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Author | Gao Xuyang Editor | Li Jing
Source | Snow Leopard Finance and Economics (ID: xuebaocaijingshe)
Douyin is changing from “swiping” to “going around”.
According to public information, Douyin is conducting a grayscale test to turn the “mall” into a first-level entrance. On the Douyin homepage of some users, the “mall” is moving from a hidden corner to the C position on the homepage. Some users have posted screenshots on social platforms: “Friends” in the navigation bar at the bottom of the Douyin homepage has become “Mall”.
Source: Douyin AppClicking on the “mall” is a UI design that is very similar to traditional shelf-style e-commerce. The word “low-price spike” can be seen everywhere, making people suspect that it seems to have entered the “home” of Pinduoduo.
“Pinduoduohua” means that Douyin is exploring from the “goods looking for people” of interest e-commerce to the “people looking for goods” of shelf e-commerce.
ByteDance Hong Kong company has recently changed its name to Douyin Group. Compared with previous rumors of Douyin’s Hong Kong stock market listing, there have been many substantive actions this time. Looking for the next trillion-level growth point and escorting the expectations of the capital market with new stories are the top priorities for impacting the listing.
From “goods looking for people” to “people looking for goods”, what is the thrilling leap that Douyin wants to accomplish?
“Shaking merchants” speed up
Since the launch of the “shopping cart” in 2018, Douyin is no longer just a short video platform, but has moved closer to a “shopping software”.
This is an accelerating trend. Since the “Douyin Store” was upgraded to “Douyin Mall” in August 2021, Douyin has started repeated tests of the “Mall Entrance”. From squeezing out the “same city”, to occupying the “sweep”, and then to the latest occupation of the “friends” of some users, the “mall” will have an important place on the Douyin homepage and become a sure thing. There is still some suspense, who will be replaced.
Since March this year, in addition to the “mall”, there are also “shopping” entrances that have appeared on the homepage of some test users. Judging from the pictures posted by users, shopping is very similar to Taobao’s “subscription”, and users can see the news released by the merchants they follow. Together with “Shopping”, there are also functions of “E-commerce Member”, “Repurchase Voucher” and “My Frequently Purchased Goods”.
In addition to the changes to the app itself, Douyin has expanded its e-commerce segment at least twice since March.
Click on the mall page, you can see the “second-hand good things” launched in March at the top of the page. On the second-hand goods page, Apple series products occupy a prominent position. In addition to digital products, the second-hand products covered by Douyin also include “treasures of the Middle Ages” and “watches”.
Entering April, media reports said that Byte was setting up a self-operated wine team to try to sell wine through live broadcast/short video.
In addition to the mall moving to the front step by step and tearing off the “sugar coating” of interested e-commerce, the behind-the-scenes ecological chain construction is also changing. In early March, the ByteDance public beta benchmarked the Douker of “Taobaoke”. The so-called “TikTok” refers to a promotion tool that helps the Douyin live broadcast room to drain traffic from outside the site and promote sales growth. According to the official introduction of Douyin, there are currently more than 60 service providers on Douker.
In addition, in order to solve the problem of logistics, Douyin has launched Yinzunda, trying to solve the problem of the last mile. (For details, please refer to Snow Leopard Finance and Economics’ “Logistics Disease of Douyin E-commerce: The Last Kilometer of Fire”)
self-subversion
Almost at the same time as Douyin pushed the “people looking for goods” interface, in March this year, my country’s first regulation specifically for algorithm recommendation – “Internet Information Service Algorithm Recommendation Management Regulations” was officially implemented. As of March 27, Douyin, Toutiao, WeChat, Taobao, Baidu, Dianping, Weibo, Xiaohongshu, etc. have all launched the “personalized recommendation” function with one click in accordance with regulatory requirements.
Not only has the “algorithmic recommendation” as the infrastructure of hobby e-commerce begun to be restricted, but one year after Douyin’s executives proposed the concept of hobby e-commerce, a problem that has to be faced now is that the drawbacks of hobby e-commerce are becoming more and more serious. Obvious – high uncertainty, low repurchase rate, and few categories covered. Interest means “non-rigid demand”, and it also means the instability of sales. Frequent returns after users lose interest has also become a major concern of Douyin e-commerce.
Douyin cannot win the tough battle of e-commerce just by relying on the discovery-style consumption that makes fun of money. Nowadays, Douyin acts frequently, hoping to resolve various drawbacks of interest e-commerce. For example, the internal testing of “going around” and “membership coupons” is intended to increase the low repurchase rate of interest e-commerce.
