Douyin adjusts the price comparison details, merchants suggest doing this

The price strategy adjustment of Douyin e-commerce has attracted widespread attention from merchants and the industry. From emphasizing price comparison for the same product to improving price power in a refined manner, these changes will directly affect merchants' traffic and sales strategies. Through extensive merchant research, the author attempts to interpret the adjustment direction of e-commerce price power strategies, as well as the responses and suggestions of different types of merchants.

During lunch break in the hot summer, Xiaolu, an operator, was urgently dealing with a price comparison problem in the backend system. Because the product was sold at a higher price than other platforms, the traffic allocated to this product by the platform was not as good as the merchant expected. Finally, the boss stepped in and used his connections to raise the price of the same product on another platform by a few yuan, keeping the prices on the two platforms consistent. Only then did he feel relieved.

Since the first half of this year, all major e-commerce platforms have been chasing price power, and merchants have mixed feelings. Platforms have further increased their requirements for price power, not only with a price comparison system for the same item, but also with an automatic price change function. By the middle of the year, all platforms have begun to adjust their strategies - Taobao no longer strongly promotes five-star price power and weakens the absolute low price strategy; Douyin e-commerce will improve its price power in a more refined manner in the second half of the year.

This trend concerns the wallets of all e-commerce merchants and has triggered widespread discussion in the industry. Some merchants have raised questions: Is there a bottom line for price cuts? Is there an end to internal circulation? Some merchants are increasingly confused about what the e-commerce platforms are trying to do? Some merchants are secretly glad that they can finally open up the e-commerce market by selling at low prices and high volumes. Based on this, Yibang Power has conducted extensive merchant surveys. Among them are professional service providers who have served thousands of companies, white-label companies in industrial belts that are starting businesses, and well-known brands with annual sales of tens of billions of yuan. From the exchanges with them, Yibang Power will try to interpret and answer the following questions:

• How will e-commerce pricing strategies be adjusted? What changes have merchants noticed?
• How do white-label and branded merchants adapt to the platform's price power requirements? What are their demands for price comparison on the platform?
• What do different types of merchants think about Douyin e-commerce’s plan to fine-tune its pricing power, and what suggestions do you have?

1. How to “refine” the pricing power of Douyin e-commerce?

During Yibang Power's research, some merchants discovered some small details about Douyin's e-commerce backend products and operations. They speculated that these changes were closely related to the platform's "more refined pricing power" and "weakening price comparisons."

1. For links to “same product at a higher price”, the impact on traffic is reduced.

In early July, because a distributor of an e-commerce company sold a product at a discount on other e-commerce platforms, the backend of Doudian directly prompted "same product at a high price", and the exposure and conversion volume of this product dropped rapidly. Its founder recalled the scene at that time, saying, "For a full 10 days, we couldn't get any traffic, and sales were half of the usual amount."

At the end of July, the merchant also encountered the same high-price situation, "but the traffic didn't seem to be affected much." He speculated that the platform may have lowered the impact of the high price of the same product, or after this situation occurred, the platform gave an adjustment period instead of directly cutting off the traffic.

2. Before payment, the "You may also like" recommendation page moves down, and after payment, the relevance of related product recommendations decreases.

In mid-July, when users submitted orders on Douyin e-commerce but did not pay, the platform automatically pushed a product page of "You may also like". At that time, this page was located in the lower middle of the user's screen, and most of the recommended products were low-priced alternatives to the products purchased by the user. After payment, users can still see similar product recommendations on the payment success page.

In early August, Yibang Power found in a test that the "You May Also Like" section has been moved down, and users need to swipe the screen to see the recommended page; service guarantees (such as seven-day unconditional returns, shipping insurance, etc.) have been inserted in front. Moreover, after users pay, the relevance of the recommended products has also weakened, and they may not necessarily be cheaper products of the same model.

In this regard, the operator of a women's clothing Douyin store said that he had been troubled before. Because "consumers buy a product for 189 yuan, and then see the same product for 169 yuan, so they naturally return it and buy the 169 yuan one. After buying the 169 yuan one, the system recommends him the 159 yuan one." In his opinion, this behavior is increasing the decision-making cost of users, and at the same time, it also increases the order cancellation and refund rate of merchants.

3. Similar products are priced as low as xx yuan, and the product details page recommends the same product at a lower price. The frequency of recommendation will be reduced or even cancelled.

In the past, after comparing prices, Douyin e-commerce not only prompts merchants with high prices for the same items in the Doudian backend, but also prompts consumers in the frontend. For example, after a user clicks on a product link, they will see a collection of recommended products with "same item at a lower price" after the product review and before the product details page. Some products will also prompt "More similar discounted products, as low as about xx yuan" or "Similar products as low as xx yuan" in the shopping cart and product main picture.

