What will the private domain look like in 2023?

Private domains have brought significant revenue growth to brands and businesses, and more companies have gone from waiting to participating. So, what will private domains look like in 2023? This article combines the report survey and analyzes nine aspects, including which brand executives pay more attention to private domains, which industries pay more attention to private domains, and how much revenue private domains are contributing to major brands. I hope it will be helpful to you.

What will the private domain look like in 2023? Jianshi has given a detailed answer to this question in 9 summaries and 9 dimensions in the "2023 Private Domain Operation Trend White Paper and Annual Research Report". We have seen that the number of brands with more than 1 million private domain turnover per month is increasing, both in absolute numbers and in percentage. The number of brand merchants with new private domain layouts is also increasing.

As the number of enterprises at both ends of the market increases, private domains have brought significant revenue growth to brands and businesses, and more enterprises have gone from waiting to watching to participating. Correspondingly, more and more enterprises have begun to personally promote private domains by VPs and above , accounting for 37.38% of enterprises that have established private domain departments and increased the number of employees in private domain departments.

It should be emphasized that the report survey started in August 2022 and ended at the end of November 2022. In the four months, a total of 2,100 valid questionnaires from brands and merchants were collected. The report uses a method of listing questions in a realistic manner, and the answers need to be filled in manually by brand operators. Every answer and every data is true, valid and of reference value.

1. Brand executives pay more attention to private domain

Among the brand operators and practitioners participating in the 2022 Private Domain Annual Survey, senior executives and VPs and above accounted for 32% , directors and department managers accounted for 54% , and front-line employees accounted for 14% .

In the 2021 survey, the participation rate of senior executives and VPs and above was 30% .

Changes in the proportion of executives participating in the survey between 2021 and 2022

The proportion of executives participating in the survey increased from 30% in 2021 to 32% in 2022. The difference does not seem to be significant, and is directly related to the survey strategy, survey method, starting population, etc. However, combined with the survey results themselves, the Jianshi team believes that the data changes partially reflect that private domain business is more valued within various brands and merchants .

Over the past three years, private domain has always been emphasized as a "top-level project". This view is becoming a consensus among more brands and is reflected in actual operations. Even if many companies are not directly managed by the CEO, there will be a key VP or CMO or COO directly responsible for the private domain, as shown in the survey.

2. Which industries pay more attention to private domains?

What industries are the brands and merchants participating in the survey in?

According to the survey, the education industry ranked first with a proportion of 11% . Then came food and beverage, health, clothing accessories, beauty and skin care, life services, maternal and child care, supermarkets and department stores, which have always been strong private domain industries.

Contrary to what most people believe: the education and training industry has indeed been greatly affected by the "double reduction" policy, but this industry has not remained static. They have actively transformed themselves with the help of private domain operations and actively sought new growth points.

In another research report on private sector talent demand and salary changes (2023 Private Sector Talent Demand and Salary Report) conducted and released by Jianshi and 51Job, we also saw another result:

Among all industries, Internet/e-commerce, fast-moving consumer goods, and clothing, textiles and leather are the three industries with the most private domain job openings, accounting for 60% of all job openings in the industry.

Computer software, retail, pharmaceuticals/bioengineering, import and export, medical care, education, film and television followed closely behind, accounting for 20% of the positions in the market.

Throughout 2022, the number of industries developing private domains has increased significantly, jumping from 11 industries in 2019 to 54 industries in 2022. As a result, the number of newly released private domain jobs has rapidly increased to more than 60 times that of 2019, and the proportion of jobs released by the industries that originally led the layout of private domains has begun to decline. For example, the e-commerce industry has decreased by 10.45% this year compared with 2019, and the fast-moving consumer goods industry has decreased by 4.37% - this is not because the number of jobs in these industries is declining, but more industries have released more private domain jobs, which has led to a slight decline in the proportion of the original leading industries in the full data.

Data source: 2023 Private Domain Talent Demand and Salary Report

3. How much revenue does the private domain contribute to major brands?

In the 2022 survey on “ Average Monthly Contribution of Private Domains ”:

• Brands and merchants that bring in more than 10 million in revenue per month account for 8.52%;
• Brands and merchants that bring in 5.01 million to 10 million yuan in revenue per month account for 5.41%;
• Brands and merchants with a user base between 1.01 million and 5 million accounted for 15.49%;
• Brands and merchants with 510,000-1 million users account for 15.42%;
• Brands and merchants with a market value between 110,000 and 500,000 accounted for 21.33%;
• Brands and merchants with less than 100,000 private domain turnover accounted for 33.83%;

Compared with the 2021 annual survey, we can see that the proportion of some merchants is changing.

In the 2021 survey:

• The proportion of companies with monthly GMV contributed by private domain users below RMB 100,000 was 26%;
• Enterprises with monthly GMV contribution of RMB 1 million to RMB 10 million accounted for 16%;
• Enterprises with monthly GMV contribution of 10 million to 30 million accounted for 7%;
• Enterprises with monthly GMV contribution of more than 30 million account for 2%.

