radicalducati Chapter 75 Where Does the Future of Taobao Brands Lie?
Chapter 75 Where Does the Future of Taobao Brands Lie?
The Alibaba Merchant SKA Conference has concluded.
The traffic and crowds in Alibaba's Xixi Park have long since faded from the daytime hustle and bustle, and the internet office buildings along the street have turned off their lights one after another, plunging the entire park into a quiet darkness.
Qingxiao's SUNSA brand studio is located in the mid-level office area of the annex building in the park.
The office on the entire floor was dimly lit. After the Double Eleven shopping festival, everyone took a short break before leaving get off work on time. All that remained were rows of neat workstations, empty chairs, and scattered documents and sample garments on the desks.
Qingxiao didn't turn on all the lights, leaving only a beam of cold white light overhead. The light barely covered the large desk, while the rest of the corners were shrouded in light shadows, maximizing the sense of solitude and profound contemplation.
He shed the low-key and reserved demeanor he had displayed during the daytime meeting, casually draping a black suit jacket over the back of a leather chair, wearing only a plain black shirt with the cuffs rolled up to his forearms, revealing his clean-lined wrists.
He relaxed completely, yet showed no sign of slackness; his entire being exuded a composure and solemnity born from the experience of a battle.
The sneers, disdain, and blind arrogance of those industry leaders at the SKA closed-door meeting during the day are still vivid in my mind; their mocking remarks echo clearly in my head.
Fang Jianhua's confident preaching, Zhao Yingguang's ambiguous smile, the arrogant sense of superiority of a group of Taobao brand leaders... he accurately replicated and firmly remembered the expressions, tones, and mindsets of each person.
Qingxiao slowly sat down in his office chair and began to think deeply.
Outside the floor-to-ceiling windows, the night view of Hangzhou was dazzling with lights from thousands of homes, but all he saw was a cold indifference.
It is now late autumn of 2015.
Everyone was still basking in the glory of Taobao brands taking the top spot in the women's clothing market in 2014, convinced that the online market would always belong to local Taobao brands, and that established offline brands and international fast fashion brands would never be able to figure out the e-commerce game and make any waves.
Everyone took the peak of 2014 as the norm for the future.
Only Qingxiao knew the truth.
2015 was the last buffer year for the first generation of Taobao brands, and also the year that determined their fate.
The plans, choices, and transformation directions made in that year directly determined whether the industry would completely fall into oblivion and disappear, or break through against the trend and gain a foothold when the industry reshuffle came in 2016.
A single thought can make all the difference.
He needed to review and verify the official final list of women's clothing category on Tmall's Double 11 in 2016, line by line, from his memory.
The cold, hard data starkly exposes the false prosperity of all Taobao brands.
Complete ranking of the top 10 women's clothing categories on Tmall Double 11 in 2016:
1. Uniqlo (international fast fashion)
2. ONLY (a long-established offline fast fashion brand)
3. Bosideng (a major national offline retail brand)
4. Han Du Yi She (the only original Taobao brand to remain in the top ten)
5. LeDing (an emerging brand that transitioned from offline to online)
6. La Chapelle (a major domestic offline women's clothing brand)
7. Ochirly (a high-end offline fashion brand)
8. VEROMODA (a major offline brand under Bestseller)
9. Zhang Dayi's My Favorite Wardrobe (An early online influencer e-commerce store)
10. ASM Anna (Top Influencer Women's Clothing Store)
The entire top ten list is so glaringly obvious.
Of the top ten spots, nine are offline and international brands, leaving only Han Du Yi She, a Taobao brand, barely clinging to its fourth-place position.
The four local Taobao brands that dominated the top 5 in 2014 and enjoyed immense success have all fallen from grace.
Qingxiao's gaze swept across the list inch by inch, his eyes as deep and cold as a still pond, without any ripples, only a calm understanding of everything.
He continued to retrieve the industry follow-up data archived in the background, reviewing the final fate of each top Taobao brand one by one, verifying everyone's destiny one by one.
