In this article, let's dismantle the representative of e-commerce SaaS - Youzan, and see what can be learned from the design and operation of this product.
1. Industry analysis
With the development of social media such as WeChat, Douyin, and Xiaohongshu, more and more merchants are trying to open stores on social networks and build their own private domain malls.
Private domain malls are different from public domain malls such as Taobao and JD.com, where merchants do not need to advertise to get traffic, but through the operation of fans and official accounts, from streaming ROI to long-term user value LTV, so there are two core differences between merchants' private domain operations and product appeals and public domain malls:
Core difference 1: customer operation, focusing on user life cycle and user value
Core difference 2: Product selection as a service, improve the explosion rate and product combination ability of product selection, and provide scarce products, popular models and new products unique to private domain channels
The private domain mall aims to provide merchants with tools to open stores and help merchants precipitate traffic in the private domain. In addition to realizing basic capabilities such as goods & inventory, orders & transactions, logistics and distribution, it also needs a wealth of marketing tools and customer operation tools to support complex and changeable business strategies.
1.1 Product Value
It is mainly for customers in the e-commerce industry and offline stores, represented by self-media merchants, brand owners, Internet celebrity anchors, Tao merchants, new retail, chain stores, beauty industry, etc.
1.2 Market size and growth trends
In 2022, the size of China's e-commerce SaaS market will be about 6.134 billion yuan. In 2022, Weimob's revenue will be 1.839 billion, and Youzan's revenue will be 1.497 billion, accounting for 54.4% of the market share.
With the development of China's cross-border e-commerce and its industrial chain overseas, the market size of China's cross-border e-commerce SaaS will reach 10.3 billion in 2022, and the customer portrait presents a situation where 90% of domestic enterprises go overseas and 10% of overseas local customers.
With the deepening of e-commerce SaaS business and the accumulation of service experience, manufacturers have begun to try to lay out multiple product lines at the same time and connect service links, such as CRM, SCRM, live broadcast, content creation, etc. For example, Youzan and Weimob have gone down to become enterprise micro-assistants, relying on direct access to order information, with data capabilities that manufacturers like Weiban do not have, and at the same time improving the customer management capabilities of the private domain to achieve the effect of 1+1>2.
With 7.9% of GDP in 2022, the wholesale and retail sector is an important part of China's economy, and it will continue to maintain a high growth rate with consumption upgrading and the development of e-commerce. In addition, the epidemic has accelerated the change of consumer purchasing behavior, the revenue of offline formats including specialty stores and department stores has weakened, and the offline supply chain backlog caused by the repeated epidemics has brought more business opportunities to the offline retail industry, which has brought more business opportunities to e-commerce SaaS.
Source: Deloitte's China Consumer Goods and Retail Industry Overview 2023
1.3 Key Players and Competitive Strategies
Second, product dismantling
2.1 Positioning
2.1.1 Target Audience
According to Youzan's official website, Youzan has helped 60W+ brands, empowered 228W+ salespeople, and established sustainable customer relationships with 560 million+ consumers.
- E-commerce industry (represented by self-media merchants, brand owners, Internet celebrity anchors, and Tao merchants)
- Offline stores (represented by new retail, chain, beauty industry, and catering)
2.1.2 Core Products
2.1.3 Positioning Evolution History
2.1.4 Core Competitive Strategy
1) Large-scale customerization: Improve PaaS capabilities and focus on merchants above the waist
- Industrialization: Expand the new retail product team, reduce the difficulty of standardization, and improve customer satisfaction
- He is good at doing traffic and consolidating the customer advantages of e-commerce and head anchors (Dongfang Selection, Brother Xiaoyang).
- Set up a "key customer service department" to gather talents with key customer experience and launch a K100 strategic cooperation plan for KA customers
2) Consulting services
- The AI product "Plus Me Intelligence" lowers the threshold for the operation of 2W+ function points, accumulates the best practice case database of each merchant and internalizes it into service capabilities, improves the delivery level and reduces service costs
- Establish a consulting team to provide consulting services for private domain operation
3) Ultimate product experience: Empower business personnel and reduce service costs
- Pay attention to user experience (white crow's "aesthetic missing department" incident, Youzan rest assured purchase and freight insurance protection)
- The product maintains high-speed iteration (more than 900 major updates per year) system stability + ultimate security guarantee (the core service of the micro-mall is unavailable, affecting the customer's business, and the exclusive commitment to give 102.4 times compensation according to the unavailability time)
As an e-commerce SaaS listed company, Youzan is in a leading position in the industry, with strong brand power and the ultimate and leading product experience.
