A new growth engine for brands.
Text/Jin Shuqiao
According to the data of the first quarter report of jewelry brand Chow Tai Sang in 2022, Chow Tai Sheng's revenue in 2021 was 9.155 billion yuan, and the number of stores exceeded 4,500, so it accelerated the layout of online channels. Once I communicated with the official of Dewu, I felt that the young people on this APP were very active, which was very suitable for the needs of online development. At that time, the Dewu APP had changed its name for more than a year, and it was building a new generation of trendy online shopping community, which could be called "popular spicy chicken".
On the Chinese Valentine's Day in 2023, a bracelet from Chow Tai Sang sold out in Dewu, pushing single-day sales to the peak of the year. In 2023, Chow Tai Sang will lead the brand's GMV growth rate in Dewu across all platforms. You might not have thought that the team that runs such a large business is currently only 3 people. In 2024, they are aiming for another 260% ultra-fast growth in GMV.
Brand merchants are soaring, and Chow Tai Sheng is not alone. Ebang Power has disclosed that last year, Dewu's GMV and sub-industries showed strong growth, behind which was the rapid rise of a group of merchants in Dewu and making money, and domestic and foreign brands that chose to embrace Dewu in the early stage have undoubtedly become one of the biggest beneficiaries. (Reference: "In the cracks of the giants, they choose to make money quietly and worry-free")
Dewu adopts a unique one-product multi-business model, that is, with the product rather than the store as the core, and a product can be supplied by the brand official, distributors/agents, etc. at the same time, so the head of the fast-growing categories such as shoes and clothing, bags, beauty, jewelry, accessories and 3C home appliances may be more amazing in overall sales.
Higher average customer value, lower return rates, high growth that can easily be multiplied, and considerable certainty of profits are attracting brands to flock to Dewu, and many even set up dedicated teams. However, in the view of Xie Gongjin, CEO of Ruiwang E-commerce, just the rapid growth of sales data is not enough for these brands and dealers to make up their minds and get into the matter.
For these decision-makers, entering any emerging platform is not a simple decision-making process. "They need to figure out what the positioning and value of Dewu is in the future growth strategy. Xie Gongjin told Ebang Power. The so-called, plan and then act, know and stop.
"Almost every merchant exceeded their goals"
Xie Gongjin has been deeply involved in e-commerce for 15 years, working in Baozun e-commerce and Nike in the early years, and founded Ruiwang e-commerce in 2019. The company is currently the official strategic partner of Dewu, providing online store hosting, agency operation, delivery and content marketing for leading and overhead brands.
Ruiwang e-commerce focuses on categories such as shoes and clothing, bags, beauty and light luxury, and its customers include Heilan Home, MLB beauty (beauty), NIVEA, MICHAEL KORS and Zippo. Xie Gongjin said that the customers served in 2023 will have a growth rate of more than 30% in Dewu, and the higher ones will even reach 80%-100%. He believes that Dewu is a platform with significant characteristics and a particularly interesting platform.
According to the survey of Ebang Power, there are two categories of businesses that have risen rapidly in Dewu, one is the well-known head and super head brands and dealers who have found new users, and the other is the emerging and strong style of national tide brands. In addition, in terms of price band, they also show a K-shaped differentiation trend, with some head and super brands providing medium and high unit price products, while others emphasize cost performance and style.
In terms of the categories in which these brands and distributors are located, fashion sports (including shoes and clothing, bags, sports and luxury products, etc.) have always ranked first, and emerging categories such as gold jewelry accessories, beauty and personal care, home appliances, and digital 3C have maintained a super high growth rate, and have entered the 10 billion club. The tide rises and the settled brands have also grown well.
In the category of gold jewelry and accessories, the GMV of the top brands or a single agent will exceed 100 million yuan in 2023, and the entire category is expected to maintain a 4-5 times growth in 2024.
A Dewu insider told Ebang Power that the platform sets targets with merchants in this category every quarter, and the GMV growth rate is at least 20% quarter-on-quarter, and "almost every merchant has exceeded the target." Kim Dasheng, introduced by agents in 2022, has maintained rapid growth in the two years of operation, "At present, we still have not seen the ceiling." In the first quarter of 2024, Kim Dae-sang doubled its GMV growth quarter-on-quarter.
