hotmtlnovel Chapter 1001: The Strategic Significance of Brand-Owned Stores
Chapter 1001: The Strategic Significance of Brand-Owned Stores
Chapter 1001: The Strategic Significance of Brand-Owned Stores
At Alibaba’s internal high-level meeting, Jack Ma said with a serious expression.
"First of all, I am responsible for the current situation. I underestimated the potential of Yigoo and mistakenly believed that Yigoo's business model could not be expanded."
After finishing his self-criticism, Jack Ma changed the subject.
"At this point, we have to admit that Yigoo is our mortal enemy and a competitor we must do our utmost to defeat!"
The Alibaba executives present all nodded. Although Yigoo’s business model seems to be different from Alibaba’s, its business segments are highly overlapping with Alibaba’s. The most frightening thing is that Yigoo has a considerable leading advantage in the two major sectors of C2C market and electronic payment.
Especially after Yigoo recently penetrated into the sinking markets in third- and fourth-tier cities, Taobao's market share in this area has plummeted.
From the user's perspective, although it is also online shopping, Yigoo supports cash on delivery. You can also go to an offline store to see the samples before placing an order. If you are not satisfied, you can return the product within seven days without giving any reason. Logistics usually delivers the product in two to three days, and you can even get it the next day if you pick it up yourself.
Therefore, except for some less popular commodities, users are more willing to choose Yiguo. Unless Yiguo really has no more to sell, they will go to Taobao to place an order.
After unifying the thoughts of the senior executives, Jack Ma proposed: "First, we need to solve two pain points. One is logistics. Yigoo can even deliver on the same day in the central areas of first- and second-tier cities, and in third- and fourth-tier cities it only takes two to three days. On the other hand, what about us? First- and second-tier cities take at least two days, not to mention third- and fourth-tier cities. Some customers even have to wait for a week."
"You have to know that after placing an order, the psychological time it takes for the product to arrive is very torturous. The longer the wait, the stronger the emotion. Once the product the user buys is defective or has quality issues, you can imagine how angry they will be."
"Therefore, it is urgent to improve the speed of logistics..."
However, halfway through the conversation, while Jack Ma was thirsty and drinking tea, an executive brought up the idea.
"But Mr. Ma, the delivery speed of goods is not something we can decide. Part of it is due to the express logistics company, and part of it is due to the merchant not shipping immediately after receiving the order..."
Jack Ma interrupted directly: "We will communicate with the express delivery companies about any problems. We will use the ones that can deliver faster. As for the problem of merchants delivering goods slowly, we will recommend more traffic to those merchants that can deliver goods quickly. In short, we must try every possible way to keep up with Yigoo's speed!"
The executives present looked at Jack Ma's murderous look and knew that he was really forced into a corner by Yigoo this time.
"Secondly, we need to improve Taobao's crackdown on counterfeit and substandard goods. I don't want to see people online associating Taobao with counterfeit goods. If things go on like this, the gap between our brand image and Yigoo will grow. Once such an inherent impression is formed in the minds of the majority of users, it will cost ten or a hundred times more to reverse it."
After the meeting, Jack Ma left Cai Chongxin alone.
"Old Ma, don't get too angry. Although Yiguo has been developing rapidly in the past two years, it does not open its platform to merchants. At most, it is an online Wal-Mart. It is difficult to compete with Taobao in terms of scale."
Jack Ma rubbed his temples: "I know this, but who can guarantee that it won't be open one day?"
Cai Chongxin looked at Jack Ma suspiciously: "You have been worried since you came back from Beijing this time. Did you encounter any problems in Beijing?"
"It's not about encountering things, but about meeting people."
"Qin Hao?"
Jack Ma nodded solemnly: "I found out from talking to him closely this time that Yigoo's success today is definitely not accidental. Looking back at the time when he founded Yigoo, every step was very organized. Do you remember how many mistakes we have made since we started our business?"
"He seems to be riding the wave of the times every step of the way, and that's the scariest thing."
Just when Cai Chongxin was about to say something, the office door was suddenly pushed open forcefully.
Jack Ma frowned, but heard the executive who broke in shouted anxiously: "Boss Ma, go online quickly..."
As a result, Jack Ma casually opened a portal website and found a banner ad on the homepage.
"Yiguo sincerely invites all major brands and manufacturers to enter..."