However, there are problems with high sales costs (Youzan Technology's sales expense ratio has increased from 37.8% in 2018 to a peak of 65.3% in 2021, and has been reduced in the past two years), and has been facing the problem of low customer unit price and renewal fee difference for a long time.
2.1.5 Recommendations
Consolidate the advantages of e-commerce & traffic business, and reach advantageous cooperation with head anchors of self-media (such as Dongfang Selection, Brother Xiaoyang, etc., which have signed contracts so far)
Seize the offline digital store market, explore vertical industries, improve product capabilities, and accumulate a large number of customer cases
Achieve the growth of key customers through acquisitions and other means, and accelerate the strategy of large customers
Enhance the consulting ability and agency operation ability to serve large customers, use AI tools to achieve corner overtaking, and benchmark Weimob to provide agency operation services since 2015, how to establish a competitive advantage
2.2 Capacity and Resources
1) Ability
founder
- With the label of "Alipay Chief Product Designer", Bai Yao has participated in Alipay website, cashier, payment, wallet and other businesses, and understands the operation formula of e-commerce and is well versed in user experience
- Formulate a strategic decision for AI to solve the problem of "SaaS system is difficult to use and high learning cost", and 50% of Youzan's R&D projects will be related to AI in 2024
technology
- 11 years of technology accumulation, leading system stability and security
- Industry-leading PaaS capabilities
- Youzan has a R&D team of more than 300 engineers, many of whom have jumped from Alibaba
The payment license guarantees the safety of the funds of both buyers and sellers
2) Resources
- In the past 11 years, the SaaS e-commerce industry has accumulated enough cases, and the listed company and brand awareness are high
- Cooperation on social media platforms, and continue to expand: WeChat, Alipay, Kuaishou, Xiaohongshu, Douyin verification
2.3 Scenarios and Experiences
1) Core functions
Scenario 1: Multi-channel customer acquisition
Customer pain points: There are few customer acquisition leads, and the channels are not connected with each other
Solution:
Multi-platform sales: The micro mall supports one-click entry into WeChat Mini Program, Alipay Mini Program, Xiaohongshu Mini Program, QQ Mini Program, (support Douyin group purchase coupon verification)
Alipay is open to Youzan merchants for search rights, using three major search capabilities: basic keywords, service direct and brand direct to help merchants get more traffic; Card and coupon configuration, synchronize Alipay card package, and improve retention and repurchase
With more than 200 million monthly active users and 43 million sharers, Youzan has opened up the Xiaohongshu Mini Program to help merchants obtain traffic in the Xiaohongshu Mini Program, realizing a closed loop from planting grass to trading. Through Youzan docking, merchants can quickly access Xiaohongshu without development, and at the same time, they can use Youzan tools to market and acquire customers, so as to achieve refined operations.
In the context of merchants paying more and more attention to Douyin operation, using mini program verification (same-city distribution) can avoid the loss of orders in non-in-store scenarios, significantly undertake this part of the order "dividend", bring more revenue, obtain more customer information, and improve repurchase.
Micro pages support multi-channel promotion
In order to meet different promotion scenarios and improve the accuracy and conversion rate of information promoted by merchants, different micro-pages are configured
Generate H5 links to promote your store to any channel such as WeChat, QQ, Weibo, SMS, Zhihu, etc
Ad serving
Docking WeChat, QQ and other channels of 100 million exposure of advertising space
Official account traffic promotion, gathering more than 100,000 WeChat self-media public account traffic owners to help Youzan merchants distribute advertising content
There are 25 million+ fans of the WeChat account
Advantages and disadvantages compared with competitive solutions (key points): multi-platform sales & micro-page capabilities are equal, and Youzan's advertising business is not as good as Weimob (Weimob is the largest advertising service agency in Tencent and a high-quality agent in the byte system)
Customer value
As of December 31, 2022, there were more than 83,000 paid merchants in China, of which subscription e-commerce SaaS merchants accounted for about 63%
Customer case: Afu essential oil shared "0 to 4 million, but there is a shortcut" in 2019, "0 to 4 million, but there is a shortcut" mainly through 3 stages, the first stage of the official account content to make bold innovations, strengthen tool attributes, product introduction, the community every day a lowest-priced group purchase product on the whole network; The second stage is to reach and market users through WeChat template messages (the open rate of WeChat template messages is 10 times that of SMS); In the third stage, traffic sources are increased through Youzan official account placement, user fission, Youzan advertising, etc., and users are stratified.
