2018-2023, Chronicle of the Rise of Douyin Brands

E-commerce and traffic are closely related. In other words, where there is traffic, there is room for e-commerce to develop. With the popularization of Douyin, many e-commerce companies have also seized this excellent development opportunity. A new concept has emerged - "Douyin brand". Let's take a look at how Douyin brand has developed!

Wherever there is traffic, there is the brand. In the offline store era, brands thrive on the streets; in the shelf e-commerce era, brands thrive on Taobao; in the hobby e-commerce era, brands thrive on Douyin and Kuaishou.

From 2018 to 2023, short videos and live broadcasts are driving a new round of e-commerce revolution. The evolution of Douyin e-commerce is also a chronicle of the rise of "Douyin brands".

The "Douyin brands" defined in this article include "native Douyin brands" that have grown in Douyin e-commerce and "re-emerging Douyin brands" that have achieved a leap through Douyin. This article will sort out the development process of "Douyin brands" and explore the growth path and future space of brands in the new e-commerce ecosystem.

The development of "Douyin Brand" can be roughly divided into three stages: 2018-2019, the difficult germination in the barbaric era; 2020-2021, the collective awakening on the cusp of the trend; 2022-2023, accelerated growth under the new pattern.

1. 2018-2019: The wild era, Douyin brand sprouted with difficulty

In January 2018, a Douyin user named "AnswerTea Qiuhan" uploaded a short video, which received more than 8 million views, and the comment section was flooded with messages such as "Please join us" and "Please give me an answer." A few months later, the number of AnswerTea franchise stores reached hundreds.

Then, a 15-second short video on Douyin brought a Peppa Pig watch candy to the public. As the slogan "Tattoo Peppa Pig on your body, applause to the working class" became popular on the Internet, the sales of "the same model as Douyin" on Taobao soared, and it was even out of stock at one point.

This was the first outbreak of the "sales effect" of Douyin short videos, and it was also the first time that Douyin showed its potential to "cultivate brands."

At that time, Douyin was also increasing its layout of its own e-commerce ecosystem. In March 2018, Douyin tested the Taobao-exclusive shopping cart function for celebrity accounts with millions of fans, trying to connect with Taobao. In May, Douyin launched an entrance to celebrity-owned stores. Subsequently, tools such as Blue V Enterprise Account and Douyin Store were launched one after another.

As the environment for bringing goods to Douyin is becoming more and more perfect, more and more merchants are coming here. However, in the face of huge traffic dividends, most merchants are selling goods roughly, and few are operating brands steadily. "If you find a skirt made by a foundry, you can sell 1,000 videos of a few dozen seconds during peak hours." said an entrepreneur.

However, some people began to operate brands through Douyin intentionally or unintentionally, and the "Douyin brand" began to take shape.

"Zhengshan Beef Brother" is one of the first generation of Douyin influencers, and joined Douyin in August 2018. After becoming popular with hit short videos such as "Steak Edge Sealed" and "Tap Water is Dirtier than Beef", he launched the "Zhengshan Beef" brand and started to open a store on Taobao to sell steaks and other products, and later expanded to alcohol. The 618 sales king list released by Taobao Alliance in 2019 shows that during the 618 period, Beef Brother sold 200,000 steaks, 1 million bottles of wine, and 100,000 boxes of beer, surpassing Li Jiaqi in sales and ranking first on Douyin.

Although "Zhengshan Beef Brother" was embroiled in controversy in the later period and failed to remain popular for a long time, judging from its influence, sales performance, supply chain, etc. at the time, "Zhengshan Beef" already had certain "brand" attributes.

Many early Douyin merchants such as "Wild Food Brother" and "Youyou" were in similar situations. They had formed some short-term brand effects, but lacked sustainability.

In addition, some businesses came to Douyin during this period. Although they were unknown at the time, they laid the seeds for future brand growth, such as LYNEE, Dismanling, Xiaodong Clothing, Star Bear Boutique Children's Clothing, UPSTAR, etc. They gradually developed in the following years.

In general, no real “native Douyin brands” were born during this period, but some prototypes and seeds have emerged. On the other hand, compared with small businesses and start-up brands, big brands woke up earlier, so “re-popular Douyin brands” such as Proya emerged.

In 2018, PROYA began to test the "hot-selling" strategy on Douyin, quickly deployed short video content marketing, and cooperated with anchors such as Wei Ya and Li Jiaqi. In 2019, PROYA Black Sea Salt Bubble Mask successfully became a hit on the Douyin platform, with monthly sales exceeding 1 million boxes, breaking the sales record of Tmall beauty products (Douyin diverted traffic to Tmall). The success of the hot-selling single product also verified PROYA's new media operation capabilities and laid the foundation for PROYA to implement the big single product strategy in the future.

