The statement "there's no business that is difficult to do" itself violates objective laws; "there's no business that is easy to do" should be the unchanging truth. This has laid the groundwork for Taobao's "pain of transformation."
The survival of small and medium-sized enterprises is becoming increasingly arduous. The appreciation of the RMB, the shortage of labor, and the high cost of land and environmental resources have turned commerce into a rich man's game where the winner takes all. Recently, Taobao Mall’s decision to raise its business threshold also signifies that grassroots commerce is becoming an unreachable dream.
At the time, Jack Ma's phrase "there's no business that is difficult to do" made countless people passionate and allowed many to realize their small entrepreneurial dreams. Taobao attracted countless small and medium sellers with the advantages of being free and cheap. With the strong support of these "ants," it defeated eBay and took the top spot in China's C2C market. However, upon calm reflection, serious thought reveals that "there's no business that is difficult to do" itself violates objective laws; "there's no business that is easy to do" should be the unchanging truth. This has laid the biggest隐患for Taobao's "pain of transformation."
Taobao Mall decided to increase rent, add service fees, immediately close stores for non-compliant merchants, and deduct all breach of contract guarantee deposits. While Taobao Mall's lavish reorganization to rectify merchant discipline was a significant blow to small and medium sellers. Why did Jack Ma make such a "transformative" move?
In fact, this was a predictable outcome. After all, the most essential pursuit of merchants is to make money and profit, and a merchant providing free and low-cost services cannot achieve this goal. After all, there's no such thing as a free lunch!
Taobao's "transformation" move caused widespread opposition from numerous small and medium merchants, even leading to collective malicious attacks. The "pain of transformation" began to strongly manifest. At this point, the "visible hand" intervened, punishing both the small and medium merchants and Taobao equally. In his helplessness, Jack Ma wrote the word "endure" five times on his palm. Taobao's new regulations were hastily implemented, but the changes failed, leaving only customer service.
Who is the ultimate winner in this "‘injury’ transformation battle," we do not yet know. However, this Taobao incident has given us three insights.
Firstly, monopolistic markets will inevitably bring about monopolistic prices. Some merchants said, "In front of Taobao, this elephant, we are like a group of ants, fundamentally lacking the power to compete with it." Many merchants criticized Taobao: "What right does it have to suddenly increase costs by tenfold?" This shows that monopolistic markets will inevitably lead to monopolistic prices.
Founded in 2003, Taobao has over 300 million registered members, with a transaction volume reaching 400 billion yuan in 2010. It is Asia's largest online retailer and has initially developed all the characteristics of commercial monopoly.
A group of weak "ants" (small and medium sellers) turned Taobao into an "elephant," but ants are ultimately unable to contend with elephants. One of the main principles of a market economy is opposition to monopolies.
Secondly, honest operations should start from "zero tolerance." Taobao's decision to upgrade its customer management system, improve merchant service levels, and enhance consumer experiences should have been supported by all parties, but instead, it led to chaos. Why? This is because when Taobao Mall first opened, it was a chaotic scene, with good and bad mixed together. Back then, Taobao's trump card against eBay was not charging rent, welcoming all small and medium sellers without question. In a mall, if one shop sells fakes, it will quickly spread. Therefore, honest operations must begin with "zero tolerance" for counterfeit goods from the very start. If you let the tiger loose, it will become uncontrollable.
Thirdly, how should the "visible hand" intervene? With the rapid development of China's internet industry, various network business wars have emerged. Last year's "3Q War" and the Taobao incident, though different in essence, share some similarities. These events undoubtedly reflect the lack of mechanisms in the development path of China's internet industry, reflecting the absence of service standards in China's e-commerce industry, leading platform operators to act as both referees and players, arbitrarily modifying game rules. The Taobao incident warns us that China's e-commerce industry urgently needs to establish a fair competitive mechanism, a complete legal regulatory system, and institutional norms. The "visible hand" must act with legal fairness, rather than simply punishing everyone equally after an incident occurs and smoothing things over.
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