Positive Reviews: The New Potential of In-store Group Buying under the Coordination of Alibaba’s Ecosystem Creates Two-way Value for Merchants and Users
The official launch of the in-store group buying business on Taobao Flash Sale is by no means an isolated business move. Instead, it is a key step in Alibaba’s “content + transaction” dual-drive strategy in the local life service sector. Judging from the information disclosed in the news, this layout shows significant positive value in at least three dimensions:
I. Multi-terminal Traffic Integration Builds a “Super Entrance” and Breaks the Traffic Ceiling of In-store Group Buying
One of the core competitiveness of in-store group buying lies in the scale and precision of traffic. Taobao Flash Sale has launched entrances in conjunction with Gaode and Alipay, directly reaching Alibaba’s user base of over one billion DAU (Daily Active Users), which is an advantage that other platforms can hardly replicate. Specifically:
– Taobao Flash Sale itself already has 150 million DAU (according to Alibaba’s Q2 financial report). Most of its users are high-frequency e-commerce consumers who are sensitive to discounts and cost-effectiveness, which highly aligns with the user needs of in-store group buying.
– As a tool-based application integrating “navigation + life services”, 70% of Gaode’s 400 million monthly active users are potential in-store customers who are “making travel decisions”. Its “Street Scanning List” has a natural advantage in the scenario of planting grass and converting customers through the “voting with feet” credit system built on real in-store data.
– As a high-frequency payment tool, the “Coupon Package Magic Coupons” entrance of Alipay can directly reach the “last mile of consumers’ consumption decision-making”, shortening the path from coupon collection to order placement.
The closed-loop of “search – grass planting – transaction – payment” formed by the coordination of the three terminals not only expands the traffic coverage but also improves the traffic precision through complementary scenarios. For example, users may see a recommended restaurant on the “Street Scanning List” while using Gaode Navigation, then place an order for a group buying coupon through Taobao Flash Sale, and finally complete the payment with Alipay. The whole process is seamlessly connected, significantly reducing the users’ decision-making cost.
II. Both “Incremental Business” and “Ecosystem Dividends” on the Merchant Side are Activated, and Small and Medium-sized Merchants Usher in New Growth Opportunities
For merchants, the attractiveness of Taobao Flash Sale’s in-store group buying lies in “increment” rather than “replacement”. The news mentioned that most of the first batch of participating merchants are those who have achieved growth in the Flash Sale takeaway business in the early stage, which means that there is already a certain foundation for cooperation between the platform and merchants, and user and operation experience can be quickly reused. More importantly, in-store group buying provides three new increments for merchants:
– Traffic Increment: Relying on Alibaba’s multi-terminal entrances, the exposure of merchants expands from a single takeaway scenario to the full scenario of “takeaway + in-store”, especially reaching new customer groups such as Gaode’s travel users and Alipay’s payment users.
– Revenue Increment: The average order value of in-store group buying is usually higher than that of takeaway (for example, a hot pot set meal with an original price of 170 yuan is available at a group buying price of 68 yuan. Although the discount is large, the average order value is still higher than that of takeaway meals). Moreover, in-store consumption can drive “table – side consumption” such as drinks and desserts, increasing the revenue per customer.
– Brand Increment: The mixed supply of national chain brands (such as Guimanlong) and local characteristic merchants (such as Feng Xiaozhang Old Hot Pot) can not only meet users’ trust needs for “well – known brands” but also attract trial – seeking users through the local characteristics of “neighborhood shops”, helping small and medium – sized merchants break through regional limitations and build national recognition.
In addition, the subsidies provided by the platform further reduce the customer acquisition cost of merchants. As a participating merchant said, “No matter how much you earn, it’s still an extra gain.” This low – risk and high – flexibility incremental model is undoubtedly a “growth catalyst” for the catering industry affected by the uneven recovery of consumption after the pandemic.
III. Upgrade of User Experience: Strengthening the Mindset from “Obtaining Discounts” to “One – Stop Life Services”
For users, the value of Taobao Flash Sale’s in – store group buying is not only “cheaper packages” but also the improvement of “demand satisfaction efficiency”. In the past, users might need to switch between multiple apps such as Meituan and Douyin to complete the process of “finding a store – comparing prices – placing an order”. However, Alibaba integrates “navigation (Gaode) – discounts (Flash Sale) – payment (Alipay)” into services within the same ecosystem through the coordination of the three terminals, allowing users to complete the whole – link operation without jumping.
For example, when a user searches for “afternoon tea”, Taobao Flash Sale may recommend group buying coupons for nearby dessert shops. At the same time, Gaode shows the real – time navigation route and the ranking on the “Street Scanning List” (based on the real in – store data and word – of – mouth) of the shop, and Alipay automatically pushes payment discounts for the shop. This seamless connection of “information – decision – action” essentially cultivates users’ mindset of “checking Alibaba’s platforms first when having in – store needs”. In the long run, this will promote Alibaba’s transformation from an “e – commerce platform” to an “all – scenario life service platform”, and the user stickiness and LTV (Life – Time Value) are expected to be significantly improved.
