Transfar Group will weaken the absolute low price strategy and return to the GMV index

According to 36Kr, Taobao Group held a closed-door meeting for merchants after 618 (end of June), with senior business management attending, and several changes were clearly made and will be implemented officially in the second half of the year. One of the "core changes" is that Taobao will weaken the absolute price strategy, and the system of allocating search weights according to "Tmall Price Power" will be weakened from 2023, and will be changed back to allocating according to GMV (Gross Merchandise Volume, total transaction amount of goods). In the first half of 2024, many categories' Tmall Price Power has been cancelled one by one.

It is understood that "Tmall Price Power" is a price power assessment system that gives a score of 1-5 for each product based on the price situation of the same product on Taobao and Tmall, to judge whether the product has price advantage in the whole market. The lower the price of the product under this system, the higher the traffic will be. After the change back to allocating according to GMV, Taobao's focus on evaluation this year will also shift to GMV (transaction amount) and ACV (average transaction amount), instead of pursuing high DAC (order volume) with low price.

It is reported that Taobao insiders said that in the future, they will not blindly push the "Tmall Price Power" logic to all merchants, but only let suitable and willing merchants participate.

It is reported that CEO Wu Yongming of Taobao Group made it clear in the early spring that GMV will be the first indicator and the platform will return to the business of self-service e-commerce. This reform of the Tmall Price Power index is also a specific business action to implement this instruction.