news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

on september 19, less than two months before china's 16th double eleven, taobao celebrity zhang dayi decided to close her store.

while commemorating the tenth anniversary of her taobao store "my happy wardrobe", zhang dayi officially announced her decision to close the store.

from the outside, zhang dayi's decision to close the store came somewhat suddenly.

you know, zhang dayi, who became famous 10 years ago, still ranks second in the taobao korean casual women's clothing store list even today:

public data shows that zhang dayi's taobao store "my happy wardrobe" currently has a total of 12.41 million fans and a five-crown credit rating. it sells more than 90,000 items per month, making it a five-crown store on taobao. it was also the first women's clothing store to exceed 100 million yuan in sales on double eleven.

according to zhang dayi, the decision to close the store was due to family reasons, but more importantly, in a weibo post, zhang dayi bluntly stated that today's clothing e-commerce's extremely low gross profit margins and extremely high return rates have meant that she no longer has the energy to support this women's clothing store, which was once ranked second on taobao and had sales of over 100 million yuan.

in zhang dayi's weibo, she didn't want to let herself and the company down, but she didn't want to let her fans down even more, so she could only bow to reality.

zhang dayi, a taobao super-celebrity who once went to nasdaq to ring the bell, was somewhat unhappy about the fact that her store had to close: "revenue does not represent profit." "i don't like to take risks when it comes to saving face but not substance." "many seemingly thriving online celebrities are just struggling to survive."

contrary to the general public's perception of taobao's internet celebrity women's clothing, even a taobao super store like zhang dayi, which ranks second in the industry, can no longer easily convert revenue into profits today.

it is an indisputable fact that even an outstanding leader like zhang dayi has the same worries as all small and medium-sized businesses: part of the reason for the industry's operating difficulties is the characteristics of the industry itself, such as the inherent low gross profit margin and high return rate of women's clothing e-commerce.

but zhang dayi's whole process from the highs of being a super internet celebrity to the lows of closing her store is itself a testament to the difficult situation that taobao merchants are facing: declining traffic, increasingly difficult rules, and the squeezing effect that other e-commerce platforms are having.

01

zhang dayi closes her shop, a single leaf tells the story of autumn

after zhang dayi closed her store, the mainstream narrative was that the closure of zhang dayi's store represented the failure of the "influencer economy", for example, zhang dayi's aesthetic selection of products began to lag behind, and the appeal of zhang dayi's fans was diluted by more internet celebrities, etc.

these questions make sense, but they cannot answer the deeper core questions:

if super-top influencer zhang dayi closed her store due to problems with energy, traffic, or product selection, then why are those mid-level taobao influencers who have been working hard for many years behind the spotlight and whose voice is not as loud as zhang dayi also in a difficult operating situation?

for example, according to incomplete statistics from lianshang.com, no less than 40 women's clothing online stores have announced their closure and stopped launching new products since 2024, including some old stores with millions of fans or more than ten years of operation:

the eight-year-old store "sinking into the deep blue losvlue", which has more than 500,000 fans, announced its closure; at the same time, the women's clothing store "the bubble", which has more than 400,000 fans, also issued a closure notice, saying it would begin clearing out its inventory; "su cai luobo studio" and "retro explosion" have all announced their closure or stopped launching new products; in may this year, the "5 gold crowns" store "girl kayla", which has more than 5 million fans, was exposed to have defaulted on payments to more than 200 merchants, with a total amount exceeding 30 million yuan.

figure: taobao closure announcements for some of the top-notch stores, source: screenshots of taobao store announcements

contrary to popular opinion, we believe that in today's world where women's clothing e-commerce stores are closing stores and stopping new products, blaming all the problems on zhang dayi and her aesthetics is actually covering up the deeper problems behind it:

the occurrence of this phenomenon is, to a large extent, closely related to today’s platform traffic pressure and the resulting changes in rules.

02

the root cause of the traffic dilemma

for industry insiders who are familiar with the unspoken rules of e-commerce, the taobao e-commerce traffic dilemma raised by zhang dayi today was actually foreshadowed two months ago.

after the major changes to taobao's rules on july 26, according to the calculations in alter chat technology's article "detailed explanation of the operating costs of the three e-commerce giants: where does the pressure on merchants come from?", the operating costs of merchants on the taobao platform will be mainly concentrated in four aspects:

store opening fees and tool fees: given that deposits and annual fees have been waived, and business tools such as business advisor are now free, this part of the fees accounts for less than 1%;

platform service fee: all merchants need to pay 0.6% for basic software service fees. tmall merchants need to pay 2%-5% for technical service fees (commonly known as "commission"), as well as tmall points and other fees, accounting for approximately 5%-7% of total revenue.

traffic promotion fee: this is the cost of "buying traffic". referring to the data before alibaba merged commission income into customer management income in the third quarter of 2020, the ratio of commission income to traffic income was about 1:2.4, accounting for more than 10%.

after-sales and logistics warehousing costs: including freight insurance, fees arising from transaction disputes such as refunds, and warehousing costs for platform cooperation, accounting for about 5%.

