Author | Zhang Fan
Edit | Chen Weixian
Design | Brother Die
Have you noticed that Douyin e-commerce has been a bit of a lot of action recently.
In July, Douyin e-commerce announced a reduction in the technical service rate (commonly known as "commission") for merchants in the grocery category, from 5% to 2%.
Then, in August, merchants in the fresh fruit category ushered in a commission-free policy.
Not only that, in the past few months, Douyin e-commerce has lowered the margin twice in a row, covering nearly 8 percent of merchants on the platform.
An e-commerce merchant told the operation agency that Douyin e-commerce has continued to give profits to merchants over the past year, and a series of commission-free benefits have allowed his Douyin store to save an average of more than 450,000 yuan in commissions per month, and these costs are helping them to expand their business model and continue to grow and develop in Douyin e-commerce.
According to the observation of the operation agency, similar merchants are not an exception, and many merchants have clearly perceived that Douyin e-commerce has made more and more concessions to merchants since the beginning of this year.
Is making profits for small and medium-sized businesses a new trend in Douyin e-commerce? What types of merchants can tap new dividends on Douyin? Isn't it easier to do e-commerce on Douyin in 2024?
In response to these problems, the operation agency contacted several merchants who are working on Douyin to talk about the new opportunities for Douyin merchants.
01
"I sell umbrellas on Douyin, and I sold 300,000 orders in 2 months after opening the store"
Mr. Dong is a veteran e-commerce trader who has been doing business on shelf e-commerce platforms since 2019, focusing on umbrellas. In March 2023, looking for more room for growth, he decided to settle in Douyin e-commerce, which began to focus on the shelf market, and Mr. Dong sensed that this would be a good business opportunity. He believes that compared with other platforms, Douyin e-commerce has natural advantages in traffic and customer acquisition, and the marketing costs of merchants on Douyin are greatly reduced.
In March 2023, Mr. Dong opened his first store on Douyin e-commerce, called Mrs. Liu's Home Furnishing Flagship Store. They still sell umbrellas and focus on cost-effective products.
At this time, Mr. Dong found that the cost of trial and error for new merchants in Douyin e-commerce was much lower than that of other platforms. He calculated an account with the operation agency, and he had to pay 50,000 yuan for the deposit of other platforms, and the service fee was as high as 60,000 yuan, and then counting other marketing expenses, and the cost budget for the first month was often 100,000 yuan.
"We only paid a deposit of 2,000 yuan to settle in Douyin." Moreover, they are also the first batch of merchants to catch up with the commission-free policy of Douyin e-commerce commodity cards, with an average monthly rebate of 7~80,000 yuan for commodity card orders alone, helping them save a lot of operating costs.
With the blessing of high-quality supply and Douyin e-commerce traffic, Mrs. Liu's home furnishing flagship store has gained good business as soon as it opened. In the first two months of opening, the number of orders exceeded 300,000. Subsequently, Mr. Dong successively opened 7~8 new stores on Douyin, and the cost of entry was not high, which was used for hierarchical operation and covered differentiated customer groups with products with different customer unit prices.
It is understood that the total GMV of all his stores reached 40 million yuan last year.
This year, Mr. Dong chose to continue to increase Douyin e-commerce, and he also expects to achieve another breakthrough in performance, and their GMV target for Douyin single channel in 2024 is 60 million yuan.
Mr. Dong is very confident that he will achieve his goal, and part of his confidence stems from the fact that while the Douyin e-commerce ecosystem is becoming more and more perfect, the platform's support for small and medium-sized businesses is getting stronger and stronger.
The most direct support is the reduction of commissions. When Douyin e-commerce announced that the commission for daily necessities would be reduced to 2% starting in July, many merchants were excited.
Mr. Dong bluntly said that the reduction of commissions is not only a simple reduction in costs and an increase in profits. It also means that the cash flow of the merchant is more sufficient, and more money can be used to the cutting edge, quickly turn the business spiral, and expand the scale of the business.
Umbrellas are seasonal products, and being able to seize the short sales season and quickly open sales channels is the most simple pursuit of factory-type businesses like Mr. Dong.
He told the operating agency that they have used the commission reduced by the platform to increase influencer cooperation, marketing innovation, product innovation and other aspects. Recently, they upgraded their operations team from 12 to 15 people with the goal of making operations more granular. At the same time, they are trying to use Qianchuan advertising to leverage more commodity card orders and build a self-broadcast team to get more traffic......
These operational actions directly accelerate the flow of cash, in the shortest possible time, the inventory into money, and then put the money into product research and development and refined operations, the ultimate goal is to achieve a positive cycle. "Let the money continue to make money".
According to Mr. Dong, since the commission reduction of Douyin's e-commerce daily necessities category, not only has the profit margin increased, but the turnover has also increased by about 30%.
02
"After the commodity card is commission-free, it helps me save 300,000 commissions a month"
Ms. Wei is also a department store merchant on Douyin, and she is the person in charge of the Yanyu brand. Since Douyin e-commerce allowed "one certificate to open multiple stores", she has successively set up a number of stores, including flagship stores, specialty stores and individual stores, with products involving furniture storage, cleaning supplies, building materials, etc.
The so-called "one certificate with multiple openings" means that merchants can open multiple stores under one business license, so as to meet the needs of merchants to create a cross-track, multi-category, and differentiated "group store matrix".
