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Author | Lv Jingzhi, Tao Tao, Editor | Cao Yang
Source: combustion dimension (ID: chain)
"See you for a long time". In this year's "618", WeChat friends circle opened the information flow promotion of Tmall's flagship store.
According to informed users, this information flow advertisement is not just brand exposure, but can directly enter Tmall stores through links, and complete a series of operations such as placing orders and purchasing.
Figure/E-Commerce advertising sources in the circle of friends/Ebon Power Such cooperation is the further exploration of Alibaba and Tencent in the traffic portal since the implementation of the "connectivity" policy.
From the perspective of the industry, the policy factors have played a great role in promoting the further cooperation between Alibaba and Tencent.
On July 23, 2021, the Ministry of Industry and Information Technology launched a special rectification action for the Internet industry, focusing on the malicious blocking of website links and interference with the operation of other enterprises' products or services, including the scenes of restricting the normal access of other website links without proper reasons and implementing discriminatory shielding measures.
On September 13, 2021, at the press conference of the State Council Information Office, Zhao Zhiguo, Director of the Information and Communication Administration of the Ministry of Industry and Information Technology, made a statement on "connectivity", clearly pointing out that "connectivity is an inevitable choice for high-quality development of the Internet industry, and making users use the Internet smoothly and safely is also the direction of the Internet industry". On September 17, all major platforms successively opened the outer chain. Since then, the action of "interconnection" of the whole network has officially started.
However, in addition to policy factors, Alibaba and Tencent have opened the door to each other's "connectivity", which is also closely related to their respective business bottlenecks.
For Alibaba, in the first quarter of 2022, its total revenue increased by 8.89% year on year to 204.05 billion yuan (RMB, the same if not marked below), which is not only the lowest quarterly growth rate since 2014, but also a 8.17% month on month decline; Non GAAP net profit was 19.799 billion yuan, down 24% year on year, also the lowest since the listing.
In terms of Tencent, the financial report for the first quarter of 2022 shows that the group's total revenue is 135.471 billion yuan, which is flat on a year-on-year basis and 6% lower on a month on month basis; Under non international financial reporting standards, the net profit was 25.5 billion yuan, down 23% year on year and 66% month on month.
Judging from the financial report data of the two "giants", it is an indisputable fact that the speed has been reduced, whether in revenue or profit.
More importantly, the offensive of "rising stars" should not be underestimated. According to public data estimates, Ditto is directly challenging the "Jianghu status" of Tencent and Alibaba, the two Internet giants, with more than 700 million daily active users. Pinduoduo, Meituan, Jingdong and other new and old e-commerce companies are also "eyeing". Breaking the business closed loop within the platform and obtaining traffic and users from other channels is undoubtedly the common demand of Tencent and Alibaba.
Zhuang Shuai, an expert in the retail e-commerce industry and the founder of Bailian Consulting, said that Tencent and Alibaba could get a share of advertising and commodity revenue from Tmall merchants when the information flow ads were launched this time, which is undoubtedly a win-win situation for both.
Liu Li, a senior analyst in the e-commerce industry, added that the intercommunication between Tencent and Alibaba is also good news for businesses. "The customer acquisition cost of '618' on Taobao is gradually rising. In contrast, the cost performance of WeChat friend circle is higher. In addition, the touch orientation of friend circle is better, and the conversion rate after customer acquisition will be higher."
In fact, Alibaba and Tencent are not the only active participants in "connectivity". From the beginning of "connectivity", the apps of Byte and Tencent have begun to get through to a certain extent. In January of this year, Tiao Yin attracted more attention to Tencent games.
According to insiders, the reason why we chose to channel Tencent Games was that Diaoyin entered the game industry last year and tried to make efforts to play Diaoyin Games through investment, mergers and acquisitions, self built teams and other ways. However, dithering seems to have not yet made achievements in small games. Therefore, as a diversion for Tencent Games, on the one hand, it will increase its advertising revenue, on the other hand, it will also further explore the game ecology.
Huang Dacheng, a lawyer from Beijing Guantao Zhongmao Law Firm, said to Huo Caijing that the Internet has passed the blue ocean era of horse racing, land enclosure and barrier strengthening. In the current general environment, by integrating superior resources and heating the group, we can better adapt to the Red Sea era.
Each needs his own or has his own dilemma?
For the cooperation between Tencent and Ali, Chen Tao, a senior analyst in the brand retail industry of Analysys, believes that the promotion of policies has played an extremely important role.
