Chapter 7 〇6. The power of "asymmetrical" serial games——How Taobao defeated eBay

There are different opinions on why e-Bay lost the Chinese market and Taobao came from behind.Some people say that e-Bay is not acclimatized in the Chinese market, and some people say that eBay EachNet's response speed is too slow and indifferent to Taobao's free strategy, resulting in the loss of a large number of users.Is it really that simple?Ma Yun said: "It's not that Taobao is doing well enough, but that e-Bay has given us too many opportunities." What kind of secret is contained in Ma Yun's words?Is there a rule to follow for the success of Taobao?The case of Taobao's victory over eBay and EachNet can be analyzed from a new perspective - the perspective of "asymmetric" competition.

Through a lot of research, we found that the survival and development of a weak enterprise depends on its own efforts on the one hand, and on the other hand whether a strong opponent gives him such an opportunity, and the latter often plays a decisive role.Pay attention to the inadvertent confession of some successful entrepreneurs, and you will find that they often say "it's not that they are too smart, but that their opponents are more stupid."These are not all self-effacing words.In the face of the same opportunity, why would a powerful opponent remain indifferent?Although you have superior resources or a superior market position, you miss the opportunity instead?

Borrowing Harvard Business School professor Clayton Christensen's "asymmetric motivation" and the concept of "asymmetric warfare" (also known as asymmetric warfare) in military theory, through the analysis of nearly a hundred countries around the world that use the weak to defeat the strong Based on the systematic summary of the cases, we established the ideological framework of "asymmetrical situation".The so-called asymmetrical situation refers to a series of strategic actions taken by the challenger to take advantage of the inherent weaknesses in the strengths of a powerful opponent, making it impossible for the opponent to respond effectively, and finally forming a non-competitive situation that is beneficial to the challenger and unfavorable to the powerful opponent.There are five main types of asymmetric situations that challengers can create or exploit: information asymmetry, cognitive asymmetry, willingness asymmetry, priority asymmetry, and capability asymmetry.

In the game with eBay EachNet, the reason why Taobao was able to catch up from behind is that it intentionally or unintentionally took advantage of the power of the asymmetrical situation.Between Taobao and its formidable rival eBay EachNet, it has successfully created at least four kinds of asymmetric situations: information asymmetry, cognitive asymmetry of target customer positioning, and profit model simultaneously creating cognitive asymmetry and willingness. asymmetrical situation.In the end, Taobao won the battle with eBay and EachNet for the first place in China's C2C e-commerce market.

The situation of information asymmetry refers to the non-competitive situation of "I know you, you don't know me" between the challenger company and the powerful opponent.In this way, the challenger can hide outside the opponent's radar scanning radius and gain valuable opportunities for survival and development when resources and capabilities are relatively weak.Relatively weak companies can actively hide in the dark, deliberately keep a low profile, hide their strategic intentions and goals, or create false appearances to avoid attracting the attention of their opponents.

Taobao took this approach at the beginning of its establishment.The Taobao project has been in a state of extreme secrecy from the very beginning. All employees in Alibaba who are willing to participate in the project must first sign a non-disclosure agreement, promising not to disclose their participation in the project to anyone else within 6 months, so that Most of Alibaba's 900 employees didn't know the behind-the-scenes story of Taobao until the news was officially released, and Taobao had been born for almost two months at that time. However, in today's information society, it is becoming more and more difficult to defeat opponents by creating information asymmetric situations. Among the five asymmetric situations, the "non-competitive" advantage that this method can create is also the most vulnerable.Especially when the customers are the general public, creating information asymmetry has greater limitations, and generally can only be used as part of the overall strategy composition at a specific stage in the early stage.Although Taobao was able to successfully "stealth" in the early stage, it still had to face the public and establish a customer base as soon as possible.As a result, Ma Yun made a high-profile announcement to enter the personal e-commerce market. Although this move aroused the interest of the public and the media, it also attracted the attention of eBay EachNet, the market leader at the time. list".In the following three years, Taobao continued to use the situation of cognitive asymmetry and willingness asymmetry to finally defeat its opponents.