From August 2018 to May 2019, the monthly revenue of Afu essential oil in Youzan micro mall was 0-4.2 million.
Deficiencies and suggestions: Channel capacity building solves the problem of tools for merchants, but does not solve the problem of lack of operational capabilities for merchants.
In the private domain operation service, according to the communication with the pre-sale, Youzan currently only supports the "private domain operation cold start" service, the service content is relatively simple and modeled, when asked whether to provide agency operation services, the other party said that it is not recommended to use on the one hand, the operation is not a strong point, on the other hand, the cost is relatively high, it is recommended to find a professional operating company.
Compared with Weimob's agency operation service in 2015, the basic service is about 5w per quarter, which is more in line with the needs of medium and large customers, and a department of our company has cooperated with Weimob for 3 years, with a good evaluation. It is recommended that Youzan accumulate experience in management consulting and agency operation, improve service capabilities, and better serve medium and large customers.
Scenario 2: Rich marketing activities + Youzanyun
Customer pain points: Private domain e-commerce based on the WeChat system mainly conducts transactions in the group and circle of friends by operating fans/official account pushes/pulling heads, and explores how to close the first order, how to improve the repurchase and how to grow in the long term?
solution
Traffic acquisition: Own distributors
It helps enterprises register employees, shopping guides, store assistants, and customers as distributors to achieve full distribution, enhance online customer acquisition capabilities, and rapidly increase sales, while employees can obtain sales rebates, which is a sales tool widely used by merchants.
Traffic acquisition: Youzan distribution channel
Youzanke: Unite the majority of Internet celebrity anchors, goods experts, and micro store owners to help you sell goods and create popular models
Quality Supplier Policy
High-quality supplier service assessment, automatic marking if the conditions are met
Traffic incentives: For 4 consecutive weeks, high-quality suppliers can enjoy: free opening of the "Discover Distributors" function, distribution market homepage "Must Sell Explosive Articles" > "New Listings" > "Dark Horse Explosions" > "Cutting-edge Domestic Products" & "Live Broadcast Good Goods"
Stimulate conversion: The in-store marketing components are abundant, attracting fans, old customers and new customers, etc
Practical results
In 2021, Youzan's official data disclosed that in the past 7 years, more than 229 million orders have been brought through distributor promotion, and the stock of distributors has reached 27 million, and distributors have gained 38.5 billion yuan.
Customer Testimonial/Actual Cases (Highlights)
With the help of Youzan micro mall, Longbeilai has launched four special areas of anti-season, tail goods, selection, and beauty, and at the same time carries out high-discount promotions for major categories, it also sells cost-effective related categories such as big-name beauty and home life. In order to improve the enthusiasm of shopping guides, online commission rewards are introduced that are higher than offline point raising, so as to encourage shopping guides to direct customers in their personal WeChat to online for conversion. In addition, Longbeilai also adopts the method of online recruitment to rapidly expand the scale of distributors in the shopping guide of the outlet store, and relies on the Youzan distributor function to provide nanny-style teaching, order progress tracking, commission arrival reminder and other intelligent assistant services to help the shopping guide get started better and faster. Through this combination of punches, Longbeile not only completed the start from 0 to 1 in the construction of private domain channels, but also achieved a breakthrough in sales of tens of millions in a short period of time, and improved the company's ability to resist risks with the help of privatization of customer assets.
Youzan has invested a lot of R&D resources into the marketing module, but there are still many personalized demands that cannot be met, according to public reports, Youzan's own technical team can handle 1/3, and there are still a large number of business needs that need to be joined by a third party. Based on this, Youzan Cloud, as a PaaS platform for Youzan business, opens up six cloud products: e-commerce, marketing, customer, retail, service, and data. At present, there are 5W+ settled developers, 1000+ open interfaces, and 500 million+ daily calls. Youzanyun not only improves the level of customer demand satisfaction, but also reduces the cost of complete research and development by itself, establishes an industry ecology, and explores more possibilities.
Scenario 3: Customer operation system
Customer pain points: Startups need user portraits to do 1v1 customer sales in-depth follow-up; Medium and large companies need user portraits to do hierarchical crowd marketing. How can user labeling and crowd modeling empower the front line with the help of system tools?
solution
Youzan CRM: Support customer segmentation and 200+ filter conditions, more powerful user screening capabilities, and support more subdivided operation scenarios
Youzan Enterprise Micro Assistant: The user's order information is automatically synchronized with the Qiwei friend tag, and the user's consumption behavior is clearer and more direct
Marketing Canvas: Based on Youzan CRM, it realizes automated marketing, and connects scattered operation strategies through process orchestration and logic to help operators deliver accurate information at the right time and with right users.