"Ali and Tencent have already formed advantages in their respective main business areas, and from the perspective of short-term benefits, it seems that their revenue will not be significantly increased by mutual cooperation. Therefore, without the promotion of external policy factors, their cooperation will not be achieved so quickly."
Zhuang Shuai has a slightly different view on this. "Even if there is no Internet policy, the alliance between Ali and Tencent is also a trend."
In Zhuang Shuai's opinion, in this cooperation, Ali has increased the attraction of its advertising space to merchants by expanding the traffic entrance outside the station, while Tencent has directly generated revenue through display advertising. "To put it bluntly, Ali and Tencent have added a 'firewood' to the weak business through cooperation."
As Zhuang Shuai said, it is not difficult to see from Ali's financial report in 2021 that the attraction of its website launch business to merchants is much less than before.
In the four quarters of 2021, Alibaba's customer management revenue (in station advertising revenue+Tmall commission) will be 63.6 billion yuan, 81 billion yuan, 71.7 billion yuan and 100 billion yuan respectively, up 39.78%, 12.2%, 3.3% and - 1% year on year, with a significant slowdown. In the third quarter of 2021, there will also be a decline of 11.6% month on month.
Data source/Ali financial report and financial drawing In the first quarter of 2022, Ali chose not to disclose the specific amount of customer management income, and instead used "equal to the previous period" instead. In this regard, industry analysts generally believe that the revenue from customer management in the first quarter may have declined to a certain extent.
In this context, the purpose of Alibaba and Tencent to launch traffic cooperation is obvious.
"The content e-commerce led by Tiaoyin has shared the launch budget of many Alibaba merchants, and the cooperation between Alibaba and Tencent is to attract merchants to launch by expanding traffic exposure." Liu Tao, an e-commerce operation director in Hangzhou, said.
Liu Tao told Fuel Finance that most businesses can't see whether the traffic comes from inside or outside the Alimama website (the platform for Alimama website). They all launch the website in a unified way, and then charge for the final display or click.
Liu Tao provided the Ali mother operation background to Fuel Finance. In the background, at the bottom of the launch page, it is marked "The resource position has been opened, and this resource will help you select more scenes from all the resources of the gravitational module to launch." Liu Tao pointed out that this label means that Ali will release the materials to the external platform, and the merchants will settle with the final exposure.
Figure/Ali Mama background source/provided by merchants In Zhuang Shuai's opinion, the essence of Ali's cooperation with Tencent is to seize the launch budget of businesses.
At the same time, Zhuang Shuai also expressed another delicate relationship between Ali and Tencent in this cooperation. "If the effect of offsite drainage is very good, businesses may go directly to private domain e-commerce for small programs and slowly leave Alibaba. If the effect of advertising is not good, Tencent itself is doing incremental and has no loss, but for Alibaba, the customer management revenue, which accounts for a large proportion of business, has no better breakthrough, which will be a more serious blow."
Bella, director of Beijing brand operations, said that the cooperation between Alibaba and Tencent did not achieve innovation in the form and materials of launch, but simply expanded the access to traffic. "From the perspective of brand launch, I will not invest the budget originally allocated to KOL or Tiaoyin or Xiaohongshu to Ali because of the increase of traffic access."
From the perspective of the above two people, Tencent seems to be able to gain more from this cooperation.
"After several years of exploration of e-commerce, Tencent has finally found a set of 'routines' suitable for itself," Zhuang Shuai further said, "Tencent is good at social networking and content. After introducing high-quality content products into traffic, Tencent has turned itself into the 'big front' of all e-commerce. Its previous investment in Pinduoduo and JD, as well as this cooperation with Ali, are gradually expanding its e-commerce ecosystem."
However, the data seems to have been "exposed". Tencent, which seems to be "plotting strategies", has a dilemma behind it.
From the first quarter of 2021 to the first quarter of 2022, Tencent's advertising revenue is not satisfactory. In the first quarter of this year, it even fell below the 20 billion yuan mark, with a year-on-year decline of up to 18%.
Data source/Tencent financial report and financial drawing After the introduction of Tmall's information flow advertising, the specific gains to Tencent's social advertising will be seen in the following semi annual report. The industry has also made different voices about the long-term impact of this increase on Tencent.