Inman: From 2014 to 2015, it consistently ranked third in its category, enjoying unparalleled success. The founder firmly believed that offline brands did not understand e-commerce and were not a threat.
However, in just two years, it completely fell out of the top ten list of women's clothing during Double 11, with a precipitous drop in traffic, a severely aging user base, and an unwillingness to adapt to the old cotton and linen literary style. As a result, it gradually became marginalized, from a top SKA merchant on Tmall to a second-tier mid-tier brand, and completely withdrew from the main competition in the women's clothing market.
Artka: Once a benchmark of retro design, it has attracted a large number of precise users with its unique style and believes that no one can break through its design barriers.
However, after traditional big brands entered the market in a big way, they were completely crushed by the other party's mature design system, perfect supply chain and low mass production cost.
Its stylistic advantages were quickly replicated and diluted, its unique characteristics disappeared, and it lost all competitiveness. After 2016, it completely fell from grace, its traffic shrank year by year, and it gradually faded from the public eye.
Liebo: It gained popularity with its ethnic style and unique niche designs, and once firmly ranked among the top tier of Taobao brands.
The company failed due to overconfidence, clinging to early e-commerce operational methods, and neglecting brand power and supply chain development. Faced with the superior performance of established brands, it was powerless to resist. In just two years, its sales plummeted, turning it from a top-tier SKA brand into a niche, unpopular shop, and it completely lost its voice in the industry.
Initial statement: Relying on the artistic and leisure style, it has risen rapidly and made the most of the early online traffic dividend.
However, it has always remained in the rudimentary model of low-price, high-volume sales and reliance on platform traffic, lacking brand accumulation, user retention system, and core competitive advantages.
After big brands entered the market and traffic was redistributed, it was quickly eliminated by the market, its sales continued to plummet, and it eventually fell out of the mainstream track.
Only Han Du Yi She managed to barely maintain its position in the top ten, thanks to its extremely rapid new product launch model, mature team operation system, and timely fine-tuning of its operational strategies.
But this is just a facade, a pretense of prolonging its existence.
While seemingly remaining on the list, its market share has been continuously squeezed, and its growth has completely stagnated. It has long lost the glory of being the defending champion in 2014 and is merely struggling to stay afloat in the tide of the times, with no possibility of ever reaching the top again.
The cold data on the screen connects the entire trajectory of the collapse of the first generation of Taobao brands.
Qingxiao's thoughts were churning, and he began to deeply analyze the core issues that led to the industry's downfall.
These early Taobao brands won the era's dividends, but they also died because of them.
Their biggest weakness has never been operational skills or online strategies.
It is precisely what they despise the most—brand heritage, standardized supply chain, offline channel foundation, and risk-resistant capital reserves.
Before 2014, major offline brands disdained to cultivate the online market, looking down on the fragmented traffic and cumbersome online operations of e-commerce, which gave Taobao brands a golden window of opportunity to grow wildly and dominate the market.
However, in 2015, the platform strategy was fully launched, and everything changed completely.
Offline big brands and international fast fashion are not ignorant of e-commerce; they just weren't willing to lower their standards in the past.
Once they understand Taobao's rules, build their own e-commerce teams, and enter the market relying on their overwhelming supply chain and brand power, it's a blatant case of "dimensional reduction attack."
Taobao brands' pride in their speed of new product launches, page design, traffic management, and fan maintenance is incredibly fragile in the face of absolute brand strength, cost advantages, and national brand awareness.
A direct confrontation would be certain death.
This is also the fundamental reason why he insisted on proposing "avoiding the main battlefield and focusing on niche markets" during the closed-door meeting during the day.
Unfortunately, the powerful figures in the room were obsessed with their past glories, stubbornly clinging to their own opinions, and no one listened to them or believed them.
Qingxiao looked up at the dark night sky outside the window, his eyes deep and thoughtful, and began to sort out the core of breaking the deadlock in this crucial year of 2015.