Strong opponents will have many cognitive blind spots with "colored glasses" of past successful models.Challengers can take advantage of such "cognitive asymmetry" to choose new games that their opponents will not play, or to create new game rules that their opponents cannot understand or recognize.An important way to create a situation of cognitive asymmetry is to create a situation of cognitive asymmetry of "target customer positioning".Because when entering a new market, successful large companies often copy the successful models of the past, but ignore the mainstream customers in the new market, forming cognitive blind spots.

eBay made mistakes precisely because it had been too successful in the past.It copied the American model to China, causing a strategic positioning error. The global strategic positioning of eBay is to provide an international trading platform for personal e-commerce for high-end white-collar workers, while the strategic positioning of eBay EachNet is to "provide an online trading platform that is both local and global, local and global". Whitman, CEO of eBay, once said: "We are successful in 27 markets around the world. In China, the 28th market, we will continue to follow the established policy firmly."

In markets outside of China, there may be no problem with "providing an online trading platform that is both local and global, local and global", because that is the mainstream demand of mainstream customers in overseas markets.But in the Chinese market, it is not in line with the actual situation of the Chinese market to position itself as a high-end white-collar worker and expect to maintain its leading position in the Chinese market.In addition, the essence of "providing an online trading platform that is both local and global, local and global" is "doing everything for everyone".Using a globally unified trading platform to meet the completely different needs of customers in the Chinese market will inevitably lead to its inherent strategic contradictions, because the needs of the two types of customers cannot be taken into account.

Under this strategy of targeting non-mainstream customers, eBay EachNet spent a lot of money and spent more than a year to complete the docking of the eBay trading platform and eBay global trading platform on September 17, 2004.The entire trading platform has fully transformed into an American-style eBay website in terms of page format, trading procedures, trading rules, and credit evaluation mechanism, which makes it difficult for old eBay users to adapt. eBay eBay's merchant customers, especially the small and medium-sized sellers, not only did not have a prosperous business because of entering the international market, but because of the unfamiliar trading environment and the lack of communication between buyers and sellers, sales were bleak. As a result, many users turned to Taobao collectively. "escape".

