These merchants who "listened to the advice" all started to make things because they saw two great potentials.

1. Know the products, reduce returns, and reduce the seller's after-sales and operating costs

Simply put, it means selling the right things to the right people. When consumers understand what they want and what they are buying, the probability of returns will be reduced.

The head of the high-heeled shoe brand "Lily Wei" told Daofa that Dewu attracts consumers who have a deep understanding of the products, have a strong purchasing purpose, and have a high degree of cognition and expectation management of the purchased products. In addition, users who understand the products also make the traffic here more accurate, thereby reducing the operating costs of merchants.

2. Goods are of high quality and can be found quickly, reducing buyers’ search and comparison costs

Dewu operates under a semi-trusted model, with strict supervision over the tone and quality of goods.

This kind of "strict selection" increases trust and reduces consumers' purchasing and identification costs. "When you want to buy something trendy and new, you can find what you want more intuitively and quickly on Dewu," said the person in charge of the badminton fitness brand "Pu Rui".

3. Having similar interests attracts each other to place orders, which reduces decision-making resistance, and reduces the comparison cost of buyers and the pre-sale cost of sellers.

This mainly refers to the real user discussion atmosphere. On Dewu, for the same product, there will be recommendations from different people, with a wide range of dimensions. These UGC contents are more in line with consumers' real thoughts and help promote the completion of purchase decisions.

The person in charge of Pu Rui gave an example, "You want to buy something for your boyfriend, and you happen to see that someone else has also bought it, and said that her boyfriend was very happy to receive it, then you will be more confident to place an order."

In summary, Dewu's focus on core groups and product styles has improved the efficiency and accuracy of matching people and goods, allowing brand merchants to achieve twice the result with half the effort, and achieve faster sales, lower return rates, and higher profit margins.

2. Two key points of Dewu’s business: understanding people and making good products

After talking about how to understand Dewu, let's take a look at how to use Dewu well. After reviewing many cases of brand merchants, we have extracted two key points of Dewu's operation.

The first is to understand people. In other words, to see the real needs of young people and integrate them into life scenes. The life scenes here can be physical or spiritual.

The former is like the dormitories where students live. The home textile brand "Laffield" achieved a year-on-year sales growth of more than 130% in 2023. They seized the start of the school season in August and the students' demand for new beds in the new semester. They focused on the mattress category and achieved a month-on-month growth of more than 70%.

The latter is a virtual scene of an 18-year-old adult. High heels are often considered a symbol of maturity and independence. Lily Wei seized this opportunity and created the mentality of "the first pair of high heels in life" and "coming-of-age ceremony" on social media to meet young people's pursuit of a sense of ritual for growth. It has achieved a boom in Dewu, reaching 400,000 per day on gift-giving nodes such as the Chinese Valentine's Day and 520. The main promotion model of the event once accounted for nearly 80% of Lily Wei's entire Dewu performance.

It is worth mentioning that behind the "coming of age gift" high heels is a huge characteristic scene of Dewu - gift giving. Dewu consumers now repurchase 4.6 times a year, and gifts reach 2.9 times. The reason is not difficult to understand. After all, new, trendy, cool and dazzling things are naturally very suitable as gifts. For brands, this means that Dewu has greater potential for exploration. The two most obvious points are that the coverage of categories is wider and the average customer spending is higher. From the perspective of covered categories, gifts can be given to oneself, but also to relatives and friends. For example, young people will buy health products for their parents during the New Year's Goods Festival, March 8th Festival, Mother's Day and other nodes. During Mother's Day, Dewu's tonic category averaged thousands of orders per day.

A typical category that may not conform to everyone's inherent impression of Dewu, but because it is very suitable for gift-giving scenarios, it has achieved rapid growth is gold jewelry. In 2023, the overall growth rate of Dewu's gold jewelry increased by 300% year-on-year.

In addition, compared with the platform promotion and product launch nodes, gift nodes are scattered throughout the year, and birthdays are bought as needed. For the brand, it brings an increase in time nodes. The head of the Douyin channel of the new life digital brand "BASE" said that the two turning points for the brand to achieve a breakthrough in Douyin's performance in 2023 are the two festivals of 520 and Chinese Valentine's Day, and after the holidays, the sales heat did not decline, but continued for several months.