Since defeat is inevitable on the front lines, the only way for Taobao brands to survive has never been to compete with big brands in terms of scale, traffic, low prices, or popular aesthetics.
Instead, they compete in a differentiated manner, leveraging their strengths and avoiding their weaknesses to build unique barriers that major brands cannot replicate, disdain to cultivate, or scale up.
He quickly sorted out several vague but precise directions for breaking the deadlock in his mind. There were no definitive conclusions, but every sentence hit the nail on the head.
First, abandon the mass-market, all-category battle, cut off homogeneous basic models, and focus on cultivating vertical, niche markets.
International brands and offline brands focus on universally appealing styles and pursue large-scale sales, rather than cultivating niche and precise styles.
Taobao brands can focus on a fixed style and a fixed target audience, deeply bind users' minds, and form a style-specific barrier.
Second, abandon the pure traffic-dependent model and shift from "selling goods" to "building users, building brands, and building private domains".
Big brands rely on their national brand recognition to generate their own traffic, while small and medium-sized Taobao brands can cultivate their fans through refined operations, build private user pools, and use high repurchase rates and high user stickiness to counter the high exposure and high traffic of big brands, thus breaking away from absolute dependence on the platform's public domain traffic.
Third, avoid the mature, low-priced supply chains of major brands and focus on small-batch, high-iteration, and differentiated customization.
Major brands excel at large-scale standardized production, resulting in extremely low costs, but their styles are outdated and highly homogenized.
Taobao brands can leverage their flexibility to conduct frequent product testing, rapid product iteration, and niche customization, winning by focusing on the freshness and uniqueness of their designs.
Fourth, partner with emerging young traffic channels to proactively capitalize on new trends that established brands tend to overlook.
Traditional big brands are lagging behind in their transformation and are slow to respond to emerging content traffic, influencer ecosystems, and community marketing. Taobao brands can take advantage of this by positioning themselves early, seizing new traffic dividends, and opening up incremental markets independent of public domain promotions.
Five directions clearly emerged, but none of them were simple and easy-to-implement standard answers.
Every direction requires meticulous implementation, precise resource allocation, and a complete transformation of mindset. It also requires a complete overturning of the profit model and operational logic that the first generation of Taobao brands relied on for many years.
There is a glimmer of light ahead, but the road is fraught with thorns and uncertainties.
Having figured out all the key points, Qingxiao let out a soft breath, a sharp and determined glint in his eyes.
In 2015, the situation was critical; the old king had fallen, and a new era was about to begin.
The next day, early morning.
As dawn broke, the morning sun streamed through the floor-to-ceiling windows into the office, dispelling the chill and gloom of the previous night.
It was exactly 9:00 AM.
The SUNSA brand's core conference room was filled with people on time.
The company's core team members are all present: the operations director, supply chain manager, user operations supervisor, marketing manager, and design team leader. They are all core members who have followed Qingxiao in starting the business and have strong execution capabilities.
Everyone noticed the somber atmosphere of today's meeting.
With the typhoon's direction shifting in recent days, industry rumors tightening, and the boss staying alone in the office late last night to review the situation, everyone knows that a major shift in the women's clothing market is on the horizon.
Qingxiao pushed open the door and walked into the conference room. He was dressed in a neat formal suit, and his expression was calm and composed. There was no trace of the fatigue from the deep thought of the previous night. All that remained was his calm and sharp aura.
He walked to the head seat and sat down, his gaze sweeping over all the core members present. Without any unnecessary pleasantries, he went straight to the point.
"At yesterday's Tmall SKA core closed-door meeting, I obtained the platform's latest strategic direction and also saw the ultimate landscape of the women's clothing market in the next two years."
He tapped the table lightly with his fingertips; the sound was not loud, but each word was clear and distinct, reaching everyone's ears with a powerful penetrating force.