After eBay's "platform docking", eBay made such an external publicity: "Within the first hour of our international connection, a Portuguese buyer immediately bought coin collections from Chinese users. Another seller According to the disclosure, in the two months after the platform docking, she has already done more than 80 overseas business transactions, with buyers all over the United States, Canada, Japan and other countries, and has become a recognized "international trade" expert on the Internet." Obviously, there are two completely different groups of eBay's original users.When eBay EachNet and eBay Global Platform are docked, the beneficiaries are only a few customers who are keen on international trade, and they are not the mainstream users in the current personal e-commerce market in China.More users have become victims after eBay and EachNet's "platform docking", because "EBay is gradually moving towards the road of nobility". In contrast to Taobao, its strategic positioning of target customers is very clear.Sun Tongyu, general manager of Taobao.com, said: "I have a dream - to let e-commerce 'soil' go to waste." He believes that people who buy things online are not in more developed cities, but in less developed cities. area.He also made it clear that he was "not very in favor of internationalization in the e-commerce space".It is said that Taobao's diamond-level American members called and asked for cross-border trade, but Sun Tongyu believed that Taobao was not ready, and the overseas market was not what the team he led was good at. It is precisely because of the cognitive asymmetry between Taobao and eBay EachNet in the positioning of target customer groups—Taobao targets mainstream “commoners”, while eBay EachNet targets a small number of “nobles”—that the gap in market performance between the two parties continues to widen.Many experts believe that Taobao's success lies in the success of its localization strategy. For example, Taobao's page design is more in line with Chinese habits, and the channels on each page are named according to Chinese people's habits.But in fact, although these details are important, they are not the key to Taobao's success. The key to the problem lies in the decision of "whom to serve". In the 18th century, there was a butterfly called the butterfly in England, which lived on the trunk of birch trees.Since the trunks are silver-gray, so are most butterflies, as they are less likely to be spotted by hungry birds.Due to some accidental genetic mutation, some darker spotted butterflies appear from time to time, and they are easy prey for birds.Therefore, in the environment of silver-gray birch forest, the silver-gray butterfly occupies a dominant position.Later, the surrounding environment changed. The original silver-gray tree trunks were blackened by the soot from the factory, and those darker spotted butterflies were easier to survive. The black spotted butterfly became the "ruler" of the birch forest.Later, as factories reduced coal use and improved filtration, the birch trees turned silver again, and the silver-gray variegated butterflies began to regain their "dominance" in the birch forest, while the darker variegated butterflies once again faced extinction. danger. The enlightenment from this story is that in a specific market environment, the butterfly's fate is determined by the color of the butterfly that the company chooses to make.Regarding the declining trend of eBay's share in China and the rapid progress of Taobao, eBay's global CEO did not grasp the key to the problem, but replaced senior managers one after another, and continued to invest funds, but all within the existing strategic positioning and strategic framework. It is impossible to change eBay's passive situation in the Chinese market by doing it piecemeal. eBay EachNet can only get more and more away from mainstream customers in China's personal e-commerce market. In order to survive, Taobao has adopted a completely free strategy of tit-for-tat with eBay from the very beginning.According to eBay EachNet's model, merchants need to pay product registration fees, display fees and transaction service fees (transaction commissions) to operate on its platform, while Taobao is free of charge.Taobao's completely free strategy has created two asymmetric situations: cognitive asymmetry and willingness asymmetry.The so-called cognitive asymmetry refers to the successful experience of eBay and eBay in the past, so that eBay cannot correctly confirm the lethality of Taobao’s free strategy in the Chinese market; the so-called willingness asymmetry is because eBay and eBay are unwilling to give up their fat meat, unwilling to give up an important source of profit.In eBay's view, Taobao's free strategy will not pose a threat to itself.This is related to eBay's experience of successfully eliminating the threat of Yahoo in the US market in the early days of eBay's development. In 1998, eBay encountered Yahoo's attack in the US market.On the day of eBay's stock listing, Yahoo announced that it had entered the personal auction market, saying that Yahoo's auction service would be completely free. eBay immediately organized a special team to meet every week to study and analyze the auction services provided by Yahoo, investigate all aspects of the opponent's business, and carefully understand the customer's reaction.After carefully studying Yahoo's auction service, the special team found that Yahoo's free service was not as attractive as imagined.It is precisely because of eBay's charging policy that sellers take it more seriously and will not put useless garbage online, so that the products displayed can maintain a higher quality.Therefore, eBay decided to continue its fee policy, and finally succeeded in eliminating the threat posed by Yahoo.This experience has convinced eBay of its charging model.It is precisely because of this that Shao Yibo, then CEO of eBay EachNet, said confidently: "Charging is our advantage. Only by charging, sellers will really deal with their items seriously and focus on improving the transaction rate. After charging, sellers will not Will set prices at will, and will not hang things that cannot be sold on the Internet for a long time. At the same time, buyers will not face a market full of various invalid products. After charging, eBay's transaction volume and transaction rate have greatly increased .” Confidence in the charging model, coupled with unwillingness to give up existing profits, made eBay and EachNet not respond to Taobao's "free strategy" for a long time.By the end of 2003, Taobao's registered members had rapidly grown to 300,000, with a market share of 7.8%, while eBay's share was still as high as 72.4%.It was not until February 2, 2004 that eBay eBay officially lowered the product registration fee. This was the first time eBay eBay "reduced prices and made profits" after adopting the charging strategy, which proved that Taobao's free strategy and publicity campaign had a certain impact on it psychological threat. In April 2005, due to the loss of member customers, eBay EachNet announced that from May 1, 2005, all transaction item registration fees would be reduced, window display would become free, and the monthly rental fee of ordinary stores would be