Jesse, director of overseas investment, predicted that this cooperation would not bring about huge changes in Tencent's advertising revenue. "Access to Tmall, a heavyweight app, will naturally benefit Tencent's advertising business, but the real challenge faced by Tencent advertising is the situation that display advertising is overtaken by KOL advertising. In the long run, this cannot solve the real dilemma of Tencent advertising."
However, Zhang Yi, an analyst with iMedia Consulting, expressed a completely contradictory view. "Tmall, as a buyer with huge traffic and stable demand, will play a huge role in the long-term growth of Tencent advertising."
Although in many ways, this cooperation cannot bring benefits to either Alibaba or Tencent in the short term, it is also an indisputable fact that the two sides are slowly "making peace".
A year of "handshake and peace" between Tencent and Ali
In fact, the "ice breaking" of Alibaba and Tencent can be traced back to July 2021.
At that time, the Ministry of Industry and Information Technology carried out a special rectification action for the Internet industry for half a year. "Restricting normal access to other website links without justified reasons, implementing discriminatory shielding measures and other scenarios" was one of the key rectification contents.
Under the guidance of the policy, since last September, WeChat has gradually relaxed the restrictions on Alibaba e-commerce external chain in private chat, group chat and other scenarios. When users open the WeChat private chat interface and want to access Taobao, they no longer need to copy and paste "Martian".
Before that, it had been 8 years since the Goose Series platform and the Amoy Series platform closed the "gate" to each other.
In November 2013, Alibaba took the lead in closing the channel from WeChat to Taobao on the pretext of "security vulnerabilities". Tencent then blocked Taobao links with "reciprocity". Since then, Alibaba and Tencent applications have blocked applications from the other side, building a "high wall".
It happened on February 3, 2015. At that time, under the influence of Alibaba and Tencent's "fight for red envelopes" during the Spring Festival, the contradiction between the two giants escalated again. Many Alibaba products have been blocked by WeChat, including Alipay and Xiami Music. For the ban at that time, the official reply given by WeChat implied that Alipay was "an illegal third-party platform", and the question of Xiami Music was copyright.
However, a number of industry insiders said frankly to Rang Finance that the root cause of the "blocking" between the two giants in those years was that they did not want competitors to grab traffic in their strong fields. More importantly, the two giants were "at the height of the sun" in their respective headquarters at that time, and there was no need for win-win cooperation.
In the 2015-2016 fiscal year, Ali's total revenue grew 45.14% and 32.68% year on year. Tencent's total revenue also increased by 30% and 48% year on year.
In contrast, Alibaba's revenue growth in fiscal year 2022 (from the second quarter of natural year 2021 to the first quarter of natural year 2022) is only 19%, and Tencent's revenue growth in fiscal year 2021 is only 16%, which is different from the highlight moment.
"Now, when the competition of Internet platforms enters the second half, it is difficult for them to get new breakthroughs. Breaking barriers has become the general trend," said Huang Dacheng.
As the leader of Tencent and Alibaba, the impasse between Tencent and other Alibaba Apps will gradually break in September 2021 after the external links of Taobao and WeChat are opened. Alibaba's multiple platforms, including Elememe, Youku, and barley, have successively accessed WeChat payment.
At the same time, in March this year, Alibaba even loosened the most taboo WeChat payment access to Taobao, and a small range of WeChat payment has been launched on Taobao.
However, according to the current internal test of Taobao WeChat payment, this function is only an indirect payment function. Users can only complete transactions by scanning the QR code or going to WeChat to find other friends to pay, which undoubtedly increases the operational complexity of intended users.
Figure/Alipay Water Test WeChat payment source/Zaker But even so, Alibaba and Tencent have kept opening the door to each other's applications, and it is the trend of the Internet that emerging Internet giants such as Ditto have joined the "Internet". Although it still takes time to truly realize the full opening of applications, it is undoubtedly a great benefit to users and businesses on the Internet.
Internet "Great Harmony"?
According to the Survey Report on "Interconnection" Users' Cognition and Attitude, in the period when Internet enterprises block each other, in addition to users' inconvenience, a large number of small and medium-sized enterprises are also trapped in traffic "islands". In the report, more than 65% of e-commerce practitioners believe that "connectivity" will provide more living space for small and medium-sized businesses, and nearly 50% of e-commerce practitioners say that "connectivity" can reduce business operating costs.
In this regard, Liu Li told Fuel Finance that the platform market can also release more dividends including technology, traffic, resources, etc. by opening up to each other.
