Is Douyin Shelf worth doing?

Douyin has invested 10 billion yuan to support e-commerce on the shelves, making it the focus of its operations. However, the service providers who have entered the market are shouting to give up. Why is that? This article discusses whether the shelf model can become a new growth point for the platform through the case of a Douyin service provider. Let's take a look.

In order to develop shelf e-commerce, Douyin has invested tens of billions of yuan to support it and regards it as the most important operation direction.

However, a service provider that has entered the shelf e-commerce market said that it is "giving up."

Recently, a Douyin service provider shared their experience in Douyin shelf e-commerce with Xinbochang. He said that overall, whether it is the commodity card that is being promoted now or the mall that has been discussed in the industry for a long time, it is difficult for them to have a growth effect.

In fact, there are still many people in the industry who are not optimistic about Douyin shelf e-commerce. Most of the problems revolve around price involution and the loss of competitiveness of interest e-commerce.

Will shelf e-commerce really become a new growth point? At present, merchants who cannot get out of the content scene seem to be still confused.

01 New volume of platform bets

"We believe that it will continue to grow, and this growth will be sustained and rapid."

At the Ecological Conference, Wei Wenwen, President of Douyin E-commerce, expressed her confidence in the development of the platform's shelf e-commerce, and sent a signal that the shelf scene is a new growth channel for Douyin e-commerce.

She once shared a set of data: the content scene accounts for 56% of the global product exposure PV of Douyin e-commerce, and the shelf scene has grown to 44%.

Behind this 50-50 ratio is the amazing growth of shelf e-commerce. In April 2022, shelf GMV accounted for about 20% of Douyin's overall e-commerce, which climbed to 27% in November and stabilized at 30% in May 2023. Among them, 56% of merchants received more than 50% of their GMV from shelf scenarios.

On the user side, the average daily search volume for e-commerce intent on Douyin has reached 400 million times. This is reflected in the performance of transaction volume, with search GMV increasing by 159% year-on-year and mall GMV increasing by 277% year-on-year.

The latest data shows that in April this year, the new consumption of Douyin live broadcast users in the shelf field increased by 356 yuan.

All these data convey one message to the outside world: the growth miracle of Douyin e-commerce in the content scene in the past three years is now being staged in the shelf scene. The shelf scene has truly become a new traffic engine and a veritable new increase.

In the industry, many service providers have also posted the transaction amounts of product cards, advocating the growth advantages of Douyin product cards and Douyin shelf e-commerce. Another service provider said bluntly: "All the stores we operate and manage on behalf of others have seen a sharp increase in product card traffic and transaction data."

From this perspective, Douyin shelf e-commerce seems to be thriving. Merchants who enter the market will be able to tap into new growth, which is an opportunity that merchants and service providers cannot miss.

However, a service provider who has entered the Douyin Shelf market revealed to Xinbochang that it is not that easy, and they have even decided to abandon the Douyin Shelf e-commerce.

02 Service providers give up shelves?

"For our track, I will pass the mall for now."

At the end of June, He Zheng, head of Doudian, a leading e-commerce service provider in the ceramic category, told Xinbochang that after trying to run a Douyin mall, they chose to abandon Douyin shelf e-commerce.

The service provider entered Douyin in 2019 and served a large number of leading ceramic merchants, achieving many impressive data and results. However, faced with the internal competition of Douyin e-commerce and the continuous performance growth demands of the service merchants, they are working very hard.

At this time, they saw Douyin's actions on the shelf e-commerce side: in 2022, after Douyin released the new concept of "global interest e-commerce", it began to focus on shelf e-commerce; it launched a mall on the site, and in 2023 it launched product cards and invested tens of billions of cash to support the shelf business...

These measures are seen by the outside world as a new path for Douyin e-commerce to solve its own growth. For merchants and service providers on the front line, they have naturally long been sensitive to the platform's operating ideas and focus.

At this time, based on the advice of the platform's waiter and seeing the general trend of the industry, Hemu's company began to expand its team and invest funds, trying to achieve new growth results for merchants on the popular shelves and product cards, but ultimately failed.

