Introduction: The traffic "cake" of the Douyin platform—early entry means early growth.

As the new year begins, Douyin Supermarket has officially launched, attracting widespread industry attention.

Media reports have noted that, based on data such as traffic ratios and user purchase behavior, Douyin believes the GMV ceiling for interest-based e-commerce is approximately 2-3 trillion yuan. To continue growing upward, it needs to venture into search-based e-commerce. With Douyin's massive user resources, it might one day catch up with platforms like JD.com and Tmall, which is one of the key reasons the industry is paying close attention. Currently, Douyin Supermarket is still in its infancy, with many possibilities ahead. This article provides a preliminary analysis of the significance and development possibilities of Douyin Supermarket. For a deeper understanding of its internal logic, on February 6 (Monday) at 19:30, New Distribution's live program "FMCG Frontline Talk" will invite Wang Fang, CEO of Hangzhou Shenxi Network Technology Co., Ltd., Li Wei, Regional Head of Mengniu, and Chen Weilong, an instant retail entrepreneur, to discuss the theme "Douyin Supermarket Officially Launches: How FMCG Manufacturers Can Cooperate and Position."

Why is Douyin opening a supermarket? It can be said that Douyin Supermarket is an inevitable product of the internet's borderless expansion. Compared to traditional industries, the internet has no strong barriers; Douyin can move toward search-based e-commerce, while Taobao and JD.com are also moving toward interest-based e-commerce. The result is mutual competition for resources—survival of the fittest. And offense is the best defense. Besides industry competition, Douyin's e-commerce itself has a need for upward development. In terms of user resources, Douyin is already a "ceiling" in China, but traffic is not GMV. To convert it, moving toward a shelf-based marketplace is inevitable. First, because the "goods find people" logic of interest-based e-commerce has a natural disadvantage compared to the "people find goods" model of search-based e-commerce. When users have purchase needs, they first think of searching. Adding a shelf-based marketplace helps cultivate the habit of placing orders on Douyin.

Second, because different scenarios may suit different products; adding a shelf-based marketplace can expand categories and attract more merchants to join.

Third, extending the shelf-based marketplace on the basis of the content field can form a closed business loop, increasing the likelihood of repeat purchases. Specifically, Douyin Supermarket is a supplement to Douyin's shelf-based scenario. However, unlike the previously launched mall section, Douyin Supermarket does not yet have a dedicated entrance; users need to search for "Douyin Supermarket" in the search bar or shopping entrance, or click on the mall page to enter the supermarket.

In terms of product categories, it is similar to Tmall and JD.com, but Tmall offers "half-day delivery" services, and JD.com's self-built logistics system also ensures fast delivery with good service. With Tmall and JD.com as benchmarks, Douyin Supermarket is essentially snatching food from a tiger's mouth. At this point, choosing the right development model is crucial.

Where is Douyin Supermarket's "grip"? Before the live interview, New Distribution chatted with Wang Fang, CEO of Hangzhou Shenxi Network Technology Co., Ltd. Shenxi is a vertical e-commerce company integrating Douyin e-commerce service provider (DP), Tmall operation service provider (TEP), and MCN content marketing service provider. It has been listed as a high-quality Douyin channel supplier on the annual brand service provider list, with partners including well-known FMCG brands such as Junlebao and Mengniu. As a link between Douyin and brands, Wang Fang has a stronger sense of platform trends. She mentioned several directions worth considering:

1. How to occupy user mindshare? First, genuine product guarantees. For example, when Tmall Supermarket first launched, many brands did not have formal sales channels on Taobao. At that time, Tmall opened official flagship stores for brands, which was very attractive to users. It can be seen that Douyin Supermarket is also emphasizing genuine product guarantees. Second, some emerging brands hope to expand business through new retail channels. Douyin Supermarket can explore new brands and engage in marketing exchanges. Third, competitive pricing, which is also the mindshare Douyin has always conveyed to users. From a consumer perspective, products with genuine guarantees build trust, and price discounts and new product trials also increase willingness to try. However, regarding price subsidies, if sustained long-term, while it helps increase user stickiness, cost issues must also be considered.

