Text丨Mirror View Terrace Xie Yuanyuan.
Since Pinduoduo's growth has been unbeatable, and its market value has caught up with Alibaba, it has become expected that 1688 has been sought after.
"Ping" is a cheap substitute, taking goods from the brand foundry on the 1688 platform, ** may only be a fraction or even one-tenth of the brand price.
Why did 1688 "Pingti" suddenly become popular? In addition to the environmental impact of changes in consumer concepts, the explosion of replacement is also inseparable from the fierce competition of domestic e-commerce and the vigorous development of cross-border e-commerce.
It is reported that many small merchants such as Pinduoduo sellers, ** store owners, anchors of Douyin Kuaishou, buyers and store owners of Xiaohongshu, and cross-border buyers take goods from 1688, and these groups are important sales users of 1688.
Platforms such as Pinduoduo, Douyin, Kuaishou, and Xiaohongshu, as well as cross-border e-commerce TikTok, Shopee and even Amazon, have also become important sales channels for 1688 in disguise. In recent years, cross-border e-commerce has expanded its territory overseas, which has further driven the sales of 1688 to increase significantly.
Of course, the 1688 platform has also done a lot of things right: for example, in the past, the platform mainly wholesaled to B-end merchants, but now it has released single or small batch purchases by C-end consumers; At the same time, the platform launched 1688 strict selection, which not only ensured low prices, but also screened out high-quality products; Third, 1688's manufacturers are actively promoting big-name "Ping" products and slogans on Douyin, Kuaishou, and Xiaohongshu.
But is the popularity of "replacement" a benign phenomenon?
There's no denying that"Flattening"The products have gained the favor of many middle-class and young people, and consumers have benefited a lot. The foundry on the platform is also the biggest beneficiary, which can not only stimulate the best-selling products, but also have the opportunity to tear off the label of "foundry" and transform into a real brand; The 1688 platform is also helping the "foundries" to continuously upgrade and become a real brand.
But for the brand merchants who have been "replaced", it is a threat. Not only may it affect the brand image, but also reduce sales, and even need to reduce the quality of the sacrifice to deal with it, so the industry is more prone to the bad trend of "bad money drives good money", will it eventually destroy the ecology of the entire industry? At the beginning, Pinduoduo's store smashing campaign is still fresh in my memory, that is, the collective confrontation against the bad industry ecology.
Perhaps the development continues, and the influence of 1688 is no less than that of another Pinduoduo, which is certainly what Ali is happy to see. Because to some extent, 1688 is also a sharp sword for Ali against Pinduoduo.
The factory is on fireTopics such as "Pingti" skin care products, "Pingti" snacks, "Pingti" small household appliances, and "Pingti" attractions have suddenly become popular on sharing social networks. On Xiaohongshu alone, there are more than 1.8 million spontaneous grass planting notes about 1688. Not long ago, the military coat as a replacement for down jackets also appeared on the hot search.
More and more consumers have begun to shift their online shopping positions, specifically logging in to the B2B platform led by 1688 to find source factories, foundries or label cutting products.
This has allowed foundries and e-commerce platforms to see business opportunities. Many brand foundries have opened live broadcast rooms on platforms such as Douyin and Kuaishou to bring goods, and 1688 and ** are also stepping up cooperation with brand foundries such as Uniqlo and Miniso, trying to eat this wave of replacement dividends. 1688 takes advantage of the situation as one of its important businesses in the future.
However, it is not easy to make a replacement product that satisfies consumers.
For consumers who like the same type of substitution, it is difficult for the foundry that has signed a contract with the brand to give the exact same product in order not to breach the contract. On the other hand, in the absence of strict quality inspection by the brand, it is unknown whether the quality of the foundry's products can reach the level of the brand.
Contemporary young people want to break free from brands** and buy more cost-effective products.
Xiao Mo, an online shopping enthusiast, said bluntly, "Some brands are sorry for the quality**, the workmanship and materials of the products are very poor, but the price of a casual piece of clothing is still as high as 100 yuan." I won't buy this kind of clothes anymore and don't want to be a leek anymore. ”
Xiao Mo is not alone, many young people are reluctant to pay a premium for the brand. According to the "2023 Young People Search Keywords Report", Ping Ti has become the keyword of the year along with AIGC, ** Xueyi, Going Ashore, MBTI Test, Relaxation, City Walk, Spiritual Tonic and Partner.