Negative Reviews: The “Ideal” of Ecosystem Coordination and the “Reality” of Market Competition, Challenges Should Not Be Underestimated
Although the layout logic of Taobao Flash Sale’s in – store group buying is clear, it still needs to face four major real – world challenges during the implementation process, and some risks may even affect the long – term sustainability of the business.
I. Suppression by the Two Giants of “Meituan + Douyin”, Difficult to Break Through in the Market
Currently, the in – store group buying market has formed a “two – horse race” pattern: Meituan occupies more than 60% of the market share with its full – link services of “in – store + takeaway + hotel and travel” and deep – rooted ground – promotion barriers. Douyin, relying on the traffic advantage of short – video grass – planting, has quickly seized the incremental market through the “content + group buying” model (Douyin’s local life GMV exceeded 200 billion yuan in 2023).
Although Alibaba has a traffic advantage when entering the market this time, it needs to solve two core problems:
– Differences in User Mindset: Meituan’s “consumption decision – making” mindset (when users want to find a store, their first reaction is to open Meituan) and Douyin’s “content grass – planting” mindset (users place an order after being influenced by short – videos) are highly ingrained. Alibaba needs to clarify its own differentiated positioning – whether to be a “discount aggregation platform” or a “scenario – based service platform”? Currently, the dispersion of the three – terminal entrances (Taobao, Gaode, and Alipay each have their own entrances) may lead to a blurred user mindset.
– Insufficient Depth of Merchant Supply: Meituan covers more than 90% of the catering merchants across the country, and Douyin has rapidly expanded its small and medium – sized merchants through “influencer store visits”. However, Taobao Flash Sale only covers the core areas of three cities in the first batch, mainly focusing on “merchants already in cooperation with Flash Sale for takeaway”. Both the breadth and depth of its supply lag behind its competitors. If it fails to quickly expand the merchant coverage, the traffic advantage may be wasted due to “nothing to buy”.
II. The “Internal Running – in” Cost of Multi – terminal Coordination May Drag Down Efficiency
Alibaba emphasized this time that “the Ele.me team is responsible for product, supply, and operation, and will cooperate deeply with Gaode and Alipay”. However, the complexity of cross – business – line coordination cannot be underestimated. For example:
– Consistency of User Experience: The usage scenarios of Taobao Flash Sale, Gaode, and Alipay are different (Taobao is for “browsing”, Gaode is for “travel”, and Alipay is for “payment”). The design of the group buying entrance needs to adapt to the interaction logic of each app; otherwise, it may lead to a fragmented user operation experience. For example, Gaode users may be more accustomed to the information presentation of “map + list”, while Taobao users are more used to “product list + recommendation”. A large amount of product debugging is required to unify the display form of discount information.
– Data Sharing and Benefit Allocation: Ele.me is responsible for supply, Gaode provides traffic, and Alipay provides the payment entrance. The KPIs of each party (such as Ele.me’s GMV, Gaode’s user stay time, and Alipay’s payment volume) may conflict. For example, Gaode may hope that users complete all operations within the app (from viewing the list to placing an order), while Ele.me hopes that users jump to Flash Sale to complete the transaction. How to balance the interests of all parties and avoid “internal competition” is a key issue that management needs to solve.
III. Weak Content Infrastructure, Difficult to Support the “Grass – Planting – Conversion” Closed – Loop
The core of in – store group buying is “trust”, and the establishment of trust depends on real and rich user reviews (UGC) and professional content (PGC). The news mentioned that currently, the “structured content of Gaode’s Street Scanning List is produced by the team, and the unstructured UGC is provided by users, with the former being the main part”, which means that the platform content still mainly consists of “official lists”, and there is a lack of UGC content such as user – generated reviews and store – visit videos.
In contrast, Meituan’s “user review + merchant rating” system has been in operation for more than a decade, accumulating hundreds of millions of real reviews. Douyin’s content ecosystem of “influencer store visits + user short – videos” generates millions of grass – planting contents every day. If Alibaba only relies on “official lists” and “merchant self – promotion”, it will be difficult for users to build trust in group – buying products. For example, when a user sees a discount for a “Xufuniu hot pot set meal at 68 yuan”, without other users’ consumption reviews, they may worry about “hidden consumption” or “shrinking food quality”, thus reducing the willingness to place an order.
IV. Subsidy Dependence: The “Discount Inertia” of Merchants and Users May Backfire on Long – Term Value
Although the subsidies provided by Taobao Flash Sale for group – buying products can indeed enhance the attractiveness of products in the short term, they may also pose hidden dangers:
– Merchant Side: Some merchants may over – discount to “make quick money”, resulting in a decline in gross profit margin. If the platform reduces subsidies later, merchants may be forced to increase the group – buying price, which may trigger negative user reviews of “price increase” and affect repeat purchases.
– User Side: Subsidies will strengthen users’ consumption habit of “only buying discounted products” rather than placing an order based on “brand preference” or “experience value”. Once the subsidies end, users may leave due to the price increase, resulting in the platform “spending money on traffic but failing to retain users”.
