operated as an independent subsidiary, breaking the previous positioning restrictions in the group, with a more independent strategy to face the broadest market, the group will continue to invest in a cycle of 3-5 years, which also means that 1688 will no longer have any constraints, can really let go of hands and feet to participate in the competition.
However, although it has industrial advantages, the competitive pressure that 1688 will face in the future is not small.
The fierce competition of the consumer Internet has extended to the industrial chain, and 1688 is facing fierce market competition in three areas, especially the cross-border e-commerce and consumer tracks, facing strong competitors such as Pinduoduo, Douyin, and SHEIN.
Zhuang Shuai believes that the 2B track is already very volatile, and the competitive pressure faced by 1688 will become more and more intense, for example, JD.com also has 2B business, and it is being done by an independent platform.
Yu Yong also admitted that he is a beginner in the industrial Internet, "There are many companies in the US stock market with the industrial Internet model, and we have less practice than them in many aspects, and our development is not as stable and in-depth as theirs." ”
With 1688 coming to the forefront, Ali's oldest but well-established business has also taken on a heavy responsibility, and has become the pioneer of Ali's future in the fierce battle of e-commerce and low prices. It carries Alibaba's vision of accelerating from the consumer Internet to the era of industrial digitalization, and represents Alibaba's search for the key to the next era.
Back on the stage**, 1688 also has to seize the opportunity and do a big job.