Beauty & Personal Care is another fast-growing category. In November 2023, the person in charge of the Dewu beauty and personal care industry said at a closed-door meeting that the compound growth rate of the Dewu beauty track has nearly doubled in the past three years, and the platform GMV has entered the 10 billion club.
C coffee, a cutting-edge beauty brand, mainly engaged in cleansing and skin care products, ranks first in sales in the cleansing category, and its GMV will increase by 700% in 2023. At present, there are only 2 people in the operation team of C Catech, and they believe that there are still opportunities for the development of subcategories such as masks, creams, and no-makeup creams.
The home appliance digital 3C also has a similar situation. In 2023, under the background of the overall pressure on the market, Dewu's home appliances will nearly double compared with the previous year, and digital 3C will grow by 200% against the trend. In terms of subcategories, personal care such as razors, hair dryers, massagers, belt protectors, and sleep devices are growing rapidly, while there is a lack of supply of smart devices, audio-visual office, photography and video, and peripheral games.
For example, Baseus, which is mainly engaged in mobile phone peripheral accessories, entered Dewu in January 2023, and its business increased by 10 times, making it the fastest growing e-commerce platform for the brand, and the GMV of the old domestic product Feike in Dewu will increase by more than 100% year-on-year in 2023, and the growth rate will also exceed that of Tmall and Douyin.
In addition to the above-mentioned categories, the entry of leading and over-the-top brands has also seen an astonishing growth. For example, Starbucks entered Dewu in May 2023, and the sales of a water cup continued to grow significantly, exceeding the growth rate of similar platforms settled in the same period, and Dove, a subsidiary of Mars, an internationally renowned food brand, entered Dewu in October 2023 and soon launched three chocolate products as the main products of the Christmas season, driving monthly GMV of more than 10 million.
Some brands' single products have a mediocre performance on other platforms, but they have a very amazing growth on Dewu, which has a huge relationship with the young user group of Dewu. Looking at the whole network, gift consumption is one of the main consumption scenarios of medium and high unit price goods, and its main consumer groups are Generation Z, that is, students and white-collar workers who have just entered the workplace.
This is where Dewu's advantage lies - it has the youngest group of users in China's e-commerce, with a penetration rate of 70% among post-95 netizens, and more than 90% of post-90s users on the Dewu APP, and the gender ratio of the platform is also relatively balanced, with 52% of men and 48% of women.
This is also what the brand values the most. First of all, the young users of Dewu are much higher than those of other platforms, and any brand that does not want to be abandoned by young consumer groups must carefully weigh Dewu. Secondly, although the sales of some explosive products on the whole network are not large, its dissemination and detonation are in Dewu, because Dewu is a gathering place for trendy consumption.
"This is actually a weather vane," Xie Gongjin said, "to a certain extent, it can form a test and feedback on the brand's trend in the consumer market." "Before a single product is detonated, it first goes through the brewing and fermentation of a small circle, and then goes to break the circle. Among them, the thrilling leap depends on the screening, screening and dissemination of professionals.
A new growth engine for leading brand merchants
Some merchants who have done e-commerce platforms such as Tmall, JD.com and Douyin will not know where to start when they first come into contact with the logic and background of Dewu.
According to the survey of Ebang Power, many brands have settled in Dewu, valued the purchasing power and gift model of Generation Z (high customer unit price, low return rate and high growth), and started rapid growth after making pallets and operation plans according to the consumption characteristics of young people.
Blue Moon is a leading daily chemical brand, with revenue of approximately RMB6.59 billion (HK$7.324 billion, calculated at the exchange rate as of December 31, 2023) in 2023, of which online channel sales were RMB3.423 billion, a year-on-year increase of 1.3%, and online accounted for 52%. At the beginning of this year, Blue Moon's sales growth rate exceeded 100%, and the return rate has been kept within 2%.