- Templates and custom design: 10+ operation templates have been launched, covering 40+ core business scenarios, allowing merchants with no user operation experience to apply and get started quickly with one click
- Tasks are automatically triggered
- Marketing AB test
Reports & Channel Monitoring
Merchants can customize the selection of data indicators, build data dashboards suitable for their own business, and understand the overall business situation. You can select 150 data indicators (the caliber of the indicators is clearly explained), customize the time interval analysis, and support year-on-year analysis. It can conduct overall analysis, funnel model, trend analysis, leaderboard, etc., to meet the needs of merchants for multivariate data analysis.
Advantages and disadvantages compared to competing schemes
Youzan and Weimob are currently evenly matched in terms of product capabilities, and have products such as enterprise and micro assistants, membership growth, and crowd operations, but the difference lies in the difference in charging models and product architectures. Youzan released Youzan cloud products in 2017 and carries out major upgrades 2-3 times a year to fully open up its core capabilities. Youzan atomizes the system function, splits it into separate components, and builds the system based on process orchestration, so that merchants can achieve personalized customization through Youzan Cloud. Weimob's customer operation system mainly relies on CRM products to achieve, package and charge, and a single product is 19800/year. The investment in the construction of PaaS is not as good as the current capacity.
Customer word-of-mouth/actual cases
The mystery has precipitated 400,000 members, but the proportion of members sleeping is as high as 94%. Through consumption data analysis, customers who have not come to the store for consumption within 180 days are defined as sleeping customers; With the help of tools such as Youzan's shopping guide assistant, the store shopping guide is driven to track the effect of the first contact, and the next step is reached according to the user's follow-up behavior to improve the transaction conversion rate; At the same time, activities such as shopping guide PK competition were carried out to further stimulate the enthusiasm of shopping guides. Through this set of gameplay, we successfully increased the activation rate of sleeping customers to 6% by the end of 2022, and kept the implementation rate of shopping guides at 99%.
2) User experience
Youzan's user experience is significantly better than Weimob's, starting from two points: quickly building a store and business experience:
Set up your store quickly
Each feature comes with usage assistance for merchants to learn to use.
Design a reasonable user learning and growth path, distinguish basic + advanced functions, and then guide users to learn advanced functions when they gradually get started and have more needs
Merchant business experience
Relatively speaking, Weimob has not done a deep job in this area, for example, the return and exchange package freight is only functionally "pre-shipment freight refund setting", compared with Youzan not only provides basic consumption protection, Youzan assured purchase, freight insurance services, to help merchants operate, and provide protection for consumers.
3. Summary
As a tool, Youzan is better than Weimob in terms of product functions, the efficiency of the use of functions, and the details of operation guarantee are very in-depth, in addition, the layout of PaaS, cross-border e-commerce, and the founder personally led the team to do AI also demonstrate the production and research strategy of the Youzan team. Although the cost of sales is constantly being optimized, the cost of sales of Youzan is still high (the cost of sales of Youzan in 2023 will be 446 million, and the sales expense ratio will be 29.8%).
We can conclude from observing the changes in the needs of merchants, the changes in the capabilities of practitioners, and the changes in the sectors that customers are willing to spend money on: it is more important to provide customers with more refined private domain content, operation, data and other services such as operational experience, operational solutions, and top-level strategic consulting services.
Large customers are a must for e-commerce SaaS, although Youzan has established a key customer service department, but in the future, how to better provide private domain operation services will still be the direction that needs to be explored and provided solutions:
- How to maintain the advantage in the competition of medium and large customers, tap the industry customers that have not been occupied by Weimob, and find your own business growth strategy
- Continue to consolidate the trust of e-commerce customers, closely follow customer business channels to carry out technical services, and maintain customer contract renewal
- Complement its own experience in agency operation capabilities, combine AI tools to achieve corner overtaking, and reduce sales costs through intelligent operations
Refer to the article
[1] Dismantling is praised, 10,000 words long!
https://www.shangyexinzhi.com/article/4851085.html
【2】有赞 AllValue 正式进军北美五城
https://news.sohu.com/a/669712558_100174687
[3] Youzan New Retail: Marketing Canvas User Guide
https://mp.weixin.qq.com/s/-uD42fsuypMdpZcAtKT1Uw
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