2. How to build warehousing and distribution logistics? Based on the current situation, Douyin Supermarket has self-built warehousing and distribution, shipping directly from Guangdong to all parts of the country. In the future, for warehousing and distribution services, Douyin Supermarket may have two chain options: First, self-built only, which may result in higher distribution costs and more dispersed procurement; Second, a "self-built + merchant co-operation" route, where some products are shipped from offline supermarkets, enabling flexible delivery to surrounding areas at the lowest cost and shortest time. In the future, it is not ruled out that Douyin Supermarket will integrate with local life services to meet consumers' instant shopping needs. In fact, self-built warehousing and distribution is a relatively "heavy" model, but if done well, it can form a "hardcore" competitive advantage.

3. How to attract merchants to join? The launch of Douyin Supermarket provides more merchants with opportunities to enter, but whether cooperation can be achieved also depends on the cooperation model between both parties. For brands, when choosing to join a platform, they consider channel impact, scale, and gross margin protection. For example, many brands have annual marketing budgets. Douyin Supermarket needs to consider what mechanisms to establish, how to conduct traffic exchanges with brands, and help brands achieve long-term operations, which is important for cooperation. If the entry threshold is too high, it may also "dampen" merchants' enthusiasm. In addition to the above points, Wang Fang also mentioned that when the supply chain matures, Douyin can also choose to develop its own brands.

Why should FMCG manufacturers pay attention to Douyin Supermarket? After reviewing some of the future possibilities of Douyin Supermarket, let's look from the perspective of FMCG manufacturers: Why should we pay attention to Douyin Supermarket? On one hand, domestic e-commerce has shifted from an incremental market to a stock market; on the other hand, data shows that Douyin's daily active users have exceeded 700 million, and the massive traffic pool still has room for deep mining. In 2022, Douyin extended the mall section based on the content field, which means that brand investment on Douyin will have spillover and feedback from natural traffic and GMV. According to media reports, in July 2022, Douyin Mall's GMV accounted for 23%, and this spillover GMV also boosted the overall ROI of brands. After the launch of Douyin Supermarket, supermarket products can also be browsed in Douyin Mall, which may prove that ByteDance's operation of Douyin Supermarket is not independent, but another supplement to the content field based on traffic advantages. With the success of the mall, it is believed that the probability of the supermarket's success is also relatively high. Based on the traffic "cake" of the Douyin platform, early entry means early growth. Therefore, FMCG manufacturers must pay close attention to such new opportunities and actively participate when appropriate opportunities arise. Merchants who previously missed out on the benefits of JD.com and Alibaba due to late entry may be able to overtake on the curve with Douyin Supermarket, bringing a high-speed growth opportunity for their brands.

So, what kind of merchants are more suitable to join Douyin Supermarket? First, Douyin Supermarket emphasizes genuine product guarantees. In the early stage, Douyin attracted many consumers through cost-performance advantages and gained huge traffic, but to truly compete with JD.com and Tmall, low prices and traffic alone are not enough; more strong brands need to join to counterbalance. Therefore, brands and their directly authorized distributors may be more suitable to join Douyin Supermarket. Small and medium distributors' product sources are difficult to verify, making it harder for them to join. Second, Douyin's biggest advantage is traffic, and it will not easily abandon it. At least in the short term, products with strong content attributes may be more likely to be promoted. In this regard, Wang Fang also shared her opinion. She believes that from the platform's perspective, in the early targeted invitations, it will definitely prefer brands that have been validated on Douyin, with good sales and mature supply chains. In addition, emerging brands with budget support, differentiated products, and strong visual content are also within reasonable consideration. She also specifically mentioned short-shelf-life foods, which require time from warehousing to delivery and have high quality requirements.

Final thoughts: From a consumer perspective, if a platform can simultaneously meet one-stop needs for entertainment, search, and purchase, it will be more convenient to use. For Douyin internally, adding the Douyin Supermarket section may integrate with other sections, cross-promote, and promote the construction of shelf-based scenarios, developing its own retail ecosystem. Of course, whether Douyin Supermarket can leverage its massive user resources to become the next Tmall or JD.com remains to be seen. Supply chain construction may be a difficult task, requiring significant cost investment in the early stage.

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