The first is to adjust the pallet. Blue Moon originally sold large-size and high-unit price products of 60-80 yuan in Dewu, but after testing, it was found that most of the target users were young people renting houses, and then adjusted to medium-size, bottled and travel-sized products. After the adjustment, the proportion of users who collect Blue Moon is 80% after 95.
In order to attract Gen Z consumers, Blue Moon used to go to major campuses every year to do promotion, including organizing activities and community promotion. After entering Dewu, Blue Moon operated these users with a very low input. "Users are the most basic and important point of operation. The relevant person in charge of Blue Moon said.
The second is to adjust marketing. E-commerce marketing mostly revolves around activities, such as Double 11, 618, Double 12, etc., but users of Dewu do not seem to attach much importance to these activities, but pay more attention to the gift nodes that are very distinctive and run through the whole year and every month, such as Valentine's Day, 520, Qixi Festival and Double Dan. Many orders have strong gift attributes, and merchants will spend more attention on products and gift boxes suitable for gifts, but the sales of gift boxes will also drive the growth of other products of the brand.
In 2023, Chow Tai Sang will target college students and new professionals, and launch jewelry and couple gift products. To this end, Chow Tai Sheng made a butterfly bracelet for the object, packaged in a gift box, and sold it on Qixi Festival, and it was sold out soon after it was listed. "Through this product, it has also led to other growth. Last year, it was basically not enough to sell. "This new product has been blessed by the platform's resources, and at the same time, the brand has also made unboxing selections on the content side, inviting influencers to shoot content, making unboxing videos, and laying some basic content.
Purui is a sports brand founded in Xiamen, focusing on young co-branded badminton and peripheral products in Dewu, and its sales have exceeded tens of millions in just over a year since it entered Dewu in 2023. "We will develop products suitable for the tonality of Dewu, and give priority to the first launch in Dewu. In the past, we thought we could only sell auctions, but now as long as there is a new product, the first reaction may be to get the product first. At the beginning, we only had the category of badminton rackets, but gradually the categories of backpacks, sportswear, and socks became richer, and we went to settle in. As long as we develop a product, we can get it. Wang Qi, founder of Purui, said.
"One of the better points is that new products are launched with a certain amount of support and traffic, so even if you don't spend too much energy in the early stage, do a good job of the product first, and do a good job of the details of the main picture, it will have a certain transformation. It's not like on Taobao or JD.com, if you don't spend money, you don't do it, and there will be no waves at all after it goes online. For example, in September 2022, the first explosive product in Dewu was actually first pushed on other platforms, but it had no effect, and in the end, it was in Dewu. ”
Xie Gongjin, CEO of Ruiwang E-commerce, believes that whether to change the design, development and production links from the upstream, or to do some optimization and matching based on the existing pallets, depends on the degree and willingness of the brand to change the pallets. "I think the latter is actually a much easier way, and it's not very costly, but it can certainly be done," he said. ”
This means that brands can choose a lighter model to start, such as adjusting the pallet structure and packaging, and then leverage platform traffic through differentiated content marketing. Different platforms are making content, but if you look closely, they have essential differences, Taobao and JD are more like seller shows, while Dewu is more like buyer shows.
"In Taobao, it may be more about looking at pictures, basically what the seller wants you to see, but in terms of getting things, it is more about the buyer's spontaneous sharing. In Dewu, if you click on a piece of what you want to buy, there will be recommendations and content from different people at the bottom, which will help you filter out and solve many problems that you may have to communicate with customer service, and your determination to buy will be much stronger. ”
Most merchants report that compared with other platforms, Dewu does not need more complex operations, and a team of 3-4 people can generally meet the daily work. "Among the more than 50 people in our entire company, there are only 5 people in the operation team. "On traditional platforms, store managers mainly focus on event operations, category operations, and promotion operations.
Different categories of brands have different needs for content operations. Generally speaking, products with strong cultural attributes have a stronger demand for content, while currencies such as fast-moving consumer goods bring their own traffic, and do not rely heavily on content operations, but focus on goods and event operations. However, content comes in handy when brands in these categories launch new products and educate the marketplace.