In the same dimension: in the turnover range of 1 million to 10 million, the proportion in 2022 was 20.9%, far exceeding the 16% in 2021.

This growth shows that private domain has brought significant incremental revenue to brands and merchants .

The proportion of merchants with monthly private domain turnover of less than 100,000 also expanded from 26% in 2021 to 33% in 2022, showing that in 2022, more companies changed from waiting and watching to taking action , so the private domain also began to contribute.

In the comparison of these years, a ladder of income levels of different private domains is taking shape. The foundation of the bottom and the middle is growing, supporting the emergence of more large private domain teams.

Under this trend, the incremental revenue contributed by private domains will become more obvious in 2023.

4. What is the problem you most want to solve?

What problems do brands want to solve most at the moment to increase revenue from private domains?

In the survey results, the issues were ranked as follows: private domain user growth (38%), refined operations (18%), user retention and activity (12%), how to achieve revenue growth (including conversion, repeat purchase, and referral, a total of 21%), and connecting user data on multiple platforms (8%).

In the 2021 survey, the same topic of private domain user growth accounted for 36% of the issues that companies surveyed were most concerned about last year. If classified as basic operations, it accounted for 56% of basic operations.

Although the survey this year did not have as detailed settings as the 2021 survey, the changes are still very obvious when combined with last year's survey:

• As more companies flock to the private domain , the proportion of private domain user growth topics will continue to increase from 36% in 2021 to 38% in 2022. Whether it is a big brand or a new team, they are obviously concerned about this common basic proposition.
• The frontier team began to turn their attention to refined operations and the improvement of conversions such as repeat purchases and referrals . The improvement of these links will more directly lead to an increase in private domain turnover.

An interesting observation is that following the huge demand for private domain user growth, mainstream service providers in the industry are also quietly transforming. Taking the communication between Jianshi and several mainstream outbound call service providers such as Yizhi Intelligence, Baiying, JD Yanxi Intelligent Outbound Call, and NetEase Cloud Commerce in 2022 as an example, they began to emphasize that AI outbound calls play an important role in the entire life cycle of user operations, all links of user operations, multiple touchpoints and scenarios, and global operations. It is no longer just AI drainage as emphasized in the past.

These changes occur simultaneously with changes in brand demand.

Brands and businesses with different levels of private domain revenue have different problems they want to solve. The Jianshi team has tried to sort out these differences, as shown in the following series of figures:

From these detailed data, we can clearly see:

• Companies with low private domain turnover are basically small companies or companies that have just started their private domain. At this stage, they are more concerned about the growth in the number of users in the private domain pool. When the turnover brought by the private domain reaches 1 million to 5 million or more, the proportion of companies paying attention to the growth of private domain pool users drops from about 40% to about 30%.
• Companies with high private domain turnover are more concerned about topics such as refined operations, user activity and retention.

5. Everything for revenue growth

The same result appears in the survey: “The problem that we want to solve most”.

In the survey, 10% of respondents were directly concerned about revenue growth, while 11% were concerned about how to increase user repurchases and referrals.

In fact, the growth of private domain users and refined operations, user retention and activity, and the integration of user data on multiple platforms are all for the purpose of increasing revenue.

If we switch to the survey results of high-flow private domain teams (monthly contribution of more than 5 million) , we will find that the focus on repurchase and referrals has slightly decreased by 3 percentage points. However, the focus on retention and refined operations has increased significantly by a total of 11 percentage points.

This reflects that large brand teams have made relatively ideal progress in private domain infrastructure, basic operations, capability matching, methodology, user migration and sedimentation, order conversion, etc., so they will invest more time and energy in active operations and refined operations.

The survey results all point to one conclusion: everything revolves around the company's revenue growth.

This is related to the original intention of the birth of private domain.

Starting around 2017, this new method was used by Taobao sellers to solve the problem of high advertising costs and insufficient revenue during the Double 11 shopping festival. Unexpectedly, it has become a universal "user operation" strategy that has swept tens of millions of merchants. Therefore, since its inception, this strategy has been closely related to the four major demands of "conversion, referral, repeat purchase, and expanded sales." And these demands are ultimately just one, that is, the company's revenue growth.

The reason why I repeat this basic (even common sense) is that more companies will develop private domains in 2022, precisely because they have to go online, digital, and private in the difficult offline market. All of this is precisely to obtain income so that companies and teams can survive, and then the need for transformation and upgrading comes second.

6. Departments where private domain business is located

Which department is responsible for the management and promotion of an enterprise's private domain business?

When we saw the results of this question, we were truly surprised and delighted.

Because 37.38% of the brands and merchants participating in the survey have established independent private domain departments.