Jack Ma's eyes went dark and he almost fell down.
"Is Yiguo open for settlement?"
Cai Chongxin didn't care about Jack Ma and quickly clicked on the banner ad. The link jumped to another interface, which was Yiguo's investment guide.
After reading it word by word, Cai Chongxin and another senior executive looked at each other and both breathed a sigh of relief.
“Fortunately, it’s not completely open.”
Just as Cai Chongxin said, Yigoo's open entry is not completely open, and many conditions need to be met. First of all, the hard power must be passed. The company's paid-in registered capital must not be less than five million, and secondly, the number of employees must not be less than thirty. In addition, Yigoo will visit the warehouses of these partners from time to time to take samples and conduct random inspections. Once counterfeit or shoddy products are found, the cooperation will be cancelled immediately, and the deposit will be deducted to compensate the users who purchased the goods.
Jack Ma was not as optimistic as they were: "Don't you realize that this self-operated store model is very disadvantageous to us?"
The self-operated store model launched by Qin Hao is mainly aimed at brands that have a certain influence but lack online marketing capabilities. It adopts a cooperative model. The brand only needs to be responsible for the after-sales of the product, and other promotion, marketing, and distribution are all completed by Yigoo, and the profits are split 50-50.
"Just imagine, once these brands enter Yiguo, they will further consolidate Yiguo's image as an authentic brand in the minds of users. Moreover, since these brands are highly tied to Yiguo, it will be almost impossible for us to poach them."
Jack Ma said worriedly that he knew very well that most brands did not have sales capabilities, and the sales departments of most brands actually connected with agents at all levels to let the agents sell the goods.
The self-operated store model of Yigoo just solves the pain points of brands. They don't need to worry about promotion and marketing, just leave it to Yigoo to operate. The 50-50 profit split is also within a reasonable range, and some stronger brands can definitely negotiate a more favorable share.
"No, we have to come up with a countermeasure quickly. Otherwise, once Yiguo's self-operated stores become famous, it will be very disadvantageous to us."
Cai Chongxin hesitated for a moment: "How about we open a self-operated store?"
Jack Ma thought about it and there seemed to be no better way. No matter what, it was better to do something than to do nothing.
So, one day later, Taobao’s banner ads also appeared on the three major portals, and some websites with relatively large traffic also had “Tmall Store” advertisements.
However, Jack Ma soon discovered that something was wrong.
Tmall's advertisements did attract quite a few businesses to join, but they were all small businesses, and the real big brands did not make any moves at all. Jack Ma could not hold back and took the initiative to look for some big-name businesses to cooperate with. However, the answers he got were all: they were worried that online sales would cause dissatisfaction among offline agents and that they needed to be cautious.
At first, Jack Ma didn’t think there was anything wrong. After all, e-commerce had only been around for a few years in 2006, and most goods were still sold offline. It was normal for brands to be afraid of offending agents.
But gradually, Jack Ma discovered that big brands moved into the self-operated stores on Yigoo one after another, and almost every day a heavyweight brand opened a self-operated store on Yigoo.
After some in-depth understanding, Jack Ma discovered to his dismay that he seemed unable to handle the self-operated store model.
First of all, Yigoo's image in the minds of users is much better than Taobao's. The reason why many brands choose to cooperate with Yigoo to open self-operated stores is not that they expect the self-operated stores to make much money for them, but to promote their brand image.
There are endless counterfeit and shoddy products on Taobao. Once brands move in, won’t genuine and counterfeit products be sold on the same platform?
Secondly, Taobao is essentially an online department store. It lacks talent in marketing and brand promotion, and it is difficult to provide help to brands. After the brands arrive, they have to spend their own time on promotion and marketing.
Yiguo is different. The first prerequisite for recruitment in Yiguo's purchasing department is rich marketing experience. Whether a product is easy to sell, whether the profit margin is high, whether it can be sold in large quantities, and how long the sales cycle takes are all issues that purchasing needs to consider. Because the purchasing bonus is directly linked to these.
As a result, a very interesting phenomenon emerged: the brand-owned stores on Yigoo were doing very well, while the "Tmall" stores on Taobao became a joke. Some merchants who had settled in "Tmall stores" found that they seemed to have become a big victim. They paid more money than others, but received almost no benefits except a little traffic support. Instead, they were laughed at by many of their peers.
