Douyin e-commerce launched its own "Taobao" clone

This article deeply discusses the strategic layout of Douyin e-commerce launching an independent shopping platform "Douyin Mall Edition" APP and its impact on the e-commerce ecosystem. It also analyzes how Douyin e-commerce seeks a balance between live streaming e-commerce and traditional shelf e-commerce. I hope it will be helpful to you.

TikTok e-commerce has launched a “Taobao” clone.

Recently, Douyin launched an APP called "Douyin Mall Edition", which is the first time that Douyin e-commerce has launched an independent e-commerce shopping platform outside the main site APP. In the Douyin Mall Edition APP, users can complete the complete e-commerce platform shopping experience, including searching for products, comparing prices, placing orders, checking logistics, and after-sales services.

This echoes the viewpoint raised by Wei Wenwen, President of Douyin E-commerce, at the Douyin E-commerce Ecosystem Conference last year. Douyin E-commerce is a complete ecosystem. It does not want the content field and the shelf field to be separated, but hopes that the two fields can be connected and operated.

Behind the changes, Douyin has long been aware that the ceiling of live streaming e-commerce is limited, and traditional shelf e-commerce still has great potential. Especially at the user level, the user retention, user conversion rate, and user experience brought by the latter have been verified by the industry.

Under this logic, Douyin e-commerce is gradually moving closer to shelf e-commerce and becoming more and more like "Taobao".

In 2022, Douyin E-commerce proposed the concept of "global interest e-commerce" and put forward a dual-wheel drive strategy of content scenarios and shelf scenarios; in May 2023, Douyin E-commerce announced that the shelf scenario contributed 30% of the annual GMV growth; in February 2024, Douyin E-commerce positioned "price power" as the highest priority task in 2024, and officially participated in the low-price competition among shelf e-commerce platforms represented by Taobao, JD.com, and Pinduoduo...

Crossing over from a content platform, Douyin e-commerce entered the e-commerce market as an interest e-commerce. With its impressive performance and growth rate, it has become a player that cannot be ignored in the e-commerce market. Today, live streaming e-commerce has bid farewell to the period of wild growth and focused on shelf e-commerce, which is an important piece of the puzzle for Douyin to complete the e-commerce ecosystem.

According to Douyin's e-commerce vision, content e-commerce and shelf e-commerce will each account for half in the future. However, this road is crowded with giants such as Taobao, JD.com, and Pinduoduo. They have spent ten or even twenty years to build user minds and open up differentiated markets. It is not easy for Douyin, a latecomer, to break through.

More importantly, traditional shelf e-commerce platforms are already competing fiercely due to price and traffic. If Douyin wants to join in at this time, it is also worth considering how to take over the traffic of Douyin’s main site and play the price power card.

1. The Douyin Mall version APP looks more like Taobao?

In 2020, Douyin, which has over 600 million daily active users, officially launched the "Douyin E-commerce" brand; a year later, Douyin E-commerce proposed the concept of "interest e-commerce"; in 2022, Douyin, which has 700 million daily active users, proposed the concept of "global interest e-commerce".

New concepts have emerged one after another, and Douyin has officially crossed over from a content platform to an e-commerce platform. Riding on the boom of live streaming e-commerce, the growth of Douyin e-commerce cannot be underestimated. According to official data released by Douyin e-commerce in January this year, the GMV of Douyin's global interest e-commerce will increase by more than 80% in 2023.

Douyin's e-commerce business is expanding, and its attitude has also changed from the initial "using content mining to satisfy users' potential shopping interests" to creating an "e-commerce ecosystem that coordinates content and shelves."

Recently, Douyin launched a new e-commerce platform, the "Douyin Mall" APP. According to the official introduction, the Douyin Mall version focuses on "super-value goods and worry-free selection", and currently only supports Android phones for download.

Qimai data shows that as of March 27, the total number of downloads of the "Douyin Mall Edition" APP on Huawei, Xiaomi, vivo, OPPO and other channels has reached nearly 420 million times, of which the number of downloads on Huawei and OPPO's app stores has exceeded 100 million times.

This means that Douyin e-commerce has been upgraded from the previous first-level entrance of the Douyin APP to an independent Douyin e-commerce version APP. Its importance and status are self-evident.

Although the functions are similar to the entrance of Douyin Mall, and user information, videos, shopping carts, etc. are all interconnected with Douyin, the page and operation of Douyin Mall APP have become simpler and more direct, directly pointing to shelf e-commerce.

Insight found that the Douyin Mall version is slightly different from Douyin.

The most prominent change is that the two want to emphasize different functions. The Douyin Mall version of the APP puts the mall interface at the top of the screen, and sets up Douyin Supermarket, trial collection and other entrances to enhance shopping functions at the top, and the video page is placed in the second place; while Douyin puts the "recommended" video interface at the top of the screen, and the Douyin Mall entrance is located next to the "recommended" page. Douyin emphasizes the content function.