The higher average order value is easy to understand. “I can’t bear to buy it for myself, so I wait for someone to give it to me as a gift”, “I can’t bear to use it myself, so I buy it as a gift to others”. Consumers’ psychological price for gifts is often higher than that for daily consumption.

Starbucks entered Dewu in May 2023, focusing on high-value water cups and gift-giving scenarios, and launching new products every month. For young people, water cups are a carrier for playing memes and expressing themselves, and they also like to use water cups to express their feelings. The average customer price of Starbucks water cups on Dewu is higher than that on other platforms, and it is also their fastest growing platform.

The second key point of Dewu's operation is to make good products and create differentiated hot products. Daofa mentioned a long time ago that it is no longer the era of "all channels have the same goods", and brand merchants need to have the ability to customize the goods for the channels, which is particularly important in Dewu. Because first of all, the population covered by Dewu is very distinctive and needs special analysis. Secondly, Dewu is displayed in the form of tofu blocks and waterfall flows. The core browsing unit is the product rather than the store. In such a platform with products as the core and no investment in traffic, it is very important to let the product bring its own traffic.

If you want to create a hit product on Douyin, product selection is crucial and pricing is also important.

Let's first look at product selection. The criteria can be summarized in four words: new, trendy, cool, and stunning. How to achieve this specifically?

First, it is a joint venture, holding hands with IPs that young people like. For example, Yili Yogurt cooperated with the line puppy, which was sold out in 3 days; in the winter of 2023, Disney hand warmers topped the hand warmer sales list for more than a month. It can be seen that as long as it meets the preferences of Dewu consumers, from food to daily necessities, many categories have opportunities.

Of course, in addition to joint ventures, there are also more "self-reliant" methods, that is, to capture the hearts of young people through distinctive products. For example, a badminton racket sold out by Pu Rui on Douyin, with white as the base color, matched with three popular colors: coral pink, sunset gold, and rose purple, with a gift box and two free grips. At the peak, 4,000 rackets were sold in a single month.

Another example is the "little gold beans" of "Chow Sang Sang", which come in many shapes such as hearts, ingots, and paper cranes. Many young people regard it as an investment fund, and say in the comment area that "saving money every time becomes empty talk, but buying gold can save money painlessly, and strive for one every month", which captures the tangled psychology of the younger generation of "wanting to save money and wanting to spend money". For mature brands like Chow Sang Sang, Dewu can be a handle and test site for brand rejuvenation. Chow Sang Sang will co-create with Dewu every two weeks, and continuously optimize search recommendations, content seeding, trend trends and other aspects. Let's look at pricing. When it comes to hot products, we often think of low-customer items that are driven by tasting and have a low decision-making threshold. But the hot products on Dewu are not like this. What is important is the "emotional price ratio".

Take Lily Wei's high-end shoes for example. They are priced at around 400 yuan. The person in charge told DaoFa that this is a price that is affordable yet high-end. It can attract students and young people who have just started working, and it also gives the brand enough profit margin to ensure good products and good services.

Consumers on Dewu have no shortage of purchasing power. For example, in the category of car aromatherapy, the price of the top single product on Dewu is 220 times the industry average. Therefore, when setting prices, brands should pay more attention to whether they cover enough people and whether they provide a sense of quality and design. Products with a "good value for money" that are both practical and can bring surprises and provide emotional value have a better chance of becoming hot products on Dewu.

In addition, when it comes to "making good products", brand merchants and Dewu are working in the same direction, so they should be good at using platform resources. For example, for new products, Dewu has special support plans, such as targeted support for high-quality natural traffic, commission-free products, marketing and content differentiated operations, etc. For new merchants, Dewu also has a 30-day commission-free, 0 yuan deposit policy, and helps new merchants get started quickly through 30 days of close companionship.

3. Analysts’ comments Daofa has been saying that a core change in new marketing is the shift from shelf logic to crowd strategy. The key to brand competition has become matching content, products, scenarios, and crowds to stimulate consumer demand and initiative.

Interestingly, Dewu looks like an oversized shelf, offering rows and rows of goods, but in fact, Dewu's goods have a clear crowd and scene orientation, in order to provide young people with the most suitable products, which is also the embodiment of the crowd strategy. The key to the integration of brand and effect is people-oriented, and Dewu puts the focus of people-orientedness on the starting point of marketing 4P, that is, products. For brand merchants, this may be a simpler and more direct explanation.

Author: Yi Shen; WeChat public account: Knife Skills Research Institute