DianTao—Analysis of competitive products of Douyin live e-commerce!

In 2021, the "Taobao Live App" was officially renamed " Dian Tao App", and it hopes to reach consumers through emerging shopping methods such as [live e-commerce + short videos]. As one of the current leaders in "content short video + live e-commerce", the author of this article will use Diantao and Douyin as examples to conduct a competitive analysis .

1. Industry Background

1. Political environment

In April 2020, General Secretary Xi Jinping encouraged live e-commerce staff, affirmed the social benefits of live e-commerce, and elevated live e-commerce to the national strategic level; local governments formulated e-commerce support documents or outlines, especially Guangzhou, which is committed to becoming China's first live e-commerce city.

In addition to incentive and support policies, governance and regulatory guidelines for the chaos in e-commerce live streaming have also been introduced one after another. For example, in November 2020, the Beijing Market Supervision Bureau, together with 16 institutions including the Public Security Bureau and the Cyberspace Administration of China, launched the "Net Sword" plan to standardize the operating procedures of live e-commerce, promote the formation of industry self-discipline conventions, and drive the live e-commerce industry to maintain a rational business model while developing at a high speed.

2. Economic environment

Currently, major live streaming e-commerce platforms are developing at a high speed. In 2019, Taobao's live streaming e-commerce GMV is estimated to exceed 250 billion yuan, a year-on-year increase of 150% from 100 billion yuan in 2018; Kuaishou's full platform traffic has brought in live streaming e-commerce GMV, with an optimistic estimate of 300 billion yuan (conservative estimate of about 150 billion yuan), and Douyin's live streaming e-commerce GMV is estimated to be 40 billion yuan. Live streaming e-commerce on major platforms has risen rapidly and become a new growth pole in the e-commerce industry.

According to the Ministry of Commerce's business big data monitoring, there were more than 4 million e-commerce live broadcasts in the first quarter of 2020, and more than 100 county governors and mayors entered the live broadcast room to "endorse" local products.

3. Development Environment

Live streaming e-commerce refers to a form of e-commerce that uses live streaming as a channel to achieve marketing goals. It is the product of the two-way integration of live streaming and e-commerce in the context of the digital age.

The live shopping function was first launched by Mogujie in March 2016, and Taobao launched the live streaming function in May 2016. 2019 was called the first year of live streaming e-commerce due to its rapid development. In 2020, the sudden outbreak of the epidemic pushed the live streaming e-commerce industry into a blowout period, and top anchors, celebrities, hosts, celebrity entrepreneurs, etc. came to the fore to live stream and sell goods.

Figure 1 Source: 36Kr Research Institute

4. Social background

In 2020, the "black swan" epidemic dealt a severe blow to the global economy. As one of the few economies that maintained positive growth, China became an important engine driving the global economy. Even though the domestic economy has steadily recovered, consumption's contribution to GDP in the third quarter of 2020 fell to 34.9% from 58.8% in the same period of 2019.

At the same time, the development of the domestic Internet industry has also ushered in a historic opportunity. During the epidemic, the revenue of Internet insurance companies increased by 7 times year-on-year; the online cloud office industry maintained a user growth rate of more than 100% every month; the short video industry rapidly grew into the second largest industry after instant messaging; in the second quarter of 2020, the scale of e-commerce live broadcast users reached 309 million, with a month-on-month growth rate of 16.6%; and there are countless examples like this.

We found that the epidemic is not all wailing, and the land swept by the storm is still full of vitality. In 2020, we witnessed the reshaping of domestic consumers' online shopping consumption concepts after the unexpected epidemic, and witnessed the boost of China's digital ecosystem to the economy. It also brought new opportunities and challenges to the consumer market.

5. Technological Development

As a new generation of mobile communication technology, 5G has greatly improved basic technical capabilities such as download bandwidth and network speed compared to previous 4G, and has a higher level of Internet, IT, intelligence and flexibility. It can bring users the ultimate user experience and better promote the development of live e-commerce. Its performance is as follows:

1. The stability of the live broadcast picture, network problems such as low clarity, page freezes and slow jumps during the live broadcast will be improved;
2. The interactivity in live broadcasting and the online communication and interaction between the anchor and the fan buyers will have a better experience, which will help build stickiness between the anchor and the fans and enhance the sense of trust;
3. The division of labor and cooperation model of real-person live streaming + virtual AR (augmented reality technology, full name Augmented Reality) attracts users' attention through technological innovation of live streaming content, such as 360° panoramic live streaming technology of products, and a more realistic shopping experience, which will be more conducive to product purchase conversion and transaction.