According to a beauty industry insider close to Douyin, at that time, Douyin's delivery efficiency was much higher than that of Taobao, with a ROI of 1:4, and Douyin's link to Taobao could help retain users. PROYA has benefited greatly from Douyin's channel and has continued to invest in Douyin, from seeding videos and Dabo to self-broadcasting matrix, without missing a single step.

However, in the early stages of Douyin e-commerce, most big brands still used Douyin as a marketing platform rather than a sales platform, and few people really got involved. PROYA was one of the few pioneers.

Moreover, Douyin officials had not thought it through completely at that time. At the beginning, Douyin did not build its own ecosystem. The shopping cart and the homepage entrance of influencers all jumped to Taobao. Douyin officials even denied to the media that they were building their own e-commerce. Without self-built e-commerce, it would be difficult to have a "Douyin brand".

2018-2019 can be said to be the wild era of Douyin e-commerce, with a lack of supply, imperfect rules, and e-commerce tools built from scratch... Both the platform and the brand were groping forward.

Objectively speaking, during this period, an environment very suitable for the growth of "Douyin brands" had not yet been formed. It was not until the end of 2019 that the closed-loop chain of Douyin e-commerce was gradually opened up, and "Douyin brands" began to grow rapidly.

2. 2020-2021: On the cusp of the trend, Douyin brands collectively awaken

In early 2020, affected by the COVID-19 pandemic, live streaming e-commerce exploded with unprecedented market potential, and Douyin e-commerce also began to accelerate. This year is considered by many to be the "golden first year" of Douyin e-commerce, and in fact it is also the first year of the rise of the "Douyin brand" .

In April 2020, Douyin signed Luo Yonghao for 60 million yuan, entering the live e-commerce track in a high-profile manner. In May, "Crazy Little Brother Yang" launched his first live broadcast, officially transforming from an entertainment anchor to a live streamer. In June, ByteDance officially established a first-level business department named "e-commerce", regarded e-commerce as a strategic business, and gradually removed external links to vigorously improve its own ecology.

An important move is that Douyin has begun to clear out those second-tier e-commerce companies that "only attract traffic on the platform to sell single products", leaving only high-quality merchants and brands that prefer long-term operations. This means that the Douyin e-commerce ecosystem has begun to tilt towards "brands".

This also made more people realize that "the opportunity has come" , and many brands began to increase their investment in Douyin e-commerce.

Before entering the Douyin e-commerce market, YaYa, a long-established domestic clothing brand, was a brand struggling on the edge of losses with outdated product design, conservative online channel strategy, older user age, and a brand that struggled on the edge of losses. After the reorganization in 2020, YaYa began to vigorously develop online, and completed a counterattack on Douyin that year, with omni-channel sales increasing to 3.5 billion yuan, which also made the brand's customer base younger.

Another brand that has gained momentum through Douyin is FILA, a subsidiary of Anta. In 2020, FILA established a separate Douyin business unit and made a strong layout of Douyin cloud retail. It started with DP agency operation and store self-broadcasting, and then went deeper step by step. Starting from the top-level brand value building, it built a complete store live broadcast system from top to bottom, successfully driving the growth of the overall online and offline business. At present, GMV ranks first in the entire Douyin sports track.

In addition to bringing a "second spring" to old brands, some new brands have also seized this wave of dividends .

Hongling, a cashmere brand founded in 2017, has strong cashmere clothing products with a per-customer price of more than 1,000 yuan. Its products are comparable to big brands and have high cost-effectiveness. Hongling started to broadcast its own brand on Douyin e-commerce in 2020. The founder broadcast it himself and set a record of broadcasting on time at 19:00 every night for 100 consecutive days, which was a complete cold start. Through its own brand broadcast, Hongling quickly hit the real needs of consumers and grew rapidly, achieving a transaction volume of 99.7 million yuan in November 2021.

At the Shenzhen Fashion Week in October 2020, Douyin held a "DOU Brand Super Guangdong Festival", which was the first time that Douyin officially promoted the concept of the Dou brand .

Brands participating in this event include original design women's clothing brands LYNEE and Dismanling, and children's clothing brand Star Bear. Among them, Dismanling, which only started to test the waters of Douyin in 2019, had a cumulative transaction volume of over 9.4 million yuan at the event; LYNEE's cumulative transaction volume exceeded 2.77 million yuan, and the transaction volume in a single live broadcast store exceeded 1.28 million yuan.

