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This article is written based on public information and is only for information exchange purposes. It does not constitute any investment advice

Including the time when Jia Luo took over, Taobao Live has changed its leaders twice in one month.

Even within Taotian Group, where personnel changes frequently occur, the pace of replacement seems a bit hasty.

Earlier on July 4, Cheng Daofang, the former "top leader" of Taobao Live and head of Taobao's content e-commerce, was transferred, and Wu Jia, head of the Taobao User Platform Division and the Alimama Division, will take over the position.

Soon, just one week later on July 12, personnel changes occurred again: according to media reports such as Bianyushi and China Internet Network Information Center, Tmall head Jia Luo will also serve as the head of Taobao live broadcast and content.

Frequent changes in the head of an organization have always been a taboo, especially for Taobao, whose young team is not up to the task:

Before taking over Taobao Live, Wu Jia had already held several positions, including in charge of user platform business, Alimama business unit, and Taobao Live and content business unit; and Jia Luo, who now takes over Taobao Live, also serves as the head of the Tmall business unit.

The fact that Jialuo, an old Alibaba employee and Tmall pillar, was directly selected to take charge of the live broadcast platform was considered by the outside world to reflect the risk of a talent gap within Taobao:

To be fair, both Wu Jia and Jia Luo were born in the 1980s. Judging from their resumes, they are the backbone forces that Alibaba has relied on for many years. The newcomers need to come to the fore, which is consistent with the youth strategy that Alibaba has been promoting since the end of last year.

But the real problem reflected in this incident is:

The lack of coordination among young talent teams makes Alibaba seem a bit hesitant when it comes to the top priority of adjusting its organizational structure.

In the case of Daofang's resignation, there are only a handful of Taotian people born in the 1980s who can be directly placed in relevant positions. After the replacement of No. 4, the 12th continued to replace people, and each person in charge had multiple positions. From the perspective of the team and partners, this actually released a confusing signal that was not good:

Every year, Taobao Live’s investment in live content and merchant resources is a major highlight, but the frequent changes in the team are bound to raise questions about the stability behind this investment. Without a clear direction, no one dares to rashly bet on Taobao Live, whether it is the team or the partners.

A detail that few people noticed is that after leaving the company, Daofang did not mention any thanks in his circle of friends, which was somewhat unhappy. Daofang himself was promoted to the core management level 7 months ago, hosted a content e-commerce celebration 3 months ago, and was even promoting a project for entrepreneurs to start broadcasting with zero threshold last month.

It is not difficult to infer that Daofang's resignation was somewhat sudden, and Taotian's subsequent performance was logical: replacing people in a short period of time when there was no suitable candidate proved that Daofang's resignation was very sudden, and it also reflected that Taotian seemed to have not really decided who should take over the job.

Of course, there may not be that much time to think it through.

01

What is the urgency of Taobao Live

There was once speculation among the public that, given the speed of the leadership change, this leadership change had a lot to do with the 618 Taobao Live performing below expectations.

In our opinion, this speculation makes no sense: first, in the long run, the organizational changes of Taobao have never had much to do with the performance at a particular time and place; moreover, judging from the information released by Taobao during this 618 event, under the current market conditions, the battle report of Taobao Live is still reasonable.

The real factor that leads to frequent personnel changes is more the relative changes in Taobao Live’s market position in the past three years.

Since Cheng Daofang took over, Taobao Live's market share has been marginalized year by year: Cheng Daofang took over Taobao Live in September 2021, and the previous year happened to be a turning point in the live e-commerce battlefield.

According to the China Internet Network Information Center, in 2020, the transaction volume of Kuaishou's e-commerce live broadcast was 381.2 billion yuan, and the transaction volume of Taobao's live broadcast was 400 billion yuan, and the two were almost on par; but in 2021 when Daofang took over, the transaction volume of Kuaishou's e-commerce live broadcast was 650 billion yuan, which had surpassed the 500 billion yuan transaction volume of Taobao's live broadcast.

