How to enter Douyin's "interest e-commerce"?

There are actually not many e-commerce opportunities left for merchants. Although it seems that various new consumption types are emerging and booming at the moment, the interests of the top e-commerce platforms are solidified and their routines are rigid, which means that the space for huge growth and disruptive breakthroughs for merchants is really limited. After years of verification in the business world, it has been found that the only way for businesses to break through and rise is to seize opportunities in new channels and new platforms.

Merchants who live by the flow need to focus their attention on areas with the greatest potential for growth - naturally, Douyin e-commerce has become a new battlefield that is recognized by everyone and worth cultivating in depth.

There is no need to elaborate on the value of TikTok. It has more than 600 million daily active users, and its technology in interest recommendation is unquestionable. The total merchandise volume (GMV) of Douyin e-commerce in January this year increased 50 times compared with the same period last year, and its attitude of supporting merchants is also very firm: in the next year, Douyin e-commerce plans to help 1,000 merchants achieve annual sales of over 100 million yuan, 10,000 high-quality influencers achieve annual sales of over 10 million yuan, and 100 high-quality products achieve annual sales of over 100 million yuan.

Against this backdrop, understanding Douyin and Douyin e-commerce is absolutely a top priority for merchants. This month, Douyin E-Commerce and Bain Company jointly launched the "2021 Douyin E-Commerce Merchant Management Methodology White Paper". Based on the first Douyin E-Commerce Ecological Conference in April, it provided a more specific path to provide brand merchants with a more practical methodology and position layout reference for their operations in Douyin E-Commerce.

FACT business matrix model

Understanding the underlying logic of “ interest e-commerce ”

To grasp the operating methods of Douyin e-commerce, you first need to understand the underlying logic of Douyin e-commerce. This is also the first key question answered by the "FACT Business Matrix" model proposed in the "2021 Douyin E-commerce Merchant Management Methodology White Paper".

In his speech, Kang Zeyu, president of Douyin e-commerce, elaborated in detail the concept of "interest e-commerce", which is an e-commerce based on people's yearning for a better life, satisfying users' potential shopping interests and improving consumers' quality of life. This means that the core of Douyin e-commerce is to actively help users discover their potential needs.

For businesses, this means that more consumer demands are being discovered, and they have the opportunity to find their consumers more accurately through Douyin. It also means that some of the logic of traditional e-commerce in the past is different here.

In traditional shelf e-commerce, consumers come for consumption with the clear purpose of wanting to buy a certain product, which is a model of people looking for goods. In this model, users need to understand the product and be interested in it before they can place an order, so the characteristics of the link are also very obvious - "traffic - conversion - sedimentation" are a one-way funnel logic.

The funnel logic of traditional e-commerce and the snowball growth logic of interest-based e-commerce

Interest-based e-commerce is a form of stimulating growth. Through recommendation technology, the continuous accumulation of user scale and transaction data can leverage more traffic distribution and acquire more potential consumers, thus allowing the business to enter a "growth cycle". Bain calls this growth model "snowball growth."

Further explanation: Product information is integrated into real and vivid content scenes through Douyin short videos and live broadcasts, which can stimulate users' consumption interest; at the same time, recommendation technology uses high-quality content as a carrier to help products reach potential consumers, and based on users' positive feedback on content and products, recommend product content to more users with the same interests, thereby promoting discovery-based consumption.

It can be seen that Douyin e-commerce has taken a completely different shopping chain, that is, it has broken away from the traditional e-commerce's "people looking for goods" and formed a "goods looking for people" shopping path. Xu Jia, the person in charge of Douyin's e-commerce marketing, said: "The so-called 'goods find people' is to integrate the goods into the content and distribute it to consumers, thus creating a recommended shopping link."

Interest-based e-commerce promotes discovery-based consumption. Image source: "2021 Douyin E-commerce Merchant Management Methodology White Paper"

Under such a special link, the merchants' growth methods are naturally unique.

For example, in the traffic gathering stage, the quality and quantity of content are raised to an unprecedented level - when the interaction, conversion, and sedimentation data of the content are good, the effect of acquiring traffic will also be very good. The "White Paper" recommends that merchants continuously optimize content by summarizing and analyzing the performance of large amounts of content data, so as to summarize the high-quality content production methods that are most suitable for the store; in terms of quantity, increasing the length of live broadcasts and the number of short videos can open up more traffic entrances. Merchants can optimize content and provide real-time feedback on results by extending live broadcasts, and ensure long-term traffic stability. Sufficient short video content also brings more content exposure opportunities for stores.