"Tik Tok has become our main battlefield because this platform can quickly attract fans and has a relatively high conversion rate," said Li Hui, founder and chief designer of the LYNEE brand.

According to media reports, from January to August 2020, the overall GMV of Douyin e-commerce increased by 6.5 times year-on-year, the GMV of closed-loop live broadcast increased by 36.1 times year-on-year, and the number of merchants opening stores increased by 16.3 times.

But the problem at this time is that the brand's presence is still weak .

From the perspective of the link between mental connection and transaction behavior, livestreaming is still the mainstream model, and brands are mostly originated from the livestreamers' "personal brands". Compared with the livestreamers under the spotlight, brands lack bargaining power and presence. After placing an order from the livestreaming room, many people only know the livestreamers and forget the brands.

The situation has changed significantly in 2021. Driven by the official, more brands have become the protagonists, from live broadcasts by experts to self-broadcasts by merchants, and there are more and more real "Douyin brands".

In April 2021, Douyin E-Commerce held its first ecological conference, proposed the concept of "interest e-commerce" for the first time, and launched three major support plans, including "helping 100 emerging brands achieve annual sales of over 100 million yuan in the next year."

Subsequently, Douyin launched a series of business support projects, including "Douyin Brand Special Support", "Douyin Newcomer Release", and "Douyin Super New Product" marketing IP, to help merchants accelerate their growth and focus on cultivating the "Douyin brand".

These actions have achieved remarkable results, and many new brands have begun to rise rapidly on Douyin .

The 2021 Douyin E-commerce Domestic Product Development Annual Report shows that in 2021, the sales of the emerging personal care brand Spes increased by 7461% year-on-year; the sales of the emerging 3C brand Alpha Egg increased by 910% year-on-year; and the emerging smart home brand "Dui Mi" increased by 11645% year-on-year. Correspondingly, in the first three quarters of 2021, the quarter-on-quarter growth rate of short video playback released by new brand enterprise accounts exceeded 120% on average, and the quarter-on-quarter growth rate in Q2 was as high as 174%.

At that time, the ecosystem of Douyin e-commerce was growing rapidly, and the gameplay of short videos and live broadcasts was changing rapidly. The choice of brands was to hold on to the platform and follow it firmly.

1. Case 1: Spes

Spes, a care brand founded in 2020, is a typical example of a brand that grew up on Douyin. Spes started with the pain point of oil control and fluffy scalp care, and launched two products, sea salt cleansing cream and wash-free fluffy spray, which are very suitable for intuitive display. Through the one-shot short video display format, Spes' new product sold 200,000 bottles as soon as it was launched, and has since occupied the "Douyin hot list" for a long time.

Since participating in the "Douyin Newcomer Release" for the first time in 2021, Spes has repeatedly achieved phenomenal breakthroughs in volume and sales with the help of Douyin's "Super New Products" and other activities. In 2021, sales on the Douyin platform increased by 7461% year-on-year. It only took Spes one year to go from being unknown to having sales of over 100 million yuan and becoming a benchmark for new brands in the personal care industry on the Douyin e-commerce platform.

2. Case 2: Wing Sleep

The Chinese sleep brand Yimian is also a typical "Douyin brand". Yimian was founded in 2012 and officially launched in 2018. Its sales in 2021 exceeded 400 million, of which 288 million were generated on Douyin.

Yimian is also a winner of "dancing with the platform". A key link is to use the "Douyin newcomer release" to establish brand awareness and achieve the integration of product, effect and sales. In the process of cooperating with Douyin e-commerce experts, Yimian has also accumulated a wealth of live streaming slice materials, which can provide thousands of videos every month. After editing and production, it continues to feed back brand short videos and continuously stimulate consumer interest at a high frequency.

3. Case 3: Lian Coffee

Another new brand that has "risen" through Douyin e-commerce is Lian Coffee. Lian Coffee entered Douyin e-commerce in April 2021. In the first three months of broadcasting, its GMV exceeded 10 million and its number of fans increased by more than 200,000. Lian Coffee has set up 5 live broadcast rooms on Douyin, each matching different product selections. At the same time, it also distributes its products across the entire platform through influencers.

Lian Coffee participated in various activities of Douyin e-commerce - the Food and Beverage Festival in June and the 818 Good Products Festival, and finally successfully launched a new brand with its popular product "Freshly Brewed Espresso".