However, no matter whether Tencent's cooperation with Ali is the trend of the times or the "last resort" under the decline of performance. Behind the seemingly win-win situation, there is an unspeakable dilemma for both sides.
Chen Tao believes that at present Tencent and Ali have taken out their most important business segments to cooperate. The current cooperation link is from WeChat to Tmall, and it may be a comprehensive connection to Taobao in the future. "In the future, Tencent and Alibaba will even have the possibility of further cooperation in enterprise services and cloud services."
However, Liang Luo, a senior cloud expert, said that in terms of cloud business, Tencent and Alibaba will not get through in the short term. "Tencent's FinTech is the business curve with the highest growth rate in recent years. Ali also hopes to achieve" second spring "through cloud business in the case of weak e-commerce. From this point of view, the two enterprises are unlikely to cooperate on cloud business."
Liang Luo added that Alibaba and Tencent, one of which is good at the back end of the "human goods yard" management, and the other is good at the front end of the traffic introduction, have a natural soil for cooperation in advertising business. However, in terms of cloud business, the services provided by both parties are homogeneous, and have formed their own ecosphere - Tencent focuses on entertainment and games, while Ali focuses on retail and e-commerce. In the short term, it will inevitably be a competitive relationship.
"For the same reason, there is no soil for cooperation between the two countries in payment and gold consumption for the time being," Liang stressed.
Zhang Yi said that in the future, Tencent and Ali have the possibility of further cooperation in both game promotion channels and content production. "Both parties can act as traffic portals to increase synergy and further achieve win-win results."
In fact, in addition to Tencent and Alibaba, whether Internet giants such as Tiaoyin, Fasthand, JD, Pinduoduo will also actively participate in "connectivity" is also a topic of concern.
Liu Tao said that JD, Pinduoduo and Alibaba are both e-commerce platforms that focus on search, so it is very easy for them to get through with display advertising platforms like Tencent. However, the original recommendation algorithm and video advertising form of Tiaoyin have higher requirements for stores that want to cooperate.
In fact, WeChat has really got through with JD and Pinduoduo. At the beginning of this year, Douyin also began to drain Tencent games. In this regard, Liu Tao said that Tencent has invested in Jingdong and Pinduoduo, and their mutual connection may be inevitable, but the sound is different.
"Douyin is also trying to build its own e-commerce business, and its recommendation algorithm has also made its advertising revenue grow rapidly, so it may not be willing to cooperate with Alibaba and other search e-commerce companies in the e-commerce field. However, it is also possible for Douyin to open its own traffic portal in other fields."
Many analysts contacted by Fuel Finance generally believe that in the future, the Internet is more and more likely to break through barriers.
Zhang Yi said that the construction of barriers by enterprises is also adding costs to themselves. Now the growth rate of Internet users in China has basically reached the ceiling. "In this general environment, enterprises will further seek cooperation to find ways to realize traffic."
Chen Tao agreed with this, "The Internet is a huge system. The fewer barriers, the more obvious the network effect created by all its participants."
Chen Tao added that for businesses, the interoperability of major platforms is a great benefit. If platforms are blocked from each other, businesses need to repeatedly build brands and marketing frameworks on different platforms, which is undoubtedly a waste of resources for businesses. After the platform is interconnected, businesses can save this part of time and capital costs for things that are more conducive to the product itself. For example, invest in product R&D and upgrading to improve product quality. In this virtuous circle, consumers will also be the ultimate beneficiaries.
Bella also said that the further interconnection of the platform is something that all brands like to hear and see. "Of course, we don't want a set of advertisements, because we need to launch different platforms and constantly modify the size, title, color, etc. The further opening of the Internet can undoubtedly greatly improve the marketing efficiency of brands."
During the nearly one year exploration of "connectivity", "Internet" people made the first round of attempts in cooperation by using their respective directors. In the future, the key to "connectivity" may lie in the further reference of technology and the further sharing of resources.
reference material:
Ministry of Industry and Information Technology Releases a New Round of Interconnection Signals, source: 21st Century Economic Report;
Dithering "Abandonment" Short Video, source: Zaker;
Upgrade of the Red Packet War: Alibaba and Tencent fight against each other. Source: Phoenix.
*The title and some of the pictures are from Visual China.
*Jesse, Liu Tao, Liu Li, Bella and Liang Luo are pseudonyms
*Disclaimer: In any case, the information or opinions expressed in this article do not constitute investment advice to anyone.
(Statement: This article only represents the author's view, not Sina.com's position.)