"One is that its current situation is not good, and the other is that there is no hope for its future." He Zheng revealed that in the actual operation process, the sales driven by their live broadcast room are not included in the sales of merchandise cards.

In fact, according to the rules of Douyin e-commerce, sales of content scenarios, including short videos, will not be counted.

In other words, the volume of goods is purely dependent on transactions in malls and stores. But the problem is that the merchants they serve have a unit price of more than 1,000 yuan. Without live broadcast and short video scenes, it is difficult for users to make transactions directly through malls and stores.

This made it impossible for Hezheng to leverage natural traffic, and the overall growth effect was not obvious. Hezheng added that in their industry, basically no one has made achievements in the shelf area.

However, Hemu also said that the shelves are not useless. They found that most of the people who come to the mall are old fans. "(Shelves) are just another channel to reach old fans."

He Zheng did not completely deny the growth possibility of the shelf scene. He said that in the process of their entry and trial, products like Dehua porcelain, which has a relatively low average order value, and tea, which is more closely related to the porcelain category, have achieved very good growth results in the mall and product cards.

For example, the white tea shop "Youyijiaxuanxuan" completed 543,000 orders in less than 120 days after its opening, gained over 7,000 fans, and was selected into the "Good Stores Collection", with its level upgraded to Gold Lv.3, surpassing 96.9% of its peers.

At the same time, while Hezheng was laying out the shelves, it also used Qianchuan to launch product cards for low-order tea. This simple plan ultimately achieved an ROI of 1:3.

But this means that the shelf scene may be more suitable for low-priced products, which may cause merchants to compete on price.

For example, the "Guess you like" recommendation mechanism for the same item in the shelf model will make consumers have a strong price comparison mentality and tend to buy cheaper products of the same item. This will prompt merchants to compete on price and squeeze each other's living space.

03 “Still the most important operational direction”

“To do shelf e-commerce, the pallets must be large and comprehensive. Is this really a capability that small and medium-sized businesses can master?” Fengnian, the founder of Dianjinshou, also commented on the drawbacks of shelf e-commerce in his circle of friends.

In addition, many practitioners have expressed concerns about Douyin's shelf e-commerce, believing that the low-price product model and the operational approach that emphasizes order density will make small and beautiful interest e-commerce lose competitiveness, become homogenized with traditional e-commerce, and may eventually lose the minds of consumers.

Even some practitioners said: "I don't have clear data, but I heard that most of the merchants in the mall are losing money, that is, they make very little profit."

This news also caused heated discussions in the Douyin merchant group. Many merchants complained and expressed their intention to give up shelf e-commerce.

In this regard, the official operation of Douyin also stood up and said——

(1) Douyin Mall is still the most important operational direction of Douyin e-commerce. Please do not believe in rumors.

(2) In 2023, the profits will not come from the live broadcast room. Only by attracting traffic to the live broadcast room, doing a good job in the basic operation of the mall, and increasing the proportion of the mall can we make money.

That is, on July 4, Douyin released a new round of product card support news. Merchants only need to complete any 2-3 of the five tasks: publishing non-duplicate products for sale, adopting title optimization suggestions, store decoration quality, product information quality rate, and successfully being selected into the "Guess You Like" product pool, to obtain commission-free qualifications in July.

For Douyin e-commerce, which has maintained growth for three years, it faces the difficult problem of "without product cards and shopping malls, there may be no growth in the future", as well as an operational orientation centered on DAU. Shelf e-commerce has become the way out that the platform currently relies on.

This is undoubtedly good news for merchants who are suitable for shelf e-commerce and merchants who have achieved success on the shelves at this stage.

However, for those merchants who cannot get out of the content scene, on the one hand, they have to look for new growth, and on the other hand, they are also worried about what their future will be like if they cannot adapt to the shelf scene.

Whether Douyin shelf e-commerce can really become a new growth point for platforms and merchants will have to wait for a while.

Author: Aligu, Editor: Xiaohong, WeChat public account: "New Broadcasting Field"