Dividends disappear, collective exodus? 10 truths about Douyin e-commerce in 2024

Regarding Douyin e-commerce, have new players lost their chance? How should merchants adjust their layout in 2024? Faced with the low-price sniping of mainstream e-commerce platforms, how can merchants avoid being dragged into a full-line price war? In this article, the author discusses the development of Douyin e-commerce in 2024 and gives 10 views, which I hope will be helpful to you.

Since 2024, the most common discussion about Douyin e-commerce is that merchants are collectively fleeing Douyin.

The fundamental reason for the discussion is that Douyin has become a very mature platform with mature crowd tags, mature recommendation algorithms, and mature traffic tools. In such a mature business ecosystem, merchants are like a "transparent body". No matter whether it is traffic action, customer acquisition path or customer acquisition cost, it can all be clearly calculated by the algorithm.

Not only that, with more than 800 million active users on the day, the traffic dividend belonging to this super platform has basically ended. The intensified competition in the track and the enhanced Matthew effect have directly led to the following results: the grayscale operation of Douyin e-commerce has become smaller and smaller, and it is only suitable for top merchants with large resources and big budgets like it, as well as top players with both content and delivery capabilities online.

To make matters worse, in 2024, Douyin e-commerce will also regard "price power" as the highest priority indicator. The introduction of price power means that the competition among merchants is becoming more and more fierce. In addition to content, operation, and traffic investment capabilities, merchants must also compete with merchants in the same track and category in price power, and the price directly determines the amount of traffic recommendations.

As Douyin e-commerce enters the "deep water zone", we may have such doubts: Have new players lost their opportunities? In 2024, how should merchants adjust their focus on Douyin e-commerce? Faced with the low-price sniping of mainstream e-commerce platforms, how can merchants avoid being dragged into a full-line price war?

On March 1, Li Hao, founder of Kass Consulting, gave a clear answer during a conversation with Hanekawa, the host of Kass Academy's Douyin e-commerce operator course. Kass Data also conducted an in-depth review of the live broadcast content of the day, with 10 viewpoints and 10 truths to help you look at the development of Douyin e-commerce in 2024 in a rational and scientific manner:

Truth 1: Merchants entering Douyin e-commerce in 2024 must make good pallet planning

In 2021, in order to encourage brand merchants to quickly enter Douyin, Douyin E-commerce launched the "FACT Operation Matrix" for merchant operations.

The so-called "FACT" refers to the four major components of Douyin's e-commerce business at that time: Field merchant self-broadcasting, Alliance influencer matrix, Campain marketing activities, and TOP KOL influencers. It also emphasizes that merchants can flexibly allocate the operating resources and marketing investment of the four major positions based on business goals and operating scenarios at different stages to achieve stable and sustainable growth of GMV.

In 2022, as Douyin e-commerce announced that it had entered a period of development of all-interest e-commerce, and users developed the mentality of actively searching and browsing on Douyin, Douyin e-commerce has also successively upgraded this business methodology, from "FACT" to "FACT+" and then to "FACT+S", where S refers to search, Douyin Mall (shopping center), and merchant shop (shop), emphasizing that while merchants should do a good job in camp management, they must also strengthen the linkage with the shelf field.

In 2024, when merchants plan to develop Douyin e-commerce, Hanekawa believes that there will be two changes. First, the FACT management theory will no longer be mentioned, and every merchant entering the market must be aware of conducting full-domain e-commerce operations based on their own inventory , and each business position must be taken into account to ensure that you have me and I have you; in addition, another change is that when "price power" becomes Douyin's highest priority annual task indicator, every merchant should establish a real-time awareness of the overall market data, and make advance inventory planning based on the user preferences of each platform and the GMV goals they want to achieve on this platform. Otherwise, what may await you are only "price reduction, flow limit" warnings sent by the platform's shop assistants.

Truth 2: The increased difficulty of Douyin e-commerce upgrades does not mean that opportunities have completely disappeared

The core reason is still determined by the GMV volume of Douyin e-commerce. For most merchants, Douyin is still an incremental platform that cannot be refused. Especially for two types of players, 2024 is still an opportunity point:

The first type of players are brand-type krypton gold players. For this type of players, with brands, resources, and budgets, it is never too late to enter the market. In 2023, there are many brands/merchants that started late but still achieved great results, such as Hanshun, Liby, Camel, etc.; the other type is supply chain merchants. Behind Douyin's large-scale shelf and intensified "low-price" competition, merchants with absolute price advantages often tend to form a crushing advantage . According to reports, in January, Douyin e-commerce launched the "explosive bidding" function. The platform's second-in-command will find out the single explosive products on the platform and let these explosive product merchants participate in the bidding. Whoever has the lowest price will be given traffic. When overwhelming traffic is positively correlated with low prices, the time for large supply chain merchants to enter the market is obviously more mature.