According to data from Dianshubao, by last year, Kuaishou's annual transaction volume reached 1.1005 trillion yuan; according to Dianshubao's e-commerce big data database, it is estimated that Taobao Live's GMV in 2023 will be about 980 billion yuan.

Data source: Netease Digital Data

The gap is getting bigger and bigger, and Taotian himself can't sit still:

Taobao content e-commerce has set a huge goal of doubling the growth of daily purchasing users in Alibaba's new fiscal year. In addition, Taobao Live also aims to achieve an 80% increase in transactions and a 100% increase in ecosystem. To match this, Alibaba Group has invested 10 billion yuan, making it one of the businesses that will receive key resources in the new fiscal year.

In today's live streaming track, setting a goal of doubling the number of users to get such hot money can be imagined. This year's 618 gave the clearest response to this unrealistic fantasy.

Looking back, rather than saying that doubling the number of users was Taobao Live's Cheng Daofang's own goal, it is more accurate to say that Taobao Live was facing the fact that Taobao was losing ground. The current management team was under almost knee-jerk pressure to perform, and Daofang's withdrawal was actually a foregone conclusion.

In the eyes of Alibaba Group, which is more keen on evaluating team performance based on data, the gradual marginalization of Taobao Live’s market position is completely inconsistent with Alibaba’s continued huge investment in Taobao Live. From a responsibility perspective, such data performance makes Cheng Daofang’s resignation seem logical.

However, to be fair, it is hard to say that the collapse of Taobao Live's model has anything to do with Cheng Daofang himself or Taobao Live's strategy. It is more of an anti-fragile outcome destined by the super-head anchor model advocated by Taobao Live.

Today, everyone generally believes that Cheng Daofang’s sudden resignation announced the complete failure of the strategy of “exit X and enter Taobao” that he advocated. But you should know that three years ago, Cheng Daofang launched this strategy of “diggering” anchors across the entire network with a lot of resources supported by the top.

During these three years, the anchors who joined Taobao Live have more or less experienced problems with live broadcast failure and acclimatization:

For example, starting in 2021, the year Cheng Daofang began to be in charge of Taobao Live, the super-head anchor model that Taobao has long been proud of began to inexplicably collapse: Taobao’s three top anchors, Wei Ya, Xue Li, and Lin Shanshan were fined for tax issues. The following year, Li Jiaqi, the darling of Taobao Live, was involved in the "Hua Xizi eyebrow pencil incident."

According to the "Analysis Report on Public Opinion on Consumer Rights Protection in Live Streaming Sales (2023)", after analyzing the public opinion data on consumer rights protection in live streaming sales of 17 anchors, it was found that the most public opinions on rights protection involved Taobao Beauty's Li Jiaqi, accounting for as much as 41%.

In the report, the "Estee Lauder empty bottle" and "Hua Xizi 79 yuan eyebrow pencil" incidents during Li Jiaqi's live broadcast were also listed as product quality problem cases and price misleading problem cases respectively.

Zhang Xiaohui, a recent celebrity poached from Xiaohongshu, had her first livestream watched by 10 million people, but the number of viewers for her second livestream, which started on May 31, quickly dropped to 5.49 million. Fans quickly discovered that the Zhang Xiaohui on Taobao Livestream had a completely different tone from the Zhang Xiaohui on Xiaohongshu. Whether it was the setting, product selection, or discount mechanism, Taobao Zhang Xiaohui seemed a bit hasty.

From a certain perspective, it is difficult for Taobao to produce super-heads on its own, and the super-heads it has poached have repeatedly failed. The final result can only be to play the safe card around some old IPs. As people joked, no matter what, Taobao has always been promoting Li Jiaqi, who became popular in 2016.

02

Where is the new IP?

It is not difficult to see that this is not a question that can be answered by Cheng Daofang's resignation. The same consistent operation strategy of super-head anchors, Cheng Daofang's problem can only be said to be taking over at a high position. If someone else were to replace him, it is hard to say what the outcome of this matter would be different.

