How many steps will Douyin's 4 trillion yuan e-commerce be divided into?

This article introduces Douyin's new e-commerce goal - 4 trillion, and introduces the difficulties Douyin faces in achieving this goal. It is recommended for friends who are interested in Douyin's e-commerce to read and learn.

Don’t learn from Jack Ma, learn from Huang Zheng.

Douyin, which has 800 million daily active users, has set a new goal.

A person close to Douyin e-commerce exclusively revealed that the total merchandise volume (GMV) of Douyin e-commerce in 2023 will be approximately 2.7 trillion yuan, and the GMV target for 2024 is 4 trillion yuan, an increase of nearly 50%.

This is another growth change after the media reported in February that Douyin e-commerce set a GMV of 3 trillion. Judging from the statements of many parties, in order to achieve this goal, Douyin e-commerce has internally made it clear that "low price" will be promoted to the core strategy, and at the same time gave up the comparison with Alibaba and turned to learning from Pinduoduo.

In order to imitate Pinduoduo, Douyin e-commerce vigorously introduced white-label and small and medium-sized merchants in 2023, but at that time it was mainly concentrated in the shelf field dominated by the mall. A person close to Douyin e-commerce revealed that in the new year, Douyin e-commerce's low-price strategy will be extended to the content field: the mall and short videos will vigorously recommend low-priced goods, and the live broadcast room will continue to carry high-priced goods dominated by brands.

A GMV of 4 trillion is exactly what Pinduoduo will reach in 2023, but it is obviously not easy to achieve this goal.

Judging from the details, Douyin has laid a lot of groundwork for this big battle. It started internal anti-corruption in April and further improved the efficiency of traffic. In addition, Douyin is also actively preparing to lower prices in terms of merchant operation methods.

On May 22, it was reported that Douyin e-commerce is testing the "automatic price change" function on a small scale. This function allows merchants to entrust the platform to change prices within the conditions set by the merchant based on market conditions and the platform's suggested prices, providing consumers with more competitively priced goods. Since the beginning of this year, all goods in Douyin e-commerce have been marked with price tags, such as the same low price, the same high price, the lowest price on the entire network, etc.

Pinduoduo’s more mature strategy is to divert traffic to low-priced products.

Douyin's e-commerce content, traffic and operations seem to be eager to try, but if it wants to achieve further growth, it may still need to overcome some major challenges.

First, there is the balance between branded merchants and white-label merchants. Although Douyin e-commerce has introduced a large number of white-label merchants, it lacks the scale advantage compared to Pinduoduo, and the limited product categories often make Douyin e-commerce prices unable to compete with Pinduoduo. Industry insiders once revealed that the price difference between the same model of many standard products on Douyin e-commerce and Pinduoduo was as high as 50%.

Insufficient pricing power directly leads to the loss of users. In order to change this problem, according to Pinduoduo's experience, in addition to introducing a large number of merchants to form competition, it is more important to equate low prices with traffic. However, such a situation is almost impossible to happen in Douyin, because Douyin itself is also engaged in traffic business. If it directly learns from Pinduoduo, the attributes of the content platform will suffer a greater blow.

Douyin's response seems to be quite standard. In 2023, Douyin e-commerce proposed to be more "aggressive" in terms of shelf space (mall, search) to expand the category of goods. However, it is still unknown how much business this patch-up middle route can grab.

The contradiction between brands and white-labels, and the problem between low prices and traffic, are all problems that Douyin Mall needs to solve urgently. In addition, in terms of content, Douyin is currently in a state of transition. The crazy Xiao Yangge, the "number one anchor of Douyin", entered the "leisure" mode after the Spring Festival and stopped broadcasting for nearly a month; and after Xiao Yangge and Dong Yuhui, the problem of the lack of super anchors is still continuing. After a series of rectifications, people even doubt whether Douyin has a new "wealth effect" and "ability to create gods".

From an external perspective, Douyin will face a new heavyweight rival this year. The entry of WeChat Video Account means that the competition in the battlefield is becoming more and more intense. Although Video Account started late, it also has a huge number of daily active users and super traffic, but its latecomer advantage is also obvious.

Douyin e-commerce has set a full-year goal when the year is almost half over, and it seems to be full of confidence, but there are still many huge mountains to overcome to achieve this goal.

Author: Sakuragi Editor: Iye

WeChat public account: New Entropy