4. Case 4: Wang Xiaolu

Wang Xiaolu is a "Douyin brand" that emerged from the marinated snack market. In July 2021, Wang Xiaolu significantly increased the priority of Douyin e-commerce operations, and directly imported Douyin's internal advertising into Doudian. The GMV of that month exceeded 10 million, and the content conversion rate increased by 40%. Through the marketing tools of the huge engine, Wang Xiaolu screened the portraits of purchased products and potential users layer by layer, and thus accurately found the target group - "80% of users are women."

Image source: Wang Xiaolu official website

After defining the target audience, Wang Xiaolu focused on both performance-based delivery and brand content output. It continued to reach the audience through mid-level KOLs through short videos, live broadcasts, and information streams. It also shot interesting advertisements to repeatedly reach precise user groups through interesting and scenario-based content. With the help of the characteristics of snacks, which have relatively light decision-making and a certain degree of impulse conversion, Wang Xiaolu was successfully sold out, achieving monthly sales of tens of millions and an increase in content conversion rate of more than 40%.

5. Case 5: Debut

The debut of the trendy shoe brand is a new brand derived from the supply chain and a representative example of the OEM factory realizing its "brand dream".

Lv Haoshen, the founder of Shouxiu, is a family factory with more than 20 years of senior industry experience. Due to the loss of overseas orders in the past few years, he began to explore ways to save himself through live streaming, and received support from Douyin's "Ace Factory" project. During the exploration, Lv Haoshen gradually established a complete brand concept. From the single-digit viewership when it first aired in 2020 to the cumulative exposure of hundreds of millions of live broadcast rooms, Lv Haoshen and Shouxiu have gradually gained a firm foothold.

The prosperity of "Douyin Brand" in 2021 also attracted more big brands to follow suit.

In July 2021, despite years of losses, Erke announced a donation of 50 million yuan in supplies to the flood-hit areas in Henan. For a while, Erke's "bankruptcy donation" became a hot topic, and netizens flocked to the live broadcast room to shop. Even after the anchor repeatedly shouted "rational consumption", consumers responded with "wild consumption".

It is reported that in just one day on July 23, 2021, Erke broke multiple records, with its sales soaring 52 times. Its products were once out of stock, and consumers rushed to the physical store to check in and show their support. There were even incidents such as "a man bought 500 yuan and paid 1,000 yuan and ran away" and "even the models' clothes were stripped off."

Many new domestic brands have benefited from this. Ubras, which was founded 5 or 6 years ago, has seen an explosion in 2021 with the help of marketing IPs such as "Douyin Newcomer Release" and "Douyin New Day" that accelerate the growth of new brands, achieving a simultaneous increase in sales and popularity. In 2021, its sales on Douyin e-commerce soared 18,371% year-on-year.

Also in 2021, the sales of the emerging compound seasoning brand "Little Bear Is Here" on Douyin e-commerce increased by an even more astonishing 33,078% year-on-year, and this brand was only founded in 2017.

In the past two years, in parallel with the development of content e-commerce, the Chinese market has also entered an era of explosive growth of new brands.

Statistics show that in 2020, the number of consumer enterprise financing cases reached 462, the highest in five years, and in 2021, the number of consumer enterprise financing cases in the first three quarters alone reached 520. According to Douyin data, as of May 2022, there are more than 400 brands in the "Douyin Brand" pool, with GMV concentrated between 30 million and 200 million yuan. Some of the TOP50 brands exceed 200 million yuan , and the category distribution is mainly beauty and personal care, and food.

2021 is the year of rapid development of Douyin e-commerce, but also a "tumultuous year" for big anchors. The conflict between Li Ziqi and Weinian intensified and she stopped updating. The tax evasion scandal of Viya shook the industry. Big anchors were involved in various disputes. The risks of personal IP were controversial. The long-term value of brands seemed to be accelerating to become an industry consensus.

3. 2022-2023: Reshaping of the landscape, accelerated growth of Douyin brands

As the infrastructure and rules of the game of Douyin e-commerce gradually improve, brands have gradually found a more systematic way to play. After experiencing the golden first year, "Douyin brands" have gradually entered the fast lane of growth since 2022.

Among them, food and beauty have become the basic plate of "Douyin brands". The "2022 Douyin E-commerce New Brand Growth Report" released by Douyin E-commerce and Juliang Suansu shows that among the 280 new brand samples, food and beverages and beauty accounted for 26% and 21% respectively.

Why beauty and food?

First, judging from the content trends on Douyin, food and beauty are the most popular top content tracks on Douyin. Second, these two categories have a complete supply chain and a large consumption scale. They belong to the typical fast-moving consumer goods category and are also popular categories where new consumer goods investment and financing are concentrated. Third, low prices and sinking have become the commercial code of live streaming. To meet consumers' rigid demand for low prices and leave profit space for MCN and platform parties, only industries with high profit margins can reap this wave of dividends. Beauty and food meet these conditions.

