Introduction: In the future, Douyin e-commerce will become a very important online supplementary channel in the omni-channel system. 2022 marks the first year of Douyin's full-scenario interest e-commerce, transitioning from content field to shelf field, and from a short-video entertainment platform to an e-commerce platform integrating short videos, live streaming, and shopping. For Douyin, this is a pivotal year of transformation; for merchants, it provides a closed-loop business environment. Since it is a closed loop, it inevitably raises the requirements for the platform's screening mechanism and merchants' entry thresholds. Why is this? For merchants, the biggest advantage of doing well in Douyin e-commerce lies in their product and brand advantages. Relying on brand product and brand advantages to do Douyin e-commerce also aligns with Douyin's current support logic for merchants. Both need to leverage each other's strengths and empower each other. According to reports, after the establishment of Douyin e-commerce, four core business indicators were set: branding, reducing the proportion of white-label products, de-headlining anchors, and traffic self-broadcasting. Clearly, building a product system centered on branding is a crucial step for Douyin. Without a branded product system, relying mainly on white-label products, Douyin e-commerce will find it hard to go long-term and compete with Taobao and JD.com. So, from the perspectives of merchants and the platform, how can merchants build product strength, and how can the platform build its product system? To this end, New Distribution interviewed three Douyin e-commerce service providers: Wang Fang, CEO of Hangzhou Shenxi Network Technology Co., Ltd.; Zhang Xianli, CEO of Hanyi Hejie (Hangzhou) Culture Media Co., Ltd.; and Wang Xiaoqiang, General Manager of Xiamen Yiboxing Network Technology Co., Ltd. In 2022, these three service providers all centered on the shelf field, shifting from short videos and live streaming in the content field to the shelf field, opening up paths such as Douyin Mall and search to improve the efficiency of matching people and goods.
Product strength is king To do well in Douyin e-commerce, one must first understand the significance and difference between the content field and the shelf field. Regardless of the platform or enterprise, the ultimate goal is growth. In achieving this goal, there are two key actions: user acquisition and user retention. We can understand that short videos and live streaming in the content field are for user acquisition, while the shelf field is for user retention, i.e., generating repeat purchases. Many people have encountered this situation: while scrolling through Douyin, they are attracted by the price, packaging, or the anchor's enthusiastic promotion of a product in a short video or live stream, so they are planted with a seed of expectation and place an order. After receiving the goods, the buyer show and seller show are vastly different, leading to a one-time deal with no repeat purchase. If similar merchants come to Douyin Mall, they will obviously fail. Who do users come for, and because of whom do they leave? The answer is clear. Therefore, a good Douyin e-commerce account needs to build a high-quality product system around user needs. In an interview with Wang Fang, CEO of Hangzhou Shenxi Network Technology Co., Ltd., she mentioned that from the perspectives of merchants and the platform, how to operate a Douyin store well, Wang Fang listed several clear frameworks. First, from the merchant's perspective:
First, product strength Good products speak for themselves. Product strength is the attractiveness of a product to target consumers, reflected in product quality, price, innovation, etc., and the ability to generate purchase desire. If in the same category, the product should have a differentiated concept. Wang Fang gave an example: for bagged tea, if it has the function of super crispy and cold brewing, the visual impact on users will be strong. Compared with traditional tea that must be brewed with hot water, the differentiation of bagged tea is obvious if it can be steeped in a mineral water bottle in 50 seconds.
Second, comprehensive service capability Specifically, this refers to supply chain and logistics that keep up in time. If a product experience is good, after-sales service and logistics should respond quickly, which places certain demands on the merchant's comprehensive service capability.
Third, strong content attributes In simple terms, strong content attributes mean creating memory points for users. First, the product's outer packaging should have high recognition. For example, Taishan Original Draft Beer prints a large "7" in a prime position on the bottle, conveying the memory point of freshness to consumers. If the packaging cannot reflect strong content attributes, then the product's seasonality, practicality, and scenario should be used to reflect value points, stimulating user needs from these three dimensions.
Secondly, from the platform's perspective, store repeat purchase rate is a key indicator that Douyin e-commerce focuses on, and it is also a direction where Douyin e-commerce gives key support to stores. To achieve a high repeat purchase rate, the key lies in product combination. Wang Fang mentioned several different combination strategies.
First is the product strategy, considering whether the product is suitable for a single-product strategy, a hit-product strategy, or a combination package approach; Second is product stratification, screening products based on different functions and scenarios to determine which products are suitable for short-video traffic generation, which are suitable for short-video cart actions, and which are suitable for mall operations; Third is the profit rate strategy, thinking based on the product's profit rate. If it is a single focused product, continuously boost it to increase the profit rate. After boosting, combine the product's own functional attributes with peripheral products to break its category boundaries, keeping the product's popularity rising, even regardless of peak and off-peak seasons, and expanding the product pool. Wang Fang emphasized that a low-price strategy is not the way out. Low price might be a path to maximize traffic, but it will be difficult to raise prices later. The ultimate goal of serving customers is not to maximize the number of users, but to maximize user value.
Low-price strategy is a hidden danger Indeed, a low-price strategy is not the way out. When discussing how to maximize user value with Zhang Xianli, CEO of Hanyi Hejie (Hangzhou) Culture Media Co., Ltd., Zhang Xianli offered a different perspective from the price level. Zhang Xianli said, In the future, platforms and merchants still need to pay attention to the issue of low-price competition.