In 2023, Ms. Wei will start to build shelves on the basis of content e-commerce, and "category vertical + good price and good goods" is their main strategy. According to her, the Yanyu brand was originally a pure grouping type of merchant, and with the expansion of the commercial scale, it is transforming into a R&D enterprise based on ODM (original design manufacturer).
It is understood that the stores under the Yanyu brand have broken 300,000 sales of single products, and many stores have achieved monthly sales of millions on Douyin, and the sales of some single products have exceeded 15 million yuan.
The Yanyu brand has a number of good reputation stores in Douyin e-commerce
Ms. Wei is very familiar with Douyin's business form, and they have a methodology for creating popular models. She believes that merchants need to be driven by R&D and supported by data to create popular products on Douyin, and work with factories to stabilize new customized products. At the same time, the new product should also have the characteristics of new, strange and special, and the difference should be prominent, which can effectively enhance the brand mentality.
On the basis of the above, if merchants can also pay attention to the traffic attributes and appearance attributes of products, it is easier to give birth to products that are sought after by Douyin consumers, for example, they will co-brand with brands such as Little Yellow Duck G.DUCK and Disney, and create a lot of popular models with the help of IP traffic and popularity.
As an "old merchant" who has been deeply involved in Douyin e-commerce for many years, Ms. Wei has a very obvious perception of the changes in Douyin in the past year. "I have the most say in a series of policy changes for Douyin."
The subsidy policy that impressed her the most was the new commission-free regulations for commodity cards. The commodity card refers to the card that displays the product information in the Douyin shelf scenario, and the order that the user clicks on the commodity card through the non-live broadcast and non-short video page is the commodity card order.
The new rules stipulate that merchants can get the benefits of commission-free for all commodity card orders as long as they complete the relevant tasks.
It is understood that the Yanyu brand deeply binds the concept of good prices and good things to the commodity card track, and the average monthly commission for the commodity card can be reduced by up to 300,000 yuan. "Counting the impact of the industry's commission reduction, we can save another 150,000 yuan in store commissions, and this number will continue to expand."
Ms. Wei admits that the commissions saved by merchants are generally not in vain on the store's account, and are often used to play a more important role.
Taking their store as an example, the Yanyu brand will mainly use the money in the following three aspects:
1. Focus on the design and research and development of new products in the category of daily necessities, add a new product every month, and produce more high-quality goods based on the content hotspots and consumer interests of the Douyin platform;
2. Pay attention to the content output of high-quality original short videos, find the combination of existing products and products to be developed and consumers' life scenes, increase investment in the shooting of original short videos, and provide financial support for providing more high-quality content;
3. There is more room for operation in the delivery, and you can use Qianchuan to launch and combine the life scenes and hot spots of daily necessities to quickly and effectively play the exposure of new products, improve the search popularity and conversion after the release of new products, and improve the activity of the store.
Ms. Wei believes that driven by this combination of products, content and delivery, it can help stores leverage more customer flow and business, so as to achieve a positive cycle, which is conducive to the continued development and growth of the brand in the e-commerce track.
03
Douyin e-commerce continues to make profits, is now a good time to do business on Douyin?
Merchants like Mrs. Liu's home flagship store and Yanyu brand that seize the dividends of the platform are not individual cases, nor are they limited to a certain industry.
In order to understand the specific situation of Douyin e-commerce dividends, the following operating agency has sorted out a series of recent subsidy actions launched by Douyin e-commerce for merchants:
In July, the commission of Douyin's e-commerce daily necessities category was reduced from 5% to 2%, covering four first-level categories: home/personal cleaning tools, home accessories, household daily use, and storage and organization;
In August, the commission reduction strategy was further upgraded, and merchants in the main fruit fresh category of Douyin e-commerce can enjoy real-time commission-free benefits, and the platform only charges merchants 0.6% of the technical service fee.
In addition, this year, Douyin e-commerce has also lowered the margin twice in a row, covering about 8 percent of merchants, with a maximum reduction of 90%.
Earlier, Douyin e-commerce also announced that it would waive all merchant card transaction order commissions for all merchants. According to statistics, in 2023 alone, more than 3.6 million merchants will receive more than 6 billion yuan in commission-free amounts.
After a series of "combination punches", Douyin e-commerce has made up its mind to help merchants reduce costs and improve efficiency. The core purpose may be to attract more excellent merchants to settle in through a part of the profits, so as to leverage better sources of goods and provide users with more abundant and high-quality products.
In this way, is it easier to do e-commerce on Douyin?
In 2023, the number of merchants settled in Douyin e-commerce will increase by 355% year-on-year, the number of billing merchants will increase by 313% year-on-year, and more than 50% of merchants will have dynamic sales within 30 days.
Judging from the data, Douyin e-commerce continues to release dividends. The latest data shows that the NPS (Net Promoter Score) of Douyin e-commerce has steadily increased in the first half of 2024, and the proportion of users who are willing to recommend Douyin e-commerce to people around them has also increased by 10%. The improvement of consumer experience has also helped merchants to stabilize their operations, and the monthly retention rate of dynamic sales merchants reached about 80% in the first half of the year.
Overall, Douyin e-commerce's support strategy for small and medium-sized businesses has achieved initial results. Under rounds of commission reductions and traffic subsidies, a large number of merchants like Mr. Dong and Ms. Wei are leveraging big business in Douyin e-commerce. It is reported that in the second half of the year, Douyin e-commerce will continue to expand the investment categories of food tonic, furniture, 3C digital and other industries, introduce more new categories, and help more small and medium-sized businesses operate stably on the platform.
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