The sustainability of the super IPs in the live broadcast era is questionable. Taobao's top star Li Jiaqi's decision to join a variety show is a landmark event:

Just a year ago, everyone was still discussing whether Li Jiaqi would leave Taobao, but a year later, Li Jiaqi has begun to transform into a variety show artist. For Li Jiaqi and his team, this transformation avoids extreme loss of IP and extends the life cycle of Li Jiaqi as an IP.

However, in terms of the sustainability of the IP echelon, live streaming platforms such as Kuaishou have unique advantages over Taobao: as a content platform, Kuaishou produces new top IP anchors every day, and the efficiency of its selection algorithm far exceeds that of Taobao Live, which has no content production capabilities.

Over the past four years, the average daily active usage time of each Kuaishou user has increased by nearly one hour, which is rare among all the Chinese Internet companies that have disclosed financial reports.

It is not difficult to understand why Kuaishou's various businesses have achieved counter-cyclical growth compared to Taobao in the past four years:

By the first quarter of this year, the average daily active users of Kuaishou app increased by 5.2% year-on-year to 394 million, which is almost the same as Taobao's overall daily active data of 380 million. From the content ecosystem that has grown on the needs of nearly 400 million users, Taobao Live's disadvantages are obvious.

Taobao’s inherent disadvantage in terms of content has always made it seem like a step behind in the competition for top anchors. It is not surprising that Taobao Live has been betting on IPs that have flourished and then declined, and that it has suffered from a lack of ROI in the past three years, and has subsequently been quickly surpassed by Kuaishou.

The change in market position, as well as the increase and decrease in the number of active merchants and the length of time users spend using the platform, is itself a conclusion of the performance of Taobao live e-commerce in the past three years.

For Taobao Live today, if no major actions are taken to change the status quo, Taobao Live will increasingly become a huge constraint on Taobao's growth. The market structure created by 618 is the core manifestation of Taobao Live's failure to cope with the situation.

In our opinion, this is the core reason why Taobao Live is eager to replace Dao Fang before the candidate is decided.

03

Can Jialuo lead Taobao Live out of its predicament?

Let’s take a look at Wu Jia and Jia Luo’s resumes, and then analyze what Taotian wants in the position of live broadcast director.

First of all, Wu Jia is a technical person. After graduating from Zhejiang University, his career path was to work in Alibaba Cloud, Alibaba's Big Entertainment UC Division, Alibaba's Innovation Business Group, User Platform Division, and Alimama Division in charge of growth exploration. His greatest achievement is incubating Quark.

Jia Luo is a marketing player. Jia Luo has been with Alibaba for 18 years and has been in charge of Taobao Marketing Department, Taobao University, Juhuasuan Division, Tmall Marketing Platform Division, Alimama and many other businesses. His greatest reputation is the innovative marketing methods of Taobao and Tmall in recent years. He is also the spokesperson for Tmall Double 11 in previous years.

Frankly speaking, neither of them has any experience in live streaming e-commerce. It is hard to say that Wu Jia is the best candidate to lead the team. As a technical expert, he was hired more as a temporary replacement. As a marketing expert, Jia Luo may only be able to do some work on marketing strategies, and will not be able to solve the problem of the lack of Taobao's live streaming ecosystem.

Judging from the state of confusion in personnel selection, Taobao Live itself is actually clear that replacing Daofang is just a benefits plan. Whether it is replacing Wu Jia or Jia Luo, it is difficult to solve the problem of Taobao Live falling behind year by year. The crux of the problem actually lies in the Taobao Live ecosystem.

But for Taobao Live at the moment, the fact that its market share is falling is a bad sign in itself. From the perspective of decision-makers, it is only natural that someone needs to take responsibility. The fact that Taobao Live was anxious to change its leadership twice in one month is not surprising.

There is not much time left for Taobao Live to catch up.

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