2. Competitive Product Analysis

1. Competitive product “manifesto”

The product e-commerce live broadcast model has encountered a bottleneck, and the product live broadcast e-commerce business of Douyin and other products has developed rapidly. We need to further study products such as Douyin, Kuaishou, and Mogujie, hoping to find new directions for the development of e-commerce live broadcast business.

2. Competitive product selection

As the attribute of “live streaming with goods” on Douyin becomes more and more important, the share of live streaming with goods is getting higher and higher. At present, the competitive products are compared and verified from the following four dimensions, analyzed and selected:

1. The value provided to users;
2. Target user similarity;
3. Usage scenarios;
4. Product features;

In the end, it was determined that the competitor of Diantao App was Douyin App.

3. Competitive product information

4. Development History

The above is the development history of DianTao and Douyin, from which we can see:

In the early days, Douyin defined its product as a social software. It imported KOLs in batches from Meipai and took over celebrity resources from Toutiao, and engaged in fan dissemination with KOLs as the core. However, its user base is still relatively small.

However, in June 2018, it subsequently signed a strategic cooperation agreement with the State-owned Assets Supervision and Administration Commission News Center and other central enterprise media alliances, including signing celebrities and talents, and coupled with fun and interesting cool animations and music, it led to the participation of other media and a large number of users; the cooperation with the CCTV Spring Festival Gala in 2019 and 2021 carried out all-round and in-depth cooperation in the fields of short video promotion and social interaction, further mobilizing the vast number of young user groups.

DianTao is the early Taobao Live. Through its status and resources in the e-commerce industry, and due to Papi Jiang's live auction, Taobao saw a new form of commodity trading, so it began to cultivate this form and recruit live broadcasters to bring goods, and then continued to develop its live e-commerce business. Finally, in March 2021, the Taobao independent app was established and launched on the App Store, and was officially renamed DianTao.

5. User Market

In 2020, the sudden outbreak of the epidemic once again boosted the live streaming e-commerce industry, which was in the midst of an explosive growth period. The market's users have entered a stage of rapid popularization. According to data released by the Forward-looking Industry Research Institute, as of March 2020, the scale of e-commerce live streaming users was 265 million, accounting for 29.3% of the total netizens. At the same time, all major Internet platforms have joined the fight, pushing the war to escalate further.

The top three in the industry at this stage, namely Taobao Live (DianTao) in the first echelon, Kuaishou Live and Douyin in the second echelon, including JD.com, Pinduoduo, Xiaohongshu, etc. have all utilized the "live broadcast + short video" e-commerce and entered the so-called 2.0 era of live broadcast e-commerce industry. Taobao then launched a new version of "Taobao Live", called "Dian Tao", which aims to use short videos + live broadcasts to break down the barriers between users and products.

At this point, industry giants have expanded the battlefield to the e-commerce platform market, targeting the opportunity of the "stay-at-home economy" and focusing on the penetration rate of live streaming e-commerce.

Figure 2: China’s live e-commerce competition in 2020

6. User Distribution

1) Geographical distribution

Figure 3 Source: Baidu Index

Figure 4 Source: Baidu Index

From the above Baidu Index statistics, we can see that the geographical overlap of search users of Diantao (formerly Taobao Live) App and Douyin App is still relatively high. These regions are characterized by a fast pace of life, users with a certain consumption capacity and a strong ability to accept new things. Especially in Guangdong, the provincial capital Guangzhou is committed to becoming China's number one live e-commerce city.

By comparison, it is not difficult to find that compared with Kuaishou, the geographical distribution of Douyin users is not only in coastal areas, but also has a certain number of groups distributed in southwest and south my country. Generally speaking, Douyin covers more southern users, with more users in first- and second-tier cities.

