Analysis of competitive products of Douyin app

With the rapid development of mobile Internet, people's awareness of diversified elements has greatly increased, and trendy culture and humanistic movements have become more and more popular among young people.

In particular, a large number of people born in the 1990s and 2000s have become the main consumers. This new generation of millennial consumers has independent payment capabilities and awakened consumption awareness. They can pay for what they love, which has brought about a series of necessary commercial elements for the supply of new consumer goods.

How did Dewu become a dark horse in the e-commerce industry in this industry trend? This article will analyze it from the following dimensions:

1. Industry Analysis
2. Competitive product analysis
3. User Value Analysis
4. Business value analysis
5. Product Iteration Analysis
6. Product structure analysis
7. Operational Analysis
8. Summarize

1. Industry Analysis

In recent years, e-commerce has been booming with the development of Internet technology, and many e-commerce giants have emerged, such as Taobao, JD.com, etc. However, as China's per capita consumer expenditure continues to rise and consumption upgrades, millennials are more focused on paying for quality and trendy products.

However, the all-category e-commerce giants mentioned above cannot meet the needs of consumers very well, such as the inability to buy trendy products and the fear of buying fakes. A series of factors have promoted the development of vertical trendy product e-commerce Dewu (Dou). Its emergence satisfies users' desire for fashion, solves users' concerns about buying fakes, and deepens users' understanding of trendy culture. Therefore, this dark horse has gradually become a giant in the e-commerce industry.

However, the development of the industry is inseparable from the factors of the macro environment. This article will analyze how Dewu (Drug) has developed in the industry trend from the four dimensions of PEST.

1. Politics

In 2013, the government introduced many measures to encourage the development of e-commerce by reducing the start-up and operating costs of e-commerce companies. E-commerce management policies have become more perfect, and the industry has received attention from the national and local governments.

E-commerce is an important part of the "Eleventh Five-Year Plan", which further clarifies the status of the e-commerce industry, clarifies the goal of developing e-commerce in my country, and also improves the e-commerce industry service system. As a result, a large number of entrepreneurs in the e-commerce industry have emerged.

The Fifth Session of the Standing Committee of the 13th National People's Congress voted to pass the "E-Commerce Law", which will come into effect on January 1, 2019. The promulgation of the "E-Commerce Law" will effectively promote the healthy development of China's e-commerce.

In January 2021, the General Office of the Ministry of Commerce required in the "Notice on Promoting the Green Development of E-commerce Enterprises" to comprehensively use policy guidelines such as planning, standards, funds, investment and financing to promote the green development of e-commerce enterprises.

2. Economy

The upgrading and iteration of the Internet and social media, and the vigorous development of the cultural and entertainment industries have become fertile soil for the rise of the "fan economy".

The shoes and clothes worn by celebrities have become objects of pursuit. Data from Sina's "Contemporary Youth Trend Consumption Questionnaire" shows that the trendy styles of contemporary young people are greatly influenced by celebrity artists such as Edison Chen and Kris Wu, and top trend icons are further promoting trendy culture to the public.

In 2019, the national per capita disposable income of residents increased by 5.3% year-on-year in real terms, and the national per capita consumption expenditure increased by 5.5% year-on-year in real terms, which promoted the upgrading of consumption. Behind the consumption upgrading is the pursuit of quality, not just the pursuit of low prices in the past.

The survey results also show that online shopping users have a strong demand for high-quality products and boutique e-commerce platforms. Against this backdrop, the prospects for trendy vertical e-commerce, whose main products are trendy shoes and clothing, are relatively optimistic.

According to an insight report released by the Alibaba Research Institute, the average number of Taobao trendy consumers in 2019 increased by more than 10 million compared to 2018, with a growth rate of 224%. Trendy shoes have always occupied a high position in the fashion market in terms of consumption scale. In 2019, the total sales of sneakers in the world reached 1.1898 billion pairs, nearly doubling compared to 613.5 million pairs in 2010.

3. Society

With the development of information technology, the NBA has become more closely connected with China, and with the introduction of NBA copyright by Tencent Video, basketball has gradually become popular among the public. Basketball superstars have created their own legends while also making sneakers and equipment popular. More and more fans are chasing after sneakers and telling the stories behind them. The organic combination of sneaker culture and hip-hop elements has been sought after by many people.

At the same time, with the popularity of "The Rap of China" and "This is Street Dance" in 2017, major sports brands combined hip-hop music with sneaker marketing, which was loved by users. At the same time, they were labeled as trendy. Sneakers once again became the mainstream of fashion and became the social currency of Generation Z.