• In April 2021, 6% of users who participated in the Jianshi Private Domain Conference established independent private domain departments.
• By September 2021, that figure had risen to 7% .
• In the 2021 annual survey, the proportion of companies establishing private domain departments rose again to 21% .

At several time points in April, September and December 2021, this data grew at a speed visible to the naked eye. Now, the proportion has reached 37.38%.

In the survey, other departments that directly dominate the private domain are the marketing and growth department (17%), user operations department (16%), e-commerce department (13%), and membership and new retail department (9%).

These departments are all strongly related to the private domain. In particular, in the past few years, many companies’ private domain businesses were led by these departments. Now, the leading authority has begun to shift to specific new departments. To some extent:

• The private domain was first driven by the demands of e-commerce and new retail sectors;
• The two major operating methods, membership operation and community operation, are almost equivalent to private domain operation;
• In many companies, CMOs and CGOs are directly responsible for private domains. In the first survey result, 32.1% of executives participated in the survey, which is consistent with this observation. Therefore, the marketing and growth departments are most often responsible for private domains.
• From this we can see that the new digitalization process initiated by the private domain is led by CMO , CGO and COO .

The annual survey confirms and re-emphasizes these findings.

7. How many employees do each major brand allocate for its private domain teams?

At the same time, Jianshi and 51job conducted relevant analysis on the 2022 recruitment big data. It can be seen that:

In 2022, the number of new "private domain"-related positions (referring to positions with the word "private domain" clearly written in the job title) released by companies was more than 60 times that of 2019.

The average number of resumes submitted for each position is about 130. Compared with 2021, the number of private domain job applications has increased nearly 3 times . Throughout 2022, the number of private domain job recruitments and resume submissions has remained high. It has become the mainstream for major industries to increase the number of employees in private domain positions .

The growth rate of employees has led to significant changes in the number of people in private domain teams of major companies.

In the 2021 Jianshi survey, 63% of brands had private domain teams of 1-5 people, which was the mainstream composition of private domain teams at the time. One year later, in the 2022 private domain survey, the proportion of teams of 1-5 people dropped to 50%. The proportion of teams of 6-20 people was 33%, and the proportion of teams of 20 people or more was 17%.

Combined with the survey results just now showing an increase in the proportion of independent private domain departments and an increase in the contribution of private domain turnover, it can be seen that an increase in the number of private domain team members is an inevitable result. Especially when we combine this with the general environment of reducing staff and increasing efficiency in many industries and companies in 2022, we will find that the increase in private domain department employees is even more valuable.

8. Is organizational structure optimization a false proposition?

Let’s look at this survey result again: only 1% of brands and merchants are focusing on optimizing their organizational structure.

Does this mean that the organizational structure optimization brought about by private domains is a false proposition?

The Jianshi team once thought that organizational structure optimization must be one of the major changes brought about by the private domain. At the beginning of 2022, many leading brands were discussing the topic of "how to optimize the organizational structure to better promote the private domain process" (at that time, the Jianshi team also sorted out and completed the theme white paper "Private Domain Organizational Change" for this purpose). At that time, the Jianshi team was optimistic that it would soon become one of the topics of concern to major brands. However, in the survey, this option was the lowest, even only half of the "other" option.

The answer is no. In particular, we discussed in the previous chapter:

• Executives of major brands are paying more and more attention to the private domain;
• 37.38% of the brands and merchants participating in the survey have established independent private domain departments;
• As the private domain brings in more cash flow, the number of employees in the private domain department is increasing rapidly.

All these indicate that the industry is paying more and more attention to the growth brought by private domains.

From the series of interviews (see the white paper on "Private Domain Organizational Transformation"), it can be seen that organizational structure optimization is a topic that the frontier team cares more about . Only when the cash flow contribution reaches a certain level will deeper adjustments and optimizations be needed to more effectively promote private domain efficiency and conversion effects.

9. A watershed number

As shown in the figure below, the brands and merchant teams that bring different incomes from private domains are divided into different teams by the number of people. When the private domain brings in more than 10 million per month , the team with more than 50 people accounts for 10.2% , and the team with 21 to 50 people also accounts for 17.5%.

In this set of segmented data, an intuitive result is presented: when the flow contributed by the private domain exceeds a certain level, it will become a watershed for a brand to invest in the private domain on a large scale.

The figure in the survey shows that when the private domain turnover exceeds 500,000/month, the brand will quickly increase the number of people in the private domain team .

The survey shows that brands with 20 or more people account for 16.9% of the total number of brands participating in the survey. The larger the scale, the higher the proportion of large teams . Other investments include executive level attention, budget investment, etc., including the purchase of private domain SaaS systems and operation tools, which will also occur in large quantities at this stage.

It can be predicted that as the revenue contribution from private domain continues to rise in 2023, the size of the private domain team will continue to expand. Talent demand, procurement budget, etc. will continue to rise.

Author: See the truth

WeChat public account: Jianshi (ID: jianshishijie)