In addition to content, the core of Douyin's e-commerce traffic operation is to operate free and paid traffic in a refined manner. Paid traffic can leverage the recommendations of free traffic.

In the early stages of Douyin e-commerce operations, the store had less user assets and lacked a clear population portrait. The accuracy and magnitude of free traffic recommendations were relatively low, causing the store to encounter a growth bottleneck during its startup period. At this time, paid traffic can be directed to potential users by selecting target audience packages.

Free traffic can help determine the accuracy of paid traffic. Through the content data performance brought by free traffic, the matching degree of the population reached by paid traffic can be optimized. When mature accounts run advertising campaigns, the quality of the intelligently recommended audience packages is often better than that of the actively selected audience tags. This is because free traffic has found the best audience delivery strategy for the account by continuously testing the performance of different audiences.

In the conversion stage, the survey found that the key to a good conversion is to organize product strategies to match the needs of potential groups, and to maximize conversion efficiency through mature live broadcast rooms and short video content operation plans.

In fact, some merchants and influencers have transformed from interactive content accounts to live streaming e-commerce accounts. The fans accumulated through interactive content before the transformation cannot be immediately converted into live streaming purchasing fans, resulting in a low conversion rate in the initial stage of the live streaming room. At this time, it is very necessary to find the target potential audience for product sales content.

To find potential groups, on the one hand, we rely on the creation of distinctive personalities and long-term stable content output to form continuous accumulation; on the other hand, we must rely on the assistance of operational actions to accelerate the identification and growth of target groups through pre-heating videos, marketing tools, advertising, etc.

However, it has to be admitted that Douyin's e-commerce live streaming needs to meet multiple marketing goals such as traffic generation, grass-roots promotion, interaction, conversion, etc. The live streaming process is more compact and requires higher capabilities from the live streaming team. This is probably what worries merchants the most.

During the sedimentation stage, what merchants need to do is optimize daily operations and focus on "increasing fans" and "repeat purchases". In daily short videos or live broadcasts, inviting viewers to interact and add fans is the most common and important accumulation action. By following, joining fan groups, and joining store fan groups, merchants can gradually deepen fan operations on fans, reach fan groups multiple times through multi-level operations, enhance fan stickiness through a variety of marketing tools (such as fan coupons, fan lotteries), and establish long-term trust relationships with fans to achieve long-term and sustainable conversions.

How to mine new gold?

Now that the chain logic of Douyin e-commerce has been clarified, the next question is: how to layout the business in Douyin e-commerce? How to match the organizational capabilities of merchants?

The answer given by the "2021 Douyin E-commerce Merchant Management Methodology White Paper" is FACT - the four major business positions of merchants in Douyin e-commerce.

• F (Field) is the field operation of the merchant’s own broadcast;
• A (Alliance) Matrix management of a large number of talents;
• C (Campaign) A combination of marketing activities;
• T (Top-KOL) is a win-win situation for product and sales of top KOLs.

(F) Merchant self-broadcasting and (A) influencer matrix are used to build stable daily sales, while (C) marketing activities and (T) top Vs are used to achieve large-scale product sales explosion. Corresponding to different business goals and operating scenarios, merchants can combine their own growth needs and carry out targeted layout operations to achieve long-term and efficient business growth.

It is worth mentioning that FACT’s methodology comes from practice, so it has very important reference value for businesses. Mu Qing, vice president of Douyin e-commerce, said: "Since we started this project, dozens of merchants have used their various experiences to tell us what the source of their incremental growth is in each track. This is a major basic source of our methodology."

Specifically at the execution level, merchants can flexibly allocate operational resources and marketing investment in the four major business areas based on the GMV growth needs at different stages, so as to achieve stable and efficient continuous growth in the total volume of Douyin e-commerce business.

For example, merchant’s own broadcast (Field) is the merchant’s most basic business position. Since entering Douyin in 2020, the domestic brand PEACEBIRD Clothing has seen its monthly GMV from self-broadcasting increase by nearly 80%. During the Douyin e-commerce New Year Goods Festival, PEACEBIRD Women's Wear broke the record for self-broadcasting by clothing brands, with the transaction volume of a single live broadcast reaching 28 million yuan.

However, Peacebird’s achievements were not achieved overnight. In the early days of the store, due to the small number of fans, Peacebird women’s clothing had poor conversion capabilities and found it difficult to obtain sufficient natural traffic. After that, relying on continuous self-broadcasting for more than 18 hours a day, the brand gradually accumulated a user group with high purchasing intention.