As for the "Beijing, Shanghai, Guangzhou and Shenzhen", the four cities with the strongest economic power in mainland China are Beijing, Shanghai, Guangzhou and Shenzhen. Two of them are in Guangdong Province, so their ability to consume and accept new things is evident.

2) Age and gender distribution

Figure 5 Source: Baidu Index

According to the age distribution data of Baidu Index, more than 70% of Diantao’s search users are between 20 and 39 years old, while Douyin’s users are relatively evenly distributed between 20 and 49 years old. The proportion of Diantao’s users aged 40 to 49 is relatively low compared to Douyin.

DianTao's users are younger, and the number of users decreases with age. They include college students, young and middle-aged men and women who like to keep up with trends and have a certain purchasing power; while Douyin's users are mostly those born in the 1990s and 1985s, and its audience group is more extensive.

7. Functional structure comparison

Figure 6 Functional architecture - DianTao App

Figure 7 Functional structure - TikTok App

From the functional architecture of the above two apps, it can be found that Diantao App and Douyin App have the same functional attributes such as shooting, browsing short video content, e-commerce live streaming, and e-commerce shopping.

The information architecture of DianTao App consists of [DianTao], [Discover], [Message] and [My]. The overall structure revolves around e-commerce live streaming, followed by short videos and attention. However, even the attention is attention to the live streaming room or the expert anchor, which allows users to find the live streaming room that corresponds to user needs more conveniently and quickly. "Live broadcast" belongs to [DianTao] and is a second-level tab.

The information structure of the TikTok App consists of [Home], [Friends], [Photography], [Messages], and [Me]. The overall structural setting is based on enabling users to browse more video content and switch videos by swiping up and down. "Live", "Follow", "Recommendation" and other options are separately used as a secondary tab in the [Homepage] to more intuitively display video content to users while ensuring that users can meet their needs and find the corresponding entrance in time, giving full play to its advantages of efficient and portable usage experience.

8. Core Function Comparison

1) Home page function comparison

Figure 8 Home page function comparison - DianTao App

Figure 9 Home page function comparison - Tik Tok

By comparing the functions of the homepage, we can clearly perceive the different positioning of the two apps. Diantao focuses on the live broadcast room, while Douyin pays more attention to users' life recording and short video creation.

Diantao places the button for shooting or uploading short videos in the upper left corner, which is not a very intuitive position for the creative users. It can even be said that the user's short video creation is "accessory" because the "secrecy" of the upload button prevents users from shooting or uploading videos in a more convenient and efficient manner. In terms of the layout of the live broadcast room, the main page is mainly presented in the form of live broadcast room partitions and multiple pictures on one screen, which makes it convenient for users to find the live broadcast room or anchor expert that matches their needs more easily and quickly at the first time, and ultimately realize their shopping needs.

Douyin focuses more on user-generated content, so the page for shooting or uploading short videos is placed in a prominent position in the lower center where it is easier to click, making it convenient for creative users to upload short videos; and the e-commerce live broadcast room is displayed in the form of a floating window or tab. Douyin users can enter the live broadcast page immediately by clicking the live broadcast or live broadcast button. It can be said that both "short video content" and "live broadcast" are given equal importance.

2) Comparison of short video pages

Figure 10 Short video page comparison - DianTao

Figure 11 Short video page comparison - Tik Tok

In terms of browsing short video content, through the comparison in the above figure, we can see that Douyin and Diantao use the same operating logic for browsing short video content, focusing on allowing users to browse more short video content in a simpler way, switching short video content by swiping up and down, and there is an unknown for the next video.

This feeling of seeking the unknown and interest-oriented nature will encourage users to further browse more video content, reduce the cost of user decision-making, and to a certain extent increase the stickiness between users.

3) Live Page Comparison

Figure 12 Comparison of live broadcast pages - DianTao

Figure 13 Live Page Comparison - Tik Tok

The product list pages in the live broadcast pages of the two apps are basically similar, including basic information about the products in the product list, as well as functions such as product purchase and product explanation.

For the product explanation part, DianTao adopts the form of interaction with the anchor. Click [Request explanation] to request the anchor to explain the product link mentioned by the user again. There are pros and cons. The pros are that it increases the interactivity and stickiness between fans and anchors; the cons are that it increases the anchor's secondary replay of the products, which will to a certain extent cause the loss of explanation of the replayed product information, and at the same time increase the length of a single live broadcast and reduce efficiency.