The left picture is the Douyin Mall APP page, and the right picture is the Douyin APP Mall page

In addition, in the setting of the shopping cart entrance, the Douyin Mall version of the APP places the shopping cart on the first-level entrance, located in the third position from the bottom, with an obvious text logo; the shopping cart entrance of the Douyin APP is located at the second-level entrance, with only a small pattern logo in the upper right corner of the "Mall" page.

At the same time, in order to strengthen users' transaction mentality in the Douyin system, the Douyin Mall version of the APP retains the video interface, but deletes the video shooting function. The Douyin Mall version only synchronizes users' favorite videos or live broadcasts in the Douyin APP, as well as the shopping cart and shopping preferences.

It is worth noting that the Douyin Mall APP puts "low price flash sale" in a relatively prominent position, replacing the original "super value purchase" in the Douyin APP Mall. This coincides with the low price strategy proposed by Douyin e-commerce this year, which was the keyword of the entire e-commerce industry last year and even this year.

Douyin Mall version of the "Low Price Flash Sale" page

Interestingly, although Douyin Mall APP belongs to the same Douyin e-commerce ecosystem as TikTok, the settings of TikTok Mall APP seem to be more similar to Taobao.

Judging from the settings at the bottom of the APP, the logic of the Douyin Mall APP is quite similar to that of Taobao. The Douyin Mall APP includes "Mall Home", "Video", "Shopping Cart", "Message" and "Me"; Taobao includes "Taobao Home", "Browse", "Message", "Shopping Cart" and "My Taobao". The only difference between the two is the name of the entrance.

Zhuang Shuai, founder of Bailian Consulting, told Insight that "The TikTok e-commerce app page is almost the same as Taobao, just like Taobao's homepage. Live broadcasts and short videos are content that enriches users' browsing needs and stays on the app, while also retaining the advantages of TikTok live broadcasts and videos in driving sales."

In fact, Douyin e-commerce tried to launch a grass-planting e-commerce platform "Douyin Box" in an attempt to further focus on e-commerce business, but it eventually came to nothing. Now that Douyin e-commerce has developed to a certain scale and launched an independent e-commerce APP, it is enough to see that the importance of e-commerce in Douyin and even ByteDance is constantly increasing, and ByteDance's ambition to do e-commerce is also growing.

2. Douyin e-commerce, why make an independent APP?

Douyin e-commerce has been around for three years, and this year's GMV target has been raised to 3 trillion yuan. Douyin e-commerce is always changing and adjusting.

An obvious trend is that Douyin e-commerce is gradually increasing its inclination towards shelf e-commerce.

Last May, at the Douyin E-commerce Ecosystem Conference, Douyin E-commerce President Wei Wenwen proposed the business concept of "global interest e-commerce". He said that good content and good products alone are not enough, and creating a mechanism that can coordinate content and shelves will bring greater growth space for the platform.

Wei Wenwen also mentioned that if Douyin e-commerce wants to do a good job in the shelf scene, it must meet the needs of users. The business space in this scene is huge. If Douyin e-commerce does not do it, the e-commerce experience provided by Douyin e-commerce to users is doomed to be incomplete, so Douyin e-commerce must do the shelf scene.

The launch of an independent e-commerce APP is also a major step for Douyin to focus on shelf e-commerce, attempting to better coordinate content and shelves.

When asked about the reason for launching the Douyin e-commerce version of the APP, the person in charge of Douyin e-commerce told the media, "We have observed that some users have a strong demand for active shopping. In order to better serve these users, Douyin e-commerce launched the Douyin Mall version to help these users find good products at good prices and manage orders conveniently."

Zhuang Shuai, founder of Bailian Consulting, analyzed to Lianjie Insight that there are three main reasons why Douyin launched the Douyin e-commerce version of the APP. The first is to establish a stronger user mind; the second is to break through the growth bottleneck of content platforms doing e-commerce; the third is to form two e-commerce teams to compete with each other, become more professional and bring more innovations.

This is easy to understand. Douyin e-commerce emerged in the early days of live streaming e-commerce and grew rapidly thanks to Douyin's huge traffic pool and high-quality content. However, after nearly four years of exploration, Douyin e-commerce has also exposed some problems.

First, there is the user mindset issue. Despite having 1 billion users, Douyin is still seen as a short video platform in the minds of most users. It takes time to get users to complete their e-commerce shopping needs on a short video platform, which also leads to the fact that the user conversion of Douyin’s main site for e-commerce may not be efficient.

Making users’ purchasing desire a rigid demand may be the most essential purpose of launching the Douyin e-commerce APP.

In the past, Douyin’s logic for doing e-commerce was to attract users through content, then stimulate users’ purchasing desire through live broadcast rooms, and ultimately form an e-commerce closed loop.

An obvious problem is that users have a rigid demand for watching videos and live broadcasts, but shopping is not a rigid demand. After the launch of the Douyin Mall APP, users will open the Douyin Mall APP with clearer shopping needs. In the independent APP, the platform attracts users with good products. Users have a rigid demand for shopping, but watching videos and live broadcasts is not a rigid demand.

