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After following the industry in offering low prices for a while, Taobao’s attitude has clearly changed.

On August 12, at a critical juncture in the second half of the year, Alibaba Group's source factory direct sales platform "1688" launched a series of "anti-involution" measures, including "improving efficiency and increasing revenue" for source manufacturers in the industrial belt, and releasing a free "AI business assistant". "1688" promised to guarantee the order volume, customer number and reasonable profit of new merchants.

Coincidentally, on July 26, Taobao announced that it would optimize its "refund only" strategy. At the same time, Taobao is also further improving the rights and interests of merchants. In response to the increase in after-sales service costs across the industry this year, Taobao will also comprehensively optimize the current freight insurance strategy.

From Taobao to "1688", Taobao has recently introduced measures to improve the efficiency of business operations. This time, "1688" publicly raised the banner of "anti-involution", which is obviously meaningful. Even Douyin e-commerce and Pinduoduo have begun to take corresponding actions.

In the previous low-price competition, Taobao e-commerce once launched a "price power war" but did not have an advantage. Now, has the e-commerce world reached a new turning point?

"1688" calls for "anti-involution"

Although it is known as the "source of goods for China's e-commerce", "1688" has already had C-end users.

In the past two years, "1688", which was born in 1999, has also undergone many changes. In September 2022, this comprehensive B2B e-commerce platform under Alibaba launched "1688 Strict Selection", which focuses on brand replacements. The price is one-tenth of the brand, and the quality is the same as the brand, with the same workmanship, materials, and production line.

"1688" revealed in October last year that in the past year, Yanxuan has served tens of millions of "small B" buyers. 64% of Class B buyers contributed more than 90% of the transaction volume, and the remaining 36% of Class C buyers almost all tried side jobs and entrepreneurship through self-purchase.

However, recently, 1688 also emphasized to reporters that 1688 is still a "pure" Class B platform. 1688 said that although the influx of young people has brought more Class C traffic to the entire platform, more than 90% of the transaction volume on the entire platform is Class B behavior.

Having said that, the changes in "1688" also brought new challenges to previous B-end sellers.

As a "1688" merchant, Dong Fanming, general manager of Shanghai Xinmai Food Industry Co., Ltd., told the "Daily Economic News" reporter that there was a surge in orders during the Mid-Autumn Festival last year. "Every day I saw thousands of packages not shipped. It was particularly stressful at that time. It definitely had an impact on the fulfillment rate and all subsequent ratings."

He said that before, they were dealing with B-end wholesale customers, and a large part of the cost was the picking cost. But when there are many SKUs (stock keeping units), picking becomes very difficult and needs to be done manually. "So when a lot of traffic comes in from the C-end, it still has a relatively large impact on us."

Dong Fanming also mentioned the problem of "involution" in the industry. Taking marketing as an example, he said that this year, the advertising expenditure was 20% higher than last year, but the impression was only 20% of last year.

In order to retain and attract more merchants, "1688" has introduced a series of "anti-involution" measures.

"1688" said that after the launch of the efficiency improvement and revenue increase plan and the release of the AI ​​business assistant, merchants have two modes of doing business on "1688".

The first is the independent operation model, where the platform provides the operation capabilities of AI business assistants and specific sales channels to "help sell", helping merchants to obtain high-repeat buyers and earn new and old customers and sales income. The second is the supply model, where the platform invites merchants to bid, and merchants join the supply model through hot-selling bidding and are given a supply price for the goods. The platform provides pricing suggestions, assists merchants in sales and contract fulfillment, and helps merchants obtain more payment income.

A representative of the "1688" waiter told reporters that under the second model, the factory mainly focuses on research and development, production, and controlling product quality, while the platform is responsible for things that the factory is not good at, "which means that the factory can regard '1688' as a sales channel."

According to the reporter, the supply model is equivalent to the trusteeship model, and currently no service fees are incurred. Merchants can agree on sales targets with "1688". For example, the two parties negotiate that "1688" will take 20% of the merchant's production capacity for the month, and the merchant will produce according to the "1688" standards and supply it. "1688" will then reserve at least 10% of the net profit margin for the merchant.

The e-commerce world is turning

Faced with the current situation of the e-commerce industry where "involution" is serious, it is unknown whether these "anti-involution" measures launched by "1688" will be effective.

After long-term observation, the head of the "1688" merchant told reporters that the essence of the "volume" is that China's production efficiency is greatly improved, but the transaction cost is rapidly decreasing. In fact, the current supply is far greater than the demand.

He believes that businesses need to move towards differentiation and certainty. The so-called differentiation refers to market differentiation, channel differentiation, user differentiation, marketing strategy differentiation, service differentiation and product differentiation.

"Most industries have entered into a game of existing market. There is not much incremental growth and the cake is only so big. For merchants, after planning for different categories and price ranges, they should choose channels that are more suitable and more certain," said the person in charge.

In addition to merchants adjusting themselves to adapt to the current living environment, the continuous "involution" in the e-commerce world has begun to cause reflection inside and outside the industry. Reporters have found that the e-commerce world, which once moved towards price competition, has undergone an increasingly obvious shift. In recent days, e-commerce platforms have introduced more and more measures to enhance the rights and interests of merchants and their living space.

On August 13, according to Jiemian News, Pinduoduo will offer a refundable technical service fee to merchants who sign up to participate in the on-site resource activity. Merchants can enjoy the refund of technical service fees for orders canceled or refunded by users during the activity, as well as refund orders after confirmation of receipt, which further reduces the operating costs of merchants.

On July 26, Taobao announced that it would optimize its “refund only” strategy, enhance merchants’ after-sales autonomy based on the new experience points, and reduce or eliminate after-sales intervention for high-quality stores.

In this regard, Zhuang Shuai, founder of Bailian Consulting, said in an interview with a reporter from the "Daily Economic News" that it is a trend to reduce the burden on merchants and reduce platform profits, and Pinduoduo can only go with the trend, but Taobao is moving faster.

In addition, with the rise of new e-commerce platforms such as Xiaohongshu, the e-commerce world is showing a trend of returning to diversification. At the end of July, Xiaohongshu said that in the past year, the number of users who purchased live broadcasts on Xiaohongshu increased by 6.3 times year-on-year, and the average price per customer of live broadcasts remained stable at more than 500 yuan.

The further popularization of AI may also bring some changes to the e-commerce world.

"1688" has released a free "AI business assistant". According to "1688", through the free AI operation capabilities provided by the platform, businesses can now complete tasks that previously required a professional operator to complete with only 0.2 manpower costs.

It is worth mentioning that the current reduction in commodity prices in the market is also related to the improvement in production efficiency. The person in charge of the "1688" merchant mentioned that the current development of intelligence and automation has greatly reduced labor costs.

For a period of time, the price-cutting model of only refunding, taking advantage of others, and selling at a loss made it difficult for e-commerce merchants to do business. In the long run, if the industry's "anti-involution" is implemented, the relationship between the platform, merchants and consumers is expected to move towards a more stable and mutually beneficial direction.

Daily Economic News