Douyin diverts traffic, Taobao merges: after low prices, content becomes king

Recently, Douyin took offline the function of mounting stores. In May, Taobao updated the settings of the homepage module. Both platforms have made adjustments, reflecting the two different development ideas of content e-commerce and shelf e-commerce.

On June 20, the function of attaching stores to short videos on Douyin was shut down. For short videos posted by users with stores attached, the store entrance will be shut down at the same time (for videos posted more than 30 days ago), but it will not have any other impact on videos posted by users.

This means that in the future, short video content on Douyin can only carry links to specific products. As a content e-commerce platform, the impact of this change cannot be underestimated. During this year's 618 promotion period, Douyin is not the only one to make major changes within the App. In mid-May, Taobao also updated its homepage module configuration.

"More streamlined and cleaner" is the general evaluation of users on this Taobao revision. Many of the original modules have been integrated into the two menu bars at the top, and more pages are allocated to dual-waterfall product and user content recommendations , with a clear trend towards increasing product content.

In fact, the removal of the Douyin short video store function is also intended to increase the content of the products.

But this is fundamentally different from the underlying logic of content e-commerce that we have talked about in the past. In the past, content served commodities, but in the future, platforms may force commodities to serve the content itself.

01 The underlying logic of user payment transactions is changing

In the early days of shelf-based e-commerce, consumers would find relevant products to make decisions and place orders when they had needs. At this time, the advantage of the commodity transaction platform is the ability to integrate commodity information.

As the number of e-commerce platforms increases and consumers can compare prices and service capabilities across platforms, e-commerce platforms need strong supply chain capabilities and efficient supporting fulfillment capabilities to gain a foothold among the platforms. At this stage, content platforms have not yet directly competed with shelf-type e-commerce platforms. Most content platforms in the pre-TikTok era still attracted traffic to shelf-type e-commerce platforms themselves.

With the rise of Douyin, the relationship between content and goods in the era of interest e-commerce has undergone a qualitative change. Content directly serves the transaction of goods , and the link from content to goods is shorter. Short video sales and live broadcast sales are all products of the content e-commerce era. At this time, the content capabilities of the platform dominate the new growth curve of the e-commerce sector. Taobao's live broadcast sales, Douyin's short videos and live broadcasts are nothing more than this.

However, in the early stages of content e-commerce, in order to demonstrate the feasibility of this business path, all parties, whether platforms, merchants, or influencers, will be more oriented towards transaction results. This also means that content and products are destined to be in a relationship of service and being served.

Since then, in the past one or two years, the content models of major platforms have not changed much. The only thing that can be competed between platforms is price. This is why Pinduoduo is so popular now. In essence, it is a performance that the platform has maximized its supply chain capabilities and fulfillment efficiency.

But when prices can no longer be negotiated, the new trend in commodity transactions in the future is that consumers' demand will become more and more granular.

From the user's perspective, initially a video or a single point of content could motivate consumers to place an order. Now, it is gradually transitioning to a complete content system to encourage an order. This content system not only includes the product's own grass-planting link, but also the content system that generates this demand, and even more dimensions that we can't imagine.

From the perspective of the platform, especially in the current situation of intensified content competition between platforms, such a model of product service content can obtain higher user stickiness, longer user attention, and at the same time obtain transactions. From the perspective of influencers, there are traces of an ideal traffic monetization model where content is not linked to transactions, such as Xiaohongshu bloggers.

In other words, consumers, influencers, and content platforms have now reached a tacit understanding - they all prefer to use products to serve content.

Merchants who focus more on products and less on content are already standing in opposition to this trend.

In contrast, brands with high content capabilities can be collectively referred to as IP brands. All the mass brands we are familiar with can be regarded as IP brands. They usually have strong content generation capabilities and the ability to stir up topics. For example, the fashion shows of major luxury brands, Lancome’s shakeshake dance by major Internet celebrities, and the three generations of Jieliya towels shooting short dramas to drive the brand to break through the circle...

Whoever can continuously bring new fun to the people will be able to gain a firm foothold in platform traffic and long-term brand development, even if this fun may have little relevance to the function of the product itself. In this process, it may seem like the brand has achieved sales through marketing, but from the audience's perspective, purchasing the product is also a part of participating in each "national entertainment" and this product serves the content.

Of course, entertainment IP can be regarded as a brand that focuses more on content than on products. The strong user appeal and stickiness of entertainment IP itself, as well as the ability to encourage users to create secondary products, are what content platforms need most. Peripheral products derived from entertainment IP have always been outside the "low price", "involution" and "decline" rules of e-commerce.