"The success of Dewu pushes back the brand's business on other platforms"
An agent told Ebang Power that in the process of communicating with brands, the most common problem they encountered was how well the platform traffic and conversion were. The usual answer is just to look at the volume of the brands they represent. In 2023, the GMV of Zaidewu will exceed 300 million yuan, a year-on-year increase of more than 900%.
The large number of young consumers and the gathering of trendy consumption undoubtedly have great strategic value for the brand. We previously disclosed that in recent years, a number of domestic brands have achieved a gorgeous turn in Dewu and realized the rejuvenation of the brand, which has a feeling of accumulating energy here when the fermentation is rising, and moving the fragrance elsewhere when it blooms.
C Cafe was founded in Guangzhou in early 2021 by Xiao Rongshen, a partner and current vice chairman of Hanhou Group. After settling in the Dewu platform, considering the user and marketing attributes, the C coffee team developed a series of gift box products to serve the people with the attributes of Dewu gifts. The success of Dewu in turn has boosted the brand's courtesy season projects on other platforms. It is reported that the C coffee courtesy season project is led by the Dewu team to promote the sales of courtesy projects on other platforms.
Whether it's the platform as a whole or a sub-category, the review of traffic and growth seems to be a never-ending topic. In addition to the traffic on the Dewu station, a large number of merchants are also attracting traffic to Dewu stores from platforms such as Douyin, Xiaohongshu and Bilibili. The reasons include that the test cycle of Dewu is shorter and the sales cycle of explosive products is longer, and the unique marketing node can enable merchants to stagger their peak operations.
The sales peak of most brands in Dewu occurred in 520, Qixi Festival and Shuangdan, etc., which not only achieved the outbreak of peak staggering, but also expanded the business opportunities of the brand's courtesy scene. The big promotions of 3C, beauty and accessories are about 3 times more than the flat sales period, and the user portraits before and after have changed significantly. For example, in beauty, the flat sales period is mainly consumed by women, and 520 and so on are converted to men.
A number of merchants said that the scope of young users of Dewu is constantly expanding, and the user distribution cities are expanding from first- and second-tier cities to third-, fourth- and fifth-tier cities, including students, white-collar workers and urban families. A leading beauty brand told Ebang Power that the proportion of men and women has been basically equal in daily sales.
In Dewu, content, traffic and commodities are interrelated, and the size of traffic largely depends on the supply of content and commodities. The continuous influx of new crowd traffic and the abundant and fast-growing new demand are also forcing platforms to increase the supply of goods and content. Since the beginning of this year, Dewu has also stepped up investment promotion. In 2023, Dewu will launch a new business plan to support merchants through a number of policies, and in 2024, Dewu will also upgrade relevant rights and interests, providing up to 30,000 yuan of time-limited commission-free incentives, new product traffic subsidies, 1V1 new business support, etc.
Many brands are also open to the growing number of merchants. "We think that more brands come in, which will make the activity and richness of Dewu better and better. Wang Qi, the founder of Purui, said, "If the traffic is large, it will definitely be better for sellers. ”
After 2023, the platform will increase its investment promotion efforts, but it still has certain review standards for settled merchants. "It's not that if we go to do a batch of investment today, all the merchants who submit the application for entering the store will successfully settle in or go online. Xie Gongjin told Ebang Power, "From my point of view, it is still necessary to have quality, tonality, and something suitable for young people." ”
Some leading brands will choose third-party service providers to explore the way, especially international brands. At present, many of the brands on Dewu are operated by dealers and agents, such as Ruiwang e-commerce, Xundi and Maya e-commerce. With the help of the platform's existing tools, brands can see data such as crowd portraits through the operation of service providers.
At the same time, some brands that settled in early and tasted the sweetness are increasing their gains. For example, Blue Moon plans to continue to increase the investment of the Dewu team in the future to do more detailed division of labor and operations around content, live broadcasts, etc.; Zhou Dasheng has held several co-creation meetings with the official and set a sales target for 2024, which is currently being implemented on a monthly basis.
Kim Dasheng's agent said that the quarter-on-quarter growth rate has remained above 20% in the past few quarters, "In 2024, we hope to deepen the category in Dewu and expand more diversified materials and styles." Sustained high growth in the next few years should not be a problem. The relevant person in charge of the company said.