Truth 3: The deeper the water, the simpler the gameplay of Douyin e-commerce becomes, and the smaller the space for "opportunism" to survive

By 2024, the core gameplay of Douyin e-commerce can be summarized into two categories: one is the payment-based gameplay, with the ROI of the delivery as the evaluation indicator . Once the ROI is positive, the scale of delivery can be continuously expanded, and even a full-scale strategy can be adopted. This type of gameplay is relatively less demanding for anchors and operations, and relies more on materials and delivery skills to achieve coverage and acquisition of the circle of people; the other is the Feeds flow gameplay, which is to stimulate the user's immediate purchasing interest through order holding, anchor speech, etc., and instantly harvest conversions. The difference between this type of gameplay and the investment flow gameplay is that it tests the team's refined operational capabilities and requires excellent anchors and operations as support.

How should merchants make a choice between the two modes? In Hanekawa's eyes, it is not only determined by the ability of the merchant team, but also depends on the traffic scale of the category . "For categories like shoes, clothing, and bags, the natural flow scale of the track itself is very large, so you can still choose the Feeds flow mode, but for some common goods and standard products, the track itself is very small and the natural flow is very small. Competitors who are doing well are all paying. If you want to rely on Feeds flow recommendations, it is likely that it will not work."

In a word, for vertical standard products, you still have to pay when it’s time to pay.

However, as the platform ecology matures and the gameplay becomes more focused, Hanekawa believes that in 2024, the "routine" gameplay that was good at exploiting platform and algorithm loopholes to obtain short-term traffic dividends has failed. Merchants should return to the essence of e-commerce operations to plan their operations, and should not only focus on short-term interests, but should spend more energy on polishing and training high-quality teams, and use deterministic teams to fight against an uncertain traffic environment.

Truth 4: For tracks with small organic traffic, don’t expect to leverage organic traffic with paid traffic, and don’t rely on “later turnaround”.

As competition in the track becomes increasingly fierce, some people say that the natural traffic on Douyin has completely disappeared, let alone using natural traffic to leverage paid traffic.

Regarding this issue, Hanekawa's observation is that whether there is natural flow or not still depends on the category. For those whose own track has a large traffic scale, such as shoes, clothing, and luggage, there is still a chance to leverage free services through payment. However, for categories and brands whose own track is very small and the competition is very fierce, it is simply a pipe dream to want to leverage free services through payment.

In this regard, Hanekawa also reminded brands to always stay sober and ensure that the positive feedback population portrait brought in by payment is consistent with the brand's target population portrait. If payment brings positive feedback from non-target populations, it will not only "disrupt" the brand's established population labels, but will also lead to a decline in the effectiveness of subsequent paid traffic.

In addition, merchants must also prevent a kind of thinking, that is, accepting the strategic losses brought by early payment, and focusing their hopes on things that are not very certain, such as "profitable in the future". Although this model can work in theory, it is based on very harsh conditions, that is, whether brands and merchants can accumulate enough 5A people through payment, and whether the accumulated A3 people have the ability to transform and fission into A4 and A5. In Douyin, there is a cruel truth that even if you have accumulated enough A3, its label heat is very short. If you cannot activate them through operation and marketing actions in the future, it is very difficult to expect long-term harvest.

Truth 5: Whether there is spillover value in marketing promotion on Douyin depends on the brand and the category

In the view of Li Hao, founder of CASS Consulting, the spillover effect of Douyin marketing is related to the brand and the category of the brand's products.

It usually manifests itself as follows: the stronger the brand power, the more obvious the effect of traffic spillover to other platforms; in addition, the shorter the decision-making cycle of products, such as home furnishings, snacks, etc., the smaller the traffic spillover effect, and the easier it is to close the loop conversion; on the contrary, the longer the decision-making cycle of products, such as skin care products, 3C home appliances, etc., the more obvious the traffic spillover effect, and the easier it is to "plant grass on Douyin and convert on traditional e-commerce platforms."

Of course, there is another situation where some brands do promote products through Douyin, and their search indexes on other platforms have risen sharply, but ultimately no conversion is formed. If such a problem occurs, Li Hao recommends that brands think about the following three questions: First, is your pricing power not good enough? Second, is the linkage operation of your (promoted) products in various fields not in place? Third, is your product details page unattractive? In short, you must think about the reasons for the stuck points and optimize them quickly.

Truth 6: Douyin Mall is not a "savior", don't be trapped in the platform's promotion

According to LatePost, the GMV of Douyin's shelf e-commerce has increased from 29% at the beginning of the year to 35% in 2023, slightly exceeding the established target. Although it only accounts for 1/3, whether you are a Douyin e-commerce merchant or an industry media, your perception over the past year should be that Douyin e-commerce is focusing on shelves, and it even made you forget that the essence of Douyin e-commerce is content e-commerce.

It is understandable that the ceiling of live e-commerce determines that Douyin e-commerce must get results faster in the shelf market. But in Li Hao's view, the shelf market is different from the content market. The content market can raise the ceiling by relying on "traffic + algorithm distribution", but the establishment of the shelf market also tests the user's mental development - this mental development is obviously much more difficult than changing the traffic recommendation rules.

For this reason, Li Hao also gave a piece of advice to brands and merchants: Be cautious about anything that the platform strongly promotes. If a business grows well naturally on the platform, the platform will never say "go big" . If the platform goes big, it just means it wants to do it, and you (the merchant) are likely to be a pawn or tool used for testing. "In the past year, many merchants around me gave up live streaming and turned to shelves, and they suffered heavy losses."