Now, some merchants have reported that even if their products are not the same low-priced ones, the platform has not prompted them on the user side. There are also product links that were previously prompted with "similar products as low as xx yuan", but now this sign has disappeared. Ebrun Power's test found that such signs are not completely cancelled, and some products currently have similar prompts, but no clear display rules and logic have been found yet.

In addition to the above speculations by merchants, the platform has also made some public official actions: after users use the "Find the same/similar products" function on the platform, the platform will also recommend "same product preferred" products instead of "same product at a low price". According to the official statement, same product preferred refers to the preferred products recommended by the platform to users after comprehensive consideration of sales volume, price, store and other dimensions.

At the same time, the Super Value Shopping channel, which focuses on low prices, has also adjusted the "compensation for overpriced purchases" service rules: on the one hand, pre-sales and discounts of less than 24 hours will not be included in the compensation scope; on the other hand, it is clearly stated that official flagship store products are compared with official flagship store products of the same brand. The price comparison logic is duty-free goods versus duty-free goods, bonded goods versus bonded goods, and direct mail goods versus direct mail goods.

2. When comparing prices, what do white-label and branded products say?

At present, almost all key positions in Douyin Mall are "giving way" to price-powered products. In addition to various product label prompts on the front and back ends (same product with high/low price, same price in the live broadcast room, lowest price on the entire network, similar products as low as x yuan, etc.), there are also fixed entrances such as low-price flash sales and super value purchases, as well as the latest online price comparison channel "Find a Good Price" (the platform's selected low-priced products in the mall), and the "Special Price" channel of search results in the mall (same product with low price within 90 days).

Under the rules set by Douyin e-commerce, the higher the price of the product, the more free traffic the platform recommends. The original intention of the platform is to allow consumers to buy high-cost-effective products, encourage merchants to take the initiative to make concessions and exchange price for volume, so that the platform can maintain its advantage in the market competition.

This strategy has indeed brought some data improvements to Douyin e-commerce. For example, during the 618 promotion, the transaction volume of the Super Value Purchase channel increased by 150% year-on-year, and the number of orders for group activities of 10,000 people increased by 101% month-on-month from April; in the first half of the year, the MAC (monthly active users) of Douyin e-commerce shelf scenes increased by more than 60%; NPS (net recommendation score) has steadily increased, and the proportion of users willing to recommend Douyin e-commerce to people around them has also increased by 10%.

The situation of JD.com, Taobao, and Pinduoduo is similar. The price power strategy has helped the platforms increase order volume and user stickiness.

However, the price requirements of e-commerce platforms have also caused some controversy among merchants, especially white-label merchants. Because small and medium-sized brands and white-label merchants have limited ability to obtain traffic, to a certain extent, their "business performance" is closely linked to "how much traffic the platform allocates."

However, small and medium-sized businesses or businesses in industrial belts are still in the growth stage, with insufficient brand power and common homogeneity. Some people in the e-commerce industry believe that using price power as the core basis for traffic allocation may increase the degree of internal competition among white-label businesses, and eventually even result in bad money driving out good money.

A merchant in the industrial belt that sells mid- to high-end products said that before the e-commerce price comparison, his live broadcast had 2,000 to 3,000 views, but now it basically only has about 1,000. Since the local production of the same type of products, merchants almost share raw materials and processes, etc., it is very easy for peers to offer the same products at a low price.

An e-commerce industry insider once told Yibang Power that after a merchant's durian product sold out on Douyin, a competitor directly undercut it by 10 yuan and used tools to purchase the crowd package of its live broadcast room and targeted it to intercept orders. "In this case, is there any other solution besides lowering the price?" He shook his head helplessly.

Business transition and development and growth are topics that white-label merchants are very concerned about. They expect that e-commerce platforms can help them cultivate and supplement other business capabilities while leveraging their price advantages, incubate new brands, and improve the stability of their operations on the platform. In this way, the platform can also better achieve the survival of the fittest.

Brand merchants value long-term management more, and price is not the main market strategy. Faced with the price power requirements of the platform, brand merchants are often unable to make further concessions due to the strict price control system or the fear of damaging the brand image. They also expect that "improving price power in a more detailed and refined manner" will improve this situation.

Some merchants pointed out that in fact every e-commerce platform emphasizes price. "Price is just a promotional means for e-commerce. What e-commerce platforms should focus on is the 'accuracy of information matching'. If users only look at low prices, why not buy from Pinduoduo?" His suggestion is that because consumer demand is multi-layered and complex, platforms should push high-quality, high-service standard products to consumers with high purchasing power and high requirements for products, and recommend cost-effective products to price-sensitive customers.

The sources of brand value are very diverse, perhaps a spiritual concept, or perhaps product quality, craftsmanship, or accurate market insights. For brand merchants, they hope that Douyin e-commerce can adjust the traffic distribution mechanism to make traffic distribution more reasonable and fair, which can not only reflect the diverse brand value, but also make business operations more long-term and healthy.