The brands that initially settled in "Tmall" also withdrew one after another. Some simply gave up the idea of e-commerce, while others switched directly to Yigoo. In this regard, Yigoo also accepted all those who met the conditions for self-operated stores.
Jack Ma was so angry that he almost vomited blood, but he had no choice but to focus on developing those small and medium-sized businesses. However, in this way, the brand image of Taobao and Yigoo became bigger and bigger.
There was once a very popular post on Tianya Forum.
A netizen asked: What is the gap between Yigoo and Taobao?
There is a highly-praised reply on the eighth floor that says this.
"To give you an analogy, shopping on Yigoo is like shopping in a high-end mall like Oriental Plaza, while shopping on Taobao is like shopping in a farmer's market."
Although this post was inexplicably deleted later, it was enough to illustrate the gap between Yigoo and Taobao in the minds of users.
This gap is also reflected in the choice of capital. Even though Yigoo's Series B valuation has reached as high as US$58 billion, it is still sought after by a large number of venture capital institutions. Taobao's financing process is relatively bumpy. It was not until after the Chinese New Year that Alibaba received a US$40 billion investment from Yahoo, but the price was % of Alibaba's shares.
After getting the money, Jack Ma breathed a sigh of relief and finally had the confidence to continue fighting with Yigoo to the end. The competition between the two sides then entered a white-hot stage.
Qin Hao did not underestimate Jack Ma just because he was currently leading. He knew very well that Yigoo had only seized the initiative, but Yigoo's model meant that Taobao still had the ability to make a comeback.
……
Time flies, and a year has passed in the blink of an eye. Before we knew it, it is already the midsummer of 2007.
On this day, Qin Hao did not go to the company as usual, but gave his driver a day off and drove to the airport alone.
At the airport exit, a pretty figure came slowly, pushing luggage. Halfway through, she suddenly dropped the luggage and threw herself into Qin Hao's arms.
"Welcome home."
Wang Ying closed her eyes, sniffed the familiar yet unfamiliar scent on Qin Hao's body, and murmured softly: "Well, it's good to be home."
Qin Hao held Wang Ying's hand with one hand and pulled the luggage cart with the other, and walked out of the airport.
"Are you hungry? What do you want to eat?"
Wang Ying took a deep breath and began to count on her fingers: "I want to eat hot pot hot pot meat, roast duck, and braised pork and steamed buns..."
Qin Hao was happy: "You can't finish all this in one meal, choose one first."
"My goodness, those who know you say you are back from England, while those who don't would think you are a refugee from Africa."
Wang Ying wrinkled her nose. "It's not like you haven't eaten British food before. It's awful."
"I have to have a good meal this time when I come back. You have to accompany me to finish all these delicious meals."
Qin Hao suddenly realized: "You didn't tell your family that you came back, did you?"
"Well, I said I would be back next week, but they don't know yet." Wang Ying's fair and delicate arms hooked around Qin Hao's neck: "Don't spoil the fun. If you mention it again, they'll get mad at you."
Qin Hao put his arm around her soft waist and said, "Okay, let's not talk about it. I'll spend all my time with you these days, okay?"
"Hmph, that's more like it." Wang Ying snorted lightly, raising her chin slightly, like a proud white swan, declaring her victory.
The first stop was hot pot meat. Qin Hao was responsible for helping Wang Ying to eat the hot pot, while she was responsible for eating.
"Go slower. If it's not enough, I'll give you more. Be careful not to burn yourself."
Wang Ying breathed out hot air, her eyes narrowed slightly, like a kitten basking in the sun in winter, her whole body exuding laziness and comfort: "Do you remember the first time we ate copper pot hot pot meat?"
Qin Hao was about to answer, but then he changed his mind and immediately swallowed his words.
"Hmph, you feel guilty."
Wang Ying snorted.
Qin Hao was a little embarrassed for a moment, but when he met Wang Ying's eyes, he found that the girl couldn't help laughing out loud.
"Look how nervous you are. Don't worry. We agreed at the beginning that I won't argue with her."
Qin Hao continued to serve hot pot meat to Wang Ying, and at this moment, a cell phone rang.
Wang Ying looked at the caller ID and frowned.
"My mom called. Did she know I was back?"
I didn't answer the first call, but another one came soon after.
After Wang Ying answered the phone, before she could say a few words, her face changed drastically and she said to Qin Hao, "Send me home."