Taobao Special Offer Edition Makes a Splash, Aims to Build a Thousand Super Factories with C2M Strategy

On March 26, Taobao released its C2M strategy for the first time and officially launched Taobao Special Offer Edition. On the day of its launch, Taobao Special Offer Edition quickly topped the AppStore free app rankings.

Zhou Mi, a researcher at the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce, said: Traditional manufacturers mainly judge consumer demand based on experience and lack accurate and effective information, often leading to overestimation or underestimation due to various factors. The significance of Taobao C2M lies in continuously improving the efficiency of interconnection between the consumer internet and the industrial internet through the construction and ongoing optimization of a digital ecosystem, enabling factories in industrial belts to quickly respond to consumer demand, reducing inventory needs, promoting supply-demand matching, and saving social resources.

Relying on its core digital capabilities and Taobao Special Offer Edition, Taobao will help factories in industrial belts upgrade into "super factories." In the next three years, it will create 10 billion new orders for manufacturing in entrepreneurial belts, help 1,000 factories exceed 100 million yuan in output value, and build 10 digital industrial belt clusters each exceeding 10 billion yuan nationwide.

Comprehensive reshaping from industrial belts to the consumer end

Taobao Special Offer Edition is actually not appearing in the public eye for the first time. On March 17, 2018, the beta version of Taobao Special Offer Edition went online. Targeting the lower-tier market, in order to attract customers, it set up special zones such as 9.9 yuan purchases, flash sales, and super value deals.

On December 2, 2019, the Taobao business group established the C2M business unit, with Alibaba vice president Wang Hai serving concurrently as general manager, reporting on two lines to Jiang Fan and B2B business group president Dai Shan; in October of the same year, Alibaba's lower-tier market pioneer Juhuasuan launched the "Factory Sales Connect" system, giving C2M factories a digital control system; and in July of the same year, Alibaba's Tiantian Temai had already joined hands with Alibaba Cloud to jointly upgrade the C2M digital intelligent manufacturing system, planning to complete the intelligent transformation of 100 industrial belts and 10,000 Tiantian factories within three years.

The heavily favored Taobao Special Offer Edition had already completed comprehensive preparations from system support to resource reserves before its launch. Relying on Taobao's system support and the huge energy of industrial belts, Taobao Special Offer Edition will embark on a completely different playbook in the lower-tier market.

Big data gives rise to "super factories":Taobao's massive internal data helps companies in industrial belts control changes in user demand in real time, adjust product structures in a timely manner, and produce on demand.

Guangdong Zhaoqing's Haoshun Odis Technology Co., Ltd. has been engaged in the production of automotive interior cleaning and disinfection products for more than 30 years and was among the first batch of enterprises in Guangdong Province to resume work. On February 4, it received a message from a Taobao "Tiantian Temai" account manager: according to data from the C2M intelligent central control platform, as Wuhan was locked down and public transportation was suspended in various places one after another, the proportion of self-driving increased sharply, and searches for car disinfection supplies surged, but the market was severely short of goods, so it was suggested that Haoshun Odis convert all production lines to produce aerosol alcohol.

General manager Qu Weihao said: "In the past 20 days, the best day sold 80,000 orders, which is the volume of one month in the previous peak season."

In addition to Haoshun Odis, at present more than 3,000 factories across multiple manufacturing industrial belts, including Zhongshan small home appliances, Dongguan digital 3C, Pidu specialty foods, Shantou toys, Shunde furniture, and Taizhou maternal and infant products, have successfully connected to the C2M digital intelligent manufacturing system. Half of them have entered a period of rapid growth, incubating 1,000+ C2M hit products.

The "good money drives out bad money" led by super factoriesIn the past, when people heard about the lower-tier market, they would subconsciously associate it with shoddy goods. Knockoff brands such as "Xiaomi New Products" and "Konka 4K" emerged endlessly and became a laughingstock after dinner.

The common saying that bad money drives out good money presupposes that bad money and good money have the same purchasing power, so people hide good money at home, and only bad money circulates in the market. Looking at good money and bad money from the supply side, we can understand it as: if everyone's goods are highly similar, and given the price-sensitive characteristics of the lower-tier market, consumers all use the same low price to buy goods in a certain category, then what is sold in the market will all be inferior goods.

Especially for enterprises in industrial belts, surrounded by manufacturers with extremely similar products, in the traditional price war routines of other lower-tier e-commerce players, they blindly increase production, reduce quality, and cut prices. Supply is severely excessive, profits are extremely diluted, and once consumer demand changes, the entire industrial belt will face a huge blow.

The C2M model will set off a wave of "good money drives out bad money" from the supply side: further subdividing product characteristics. For goods in the same category, even a very subtle selling point or detail difference will be discovered by the C2M intelligent central control platform, thereby creating differentiation in segmented markets.

The super factories incubated from this will comprehensively crush other factories in terms of scale and quality.

Cuizhixuan, a newly emerging brand in the Fuzhou daily chemical and home cleaning industrial belt, became completely popular on the Taobao platform with a 2-kilogram 9.9-yuan free-shipping soap-based laundry detergent.

At the end of 2018, under the data guidance of Taobao Tiantian Temai, "Cuizhixuan" gained a clearer understanding of consumers' "key needs" and "non-key needs," removed the surfactant ingredients in ordinary laundry detergent, and replaced them with coconut oil essence ingredients in soap liquid, thereby also removing the chemical ingredients that stabilize surfactants.

After this C2M reform, "Cuizhixuan" not only reduced the damage of chemical ingredients to clothing fibers, but also lowered production costs by 15%. The factory upgraded digitally by Tiantian Temai responded extremely quickly and completed production rapidly. Under the dual guarantees of the C2M model and digital factories, it once set a sales record of 100,000 items sold per day on Taobao.

The C2M system helps enterprises move from "selling well" to "being easier to sell," and competition on the supply side will shift from price wars to value wars.

Establishing new quality standards for the lower-tier marketWith the release of Taobao Special Offer Edition, Taobao will hold the first Factory Direct Purchase Festival on March 29. This will be a dedicated marketing event newly created by the Special Offer Edition platform for merchants in industrial belts, providing consumers with extremely cost-effective cheap good goods through factory-direct supply. Factory managers were enthusiastic, and in just a few days, 10 DingTalk groups each with 1,000 people were fully registered.

As large numbers of users and manufacturers pour into Taobao Special Offer Edition, new quality standards recognized by users will be formed, forcing other manufacturers to improve quality, and will soon deal a huge impact to the subsidy and price war tactics of other lower-tier market e-commerce players.

The market's positive feedback on Taobao C2M

On the second day after Taobao released its C2M strategy, C2M concept stocks in the A-share market led gains in both markets. Stocks such as Aokang International, Lancy Co., Ltd., Cixing Co., Ltd., Whirlpool, Qingdao Kingking, Metersbonwe, Deli Group, and Si Te Qi hit the daily limit.

Market analysts pointed out that C2M is not a theme, but should be a track and a wave. Ecosystem businesses that can work with these major e-commerce players on supply chain integration, data analysis, and empowering factories will naturally benefit. Those that can become core production enterprises on the M-side of these major e-commerce players will naturally also be beneficiaries after order concentration, and can at least play the role of price butcher in the market, with a more solid industry position.