Why Has Alibaba Stopped Talking About That Phantom Number, GMV, and Started Telling a Story About "Time Spent"?

Everything Alibaba does is meant to get you to buy more. But now it first has to keep you there — and nothing does that better than content.

These days it is hard to get away from a hot topic. If you opened Taobao on the afternoon of August 15, 2016, out of habit, to see whether the shops you follow had anything new, you would have scrolled past a Weitao Discover post titled "Marry a Wife for Her Virtue, Not Her Looks; Marry a Husband for His Heart, Not His Money."

This is effectively Taobao's own subscription account — pushed to every user, with no way to unsubscribe. Within 24 hours the post had collected 49,693 likes. Click in and you found posts about Wang Baoqiang's divorce made by seven different Taobao shops — sellers of children's cars, household goods, factory-overrun clothing — all riding the same hot topic, with Taobao gathering them in one place.

Even if you are not the lingering kind of Taobao user — that is, you know what you want, have no trouble choosing, hit "Buy Now" and pay, the whole thing over in under a minute — you probably still can't get away from the blanket of themed features Taobao now runs.

Below the old category entry points sits a constantly scrolling feed called "Taobao Headlines." It looks like a version of Toutiao tied more closely to shopping: besides leaked photos of the new iPhone, it may also cover Lin Xinru's pregnancy or the South China Sea dispute;

further down are a few carefully prepared shopping-guide sections — "Good Stuff," "Love Shopping" and "Must-Buy List." Before 2013 this was what shopping-guide sites like Meilishuo and Mogujie did best; at their fastest-growing point they could send Taobao 10% of its traffic in a single year;

themed content has become the main format for "Hot Market," "My Daily" and "Daily Good Shops." In these posts you can look through necklaces and linen-and-cotton summer wear from dozens of shops at once, or pick up tips on how to dress, how to stay healthy, how to lay out a kitchen;

in "Weitao" and "Community," every shop you follow, and every customer of those shops, can become a publisher — not just news of new arrivals, but chasing hot topics, posting inspirational quotes, running interactive polls, even going live;

even if all you do is read the reviews — and wordless, photo-less default praise is still the norm — you will keep catching sight of onlookers in the comment threads —

people who, whether or not they are buying anything, like to trail behind other people's comments, point things out, hit "like," or fire off a sarcastic "heh" the moment they disagree. That used to be the scenery of portal-site comment sections.

Taobao has turned into a shopping site with a news cycle, an editorial line, and content as its main draw.

A year or so ago, whenever Wall Street or the press talked about Alibaba, they said that whatever it did, the end goal was to steer users toward buying.

Alibaba liked to cite a number called GMV — literally, the value of transactions on the site, or "turnover" in retail terms. But on an e-commerce platform the figure lumps together completed sales, cancelled orders, refused deliveries and returns. In other words, a fair amount can leak away before an order turns into actual revenue for the platform. GMV counts the leakage in anyway, which makes it, plainly, an inflated number.

In May 2016, Alibaba reported its full-year 2015 results: GMV of 3.092 trillion yuan the year before, from which the company earned 101.1 billion yuan in revenue.

In fact, over the ten years from 2006 to 2016, GMV was always a number Alibaba liked to bring up, even as more and more people looked instead at actual sales and at the conversion rates promotions delivered.

Then, at an investor meeting this June, Jack Ma announced that in future quarterly reports Alibaba would no longer disclose GMV, that key e-commerce metric.

One of the most powerful voices in Chinese business said: "GMV should never be the core standard for e-commerce — commercial infrastructure is the core. ... It's like PV [page views], which used to be a hugely popular metric among internet companies but wasn't what we should really have been paying attention to."

Ma did not spell out what "commercial infrastructure" means, but if you follow the PV analogy, the metric that counts would be UV, or unique visitors. Now that new internet users cost more and more to win and the growth dividend keeps thinning, Alibaba wants to squeeze as much value as it can out of the users it already has.

On this, Alibaba CEO Zhang Yong put it more plainly this year: Taobao has to become more content-driven, more community-driven and more oriented toward local services, and more advertising resources are expected to tilt toward these content-centered formats. He wants users to find "the pleasure of discovery" on Taobao, and to turn Taobao into a real tool for killing time.

Zhang's remarks were a concrete gloss on the phrase "social and community commerce platform." That is Taobao's new positioning.

The clumsy phrase turned up on the slides Alibaba used to walk investors through its results, alongside descriptions of sections such as "Taobao Live," the "Maker Festival," "Ask Everyone" and "Good Stuff." Alibaba carefully marked how many users each section drew and how often they interacted.

In 2015, after Alibaba's second-quarter results came out, Wall Street's disappointment peaked: that quarter revenue grew 28% year on year and transaction volume in the core business grew 34%, the worst showing in three years. The stock soon dropped below US$60, close to half its best price.

The screenful of sections now crowding Taobao's home page is what Alibaba came up with to ease its own anxiety and its investors'. It hopes to catch traffic that is getting scarcer, and so build a bridge between its users and buying.