reduced by 30%. eBay EachNet said that this time it will give free websites a fatal blow. On October 20, 2005, on the same day that eBay announced its third-quarter financial report, Alibaba announced that it would increase its investment in Taobao by 1 billion yuan, and decided that Taobao would continue to be free for 3 years.And eBay's official response is: "Free is not a business model. Taobao announced that it will not charge for its products in the next three years, which fully demonstrates the strong momentum of eBay's business development in China." However, not long after, eBay EachNet announced the cancellation of transaction service fees. An eBay China spokesman said: "Chinese people are very price sensitive, probably more so than any other market. We believe it is very important to us to reduce transaction costs for sellers and encourage them to use secure means of payment." It took two and a half years to finally realize the mistakes I made in the Chinese market, but it was too late. Taobao's "completely free" strategy, in addition to playing an important role in creating a situation of cognitive asymmetry, also has the strategic effect of creating a situation of asymmetric willingness.The so-called asymmetrical situation is that the challenger takes advantage of the weakness of the rational motivation of the powerful opponent to "avoid harm" and take offensive strategic actions, which puts the opponent in an awkward dilemma because of the consideration of his own vested interests: if he does nothing, the challenger If the company develops and grows; if it counterattacks and follows up, it will affect its own income and destroy the tangible or intangible assets accumulated over a long period of time.Taobao's "free strategy" obviously created this effect, directly attacking eBay, which has established a charging model, and making opponents hesitate again and again, unable to make a quick response to Taobao's free offer.Two and a half years later, when eBay and EachNet fully canceled transaction fees, the market decline was irreparable. Not only that, Taobao's free strategy has also spawned another situation of asymmetric willingness, which traps opponents in a dilemma.At the beginning of its establishment, Taobao found through research that it was very difficult to communicate on e-Bay, and it was difficult to determine the quality of the other party's goods just by browsing the Internet.Therefore, Taobao Want Want, which is convenient for online instant messaging, was launched, which allows buyers and sellers to negotiate in real time, build trust, and then turn transactions into reality offline.It is precisely because of the free strategy that Taobao can do this.However, eBay, which implements a charging model, keeps secrets about this: because one of its important sources of income is transaction commissions, if buyers and sellers are allowed to communicate at any time, wouldn’t it destroy the Great Wall?Therefore, eBay EachNet does not provide instant messaging tools, not because it does not pay attention to the local needs of Chinese people, nor does it lack research and development capabilities, but because it is unwilling to do so under the existing profit model.Under the cover of this situation of asymmetric willingness, Taobao has gained a lot of popularity through Taobao Wangwang, while eBay and EachNet can only stand by.It was not until January 20, 2006, after eBay EachNet announced the abolition of transaction service fees, that Skype, a world-renowned communication tool acquired with a huge sum of money, was officially launched in China, but it was too late. From the perspective of creating an asymmetric situation, we analyzed the key reasons why Taobao won and eBay lost to Maicheng.However, emphasizing the importance of asymmetrical situations does not negate that companies can ignore other aspects.In a business war, creating an asymmetrical situation is "surprising victory", while symmetrical imitation and learning with opponents around satisfying customer needs is "just matching".In the PK between Taobao and eBay, Alipay, which has made great contributions to Taobao, borrowed from Yifutong launched by eBay in 2000.Interestingly, Taobao continued to upgrade and improve Alipay, while Yifutong died in 2003 without a problem.Until October 2004, eBay EachNet launched Anfutong, an upgraded version of Yifutong, and set up an Anfutong protection fund with a single maximum limit of 3,000 yuan for the first time.There are always people who better than you. In December 2004, Taobao announced the upgrade of Alipay, and two months later announced that Alipay would implement "full compensation". eBay eBay reacted quickly and announced that "buyers and sellers will implement full compensation".The continuous upgrading of payment tools makes the respective value networks of both parties more complete and stable.If any party in the business war loses in such a link, even with the protection of the previous asymmetrical situation, it will be difficult to win the acceptance and recognition of customers. If a challenger wants to fight the big with the small and win the strong with the weak, it must discover and exploit the inherent weaknesses in the opponent's advantages and create an asymmetrical situation.The weakness in the opponent's advantage is the Achilles' heel.In the PK case of Taobao and eBay, eBay’s past success model contains two fatal weaknesses: one is the cognitive blind spot of target customers, and the other is the rationality of “avoiding self-harm” formed by the tried-and-tested charging model in other global markets Motivational weakness. Furthermore, the more asymmetries the challenger creates, the better.Taobao created information asymmetry from the very beginning, and then identified the target customer positioning during its growth, creating a cognitive asymmetry with its opponents; challenging the charging model with a free model, creating a cognitive asymmetry and willingness asymmetry.The creation of each asymmetrical situation is like an anesthetic injection, preventing the opponent from responding effectively and losing the initiative.The ideal asymmetrical situation is exactly so intertwined - let the opponent not know; I have done it, I would rather do it, but I can't do it well or even can't do it. Finally, creating an asymmetrical situation with competitors cannot ignore customer value.Only when the challenger can not only create an asymmetric situation, but also create value for customers, can the weak win the strong and the small fight the big can be successfully realized.In the above cases, the creation of each asymmetrical situation did not come at the cost of sacrificing customer value, but instead created value for customers: for example, targeting popular civilians met the needs of mainstream customers in the Chinese market, free of charge The strategy allows customers to get real benefits; the development of Taobao Wangwang facilitates the communication between buyers and sellers. The asymmetric situation of Taobao PK eBay eBay is the best protection for challengers.As long as you are good at discovering the inherent weaknesses in the opponent's advantages, it is no longer a myth to fight the big with the small and win the strong with the weak.