Truth 7: Not all brands deserve to be heavily invested in shelves. There are also underlying differences in the logic of pushing traffic between shelves and content.

As for which categories should be placed on shelves, Hanekawa believes that it is not possible to generalize. First of all, merchants can use Doudian Compass to check the source of GMV traffic for each category . For example, 90% of the GMV of clothing comes from live streaming, while only 30% of the GMV of Jiabai comes from live streaming. Obviously, Jiabai should pay more attention to the operation of shelves than clothing.

Secondly, for the operation of content and shelf fields, the same brand and the same goods should also be operated in a differentiated manner as much as possible. Take the old domestic brand Manting as an example. In the Douyin Mall, Manting defines it as a "low-priced trial pack" sales channel, using low prices to obtain large-scale orders, and then leverage the mall's free traffic distribution to obtain enough orders, and then use "targeted delivery (people who have purchased trial packs)" and store broadcast retention to stimulate the conversion of trial pack consumers into regular wear consumers.

Hanekawa said that in the shelf market, Douyin's traffic distribution logic will test the "order volume" indicator at this stage, but in the content market, GPM is still the core indicator . The reason is that in the content market, if the Douyin e-commerce team wants to get more traffic, it needs to compete with the live broadcast team, the advertising team, and the life service team, so it is impossible not to pay attention to the GPM value (sales generated by a thousand exposures), and naturally recommend traffic to people who are more capable of conversion through algorithms. But in the shelf market, the e-commerce team does not need to carry out internal team competition, which leads to the team responsible for the shelf to combine the current goals to do traffic distribution assessment, such as the current focus on the order volume, the width of the supply chain and the user's mind, rather than rushing to pursue the maximum GMV conversion of unit traffic.

Truth 8: As Douyin e-commerce matures, it requires higher skills from operators

As mentioned above, Douyin e-commerce is still an irresistible platform for merchants. It is also the platform with the most mature live e-commerce ecosystem and a touchstone platform for most merchants to deploy live e-commerce operations . "Many of my students have moved Douyin's experience in people, goods and markets to video accounts, and the transformation process has been very smooth."

But the more mature a platform is, the higher the ability requirements for traders are. It is almost impossible to make a living on a huge platform like Douyin by relying on experience.

One detail is that today's Doudian Luopan is becoming more and more like Taobao's data bank, providing merchants with enough raw, unprocessed data. However, faced with so much data, if merchants do not have advanced data analysis capabilities, they cannot use the data to serve themselves, and they will easily be overtaken by powerful peers. In addition, Douyin e-commerce has extremely high requirements for anchors and central control. "Recently, a joke went viral. The joke compared the central control to a supporting role, which actually highlights the high ability of Douyin's operator team."

Truth 9: Douyin e-commerce also follows an iron rule: choice is more important than effort

After attending many classes and filling in the gaps in "people, goods and places", many brands and merchants still find that they cannot play Douyin e-commerce. Hanekawa summarizes that the bottlenecks may come from two aspects: First, there are problems with the product. Whether it is brand power, product power or price power, there is no advantage, or the track you are in naturally lacks traffic . Therefore, in Douyin e-commerce, it also follows the scale of "choice is greater than effort". Don't think that you can cultivate flowers in the traffic desert by relying on refined operations; second, after hearing about the experience of certain categories and brands starting up, you mistakenly think that you have mastered the real gold of traffic and enter the market rashly. Before entering Douyin, you must use Douyin's various data and product tools to do a SWOT analysis, including but not limited to the current traffic scale of this category, the sales performance of the head live broadcast room, and the profit balance point, and analyze whether your company can support it before the profit balance point appears (the expenses incurred in the early stage).

In 2024, don't invest madly in Douyin without doing a good job of market research and cultivating the basic capabilities of your team. Otherwise, the beginning will determine the outcome.

Truth 10: "Price comparison" will only exacerbate the Matthew effect. In 2024, a new round of merchant elimination will begin

In 2024, Douyin e-commerce will implement "price comparison", which will undoubtedly intensify the Matthew effect of the platform. Only brands and large supply chains can give users low prices and pay large marketing expenses to the platform.

Yes, the cruelest truth about TikTok in 2024 is: small and medium-sized businesses will be gradually eliminated, and the top players and RMB players will remain. When commercialization enters the deep water zone, when the information gap and cognitive gap gradually narrow, the algorithm will not leave dividends for anyone, and we must be prepared to fight to the death.

Summarize

For supply chain merchants, in 2024, "low price" will definitely be your chance to win the Douyin e-commerce;

For brand merchants, they can still use the "single/hot product + krypton gold" method to get big results on Douyin, but the premise is that they must do a good job of full-domain coordination. If they only focus on the investment-output ratio of the Douyin platform, it will be more painful ;

Finally, it is necessary to pay attention to the distribution of products by influencers and establish deep distribution capabilities within the company. Li Hao of CASS Consulting believes that deep distribution capabilities have become the third basic capability that brands need to build in addition to product strength and content strength.

Author: Kas Data; WeChat public account: Kas Data