3. How do merchants hope Douyin e-commerce will compare prices?

Even though they have sensed some clues that Douyin is adjusting its pricing strategy, merchants generally believe that "this is not enough." According to their ideas, what is the direction of the platform's "fine-tuning" adjustment? Ebrun Power has compiled three common demands and suggestions as follows:

Different industries use different price comparison methods or tools. At present, Douyin e-commerce provides two price comparison tools, namely, the best price pusher and the hot item bidding. The former identifies the market situation, judges the price competitiveness of the current goods, and determines whether they are high-priced goods of the same model; the latter encourages merchants to offer lower prices for the hot-selling products of their peers and participate in price competition to gain traffic.

Xiaoying is in charge of a gold jewelry store with more than 3,000 SPUs. Because the gold price fluctuates every day, the identification results of the best price pushers in the Doudian backend are lagging and inaccurate. "We can't change the price according to the system's recommended price. We have a unified price control system internally. If the system's recommended price is inaccurate, our profits will be lost." At present, she can only prepare materials and file a complaint with the platform.

Xiaoying believes that pushing for good prices is time-consuming and labor-intensive for her industry. "After all, each piece of gold jewelry has many weights. If you really want to take it seriously, you need someone to do it, but the price ratio is very low and the result may not be good," she said.

Some merchants also suggested that price comparisons can be conducted in industries such as home appliances, beauty products, and daily necessities, but special industries such as food cannot be strictly compared. "Low prices for food coupons will only lead to food safety issues in the end," said the merchant. Another merchant said that the platform should classify goods into standard products and non-standard products and treat them differently, with standard products being priced low and non-standard products being priced less low.

The price comparison results are not linked to the registration for the promotion or the sales of influencers. Currently, the registration for official promotions and the price points of influencers are closely related to the price power of the goods. For example, merchants who want to participate in the 6.18 million store discounts and super value group live broadcast rooms need to submit the live broadcast room in advance, and the high price rate will affect the registration results. "If we do not change the price according to the platform's recommended price, the biggest impact is that we cannot register for the promotion live broadcast room." A brand said.

For influencers, authors with high price scores will also receive more exposure, which will be linked to revenue in the future. This indicator is calculated by the proportion of orders generated by products without the label of "weak price power" or "same price at a high price" to all orders completed by influencers. This forces influencers to further demand low prices from merchants. An entrepreneur tested and found that once his price score was lower than 60 points, almost no one would enter his live broadcast room.

Some influencers have found that the platform will add a small blue word "Search for the same product in the video" to the comment area of ​​their original short videos. A large number of fans attracted by the small blue word search for the same product through the small blue word, find a lower-priced product to place an order, and ignore the window entrance they added in the comment area. This is equivalent to the influencer planting content for other product links for free, and there is a conflict of interest between the influencer's income and the search for the same product at a lower price.

The platform traffic distribution is more clearly determined according to comprehensive dimensions, increasing the weight of factors other than price. At present, in the perception of many merchants, a large amount of Douyin e-commerce traffic is inclined to low-priced goods, while service, quality, etc. do not obviously affect the traffic weight. A clothing merchant whose factory is in a small city in Northeast China and whose live broadcast room is in Zhejiang said directly: "You can't compete with others. There will always be someone who can lower the price than you. There are clothes for 9.9."

The root cause is that there is a loophole in the platform's way of judging the same style, that is, as long as the basic information of the goods (brand, name, specifications, size, color, model, material, flavor, etc.) is the same, the products will be judged as the same style. "It is very common for e-commerce companies to steal pictures and send pirated goods, and in the end, even products of different quality are judged as the same style." A flower and green plant merchant said, "I sell imported flowers in my store for 30-50 yuan per pot, while fakes from other places only sell for 10 yuan. The platform automatically follows the price and suggests that I sell them for 9 yuan, but I can't get the goods."

Public information shows that Douyin e-commerce has recently upgraded its counterfeit compensation policy from "three times the compensation for one fake product" to "N times the compensation for one fake product", with a maximum compensation of "ten times the compensation for one fake product". By the end of this year, this new regulation is expected to cover 30,000 merchants, which may restrict and regulate the above situation.

When talking about how they hope Douyin e-commerce can improve its pricing power in a refined manner, many merchants expressed the hope that the platform's rules for allocating traffic can be clearer and more diversified, and that the weight of traffic distribution based on factors such as quality, service, experience, reputation, and logistics can be increased. Their appeal is that the platform should judge each merchant and each product link from a more comprehensive and integrated perspective, and then allocate traffic accordingly.

All the characters in the article are pseudonyms.

Text丨Liao Zilin Editor丨Dong Jinpeng This article is written by the author of Operation School [Yibang Power], WeChat public account: [Yibang Power], original/authorized to be published in Operation School, any reproduction without permission is prohibited.

The title image is from Unsplash, based on the CC0 protocol.