Alibaba needs an app people open countless times a day. Right now that role belongs to another app with ever-stronger payment and shopping functions: WeChat.

According to the third-party firm Trustdata, in 2015 users opened Taobao about 5 times a day on average and Alipay fewer than 3 times, while WeChat was opened more than 19 times.

You open WeChat not only to chat and reply on Moments, but possibly to pay for something. According to Tencent's 2015 annual report, WeChat Pay already had more than 300 million users with a bank card linked, and monthly active accounts had grown more than 70% year on year. Three years after its payment function launched, WeChat had taken close to 20% of China's mobile payment market.

Against this shift, Alipay's odds are not good. On one side it keeps fighting WeChat over how many offline stores it can sign up, to widen the situations in which it gets used; on the other it has begun trying to make its app social and content-driven:

in its two most recent big redesigns, Alipay copied WeChat's chat and Moments wholesale, then promoted its own feed to the most prominent slot on the home page.

The aggressive changes annoyed plenty of users. But few strong apps are left that can take up people's time, and without moves like these Alipay would have almost no chance at all.

Taobao has the same problem.

Taobao is 13 years old. While its user numbers were still climbing fast, "fast" brought bigger transaction volume. But once users and transaction volume stopped growing, "slow" — longer visits, more products browsed — became the only way left to grow transaction volume.

Content of every kind has become Alibaba's answer. That is why the Taobao app you see today follows a design logic completely different from the PC Taobao website of three or four years ago, or earlier.

In 2013, Alibaba set out its "All in Mobile" strategy. Before that, part of the Taobao website had already been moved onto phones, but it was a pure utility app: you could search, buy things and track shipments, with no interaction or conversation of any kind.

This mirrors the way Taobao first copied physical stores and shopping onto the internet.

It is worth recalling everything that sits behind a single transaction in a traditional shop or market hall:

brands and distributors have to decide what goes on the shelf and how much stock to hold behind it; to sell more, they fight for better shelf positions, and ideally get promoters and floor staff to talk the goods up;

at the open shelves, consumers can compare prices, specifications and quality, and may even haggle; during a big sale they buy on impulse too, carrying off a pile of things they may not need;

for whoever runs the venue, the questions are which brands to bring in, judged by tone and profitability, what services it can offer those merchants, and how much it can collect in the end in rent and service fees.

In the 2000s, e-commerce companies like Taobao and JD.com gradually appeared. A dozen-odd years on, online retail sales of physical goods account for 10.8% of China's total retail sales of consumer goods.

But for a long time, Taobao the website still ran on business logic that was a copy of the offline transaction, moved online —

as an e-commerce platform, Taobao amounted to a huge, endlessly extendable shelf, stocked with every category, offered to brands and distributors. It still had to decide which goods went where they would be seen and which ad slots could set off an impulse purchase (this is where Taobao's two core advertising products, Zhitongche, or "Through Train," and Diamond Booth, came from), and when to run a sale across the whole site ("Double 11" and the "618 mid-year sale" are both examples).

Managing things from the top down could only hold up results in the short term, and it also hid away part of Taobao's "long tail" of products and shops. Faced with consumer demand that changes constantly, it had no way to make genuinely personal recommendations either.

Taobao's turn to content has now overturned that top-down model. Users are still swiping, but Taobao has created far more entry points and themed content than before, and the "there's bound to be one for you" approach, plus social-style operations, has successfully stretched out how long users stay.

So in the second-quarter 2016 results Alibaba published on August 11, several Taobao figures were singled out:

of all Taobao's monthly active users, 40% open Taobao at least once a day;

among those daily active users, Taobao is opened 7 times a day on average, and they browse more than 18 shops a day;

"Ask Everyone," the feature that lets shoppers put questions to other consumers before buying, draws 2 million user questions and answers a day;

an offline event called the "Taobao Maker Festival" drew more than 10 million views and more than 200 million likes on the Taobao app's own livestreaming system.

The last quarterly transaction volume to be disclosed rose 24% year on year, halting the run of sluggish growth; along with it, group revenue, which comes mainly from advertising, grew 59%, and profit grew 49%.

For Alibaba this may be good news. It never found its feel for social with Laiwang or with chat inside Alipay; now, through goods and shopping behavior themselves, plus some simple work around hot topics, it seems to have found what may be the fittest way to interact with its users.

All this bustle may go on shaping Taobao: if the relationship between consumers and Taobao's shopkeepers stops being purely transactional and becomes social; if consumers build stronger ties with one another, and talk about products and the platform more often and more usefully... what will China's largest e-commerce platform look like then?

Some worse things could happen too:

every merchant hoping to be noticed on Taobao will care about "content operations" far more than before. That is much harder than buying an ad slot or setting a better keyword, but the point is the same: aim traffic and attention at the goods, and sell more of them in the end.

And along the way there will always be pushes you can't turn off, banal topics meant to please everyone, and a few strange social features.

Can you put up with all of it?

Graphics by Wu Lingwei