Previously, Douyin e-commerce relied more on public domain traffic such as short videos, and the connection between users and merchants was weak. Through the multiple exposures of “going around” and the constant reminders of “membership coupons” and “frequently purchased good things”, a more stable relationship has been established between merchants and users. People looking for goods” increases the certainty of transactions.
As mentioned above, Douyin formed a self-operated beverage team and launched “second-hand good things”, which is to make efforts in the subdivision field.
Douyin currently does not have the ability to cover all categories. If it is split by category, in the second half of 2021, the sales of clothing categories will account for nearly 40% of the Douyin platform; beauty, second-hand luxury goods, and food and beverages will account for more than 10% respectively.
According to the “2021 White Paper on User Insights and Content Ecology in the Drinks Industry” released by ByteDance’s giant engine company, in December 2020, the number of core interest users of Douyin wine consumption exceeded 67 million, a year-on-year increase of more than 62%. From January to March this year, the sales of Douyin Liquor live streaming also reached 3.18 billion yuan. Douyin’s self-operated wine track should not be a whim.
The biggest move of Douyin recently is the first-level entrance of internal testing e-commerce.
Today’s Douyin Mall interface, the home page is equipped with categories such as “Live Featured”, “Brand Pavilion” and “Low-priced Lightning Deals”, which are no different from traditional shelf-style e-commerce. It subverts the previous Douyin model of “goods looking for people”, and instead relies on users’ active search, that is, “people looking for goods”.
In order to further increase the frequency of “people looking for goods”, Douyin followed the way of Pinduoduo to create the GMV myth, that is, marketing strategies such as ultra-low prices, “ten billion subsidies”, and even the UI design of the mall’s double waterfall flow , are very similar to Pinduoduo.
Previously, Douyin had tried to launch the “Douyin Box” app to divert shopping traffic outside the main station. But judging from the single-digit likes for a single video in the Douyin box, at least so far, there has not been much improvement.
Before finding the answer, “Shaking Business” will continue to trial and error. After all, the foundation of the 2 trillion valuation must not be the uncertainty of “interest”.
What will TikTok become?
Soochow Securities stated in the research report that live streaming and short video streaming are high-cost marketing activities in the final analysis. Therefore, the repurchase rate is a core variable that is often ignored in the field of live streaming e-commerce, but affects the profitability of merchants.
Douyin superimposes “people looking for goods” on the basis of the existing “goods looking for people”, which is to cultivate the habit of users to actively shop on Douyin and increase the possibility of repurchase. The ideal state in the future is to multiply interest e-commerce and shelf e-commerce—that is, to attract users through interest e-commerce and retain users through shelf e-commerce.
As a result, Douyin can realize the transformation of “content – interest e-commerce – shelf e-commerce”, and 600 million daily active users will also be able to stably transfuse blood for e-commerce. This jump is also another major traffic realization point for Douyin after advertisements and live broadcasts.
But at present, it seems that it is not so easy for Douyin to try to quickly prop up GMV with the Pinduoduo model, and even provide new stories for possible listings.
The first is the hard-to-change user mind.
In the eyes of users, Douyin has always been positioned as a short video content platform. Recently, after Douyin increased the advertisements of the “Growing Grass” videos in the mall, some users were so annoyed that they began to post complaints on social platforms, believing that frequent advertisements seriously affected the short video viewing experience.
Source: Zhihu AppHow to find a balance between shelf e-commerce and short video content platforms in consumers’ minds is an inherent challenge that Douyin needs to face.
In addition, Douyin will inevitably go to shelf e-commerce, and it has to solve problems such as insufficient supply chain of its own.
According to a LatePost report, in 2020, although the GMV of Douyin e-commerce exceeds 500 billion yuan, only about one-fifth of it comes from the self-operated platform Douyin Store, and most of them jump to JD.com and Taobao to complete transactions. Due to weaknesses in the upstream and downstream supply chains of e-commerce, merchant services, etc., it is inevitable that they often make wedding clothes for others.
However, Pinduoduo was able to get started quickly back then, by going deep into the production end and connecting manufacturers and users, so that they could get low prices through the M2C (manufacturer-to-consumer) model. But Douyin obviously does not currently have the ability to go deep into the first kilometer.
The external challenges are even more severe, and shelf e-commerce has long been an extremely crowded Red Sea track. Not only is it crowded with first-tier platforms such as Taoxian, Pinduoduo, and JD.com, Douyin also has to face second-tier platforms such as Dewu and Vipshop in subdivided fields. It is not easy to get another share of shelf e-commerce. .
Using the “materials” of short videos to make “dishes” for e-commerce on the shelves, Douyin is making a super difficult “full banquet” feast. Whether the listing is urgent or slow, Douyin e-commerce may still have too much homework to make up.
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