In terms of self-broadcasting, the most important thing is to create content, humanize the brand, and narrow the distance between users and merchants. In fact, PEACEBIRD Women's Wear has created a unified image for all the anchors in the brand's live broadcast room and launched the "PB Girl Group", which conveys the brand concept through the distinctive personality characteristics of each anchor. The growth of the anchors has also greatly driven the growth of the store's popularity, bringing the number of store fans to over 1.5 million.

This process also requires close coordination between advertising and data analysis. For example, the PWU brand uses the massive Qianchuan platform to make real-time adjustments to advertising in live broadcast rooms. By monitoring the data performance of the live broadcast room background and coordinating with the requirements of the live broadcast room rhythm, the PWU advertising team modified the advertising plan in real time, thereby obtaining a stable advertising ROI and helping the business achieve rapid growth.

The Taiping Bird on TikTok

Another example is the talent matrix (Alliance), where talents can be said to be amplifiers of business growth.

Although some public opinions some time ago believed that "brands are working for KOLs", it is undeniable that influencers can indeed provide businesses with increased sales and popularity.

The Li Ziqi brand has leveraged its own talent resources and cooperated with the platform's talent matching tools to achieve the excellent result of stable monthly sales of over 10 million on Douyin e-commerce with the talent matrix as the main base. At the same time, with the help of influencer diagnostic tools and the brand's own influencer database, the Liziqi brand is able to track and evaluate influencers' performance in detail and continuously optimize the influencer matrix structure. It has currently cooperated with more than 2,000 influencers and achieved steady business growth.

In terms of marketing activities, this is the place where large-scale sales explode. With the help of various marketing activities, merchants can achieve large-scale traffic aggregation and user mind reinforcement based on different business goals such as brand promotion, new product launches, and big promotions, thereby facilitating concentrated transactions with high turnover in a short period of time.

"TikTok Super Product Day", "TikTok New Day" and "TikTok Newcomer Release" are all TikTok's marketing IP activities. In January 2021, Whoo participated in the Douyin "Super Brand Day" event for the first time, and achieved a single-game sales of 300 million and a single-product sales of 289 million, setting the highest single-game record and the highest single-product record at the time.

Merchants can also plan their own events - Be & Cheery took advantage of the New Year shopping season to organize a Super Brand Day event. Through multiple short video contents, the official topic of Baicaowei #BaicaoweiTreasuresNewYearGoods# has accumulated more than 14 million views, which has fully warmed up for the Super Brand Day. On the day of the event, advertising that was highly coordinated with the live broadcast room provided sufficient traffic foundation for the sales explosion. Ultimately, the live broadcast on Super Brand Day achieved an impressive result of over 10 million views, and at the same time helped the brand account gain nearly 300,000 followers.

Be & Cheery on TikTok

Finally, there are Top KOLs. A series of successful cases in the past have proved that the cooperation between brands and Top-KOLs such as celebrities and top influencers can help brands achieve a “double explosion” in product promotion and sales. For example, during the opening period of Douyin e-commerce, La Roche-Posay invited Douyin celebrity Zhu Guagua to live broadcast the opening ceremony. With the help of Zhu Guagua's popularity and influence on the platform, it quickly accumulated initial fans and sales.

It is also worth noting that using content to stimulate consumers' interest in products is the core value of Douyin e-commerce. Building content-centered e-commerce management capabilities and team structure will greatly improve merchants' operational efficiency and business growth rate on Douyin e-commerce.

“If you want to do your work well, you must first sharpen your tools.” “It is better to teach a man to fish than to give him a fish.” Too much historical experience tells us that the key to getting something done lies in mastering efficient methods and reusing them in other things.

"We believe that this business methodology is particularly important to us. It may be a very important cornerstone for all brands and merchants to operate, take off their businesses, and grow their businesses on this platform now and in the future," said Chen Duye, vice president of marketing at ByteDance.

Mu Qing, vice president of Douyin e-commerce, clearly pointed out that the FACT business matrix model is a basic guide and reference for merchant partners. "It can help him develop faster and better on the platform. It is a big guide, a model, and a direction that has both underlying logic and business operations."

The FACT business matrix model is derived from the deduction of Douyin's e-commerce logic and the co-creation of a large number of successful brands. When merchants face the huge opportunities of Douyin's e-commerce, these methodologies will undoubtedly bring deep inspiration.

Author: Deep Sound

Author: Deep Sound