it can be seen that after the rules are modified, the proportion of traffic promotion in the operating costs of merchants in the taotian system may exceed 50%.

such rule changes obviously put a lot of pressure on the low-gross-profit and high-turnover women's clothing mcn model represented by zhang dayi. the sudden increase in traffic costs can be said to be a big blow to the already meager gross profit margins of the mcn model women's clothing stores represented by zhang dayi.

in fact, the traffic dilemma faced by taobao merchants today is not a coincidence:

take taobao live as an example: as the earliest e-commerce platform to dabble in content, taobao live has found it difficult to keep up with the pace of development of short video live streaming in the industry today.

in the live streaming track, a set of data about kuaishou and taobao live can illustrate the status of taobao's competitors coming from behind and taking the lead:

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; by 2021, the transaction volume of kuaishou's e-commerce live broadcast was 650 billion yuan, surpassing 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.

figure: comparison of transaction volume between kuaishou and taobao live (2018-2023), source: company financial reports, jinduan research institute

taobao live, which has been in operation since 2018, had a gmv of less than one trillion yuan as of 2023, less than half of douyin live, and was even left behind by kuaishou.

figure: gmv comparison of the three major live streaming platforms over the years, source: guosheng securities, yuanchuan research institute

looking deeper, the shopping attributes of the taobao platform have made the content anchor ip more or less unsuitable. in the past three years, many well-known anchors have experienced the problem of live broadcast failure:

for example, starting from 2021, the super-head anchor model that taobao has long been proud of began to collapse inexplicably: 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’s live broadcast, was involved in the "hua xizi eyebrow pencil incident."

the first live broadcast of zhang xiaohui, a super celebrity who was poached from xiaohongshu, had tens of millions of viewers, but the number of viewers for the second live broadcast on may 31 quickly dropped to 5.49 million.

fans quickly discovered that the tone of the zhang xiaohui who joined taobao live was completely different from the super-head zhang xiaohui on xiaohongshu. whether it was the setting, product selection, or discount mechanism, the taobao zhang xiaohui seemed a bit hasty.

on taobao, the reason why anchors frequently fail is not difficult to understand:

due to the limitations of the platform model, taobao live is doomed to be unable to generate super-heads on its own and needs to dig out ips from outside. however, the super-heads dug out are prone to failure due to the huge differences in the tone of the platforms. people joke that no matter how you turn it over, taobao live has always promoted li jiaqi, who became popular in 2016. this itself is a footnote to taobao's traffic dilemma.

as traffic increases and decreases, it is not difficult to speculate the trends of many top traffic ips:

on july 26, at the company's shareholder exchange conference call, new oriental founder and oriental selection ceo yu minhong stated that oriental selection's current main live broadcast platform is douyin, and the cooperation with douyin will be closer in the future.

in contrast, the live broadcast room of oriental selection on taobao live, another major live broadcast platform where it has settled, has been suspended for more than a month and there is no live broadcast replay content.

in august 2023, oriental selection entered taobao live in a high-profile manner, and it has not been a year yet.

03

the dilemma of operating costs

in addition to traffic issues, traditional e-commerce represented by taobao has suffered an unprecedented impact in the past 3-4 years. from low-priced white-label products to live streaming short videos, douyin, kuaishou and pinyin have eroded a large amount of market share of traditional e-commerce. as the banner of the city and the most eye-catching "era overlord" in the e-commerce market, taobao naturally knows its own situation.

figure: market share of mainstream e-commerce platforms estimated by gmv, source: cicc wealth, jinduan research institute

the major rule changes made by taotian on july 26th was itself a positive response to this pressure. the platform’s self-reform needs to be affirmed, but for the giant ship taotian, which involves a wider range of aspects, rule changes should be more cautious.

judging from the reactions of many stores afterwards, the frequency and magnitude of taobao's rule changes over the past year have far exceeded the expectations of practitioners and have directly affected all aspects of taobao merchants.

taking refunds as an example, as a pillar category of taobao's business, clothing will naturally have much greater inventory and seasonal pressures than daily necessities. coupled with the problems of low gross profit and high return rate, the refund policy alone will most directly affect the long-term costs of clothing merchants. therefore, the direction of the refund policy alone has always been a focus of taobao merchants.

in the rule change on july 26, while adjusting only refunds, taobao announced that it would replace the dsr rating system with pxi: in a nutshell, pxi pays more attention to negative feedback from users and evaluates the service capabilities of merchants from multiple dimensions such as products, delivery logistics and after-sales.

this evaluation system is relatively complex, but some indicators actually hit the cost center of most mid-level stores. here are two relatively typical examples:

1) first-time product return rate: this refers to the ratio of orders for which the first reason for a refund is due to store quality to completed orders.

the impact of this kpi on merchants is that many buyers will choose to refund because they do not want to pay the return shipping fee, but in fact there is no problem with the actual product quality.

raising this factor will directly affect the calculation numerator of the experience score. even if the store’s appeal is successful, only the deposit will be returned and the platform will not modify the score of this order. this will obviously directly affect the merchant’s product experience score.