1. Case 1: Lin Xiaosheng

Lin Xiaosheng, one of the “Four New Seasoning Dragons”, is a food brand that grew up during this period.

Lin Xiaosheng was founded in 2019, and its first product was launched in 2020. Since its inception, it has been exploring the gameplay of Douyin. In 2021, Lin Xiaosheng seized the trend of "interest e-commerce" and targeted the demand of Douyin platform users for healthy food, launching a "30% low-fat chicken breast sauce", which was cold-started with a combination of "short video promotion + live broadcast by experts" and quickly sold out.

Subsequently, Lin Xiaosheng polished and upgraded the "50% low-fat chicken breast sauce", which sold 3 million bottles in half a year, becoming a phenomenal category innovation product that rose against the trend in 2022. Lin Xiaosheng also jumped into the industry's vision and became a "dark horse" in the cutting-edge condiments. It is reported that Lin Xiaosheng's sales last year were 60 million, and sales in the first half of this year reached 50 million.

2. Case 2: Jiaorunquan

In the skin care market, Jiao Runquan is another representative of "fast". Jiao Runquan was successfully registered in June 2023, and its Douyin flagship store has only been open for more than 170 days. However, it easily won four firsts in a few months, with monthly sales of up to 150 million. In just over 100 days, these four products have successfully topped the Douyin rankings in various subcategories. Jiao Runquan's success is very typical, but not easy to imitate - it is deeply bound to Xiao Yangge, the "Douyin sales leader".

3. Case 3: Li Ji

Another rapidly rising beauty and cosmetics brand on Douyin in 2023 is Li Ji. According to statistics from Guoji Feigua, among the top 10 brands with the highest sales in Douyin's "Beauty" (including beauty, skin care, beauty equipment and other categories) in July, three dark horses with sales of more than 100 million yuan emerged, namely Li Ji, Jiao Run Quan and VC.

Facts have proven that Douyin e-commerce can grow brands and is very suitable for creating new brands, especially new consumer brands. The characteristic of content e-commerce is the word "new". Short videos are particularly good at promoting new products that you have never used or seen. Therefore, under the premise of accurate insight into the crowd, product and marketing innovation, and insight into traffic rules, the chances of rising are very high.

On the other hand, most big brands already have a mature Douyin layout at this time, and those giants that have failed in transformation are even considered too conservative.

On Double Eleven 2022, Midea's sales of all product categories were approximately 13.5 billion, of which 3.5 billion came from live streaming channels such as Douyin; Balabala, a children's clothing sub-brand under Semir, also ushered in a new growth inflection point after entering Douyin e-commerce. On Double Eleven 2022, Douyin Mall's sales performance increased by more than 100% year-on-year; Huili's "textbook-like national trend revival path" is also closely related to its success on Douyin - from January to July 2022, Huili became the leading brand in Douyin's shoes, boots and bags category by virtue of being "domestic shoes favored by young people", and the brand's sales growth rate was as high as 606%, far exceeding the Douyin e-commerce market and the shoes, boots and bags business category.

However, as the “Douyin brands” enter the fast lane, doubts continue to emerge. Can the “Douyin brands” that have grown rapidly continue? This doubt is probably unavoidable.

The most important thing for a brand to grow is time. For a start-up brand, the road to growth from entrepreneurship to small and medium-sized enterprises and then to branding requires a marathon-like long-distance race. This also means that the products, services, supply chains, user operations and communication capabilities of "Dou brands" will be subjected to more comprehensive tests in the next few years.

Consumption will recover in 2023, and "Douyin brands" will face a new market environment. The fledgling "Douyin brands" undoubtedly still have a long way to go.

"The platform dividend of TikTok helped us to grow quickly, established our initial position in the compound seasoning industry, and bought more time for the team to develop. Next, we will seize the time window to accelerate the pace in supply chain, product innovation, omni-channel layout and brand building to further lay a solid foundation for the long-term development of the brand." said Shao Zhuang, co-founder of Lin Xiaosheng.

Although the road ahead is long and arduous, these first-mover brands, with their keen sense of smell, quick response, strong desire and closeness to the essence, may be the most combative group in the current business environment. In the next few years, whether the competing brands can become super players has become a common expectation of the market.

Author: Zhang Chi; Editor: Kui Yi

Source: ValuePlanet (ID: ValuePlanet), discovering company value and telling capital stories