From the perspective of business sustainability, content platforms are naturally more welcoming to IP brands.

02 Douyin’s division and Taobao’s integration

Douyin has been continuously adjusting the specific functions of bringing goods on the platform. As early as May 14, Douyin's "Automatically add showcases" and "Mount showcases for released videos" were offline. This means that merchants can no longer add showcases to videos that originally had good traffic later, and can only add showcases when the video is released.

For merchants with low content capabilities who are focused on "stealing traffic", such a change is like adding insult to injury, because they also know that it is more difficult to gain traffic if videos are displayed in showcases at the time of release.

The feature of attaching short videos to stores has not been online for long, and the merchants who rely on this feature are likely to be the same category as the above. The previous mainstream analysis believed that Douyin launched this feature in order to develop shelf-based e-commerce at the same time. However, in fact, this feature has no direct connection with Douyin's shelf system, and its biggest impact is still Douyin's own content system.

Judging from all the current changes, Douyin is further "expelling" the content of these "traffic stealing" businesses out of the Douyin app itself.

Nowadays, the competition for user attention among many content social platforms such as Xiaohongshu, Video Account, and Douyin is entering a new white-hot stage. WeChat has a natural and irreplaceable private domain advantage, while Xiaohongshu has advantages in decentralization and guiding user expression. Therefore, after its own e-commerce model has matured, the changes in these functions are all for Douyin to further clarify that content quality is the first priority.

In other words, for Douyin as a whole, its content model anxiety is now far greater than its commercialization or GMV anxiety.

For these merchants with low content capabilities, the Douyin Mall version launched by Douyin in March may be a content "shelter" for these merchants. Currently, the Douyin Mall version and the Douyin app itself have a high degree of functional overlap, both have product recommendation pages and content recommendation pages, but the Douyin Mall version has a higher proportion of e-commerce sections. At the same time, according to the observation of "New Standpoint", the probability of seeing videos related to bringing goods on the Douyin Mall version will be higher.

But no matter what the probability is, in terms of e-commerce layout, the difference between the two apps is not the difference between content e-commerce and shelf e-commerce, but the difference in the psychological state of users between passive shopping and active shopping. This is the core of Douyin's current dual-wheel drive e-commerce system.

Unlike Douyin, Taobao's e-commerce system currently only has active shopping mentality. In fact, Taobao does not lack traffic entrances. Its largest traffic entrance is the user's original online shopping habits. In this case, only active shopping mentality is also an advantage. How to make users "keep swiping until they can't stop" in the state of active shopping mentality is the key to bring out this advantage.

Taking the revised content of Taobao as an example, the layout has been streamlined, more homepage pages have been allocated to dual waterfall product recommendations, and the revised Taobao has also significantly improved the personalization of the recommendation mechanism. Obviously, the e-commerce system and content system in the Taobao app are actively running in, and in order to ensure that users have the motivation to keep browsing, the product pages will become more and more content-oriented.

Douyin’s content e-commerce approach is to differentiate between users’ active and passive shopping mindsets, while Taobao’s content e-commerce approach is to integrate content into its own platform and turn the products themselves into content. This is Douyin’s division and Taobao’s integration.

It is foreseeable that the two apps, Douyin Mall and Taobao, are very similar in terms of user perception and functions, and will inevitably "accompany" each other to run the path of commodity contentization. If the two do not differentiate into models with obvious differences in this process, the only thing that can be compared is the quality of the content.

03 Conclusion

After seeing the separation of Douyin and the merger of Taobao, we actually found that both of them are now following the Xiaohongshu model. Douyin is actively reducing the commercialization proportion of its own app, while Taobao seems to be making a Xiaohongshu in which commodity content accounts for a large proportion.

Although Xiaohongshu’s commercialization process has been criticized in the past, it now seems that one of the reasons why Xiaohongshu’s content model has an advantage is that it is not yet so commercialized. “Planting grass” itself is a typical model of goods serving content. Coupled with its decentralized user mindset, Xiaohongshu can be said to be one of the platforms with the greatest content model advantages at present.

There are still only two possibilities for products to become hits in the future. First, the merchant can build a whole content matrix for the product to guide consumers’ minds, which is the brand marketing level. Second, a product can appropriately cater to the content trend spontaneously generated by users, such as the domestic products that suddenly became popular before, which has some metaphysical factors.

In fact, these two types of products were the ones that had been popular before, but in the future, as the only thing that platforms can compete with is content, products will become part of the content.

Author: XX, Editor: Wang Wei

Source public account: New Standpoint Pro (ID: xinlichang66), see the world from a different perspective.