Amazon's entry into Tmall leaves three major suspense

Amazon quietly entered Tmall, seemingly not wanting to make it public, but it was still discovered by careful observers. Although Dangdang, Gome, and No.1 Store have successively entered Tmall in the past few years, this time the world's former "largest" e-commerce platform Amazon's entry into today's largest e-commerce platform has attracted much more attention. As both parties remained silent, it also left some suspense.

Suspense 1: This is the will of the headquarters. Is Amazon China an outcast?

Amazon previously had a brand store called "Kindle Official Flagship Store" on Tmall, selling Kindle series e-book readers, tablets and other products. Because the categories are scarce, it will not pose a threat to Amazon's brand and Amazon China's model. This time Amazon directly entered Tmall, although the current categories are only overseas direct purchases, but the impact it brings cannot be underestimated.

In June 2013, Tracy from Sina Technology reported that Amazon's global BD director had pushed the head of China to have a secret meeting with Tmall's top management to discuss the possibility of Amazon's cooperation with Tmall and its entry into the market. At that time, it was said that this cooperation was directly communicated by Amazon Global and the headquarters took the lead in negotiating the matter, which meant that Amazon Global paid more attention to the development of the Chinese market. Now, some media reports mentioned that this was personally promoted by Amazon CEO Bezos. Obviously, this was the will of Amazon headquarters.

This does not seem to be the result that Amazon China wants. People choose to go to Tmall to buy Amazon's advantageous categories of products. What is the competitive advantage of Amazon China? During the Double Eleven period, Amazon China's strategy to deal with Ali Overseas Shopping was the Overseas Shopping Festival. The senior executives of Yazhong said that they were very satisfied with the results and seemed to be making the final effort to prove Yazhong's strength to the headquarters. In February, they quietly moved in to the enemy they wanted to snipe at that time. The ending of smiling and forgetting the grudges came too quickly. If Amazon's flagship store lists more SKUs in the future, where will Amazon China go?

Suspense 2: How long will the sweet period between Amazon and Alibaba last?

Before Alibaba went public and announced the launch of its internationalization strategy, Amazon and Alibaba were almost isolated from each other. First, there is a fundamental difference in the business model between the two. Amazon is mainly self-operated B2C, which is equivalent to a supermarket like JD.com and is better at supply chain, while Alibaba is a B2C platform, equivalent to Wanda Real Estate. Second, Amazon's market share in China is only 1.5% (as of June 2014), while Tmall accounts for 57.4% of the B2C online retail market. They are not competing at the same level. One is based on the global market, and the other focuses on the Chinese market. There is no conflict.

In September 2014, with the listing of Alibaba, the atmosphere became tense. Amazon had been the world's largest e-commerce platform before Alibaba's listing, but was soon surpassed by Alibaba, which has a market value of 200 billion US dollars. The change in the name implies the confrontation between the two parties in the capital market, and the two are competing for investors on the Nasdaq and the New York Stock Exchange respectively. The greater conflict comes from Alibaba's ambition to go global. Now, Alibaba's real competitors are no longer JD.com, but Amazon and EBay. Because Alibaba wants to go global, which has two meanings: one is to help Chinese people buy overseas products more conveniently, and the other is to help Chinese merchants sell products directly to overseas end users.

Alibaba has been making frequent international moves since its listing, with hundreds of countries participating in the Double Eleven, Prince William of the United Kingdom visiting China to promote British brands, design weeks held in many countries, and investment in Singapore Post. A person close to Amazon China even revealed to me that Amazon has a team that is not affiliated with Amazon China, responsible for sniping Alibaba's internationalization and attracting Chinese sellers to Amazon Global. Because if we don't attract them today, they will sell goods overseas on Tmall tomorrow and compete with Amazon. The competition between the two companies is becoming increasingly fierce, and the future of global e-commerce will definitely be an "AA war".

In an interview on the day of Alibaba's listing, Jack Ma said that he would not rule out setting up a joint venture with Amazon to jointly serve small and medium-sized enterprises. Alibaba needs to learn from its supply chain and go global; Amazon needs to find its right position with the help of Alibaba, the Chinese giant. Driven by common interests, the two sides have now come together, but how long can they last?

Mystery 3: Will JD.com be the next B2C self-operated e-commerce company to enter Tmall?

The cooperation between Amazon and Alibaba illustrates two points. First, there are no eternal enemies. Second, it is a general trend for self-operated B2C to enter B2C platforms. Well-known cases are that Dangdang, Gome and No.1 Store have already entered Tmall. What is more interesting is that Gome has also entered Dangdang. "Entering" is becoming the mainstream way of e-commerce cooperation. It seems to be opening a store in the other party's territory, but in fact it is to obtain the other party's traffic, users and orders, and the cost is rent, advertising fees, transaction fees, and discourse power. More importantly, even if you can get other people's traffic to fill your stomach, you must abide by their rules of the game and be stuck by the neck. Channels are king.

Even with all the costs, major vertical self-operated B2Cs have surrendered to Tmall, and the core reason is still profit. Before Dangdang, Gome, and No.1 Store have the energy to consider whether they will be controlled in the future, they need to survive or succeed. Li Guoqing's metaphor when Dangdang entered Tmall was vivid: "They are building a commercial property on a busy commercial street. We sell goods, so of course we have to move in. Besides, the rent is not expensive." Alibaba has already occupied the busy territory (user volume) and built infrastructure such as Alipay and Alimama. Those who sell things can see clearly, bow their heads, and benefit from it early. Alibaba is not a seller, but an infrastructure builder. In essence, there are opportunities for cooperation with self-operated B2C platforms.

My question is, will JD.com be the next one to enter? Now everyone would think it is impossible. However, looking at JD.com’s financial report, in 2014, it lost 5 billion RMB, ten times that of the previous year. It is still unknown when it will be profitable. The traffic cost is high. In 2014, the sales cost was 101.6 billion RMB, a year-on-year increase of 63%, mainly due to the traffic purchase cost. Alibaba has traffic, especially after achieving certain results in internationalization, it will have overseas traffic that JD.com does not have. These will only become more and more tempting to JD.com in the future. JD.com’s advantage is supply chain and logistics, which are complementary to Alibaba. Therefore, looking at the Amazon flagship store, will it be possible for JD.com to enter Tmall in the future?

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.