Secondly, as the user scale gradually reaches its peak and more and more players from content platforms cross over to engage in e-commerce, the live streaming e-commerce on which Douyin e-commerce relies for its survival has bid farewell to its period of wild growth.

The "2023 China Live Streaming E-commerce Industry Research Report" released by iResearch Consulting pointed out that the market size of live streaming e-commerce will reach 4.9 trillion yuan in 2023, with a year-on-year growth rate of 35.2%, which is a certain decline compared with the early stage of industry development.

At this time, facing market competition, Douyin e-commerce needs to find a new growth curve, and shelf e-commerce is one of them.

In May 2023, Douyin e-commerce revealed that in 2022, the shelf scene business was growing rapidly, especially the Douyin Mall GMV increased by 277% year-on-year, of which the shelf scene GMV accounted for 30%. At the same time, Wei Wenwen hopes that the proportion of shelf e-commerce will reach at least 50% in the future.

Back to the launch of the independent e-commerce APP, Douyin wants to strengthen the mindset of Douyin shelf e-commerce, increase the proportion of shelf e-commerce, and untie the strong connection between e-commerce and content, helping Douyin e-commerce become a comprehensive e-commerce platform.

After three years, Douyin e-commerce has gradually developed into deep waters. What users need is a more complete Douyin e-commerce ecosystem, and Douyin e-commerce also needs to give users a clearer e-commerce label.

3. Can the Douyin Mall APP handle the traffic of Douyin?

Having identified a new growth path, Douyin e-commerce’s more important task is to achieve growth, or even surpass others as a latecomer.

According to LatePost, Douyin e-commerce has set a GMV target of over 3 trillion yuan this year. The GMV of Douyin e-commerce in 2023 is about 2.2 trillion yuan. Based on this estimate, Douyin e-commerce will achieve at least 36% growth this year.

This growth does not seem to be a difficult task for Douyin. In the long run, in May 2022, Douyin's e-commerce GMV increased by 220% year-on-year, and by May 2023, this figure became 80%. Although the growth rate is slowing down, it is still not low.

However, the difficulty this year is that as the growth space brought by traffic is limited, Douyin e-commerce will shift its resources to the shelf e-commerce field and penetrate into the hinterland of traditional e-commerce platforms. The first thing it has to face is competition with Taobao, JD.com, and Pinduoduo.

These three giants have been exploring the field of shelf e-commerce for many years and have a complete e-commerce system and their own advantageous product categories. It is not easy for Douyin to grab a piece of the pie.

"Taotian is sticking to clothing and cosmetics, JD.com is sticking to its own 3C products and home appliances, Pinduoduo is sticking to agricultural products and white-label products, and Douyin is strengthening the linkage between live streaming e-commerce and shelf. The category advantage is not obvious yet. This is a problem for Douyin e-commerce." Zhuang Shuai analyzed to Lianjie Insight.

In fact, traditional shelf e-commerce competes on product strength and price power, and Douyin e-commerce has put in a lot of effort in the past year.

Like traditional e-commerce platforms, Douyin e-commerce has set up a product center, paid attention to small and medium-sized businesses, and introduced white-label businesses. At the beginning of this year, Douyin e-commerce set "price power" as the highest priority task in 2024.

Douyin e-commerce has stepped into the focus of competition in the shelf e-commerce industry - product power and price power.

As mentioned above, the Douyin Mall version of the APP will highlight the "low-price flash sales"; at the same time, for newly registered users, the Douyin Mall version of the APP homepage will have an obvious "exclusive subsidies for new users" channel.

The rise of Pinduoduo has verified the importance of price power. Low prices have also become the theme of Taobao, JD.com and even the entire industry in the past year. When competitors are all competing on low prices, it depends on who has a stronger voice. This is the shortcoming of Douyin e-commerce.

Especially when facing merchants with strong brand voice, Douyin e-commerce has relatively weak pricing power. According to LatePost, a person close to Douyin e-commerce said that for many standard products, the price difference between Douyin e-commerce and Pinduoduo could be as high as 50%.

In addition, a large part of the reason for the rise of Douyin e-commerce in the past was due to the traffic from the Douyin main site. But now the Douyin e-commerce version APP is separated from the Douyin main site. Although the Douyin main site has a certain traffic diversion effect, it is still unknown how much of this traffic the Douyin e-commerce version APP can receive.

From an industry perspective, the number of Internet users is approaching its ceiling, and the customer acquisition costs of major e-commerce platforms have been raised. If the Douyin Mall version wants to compete for more users, it must work hard on prices and products.

It is foreseeable that the competition in the e-commerce market will be more intense this year. With the independent e-commerce APP, Douyin e-commerce has a more complete ecosystem and a more flexible posture. However, in terms of market competition, Douyin e-commerce still faces great challenges. How to coordinate internally and jointly explore market growth is the key proposition of Douyin e-commerce this year.

Author: Wang Huiying Midnight

Source: WeChat official account: "Lianxian Insight (ID: lxinsight)"