Compared with Diantao, Douyin's approach is simpler and more crude. It records the entire live broadcast of the anchor, and at the same time cuts and categorizes the part where the anchor explains the product. If users want to view the host's explanation of historical products, they can directly click the [Watch Explanation] button to directly replay the video page when the host explained the product link, which can allow users to obtain more information about the host's explanation of the product link at that time.

PS: The original intention of the live broadcast page was to make a comparison through the situation of expert anchors. I had no choice but to open the historical live broadcast of the historical anchor on Taobao App, but it showed no response (excluding network factors). At the same time, I switched to other anchors' historical live broadcasts, but the result was still the same. In general, DianTao has many bugs and there is a lot of room for improvement.

4) Order process page comparison

Figure 14 Order page comparison - DianTao

Figure 15 Order page comparison - Douyin

In fact, the process logic of the ordering pages is basically the same. It should be noted that the DianTao shopping cart directly connects to the user's Taobao data, which reduces the user's learning cost to a certain extent.

When clicking on the details of the product lists of both, a part of the detail page is pushed out from the bottom to the top, and the user can control the opening and closing of the detail page by swiping up and down.

At the same time, on this page, Douyin users can also directly add the product link to the [Shopping Cart] function, which is convenient for users to add their favorite products to the purchase in a timely manner and settle the bill in a unified manner.

As for the product details page, DianTao jumps to the Taobao product details page for the second time. The anchor's live broadcast room will be displayed in the form of a small floating window. That is, the user needs to click on the product link first, and the page will jump to the details page of the Taobao product link. Then the user can choose to add the product to the "Shopping Cart" or "Buy Now".

In terms of interaction logic, the former will provide a better experience, but when users need to check a large amount of product details and content, the latter will have a significant improvement in sensory experience and efficiency.

If you add items to the shopping cart, users will also see links to the items in their Taobao shopping cart in addition to the links to the new items.

3. Profit Model

Regarding the profit model, the two have some similarities, as follows:

• Advertising business: hard advertising + soft advertising (i.e. splash screen advertising and information flow advertising);
• Platform user video content implantation;
• The platform live broadcaster's sales and gift rewards share;
• The layout of the platform’s live streaming links (refer to Taobao here);
• The platform’s live broadcast room “DOU+” is weighted (here refers to Douyin).

IV. SWOT Analysis

V. Conclusion

By comparing Diantao and Douyin, we can find that both of them have their own characteristics and advantages in the field of live streaming e-commerce. This is especially true for Diantao. Taobao and Tmall have been deeply engaged in e-commerce business for many years. Their e-commerce systems are mature, their industrial chains are complete, and their platforms have accumulated a large number of merchants and users. They are now developing live streaming e-commerce through the Diantao (formerly Taobao Live) App, which means that Taobao or Alibaba has a clearer direction and goal in the commercial development of live streaming e-commerce.

As a new product this year, DianTao is currently slightly weaker than Douyin and Kuaishou in terms of user awareness, and its own construction is still not perfect. For example, there are many product bugs, slow development of short video content construction, and technological development (short video content pauses image recognition and product recommendation), etc. We hope that these problems can be solved smoothly in the future. At the same time, the technological development of AI smart anchors and live streaming with real people + virtual AR hopes to bring users a new shopping experience.

Compared with the new player Taobao Live, Douyin should not be underestimated both in terms of business development and forward-looking vision.

Facts have also proved that Douyin has completed its own business closed loop with the layout of Douyin payment and the combination of mini-program ecology, which means that Douyin does not need to rely on other third-party payment tools. Users can directly complete the entire process from product selection to final ordering and payment through Douyin alone, thus forming a good user experience. Tik Tok initially achieved the goal of user retention and user activity by producing short video content, and eventually adopted the form of live e-commerce to convert users, which was truly a smart move.

We hope that they can have better development in the field of live e-commerce. At the same time, as users, we hope to have a better shopping experience. Let us wait and see.

Author: My name is Zhang Renzhi

Source: My name is Zhang Renzhi