Suggestions for Entrepreneurs: Leverage Ecosystem Dividends to Build Differentiated Barriers
The launch of Taobao Flash Sale’s in – store group buying provides new growth opportunities for entrepreneurs in the local life service sector (especially catering merchants), but potential risks also need to be guarded against. Based on the key information in the news, entrepreneurs can focus on the following strategies:
I. Seize the “Ecosystem Traffic Dividends” but Avoid Over – Reliance on a Single Platform
The traffic advantage of Alibaba’s three – terminal coordination (Taobao Flash Sale’s 150 million DAU, Gaode’s 400 million monthly active users, and Alipay’s high – frequency payment scenarios) is the biggest current dividend. Entrepreneurs (especially merchants with existing takeaway businesses) can give priority to accessing Taobao Flash Sale’s in – store group buying, taking advantage of platform subsidies and multi – terminal entrances to expand exposure. However, it should be noted that:
– Multi – platform Layout: Do not bet all resources on Alibaba’s platforms. At the same time, maintain operations on platforms such as Meituan and Douyin to avoid performance fluctuations due to policy changes on a single platform (such as subsidy reduction or traffic allocation adjustment).
– Private Domain Traffic Accumulation: Guide users to add enterprise WeChat accounts or follow official accounts through group – buying coupons, converting platform traffic into private domain traffic and reducing dependence on the platform. For example, after users purchase a group – buying coupon, they can be guided to join a membership group, and “member – exclusive discounts” or “in – store surprise benefits” can be pushed to improve repeat purchase rates.
II. Strengthen “Self – operation of Content” to Make up for the Shortage of Platform UGC
In response to the current weak content infrastructure of Alibaba, entrepreneurs can actively produce high – quality content to fill the UGC gap on the platform and build user trust at the same time:
– User Review Guidance: Encourage users who have consumed in – store to leave real reviews on platforms such as Taobao Flash Sale and Gaode (for example, “post a photo and a positive review to get a free dessert”) to improve the “social recognition” of product pages.
– Short – Video/Graphic Grass – Planting: Produce short – videos or graphics about the store environment, food preparation process, and customer dining scenes, and upload them to the product detail page of Taobao Flash Sale or the merchant page of Gaode to enhance the users’ “immersive experience”.
– Joint Platform Activities: Participate in the selection of Gaode’s “Street Scanning List” and improve the ranking on the list through real in – store data (for example, launch a “Street Scanning List – exclusive set meal” to attract users to consume in – store and increase real “voting with feet” data).
III. Design “Hierarchical Packages” to Balance Short – Term Discounts and Long – Term Profits
Facing the “discount inertia” that platform subsidies may bring, entrepreneurs need to optimize the design of group – buying packages to avoid “losing money to gain popularity”:
– Basic Package + Upgraded Package: Launch “traffic – attracting packages” (low – price, high – discount packages, such as a 19.9 – yuan dessert set) to attract new customers, and at the same time, offer “profit – making packages” (medium – to high – price, reasonably – discounted packages, such as a 99 – yuan double – person meal) to increase the gross profit margin.
– Time/Scenario Limitation: Launch time – limited group – buying coupons for off – peak hours (such as weekday lunches or afternoon teas after 2 pm), which can not only utilize the idle capacity during these hours but also avoid conflicts with regular – price sales during peak hours.
– Member – Exclusive Benefits: Bind group – buying coupons to the membership system (for example, “purchase a group – buying coupon to upgrade to a silver – card member and enjoy a 10% discount on subsequent consumption”) to guide users from “one – time discounted consumption” to “long – term membership consumption” and improve LTV.
IV. Focus on “Scenario – Based Services” to Coordinate with the Platform Ecosystem
Alibaba’s “navigation – discount – payment” closed – loop is essentially an embodiment of “scenario – based services”. Entrepreneurs can provide value – added services around the users’ “full in – store process” to coordinate with the platform ecosystem:
– Gaode Navigation Linkage: Mark “parking spaces exclusive for Flash Sale group – buying users” or “green channels for in – store pick – up” on the Gaode merchant page to improve the in – store experience of Gaode users.
– Alipay Payment Extension: After users complete the payment of group – buying coupons with Alipay, push messages such as “this consumption can accumulate Ant Forest energy” or “participate in a lottery after payment to win a discount on the next group – buying” to improve the user stickiness on the Alipay platform.
– Taobao Flash Sale Member Interconnectivity: Connect the user consumption data of Taobao Flash Sale with the self – owned membership system (with user authorization) to provide “cross – scenario benefits” for high – value users (for example, “consume three times on Taobao Flash Sale to get a free in – store dessert”) and strengthen the connection between users and the brand.
Conclusion
The launch of Taobao Flash Sale’s in – store group buying is an important step in Alibaba’s “ecosystem coordination” strategy in the local life service sector. It has created new value for merchants and users, but also faces multiple challenges such as market competition, internal coordination, and content infrastructure. For entrepreneurs, the key is to “leverage the trend without over – reliance” – use the platform’s traffic and ecosystem dividends to quickly acquire customers, and at the same time, build their own differentiated barriers through content operation, package design, and scenario – based services to achieve long – term growth in the highly competitive local life service market.
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