It will be closed after 28 months of launch! It was backed by Alibaba but died early. What happened to the social e-commerce Taobao store?

      Recently, the e-commerce industry has been immersed in the good news of canceling the blocking of external links. However, some people in the e-commerce industry are happy and some are worried: Alibaba's Taoxiaopu, which has been online for more than two years, has announced the suspension of operations in a low-key manner in the system announcement , which really makes merchants confused. So what happened to this social e-commerce backed by Alibaba?

Alibaba shuts down Taoxiaopu

      On September 12, Taobao issued a "Notice on the invalidation of relevant rules of Taoxiaopu", which stated that due to business strategy adjustments, related functions such as commodity trading will be stopped on the evening of October 11, 2021.

      Subsequently, while Tao Xiaopu also issued an announcement on September 13 to announce the closure, it recommended that Tao Xiaopu users withdraw their account balance in a timely manner before November 25, 2021 and use the relevant rights and services in the account . After the service is stopped, the unpaid balance will be automatically returned to the Alipay account bound by the Taoxiaopu user. By then, the rules will be invalid synchronously.

      In this way, the closure of Taoxiaopu's business has been confirmed, and what remains is the withdrawal of the merchant and the final work after the closure. What is certain is that in addition to the fee settlement work, Taoxiaopu will integrate and transfer business, and some of the promotion business will be integrated with Alibaba’s Taobao platform Taobao Alliance in the future.

Taoxiaopu died, it was not that the incident happened suddenly

      Taoxiaopu has just been launched for more than two years and announced its closure in a low-key manner. This ending is not sudden.

      As early as August 31, Yao Wei (iFlytek), the head of Taoxiaopu, posted on his Moments: This song from Taoxiaopu commemorates the years he once struggled. Before this circle of friends, he had already transferred to Taobao to shop and was responsible for the operation of the content ecosystem in the Content E-commerce Department. Taoxiaopu's original business team has been shrinking this year, from dozens of people to only more than ten people now.

      The business reduction is not only due to the personnel adjustments within Taoxiaopu. In fact, after April this year, the content of the Taoxiaopu platform has decreased, regular activities have been cancelled, and merchants' commodity transactions have begun to be affected. However, unexpectedly, Taoxiaopu, which was launched in mid-2019, has Alibaba as a solid backing, and has developed nearly one million shopkeepers, created hundreds of millions of transactions, and has thousands of teams across the country, which has declined so quickly.

Business model is a tough problem

      As a social e-commerce platform, Taoxiaopu is Alibaba opening up a new track on its Taobao promotion platform.

      At first, Taoxiaopu adopted an internal test model. Users had to spend money to buy product gift packages to become shopkeepers. After that, they could earn money by recruiting new shopkeepers. After the number of shopkeepers reached the requirements, they could also be upgraded to mentors and enjoy team remuneration benefits.

      On December 30, 2019, Taoxiaopu was officially launched and announced the closure of the membership system and was open to everyone for free. Unlike before, Taoxiaopu adopts the S2B2C model, which requires each user to complete 5 orders and share transactions before it can be activated after the user goes online.

      Despite this, with Alibaba's strong endorsement, Taoxiaopu has attracted a large number of entrepreneurs. By opening Taoxiaopu on Taobao, it authorized the sale of products from brands, dealers, factories and offline channel merchants . After becoming the shopkeeper of Taoxiaopu, these users do not need inventory and ship the goods directly by suppliers, and receive rebates and other rewards in the form of distribution. Its goods are mainly composed of suppliers such as Tmall brand owners, Taobao original buyers, NetEase Koala factory stores, etc.

      At a time when traffic costs are becoming more and more expensive, Taoxiaopu has used the business logic of social e-commerce to "hit people + multi-level distribution" to obtain a good user base, and to a certain extent, it has also brought good traffic to merchants. However, success and failure are both social. In June 2020, Taoxiaopu was controversial because of this sales model and was deeply involved in pyramid schemes. The related accounts were frozen for more than 44 million yuan.

      With the rise of live e-commerce, social e-commerce, mainly Taoxiaopu, has also begun to go downhill.

Social e-commerce, where will it go in the future?

      If the closure of Taoxiaopu business is just a microcosm of the failure of Alibaba's social e-commerce. Then looking at the entire social e-commerce industry, it seems that the development is not optimistic.

      "The first stock of social e-commerce" has gathered. Since its listing in 2019, the stock price has been declining from the initial $14 to below $1 now, with a market value of only more than $100 million.

      Coincidentally, in August this year, Beidian, which is also a social e-commerce unicorn, was gathered in Beibei headquarters building to collect debts because the merchant’s accounts were not settled for several months.

      What is the future of social e-commerce after its wild growth? In fact, the overall scale of social e-commerce has not been reduced. According to the "2021 Social E-commerce Innovation and Development Report", the scale of China's social e-commerce market is expected to reach 5.8 trillion yuan in 2021, a year-on-year increase of 45%. It can be said that social e-commerce still has considerable development prospects in the future.

      Perhaps, the transformation of models and the exploration of innovativeness will bring new vitality to the future development of social e-commerce, and we may wish to wait and see!