Taobao Sets Up Live E-commerce Company

On February 20th, Taobao announced the establishment of a live e-commerce company to provide fully managed operational services for celebrities, KOLs, and MCN agencies entering Taobao to start live streaming. According to Taobao, this service is mainly aimed at “novice players” who are new to Taobao, helping them quickly get started and adapt to the Taobao ecosystem.

Chinese media Jiemian has learned that the company is operated by the Taobao and Tmall Group’s Live streaming team and adopts a flexible cooperation model with anchors, offering either a guaranteed minimum or profit-sharing arrangement to help them with account cold start, full-cycle planning, business connections, official inventory, marketing planning, financial management, venue support, and other in-depth fully managed services. Taobao explained that the main purpose of establishing the company is to provide a six-month service for newly entered anchors. After the “novice development period,” anchors and agencies who have adapted to the platform rules can either build their own teams or sign with other MCN agencies.

Will the official establishment of the live e-commerce company lead to competition with other MCN agencies? Regarding this, the company’s head, Yuan Ge, introduced that the managed model is like a new anchor incubation camp, helping new anchors and agencies reduce early operational costs and minimize investment risks. During the six-month support period, anchors can withdraw at any time and automatically terminate the contract to return to the market after six months. “This project will not compete with other agencies. We also welcome agencies to put new anchors they want to sign into the managed model, with the platform helping to bear the early incubation risks. The entire project is not profit-oriented; instead, it will invest in support. The goal is to promote ecosystem prosperity,” Yuan Ge said.

Zhuang Shuai, founder of Bailian Consulting, stated that Taobao and Tmall Group established this company primarily to address two issues in the fiercely competitive platform landscape, which are also core demands of Taobao Live: firstly, Taobao needs to quickly cultivate more high-quality live streamers to drive platform development, and secondly, these high-quality anchors need to stay on the platform more steadily. Zhuang Shuai further added that relying solely on third parties to cultivate super anchors is inefficient and lacks stability, while the Taobao and Tmall team is more familiar with the platform than third-party MCNs and has more autonomous ability to match platform resources for anchors. This way, anchor stability is stronger, and the connection with the platform is closer. “However, at the same time, Taobao still needs to balance the platform’s ecosystem and maintain a fair competitive relationship with independent anchors and third-party MCN companies.”

In 2023, live streaming was designated as one of the five major strategies of the Taobao and Tmall e-commerce system, with its status continuing to rise. Over the past year, Taobao Live has built up overall business capabilities and anchor ecosystems, such as intensively releasing support policies to attract more talented anchors and store broadcasts. The establishment of this new institution is also one of the measures to help develop the ecosystem. Taobao’s direct involvement also indirectly indicates the fierce competition in the industry.

Additionally, recently, Chinese consumers have discovered that some Taobao orders can be directly redirected to WeChat for payment. Regarding this, Taobao customer service repsonded that the WeChat Pay feature is gradually being opened up and is currently only available to select users, and can only be used for purchasing certain items. “The feature is currently in testing, and we will gradually expand its coverage. This process will not take too long,” explained a Taobao customer service representative. However, the representative did not provide a specific timeframe. As of the time of writing, there has been no further official response from Taobao or Tmall.

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