2) wangwang manual response time: this refers to the ratio of the average response time of conversations between merchants and users from 8 am to 11 pm in the past 30 days to the total number of conversations.

this kpi has made many family businesses miserable: based on an 8-hour work system, even without taking daily breaks into account, meeting 8am-11pm means about two work shifts. this requirement has increased the operating staff costs of each store by at least one unit.

based on the above two items alone, we roughly calculated that, based on the average 10% gross profit of jiduo.com clothing stores, with a unit price of 50 yuan and monthly sales of 10,000 pieces, the operating cost (2 workers with an average monthly salary of 4,000 yuan) would consume an additional 16% of the gross profit.

in this way, after the rule adjustment, for many merchants, if they want to loosen the entry threshold to only refund, they will need to pay a considerable cost.

according to data from taobao's official website, about 30% of all merchants in all categories with a score of 4.8 or above have relaxed the refund-only policy. if more merchants want to get rid of the pressure of refund-only, it is obvious that the cost line will continue to move up.

it is a well-known fact that women's clothing stores are notorious for their high return rates and poor inventory control will lead to losses. taobao's policy changes have increased the operating cost pressure on many merchants.

judging from the reactions of all parties afterwards, both the managers of women's clothing stores and the platform itself are well aware of the possible side effects of modifying the rules:

on july 26, taobao changed its rules. at the same time, the women's clothing stores mentioned above, such as "the bubble" and "losvlue", also chose to close. in addition, zhang dayi also announced in september that she could not support the business and had to close her store. the closure of a number of stores at the same time is difficult to say is a coincidence.

it is not difficult to see that the dilemma faced by zhang dayi and a number of platform-oriented stores was not taobao's original intention. in retrospect, taobao's rule changes can only be regarded as a helpless move to cater to multiple parties:

with traffic being stretched to the limit and multiple e-commerce platforms competing fiercely, taobao urgently needs performance to support alibaba’s image: there is really not much else to do except transferring the pressure of refunds and inventory to taobao merchants and increasing the intensity of charges for traffic. the inventory game of taobao merchants will inevitably lead to the closure of stores with 100,000, 1 million or even 10 million fans.

the closure of leading clothing stores that we are witnessing today can only be said to be the inevitable result of the three-way game between platforms, stores, and the capital market.

04

about not forgetting your original intention

it is not difficult for people who follow taobao to see that since the end of last year, the main topic of taobao's external debate has been centered around the shift in its core service goals: whether to put users first, or to stay true to its original aspiration of "making business easy for everyone," maintain merchant priority, and avoid exhausting all resources.

through the changes in the new regulations, taobao finally made a clear choice between merchants and users: the most typical example is that after the rules were adjusted, taobao announced that it would charge all merchants a "basic software service fee" of 0.6% of the order transaction amount, and at the same time refund the 2024 annual fee.

before this, although taotian charged a high annual fee of 30,000 to 60,000 yuan at one time, the original annual fee policy was full of flexibility, and most merchants would implement annual fee reductions after completing their tasks.

according to the "tmall 2024 annual fee category software service fee list", merchants in most categories can enjoy a full annual fee refund as long as they achieve sales of 10-20 times the annual fee threshold, and as long as they achieve half of the sales target, they can get half of the refund.

the refund policy under the technical service fee model is aimed at merchants with an annual transaction amount of ≤120,000 (full refund), and from september 1 to december 31, 2024, alimama coupons worth 50% of the basic service fee will be issued to merchants with a transaction amount between 120,000 and 1 million.

we made a calculation based on the women's clothing category, which is roughly shown in the following table:

figure: cost difference between annual fee and technical service fee, source: tmall official website, jinduan research institute calculation

the new regulations seem to have lower absolute costs, but calculated based on the unit price of 50 components, the technical service fee borne by a store with monthly sales of 2,000+ will be greater than the previous annual fee, and the more units sold, the higher the cost.

some third-party research institutions have previously estimated that alibaba's technical service fee will directly increase taobao's customer management revenue by nearly 10 billion yuan, and this was also confirmed in alibaba's conference call later: in alibaba's financial report meeting, management stated that the new policy can make up for the difference in the growth rate of gmv and customer management revenue.

in retrospect, it is not difficult to see that the real effect of the new regulations is that the platform has made a clear choice between users and merchants by raising the costs of mid-level and above merchants.

for the platform, after each round of policy adjustments, someone has to spread the costs in the updated rules. the closure of zhang dayi's women's clothing store, the first on taobao to exceed 100 million yuan in sales, heralds the arrival of a rather helpless era of stock game e-commerce for taobao merchants:

the closure of the once-popular stores is itself a very bad signal for the platform ecology, but from the platform's perspective, the pricing pressure exerted on the merchants is the most natural result of rebalancing the interests of the three parties.

from this perspective, it is not surprising that taobao influencers like zhang dayi bid farewell to this double eleven.