Foundries are regarded by young consumers as the main force in the production of high-quality replacements, and these foundries that produce products for well-known brands have huge resources and a large number of them.
According to the official list of foundries released by Fast Retailing, the parent company of Uniqlo, as of September 1, 2023, Uniqlo has at least 280 foundries in China. Bananaxia doesn't even have its own factory, and all production is outsourced to contract manufacturers.
By producing quality products for major brands, these foundries have left an impression of stable quality in the minds of consumers. Another advantage is that the products produced and sold by the foundry are very cost-effective.
Previously, some bloggers commented that the banana products priced at 199 yuan were only 52 yuan for the foundry goods on 1688. The original price of brands such as Ono Kazuko and Moxun is around 200 yuan, and the factory goods only need 56 yuan. 1688 Yanxuan also gave data that in 1688, the ** of the replacement goods sold by Sam's ** merchants was only one-tenth of Sam's.
As a result, foundries and source factories have become the main channels for young people to find replacement goods, and 1688 has become a favorite of young people.
The data shows that among the buyers carefully selected in 1688, "Generation Z" between the ages of 25 and 30 accounted for 488%, and users between the ages of 30 and 35 account for 449%。
According to 1688 official data, in mid-December 2023, the number of merchants in 1688 exceeded 1 million, of which 600,000 were source factories. The platform has a large number of big-name replacement products, including the same style of Jiaoxia OEM, the same beauty instrument of L'Oreal OEM, and the same type of snow boots of UGG OEM.
Recently, Xiao Mo has bought several pieces of factory goods"I bought a Korean-style cream coat that has been very popular recently, with 70%-80% wool content, and some Tencel and cashmere, which only cost 300 yuan. It's very cost-effective to buy clothes made of such materials. "
Picture: The coat that Xiao Mo bought at a foundry.
* Provided by Xiao Mo.
Foundries and platforms that smell business opportunities have gone down one after another, trying to share the dividends of replacement.
Bet on the replacement businessWith the advantages of cost performance and good quality, Pingdi products are regarded as potential stocks in the future by foundries, e-commerce platforms, and MCN institutions.
Make a friend has also recently entered the market, launching a new live broadcast room with the origin of the industrial belt or the source factory as the core "Factory Sale", and the promotional poster in the live broadcast room has played the slogan "direct to the source of origin" and "selected big brands in the same factory". According to official data, the sales of "Factory Sales" exceeded 1.03 million yuan on the day of its premiere.
1688, which is popular among young people, has high hopes for the replacement. In order to develop this business, 1688, which used to only do to B (for enterprise merchants) transactions, began to make up for the shortcomings of individual user operations and strive for more to C (for individual consumers) users.
In the past, 1688 did not sell a single product, and had to start with dozens of pieces. Nowadays, in order to support C-end consumer shopping, the platform has launched a dropshipping function to meet the needs of such users who only buy one or two goods, and these users can even get wholesale prices through mixed batches of different products.
In order to expand its voice, 1688 opened an official account on Xiaohongshu, which gets the traffic of "tap water", and from time to time posted some content that taught netizens how to search for big-name foundries and big-name replacement.
In"It doesn't have to be that expensive to survive the winter! Save money and replace the keyword, hurry up! ""This can't be replaced, it really can't be replaced! "and other posts, 1688 is marked with the foundry names of brands such as Arc'teryx, UGG, and Beimian.
Figure 1688 official account published the brand flat substitution factory.
* Screenshot of the Mirror Observatory.
Some brands that already focus on parity have not escaped the fate of "being replaced". In 1688, affordable brands such as Sanfu and MINISO have flat replacement products on the platform. 1688 has previously stated that the ultimate goal of the platform is to make the Internet celebrity products on the market cost-effective.
This means that as long as there is a market for goods, 1688 will use low prices to snatch users over.
In order to better tap this "gold mine", 1688 launched 1688 Yanxuan, which focuses on brand replacement, and launched a membership-based supermarket "PLUS member store" in 1688 Yanxuan.
The latter is mainly based on 1688's strict selection of less involved food and daily necessities, and is directly benchmarked against Sam, which is very popular among the middle class, and some products will be directly marked with the words "Sam Pingti", and the price is much cheaper than Sam's.