First, at the platform level, Douyin has huge traffic. When a hit product appears, it can drive the development of the entire industry, even revive some sluggish industries. Hitting an industry through a single explosive case is the charm of the Douyin platform, but it may also bring hidden dangers. What hidden dangers? If a product has a large volume and becomes popular through Douyin's traffic pool, many people enter this pool. Some compete for low prices to grab volume, some attack your marketing, and some have uneven product quality due to low costs, leading to uneven pricing. This gives users an uneven user experience, causing them to question the product or even abandon it. Therefore, the platform needs strict control.
Second, at the brand level, besides Douyin, there are many other shelf e-commerce platforms. Each brand has many different distributors. If distributor A invests in advertising on Douyin and users see it, but find lower prices on other platforms, they may complete the transaction outside Douyin, and the user's money flows to distributor B. This harms distributor A greatly, as they have made wedding clothes for others. So, first, the platform's low-price competition, and second, the brand's price control, both need to be unified.
So, how to retain users while avoiding low-price competition? Zhang Xianli believes that the first situation requires joint supervision by the platform and the industry. Wang Fang, CEO of Hangzhou Shenxi Network Technology Co., Ltd., also mentioned that the platform's development form should be healthier. Here, health refers to the weight of the platform's search mechanism, which should be as high as possible. Due to some algorithm mechanisms of the platform, natural traffic currently has some biases. Many merchants use high-cost paid traffic to promote products or brands, which may achieve user acquisition and exposure in the short term, but in the long run, it is a big test for merchants' cash flow. Therefore, the platform should increase the search exposure of brands and the presence of natural traffic. For high-quality products, brands, or content, the platform should give certain search weight and give brands confidence.
Additionally, regarding improving repeat purchase rates, Wang Fang also suggested that the platform should add more repeat purchase entry points. Whether in the content field or the shelf field, cultivating user habits is important. If repeat purchase entry points can be added based on user habits, shortening the repeat purchase path and greatly improving the convenience of repeat purchases, it may maximize user retention.
Supply chain is a sustainable competitive advantage As mentioned earlier, Douyin Mall deepens the product pool. In fact, it also brings development opportunities to more types of merchants. Wang Xiaoqiang, General Manager of Xiamen Yiboxing Network Technology Co., Ltd., told New Distribution that Douyin Mall is the most important landing link in the entire Douyin operation. "Live streaming + short videos + mall" is a combination punch under the full-scenario interest e-commerce ecosystem, but it does not rule out that some merchants have advantages in products but weak live streaming capabilities. Such merchants can only do the mall section while establishing cooperation with influencers. For example, a bread manufacturer with good bread quality can launch SKU combinations and have timely logistics, but if the cost cannot support its own live streaming, it can seek cooperation with small and medium influencers, operating through mall entry plus influencer live streaming.
Additionally, on how to do well in Douyin e-commerce, Wang Xiaoqiang also expressed his views. He believes that merchants should first cultivate their "internal skills" when entering Douyin, including: product continuity, logistics stability, and backend service capability. Wang Xiaoqiang gave an example: when Yiboxing operated a fresh food project, it achieved 20 million GMV in the first month. The key to such rapid results was that the brand's e-commerce director had strong supply chain management and product coordination capabilities. He deployed four warehouses simultaneously, coordinated the optimal cold chain supply chain, and arranged multiple factories for production and stocking, ensuring the stability of logistics and goods. While the brand ensures backend stability, combined with the service provider's professionalism in front-end project operation, the project can be well executed. Therefore, enterprises that can achieve an average monthly GMV of tens of millions must have a supply chain that can operate in a closed loop repeatedly.
In terms of improving repeat purchase rates, Wang Xiaoqiang mentioned private domain operations. Establish long-term relationships with users through the store's marketing tools. For example, when a user's purchase time exceeds two months, appropriate actions such as sending SMS or coupons can be taken to recall them.
It can be seen that for how to do well in Douyin operations, the three service providers all mentioned two common points: strong product strength and supply chain capability.
In the initial stage, high-quality products drive traffic; in the development stage, stable quality products accumulate reputation; in the improvement stage, brand and differentiated products bring competitive advantages; in the branding stage, a strong supply chain achieves longer-term brand influence and IP long-term operation.
As the saying goes, "If you want to do a good job, you must first sharpen your tools." Product strength and supply chain are the basic fundamentals for merchants to do Douyin Mall. One is the pull, the other is the push, and these are also the key objects of platform support.
Regarding the future development trend of Douyin e-commerce, based on the current comprehensive market environment analysis, we should neither blindly exaggerate nor underestimate or look down upon it. According to multiple media predictions: Douyin e-commerce GMV has exceeded one trillion yuan, becoming a channel that enterprises need to focus on besides traditional e-commerce platforms. In the future, Douyin e-commerce GMV will continue to grow. Overall prediction: In the future, Douyin e-commerce will become a very important online supplementary channel in the omni-channel system. It will occupy a place in the numerous online and offline channel systems. In the entire channel structure, it may form a single-digit channel share. In the short term, it is impossible to surpass current offline channels, and it will also take time to surpass Taobao, JD.com, and Pinduoduo. However, even a single-digit channel share is a very important new channel force and a new channel that enterprises need to pay attention to.
(Note: The interview content only represents the personal views of the service provider companies.)
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