Under the influence of the black swan of the epidemic, the economies of various countries have been hit. Trendy shoe brands have no promotional activities such as the NBA, their marketing rhythm has been disrupted, offline stores have been forced to close, and upstream supplier factories have also begun to shut down. With China's medical care and control, China is slowly resuming work and production, and the economy is recovering. Online channels have helped these brands save cash flow and reduce inventory.

The number of Generation Z in China has exceeded 226 million, accounting for 6% of the total population. Looking at the field of fashion consumption, this group of Generation Z will also become the main consumer force in the fashion industry. According to data from the Douyin app, Generation Z users account for 85% of Douyin’s users.

4. Technology

The flexible use of the Internet in the information age has broadened the channels for the public to obtain fashion information. For fashion brands focusing on young groups, social media has naturally gradually become an indispensable main medium for them to communicate with young people.

In addition, the rise of Internet payment and the increasing maturity of online banking, third-party payment and mobile payment have made it easier for users to shop online and pay. Users are also more inclined to shop online, which is how the e-commerce industry has flourished to this day.

The rapid development of modern logistics has made the C2B2C model of logistics distribution faster.

2. Competitive Product Analysis

Faced with the fast-growing trend of e-commerce, especially the development of vertical categories, which is an important track in the second half of e-commerce, a large number of participants have emerged, such as Get, Nice, Shihuo and other vertical category e-commerce platforms.

NICE and Dewu are similar in terms of target users and business models, and are direct competitors. Next, we will analyze these two competitors to understand the differences between them.

1. Get something

(1) Growth path and main business model

In 2015, the "Du" APP incubated by Hupu was launched. Its main function is to serve as an information exchange and sneaker authentication platform. By then, it has accumulated a large number of trendsetters in vertical niches. Relying on Hupu's reputation, it quickly penetrated the trendy brand market with the single point of "sneakers". At this time, the main function of Du is information exchange and sneaker authentication platform.

In September 2016, Dewu launched the live broadcast function and officially opened the live broadcast KOL community.

After the launch of the Du APP Mall in 2017, it was the first to stand out with its “C2B2C” business model. Sellers supply goods to the platform, and the platform authenticates the authenticity of the goods.

In 2018, it received angel round financing from Hupu, thanks to its early efforts in the vertical segment of sneakers and its professional service of sneaker identification. According to Qimai data, the number of independent devices of Du app increased rapidly in the second half of 2018, with daily downloads stabilizing at more than 50,000, and reaching a peak of 220,000 on Double Eleven.

In 2019, it received Series A financing from Pusi Capital and Series A+ financing from DST Partners.

In 2019, it received DST A+ round of investment, with a post-investment valuation of over US$1 billion, entering the ranks of unlisted unicorn companies.

According to 36Kr in 2020, the e-commerce platform Du APP was officially renamed " Douyin APP ". In the future, it will continue to expand the categories of trendy items beyond sneakers and clothing, create a new generation of trendy online shopping community, and attract a large number of loyal trendy users born in the 1990s and 2000s.

(2) Product source

With the official entry of brands, Douyin has become the preferred platform for the operation and sales of trendy brands.

For individual sellers, during the process of free entry, the Douyin platform strictly guarantees the supply of goods through the seller's certification system and classification and grading management. The specific steps are real-name authentication – select service – fill in information – confirm agreement.

(3) Product classification

Fashion shoes, fashion clothes, watches, luggage, accessories, fashion toys, sports, digital products, women's clothing, beauty products, cars, furniture, home appliances, and art. Although Dewu has many categories of products, judging from its information and community, Dewu is more focused on categories that male users are more concerned about, such as shoes, trendy clothes, trendy products, and cars.

(4) Identification function

Du APP first operates the identification service on a large scale, gathers scattered and spontaneous appraisers together, forms an access mechanism with platform endorsement, and grants appraisers the qualification of "identifiers".

In addition, as the pioneer of the authentication service, Dewu’s platform is an authentication platform, and it has reached a cooperation with China Inspection Group, making the authentication function of the platform more authoritative.

(5) Transportation

The seller ships the goods to the platform, and the platform ships the goods to the buyer after inspection.

(6) After-sales

Dewu has the "four-piece anti-counterfeiting set", the promise of "advance payment, three times compensation for fakes", platform anti-counterfeiting, professional logistics distribution, etc.

(7) User groups

Gender: Male users account for the majority, accounting for 55%.

Age: 20-39 years old, mainly Generation Z.

2. Nice

(1) Growth path and main business model

In 2013, it received US$8 million in Series A funding from 5Y Capital, ZhenFund, and Matrix Partners China.

