Adhering to Jack Ma's advice, Taobao and Tmall are restructuring their business strategies, emphasizing improved user experience for consumers.
In the bustling world of Chinese e-commerce, Taobao and Tmall, part of the Taotian Group, have once again proven their dominance during this year's 618 shopping festival. Here's a roundup of the significant achievements and initiatives that have contributed to their success.
Record-Breaking Sales and Growth
Taobao's RMB 100 billion subsidy during the 618 event led to a staggering 445% increase in gross merchandise value (GMV) compared to last year's promotion. This surge was accompanied by a 74.2% growth in home appliance sales and a 90.1% increase in 3C digital sales.
The platforms also witnessed impressive growth in specific product categories. For instance, Taobao's beauty and skincare sales skyrocketed by 69.2% year-on-year in May 2024 alone.
Emphasis on User Experience
Taobao and Tmall have been focusing on a user-first strategy for over a year, significantly increasing their investment in consumer experience. This shift is evident in the new initiatives such as "Taobao Instant Commerce," aimed at improving user experience and increasing daily active users by offering faster delivery and better service quality.
To guide traffic flow and enhance competitiveness against rivals like Pinduoduo and JD.com, Taobao introduced a new wage system in 2024 that considers merchants' performance in providing good products, prices, and services.
Simplified Shopping Experience
Taobao has simplified online shopping for customers, eliminating numerous pre-sales, deposits, and final payments, and offering unified discounts. This move has made the shopping experience more straightforward and trustworthy, with 44% of consumers valuing genuine products, 34% focusing on the comprehensive shopping experience, and only 50% prioritising low prices.
Live Streaming and Celebrity Influence
Taobao Live, the platform's live streaming service, attracted hundreds of celebrities and CEOs during this year's 618 event. This influx of high-profile personalities added an element of excitement and trust to the shopping experience, contributing to the overall success of the event.
Traffic Distribution and Ratings
Taobao is fully implementing a new rating system that combines a "shop experience score" and a product experience index (PXI), replacing the previous dynamic store rating (DSR). This new system rewards operational efficiency with traffic bonuses, indicating a shift towards traffic distribution guided by service rather than low prices and high GMV.
Expanding Reach and Impact
Initiatives such as free shipping to Xinjiang, a region with a population equivalent to Shanghai, have expanded Taobao's reach and impact. This move not only benefits Xinjiang residents but also extends Taobao's services to a wider audience.
In the news comments section, a Henan netizen shared his story: he is from Henan, and his girlfriend is from Xinjiang. Now, with Taobao's designation of Xinjiang as a free shipping zone, he can finally show more care for her.
Market Share and User Engagement
During the first phase of the 618 promotion, both platforms held close to half of the market share among the five major domestic e-commerce platforms, maintaining a 14.6% growth rate. Huachuang Securities' research report shows that, in March 2024, Taobao's monthly active users (MAU) reached 910 million, and the daily active users (DAU) increased by 22.9% year-on-year during the first phase of the 618 festival.
As of May 28, more than 37,000 brands saw their sales double, further solidifying Taobao and Tmall's position in the Chinese market.
In conclusion, Taobao and Tmall's focus on user experience, quality products, and simplified shopping processes have paid off during this year's 618 shopping festival. Their continued success and growth are a testament to their commitment to their customers and the Chinese e-commerce market.