Sam's Oaks household vacuum cleaner priced at 690 yuan only costs 69 yuan in the plus member store, which is equivalent to a discount; 42.The price of a 24-bone automatic umbrella of 75 yuan is only 855 yuan.
The low price is superimposed on the label of "flat", and the PLUS membership store attracts a lot of consumers. According to official data, there are currently nearly 1.5 million paid buyer members (plus members) in 1688, which contribute about 26% of the turnover to the whole platform. Judging from the entire 1688 strict selection, within one year after its launch in 2022, the annual sales of the platform have reached 30 billion yuan.
1688, which is optimistic about the flat business, has placed "1688 Strict Selection" at the first-level entrance of the homepage, and you can see the entrance of "Plus Member Store" by clicking "1688 Strict Selection". When 1688 proposed four upgrade services this year, including full-site credit, site-wide free shipping, estimated delivery, and credit refund, 1688 Yanxuan also became the first early adopter.
The "ceiling" is to be breachedAlthough the replacement business has great potential, it is not easy to eat this "fat meat".
In the case of young people's increasing requirements for the quality of replacement, 1688 Yanxuan and PLUS member stores have improved the audit standards for the quality of the supply factories, and at the same time, they must also take into account the cost performance.
According to the official, the 10,000 suppliers behind the plus member store are all brand originals, big-name foundries, and well-known brands in the industrial belt selected from the million-dollar factory on the platform, eliminating "fake brands" for young people, and selecting "the source is really low", and the quality is the same style, the same work, the same material, and the same production line of the brand.
1688 Yanxuan also formulated a standard around "price and service" when selecting goods. According to Dolphin Investment Research, the strict selection of goods needs to have good response speed, good service ability, good performance ability and good performance.
However, the replacement goods produced by the foundry cannot fully meet the requirements of consumers, and Xiao Mo bluntly said that he could not buy the same replacement with good quality.
Coco, who works for a clothing company, said, "The foundry and the brand have signed a contract, and if the foundry sells the same product and the brand finds out, not only will it have to pay compensation, but it will also lose subsequent orders, and the gains outweigh the losses." Those popular ones of the same style are generally produced by other factories, which is essentially plagiarism. Because I have not produced goods for the brand, I do not have a strong ability to control the version. "
Xiao Mo has stepped on such a "pit".
Many businesses use network maps, but they can't make products on network maps. A lot of the clothes I bought back weren't in the right place. The green sweater I bought before not only has a big color difference, but also has a different texture of the clothes. "
Figure: Xiao Mo bought a sweater with the wrong goods at a foundry.
* Provided by Xiao Mo.
It seems that there are not a few factories that take the "imitation route". According to Entertainment Capital, 1688 mainly endorses the qualifications of two types of factories.
One is true homology, such as Sam's ** merchant and foundry. The products produced in these factories are made from the same raw materials as Sam's, but with different specifications.
The other is a factory that has the ability to emulate international brands that do not have foundries in China to make products of the same quality, the same work, and the same materials, such as lululemon. It is difficult to judge how well such factories can restore products from brands such as lululemon.
Even if it is the same flat produced by the brand foundry, the quality may not be able to pass the test.
Cocoa called,"The brand side has quality control and quality inspection, has requirements for workmanship and version, and will directly give raw materials to the foundry, which is the reason why the brand quality can be guaranteed. It is not certain whether the factory is so strict when it does its own quality control. "
After experiencing many returns, the helpless Xiao Mo even gave up the pursuit of style, "In order not to step on the thunder, I now only buy the basic model, and the basic model I bought in the foundry before is quite satisfied, and the materials and workmanship are OK." ”
For the platform, it is also difficult to open the replacement market with big names.
Many foundries have signed strict confidentiality agreements with brands, and some foundries cannot use the partnership between the two parties to promote themselves. 1688 has said that because MINISO has put forward such a requirement for the foundry, the platform can only use the foundry's own brand to promote it.
On the other hand, the replacement market seems to be peaking easily. Previously, 1688 CEO Yu Yong had said that the flat business had a good life for 3-5 years. The path of the entrant is also a mystery.
Reference: "Sam's Foundry, on Fire in 1688", Entertainment Capital *title map** in Visual China. *Xiao Mo and Coco are pseudonyms in the article. *Disclaimer: Under no circumstances does the information or opinions expressed in this article constitute investment advice to any person. Carefully selected