Text | Narrowcast, Author | Pang Mengyuan
This week, Kuaishou E-commerce announced the launch of the "Kuaishou Preferred" project to provide merchants with agency operation services. After the merchant settles in Kuaishou Preferred, he only needs to be responsible for delivery and after-sales, and the traffic operation and product sales are all responsible for the platform.
During the Spring Festival, the 10,000-person group gameplay launched by Kuaishou e-commerce also adopted a similar hosting model. The official recruits and selects high-quality and low-cost seasonal products, and distributes the products to anchors, small and medium-sized merchants and talents, so as to promote the rapid transaction of goods.
There is a view that this is equivalent to Kuaishou e-commerce also doing self-management.
Two months ago, Taobao also set up a live broadcast e-commerce company to provide full operation hosting services for new anchors entering Taobao. Including account cold start, full-cycle planning, business docking, official inventory, and marketing planning.
Even JD.com's self-operated business has experienced giving way to POP and low-price strategies in the first half of 2023, and it will come back again in the second half of the year, becoming the core grasp of JD.com to continue to consolidate its advantages such as 3C home appliances.
Whether it is self-operated or fully managed, it is just a difference in the saying - in essence, with the increase in the intensity of competition in the e-commerce industry, including the homogenization of goods, low-price competition and fierce competition for traffic, the e-commerce platform has comprehensively improved the depth of involvement in people, goods and traffic for the needs of price competition, supply competition and efficiency improvement.
If we roughly divide the transaction of the e-commerce platform into three links: commodity trading, logistics delivery, and after-sales service, as the platform intervenes in these three links from shallow to deep, the corresponding modes are POP platform mode, semi-custodian, fully custodial, and self-operated.
Among them, Taobao is a typical POP model, and the platform is only responsible for matching users and merchants, while JD.com is a loyal supporter of the self-operated model, which is self-owned and self-built from goods to warehouse to delivery.
As for full custody and semi-custody, they have not been clearly defined, and they were the first to become popular in the field of cross-border e-commerce.
The reason is that all cross-border e-commerce platforms are facing the problem of lack of supply and poor performance experience in the early stage of development, and in this case, strengthening the platform's ability to control the supply chain is the right move. Although the hosting model of each platform is different, it basically involves that the platform is responsible for product selection, fulfillment, operation, and after-sales links, and the merchant is responsible for supply.
Later, in order to solve the problem that the pallet is too standardized and the supply is not rich and diversified, cross-border e-commerce has developed from full custody to semi-custody, and has entered the stage of supplementing brand supply (AliExpress proposed a subsidy of 10 billion yuan).
This year, custody has gradually spread from cross-border e-commerce to domestic e-commerce. However, it should be clear that an obvious difference between cross-border custody and domestic e-commerce custody is that cross-border custody mainly solves logistics, fulfillment and after-sales problems, while domestic e-commerce currently mainly uses hosting to solve the problem of traffic barriers, and then quickly replenishes the shortage of supply.
As mentioned above, Kuaishou and Taobao Live are using similar ideas to introduce supply and talent. "Kuaishou Preferred" is open to all categories of merchants, and the current merchants are mainly merchants in the agricultural product industry belt.
Whether it is hosted or self-operated, in essence, the platform is more and more deeply involved in people, goods and traffic, including the following points:
First, in the stage of rising momentum, you can quickly compete for supply - including talents, but also goods.
After the rise of low-price competition on e-commerce platforms, the supply of white labels in the industry with intermediate links has become the focus of competition for various platforms. However, the characteristics of businesses in this part of the industrial belt are that they do not do complex traffic operations and do not have perfect after-sales service.
For example, the businesses in the agricultural product industry targeted by Kuaishou Hosting do not necessarily have the ability to do traffic operations and content operations on the Kuaishou platform. Because Kuaishou is a platform with community attributes, the traffic is more complex than that of a pure public domain platform, which has a certain threshold for merchants who are not familiar with the platform ecology. What Kuaishou provides is the traffic capacity that this part of the merchants need most but do not have for the time being.
The same is true for Kuaishou's 10,000-person group gameplay during the Spring Festival.
Second, in the stage of price competition, intermediate links can be removed, relying on scale effect, to provide the ultimate cost-effective products.
A typical representative of this is the direct sales model of Tao factory. As we mentioned earlier, the direct operation of Tao Factory is a store hosting project, the factory is only responsible for supply, and the platform provides digital product selection, intelligent pricing, marketing hosting, supply chain optimization, logistics and localization services. It has the ability to reverse the selection of products to accurately meet the needs of consumers, and has the ability to truly change the supply chain of circulation, which can consolidate shipments for the same delivery address, eliminating the cost of multiple packaging materials, sorting and distribution, so as to reduce product prices.
Third, the supply homogenization stage can help the platform introduce differentiated supply, and then cultivate the minds of differentiated users. In essence, this is the platform using its own understanding of C-end users and the ability to grasp consumer trends, and then intervene in the customization and development of goods, forming an exclusive supply of goods, and because it bypasses intermediate links such as brand owners, such supply also has obvious cost-effective advantages. Typical representatives are made by Sam and Kyotokyo.
However, this kind of supply not only has category boundaries, but also involves fair competition and ecological coordination between self-operated and third-party brands, which tests the platform's understanding of consumers and supply chains.
At the same time, it should be emphasized that compared with JD.com's self-operated operation, whether it is cross-border custody or domestic e-commerce hosting, it is still a light operation model that does not control goods. This is very different from the heavy model of JD.com's self-operated goods control, warehouse building, and self-built logistics.
But this does not mean that self-operated e-commerce as a new trend is going to return on a large scale. In fact, when the development of e-commerce enters a more mature new stage, no model can achieve sweeping victory, even if it is low, it is only a product of a specific consumption cycle. The emergence of any model is a supplement to the existing model and a means for the platform to enrich.
And the hosting model itself has limitations.
Second, because the platform operation is too standardized, it can actually screen out the supply that is more advantageous in terms of price and certain types of services, and cannot meet the differentiated consumption needs of consumers.
With the expansion of the platform, there must still be a need for an open ecological approach to attract more diverse merchants to meet the long-tail needs of users. Cross-border e-commerce itself is also moving from full custody to semi-custody and POP.
Therefore, Kuaishou is preferred within Kuaishou, and it should only cover individual categories, and most of them still rely on the way merchants operate.
If you refer to JD.com's self-operation, the trusteeship/self-operation of the platform with too deep involvement may also encounter problems such as scale, growth rate, corruption, and too heavy a model.
Therefore, whether the platform needs to be hosted, in which links, and for which categories to do hosting, is to be comprehensively judged in combination with the platform's overall planning in the e-commerce business, category advantages, and merchant service capabilities.
In the long run, the common evolution direction of e-commerce and retail is the integrated zero-supply relationship with smooth information flow and clear role division, rather than the hosting business where the platform does everything and builds everything by itself.