After Ali and JD.com, Douyin is also aiming at the "low-price" battlefield. On February 21, a reporter from Beijing Business Daily learned that since January this year, "* force" has been listed as the primary strategy by Douyin e-commerce, and has launched a "value purchase" against the "10 billion subsidy", declaring war on Pinduoduo. Suffering from insufficient sales of goods and incomplete SKUs, Douyin uses low prices to promote more white-label and small and medium-sized businesses to enter, but brand merchants and the platform ecology will also be impacted. At both ends of the shelf and content, Douyin has to find a new balance.
Value purchase "sniper" tens of billions of subsidies
Pinduoduo has one more opponent. On February 21, an insider close to Douyin e-commerce revealed to a reporter from Beijing Business Daily that in January this year, Douyin e-commerce set the best force as the top priority in 2024. Correspondingly, the assessment indicators of Douyin e-commerce have also changed.
This year, the goal of Douyin e-commerce will change from assessing GMV to assessing sales, that is, the number of orders. The above-mentioned person further explained that if you blindly pursue GMV, then merchants will increase the unit price of customers to sprint KPIs. The assessment index has become the number of order transactions, which is a disguised way to encourage merchants to lower the unit price of customers to stimulate the number of transactions.
Benchmarking Pinduoduo is not a new thing within Douyin. "Since October last year, 'low price' has been something that the e-commerce department has been emphasizing. Lin Dong (pseudonym), an insider from Douyin, said that it was almost at the same time that Douyin began to tilt its traffic towards the "value buy" section within the **. According to data released by Douyin in January, during the Douyin E-commerce New Year Festival, the average daily GMV of products on the "Value Shopping" channel increased by 604% year-on-year.
Value shopping is the focus of Douyin e-commerce this year, and the target is Pinduoduo's 10 billion subsidy, which will launch a 10,000-person group every week, and the goal after the platform subsidy is the low price of the whole network. At the same time, Lin Dong confirmed to a reporter from Beijing Business Daily that this year's ** force strategy will be more rolled out to the short ** module, "last year's traffic to Douyin ** was 60%, this year it has dropped to 50%, and the current content and shelf e-commerce traffic tilt accounts for five or five open."
On February 21, according to the report of "Late LatePost", Douyin e-commerce not only set the "** force" as the highest priority task in 2024, but also set a total turnover (GMV) target of more than 3 trillion yuan for the whole year. The low-price strategy will be extended to **and short**, and the live broadcast room will continue to carry brand-based high-priced products.
Regarding the statement that the GMV exceeds 3 trillion, the relevant person in charge of Douyin e-commerce told a reporter from Beijing Business Daily that the relevant data is untrue.
The product strength is weaker than that of traditional e-commerce.
In the past many years, Douyin seems to be proving that it can grasp interest e-commerce with one hand, shelf e-commerce with the other, and run through the business model of "walking on two legs" in e-commerce business. However, under the effect of the decentralized distribution model and the personalized algorithm recommendation mechanism, Douyin e-commerce is better at interest e-commerce with content and live broadcast as the core.
After all, the time to do Douyin channels is relatively short, so there is still a gap between the brand's sales on Douyin and Tmall and JD.com. A person in charge of the snack brand provided a set of data to a reporter from Beijing Business Daily, the brand's sales in Tmall and Jingdong in the past 1 year were 2.4 billion yuan and 1.2 billion yuan respectively, but the sales on the Douyin platform were only 900 million yuan, and the average customer unit price sold on Douyin was significantly lower than that of Tmall and JD.com, "about 30% lower."
In the short term, relying on a strong traffic push mechanism and a strong grass planting mentality, the GMV growth rate of Douyin shelf e-commerce is still considerable. According to the official data released by Douyin, in 2023, Douyin's shelf scene business will grow rapidly, and **GMV will increase by 277% year-on-year. However, compared with traditional e-commerce, the lack of merchant richness and product sales of Douyin e-commerce is still a shortcoming.
Last year, Douyin began to consciously lower the entry threshold for merchants and attract small and medium-sized businesses to settle in through models such as '0 yuan entry', but the platform's follow-up operation capacity is still a problem. In the view of Zhuang Shuai, an expert in the retail e-commerce industry and founder of Bailian Consulting, due to the shortcomings of the platform's organization, operation and service for merchants, these white labels and small and medium-sized businesses have not established a strong transaction mentality on Douyin, "so for the platform, establishing its best mentality is precisely the starting point for Douyin to break through this bottleneck."
Brands may be affected.
The low-price market of Douyin has long been full of giants. Looking back, Pinduoduo attacked ** and Jingdong with a "low price", and won a place in the tiger's mouth. The reaction** and Jingdong also made subsequent moves, both of which shouted the low-price strategic slogan in 2023, and Jingdong even made a high-profile low-cost live broadcast IP as its new label during last year's "Double 11".
In the e-commerce market, Douyin is late, what difference will it be? "The advantage of Douyin in cutting into low prices is that the scale of active users on the platform for a long time and the merchant resources brought to the platform by live e-commerce. Zhuang Shuai believes that in the past, Douyin was the first to leverage brand merchants, and now, Douyin has also proved its feasibility and necessity as a brand channel. How to get more cakes in ** is its goal for a long time in the future.
In the past year, the emergence of white labels on Douyin has given the platform a new idea of low prices. According to data from the National Finance Research Institute and Cicada Rubik's Cube, during last year's "Double 11", a white-label beauty brand called "VC" outperformed other beauty brands on the platform with sales of more than 2 million and sales of more than 100 million yuan, and won the first place in the GMV of the Douyin makeup list. "This is exactly where Douyin can use its own interest in e-commerce play, low price + content, combination of punch offensive to promote transactions, and go with the flow. Zhuang Shuai said frankly.
However, Douyin's switch to a low-price strategy can also pose some problems. For example, in Douyin's most proud algorithm push mechanism, once the "first-class force first" strategy is followed, and the e-commerce traffic is tilted to low-priced goods, the original advertising-based commercial income and high customer unit price brand merchants will inevitably be impacted.
Live e-commerce has little impact because it is a decentralized model and merchants have a high degree of freedom to operate independently. However, shelf e-commerce is a centralized model, so the low-price strategy of supporting small and medium-sized and white-label merchants will inevitably have a certain impact on brand merchants. Zhuang Shuai said. In addition, lower ** also means more limited profit margins, and whether Douyin can help merchants find their own pallets and chain resources that can flexibly respond to **fluctuations** is still a question.
Therefore, in the future, platforms still need to make more efforts to balance the traffic mechanism of brand merchants and small and medium-sized and white-label merchants. Douyin's low-price road doesn't seem to be so easy to follow. "After all, e-commerce is not an industry that can survive simply by copying the successful experience of its predecessors. Zhuang Shuai said.
Beijing Business Daily reporter He Qian Qiao Xinyi.