"To put it bluntly, 2014 was the peak of the first generation of Taobao brands, a final burst of glory. Starting in 2015, established offline brands and international fast fashion brands launched a full-scale attack on online platforms, and the era of easy profits for traditional Taobao brands came to a complete end."
The meeting room fell silent instantly. Everyone stiffened, sat up straight, and looked serious.
The operations director spoke first, his brow furrowed: "Boss, we have indeed seen some unusual activity in our backend data recently. The traffic share of major brand stores continues to rise, and the price pressure on similar basic products is very obvious. The conversion rate of our general-purpose products has begun to decline slightly, but we haven't been able to determine whether it's just a short-term fluctuation."
"It's not fluctuation, it's a trend."
Qingxiao immediately interrupted, his tone resolute, "In the 2016 Double 11 shopping festival, nine out of ten of the top brands will be offline big names. Half of the current leading Taobao brands will fall behind and become completely marginalized. We have absolutely no advantage in head-to-head competition for traffic, styles, prices, and brands."
Upon hearing this, a low murmur rippled through the conference room, and an incredulous solemnity filled everyone's eyes.
The supply chain manager, his face tense, questioned, "But we've been in e-commerce for years. Our online operations, new product launches, page conversion rates, and product testing speed are unmatched by major offline brands. Can the gap really be that big?"
What used to be an advantage will become the most useless advantage in the future.
Qingxiao gave a curt retort, then raised the core issue, bringing the meeting to the main point.
"So today's meeting isn't about the crisis, it's about finding a way out."
"Since a head-on confrontation is certain death, how can SUNSA avoid the main battleground? How can we defend our core market, capture incremental growth, and build an impenetrable barrier amidst the encirclement of big brands?"
He didn't give an answer; he simply posed the question to everyone.
"Let's all have a free-flowing discussion, covering five aspects: design, supply chain, users, traffic, and market positioning. Everyone should share their ideas, raise questions, and explore feasible directions. We need to find our own unique path to survival, but we're not in a rush to finalize a solution."
As soon as he finished speaking, the meeting room fell into a heated and tense discussion.
The marketing manager spoke first: "I think we can abandon the mass-market, blockbuster route and focus on a niche, young demographic! Big brands mainly focus on universally appealing styles; they don't cater to the younger, more individualistic market segment. We can precisely target that niche!"
The user operations manager immediately followed up: "And there's the private domain! Big brands are all about extensively harvesting public domain traffic, without doing anything about refined fan retention. We can focus on repeat purchases from existing customers and use high engagement to counter high traffic!"
The design director shook his head slightly, expressing his concerns: "Segmenting the market is indeed feasible, but the market size is limited. How can we guarantee brand scale? If we only focus on a niche market, won't we fall into the trap of being small but not big, and never reach the top?"
The supply chain manager then raised a crucial question: "The small-batch, multi-iteration model puts immense pressure on the supply chain, leading to a significant increase in costs. Once we lose our price advantage, how do we balance profits and market demand?"
As ideas were put forward, problems emerged one after another.
Some see opportunities in niche markets, while others worry about limitations due to insufficient scale; some are optimistic about the growth of private domain traffic, while others are concerned about supply chain weaknesses; some advocate for differentiated breakthroughs, while others are wary of the risks of transformation.
In the meeting room, opinions clashed, and everyone made their own choices. There were directions, ideas, and glimmers of hope, but no one could come up with a perfect, flawless, and fully implementable ultimate solution.
The path ahead is clear in terms of crisis, but unclear in terms of the way out.
Qingxiao sat upright in the main seat, listening quietly to everyone's argument, his expression calm, but his eyes held an unfathomable light.
He didn't interrupt, didn't break the ice, and didn't make decisions.
They simply silently absorbed everyone's thoughts and concerns.
He knew.
SUNSA's path to breaking through the impasse has already taken a vague shape, but the truly precise, fatal, and ultimate answer that can turn the tide still lies hidden in layers of competition and trial and error.