In 2014, it received a US$20 million Series B investment and a US$36 million Series C financing from H Capital, Vy Capital, 5Y Capital, and Matrix Partners China Tiger Fund. In the same year, Nice was launched. Nice is positioned as a photo social software. With its "photo + tag" gameplay, it has accumulated a group of young users, including many fashion experts who love dressing.

In June, the number of users reached 2 million, with 150,000 photos produced daily. By the end of 2014, the number of users reached 10 million, with 1 million photos produced daily, laying a solid foundation for the communication community.

In version 2.0, a private chat function was added to build a communication bridge among users. However, the nice private chat function can only be enabled after the commented picture has received a reply, always reminding users to give specific content to generate valuable communication.

In 2015, nice announced its Chinese name "Hao Zan" and took advantage of the live streaming trend to launch a live streaming function.

In April 2018, Nice launched the "good goods" feature, keeping up with the explosive growth of the secondary sneaker market. Five months after its launch, the platform's monthly GMV exceeded 100 million yuan.

In 2019, it received tens of millions of dollars in Series D financing from TPG SoftBank Box Fund, Yuanjing Capital, Fanchuang Capital, and Matrix Partners China.

(2) Product source

• Brand official entry;
• For individual sellers, you can publish products in two steps: fill in the information during the individual seller registration process and authenticate with Alipay.

(3) Product classification

Sneakers, beauty products, second-hand goods, clothing, national trends, and accessories.

(4) Identification function

Compared with other identification apps, the number of appraisers is relatively small.

(5) Transportation

Individual sellers ship goods to the platform, and the platform ships goods to buyers after identification.

(6) After-sales

Nice’s after-sales service does not support 7-day unconditional returns, and the platform description clearly states that nice is an e-commerce sales platform, not a product seller, and does not bear the seller’s responsibilities.

(7) User groups

Gender: Female users are the majority, accounting for about 60%.

Age: 20-39 years old, mainly Generation Z.

(8) Summary

From the above competitive product analysis, it can be seen that although Dewu and Nice are similar in establishment time, target users, and later business models, both focus on creating a platform for reselling trendy products.

However, after receiving investment in 2019, Dewu’s valuation exceeded US$10 billion. It took only four years to become an unlisted unicorn company, while Nice was still far behind.

In the early stage, nice was mainly focused on building a social ecosystem, but it did not find its own commercialization model. However, Dewu found the platform's monetization model earlier than nice, which was to establish a platform e-commerce and earn platform commissions with the "C2B2C" business model, and therefore gained the favor of capital.

Nice started live streaming earlier than other brands, and from time to time, it conducts cross-border cooperation with fashion brands, film and television entertainment, and cultural performances, introducing celebrities, Internet celebrities, etc. to obtain more traffic. The traffic power brought by the "fan economy" cannot be underestimated.

According to the population attribute analysis data of Dewu and Nice on Baidu Index, it can be seen that in terms of target users, the proportion of female users of Nice is higher than that of female users of Dewu. Dewu is more inclined to the "straight male economy" and wants to become the "male version of Xiaohongshu". The higher proportion of female users of Nice is mainly due to the fact that the entrance of beauty products in its e-commerce category is more obvious than that of Dewu.

In terms of social functions, nice's social functions are better than Dewu's, because nice started with social functions, and developed ecological functions such as live broadcast, tags, nearby people, social classification, and friend sports earlier than Dewu.

In terms of the admission of individual sellers, Dewu is more strict and cautious than Nice, which can increase the credibility of the product.

In terms of product quality assurance and after-sales service, Dewu pays more attention to user experience than Nice. The most important function of the platform is to distinguish users from buying fake goods on e-commerce platforms such as Taobao, so Dewu’s product quality and after-sales service meet users’ needs better in this regard.

3. User Value Analysis

In the e-commerce platform, the main participants are sellers, buyers and platforms. If the platform wants to develop rapidly, it must meet the needs of sellers and buyers. Let’s discuss the needs of these three parties and how Dewu meets their needs.

1. Buyer

Buyers are important participants in the development of e-commerce business. Without consumers, there will be no main source of income for the platform. The buyers of Dewu are mainly Generation Z. Generation Z has four main demands for trendy products:

First, they prefer sociality. Generation Z is often more receptive to friends’ recommendations and convert them into new users because products are social.

Second, they accept high premiums. Generation Z is willing to pay high premiums for "extremely favorite" products. Transactions in the second-hand market are active, and co-branded and limited edition products stimulate consumer desire.

Third, small amounts and multiple times. The consumption capacity of Generation Z is temporarily restricted by limited income sources, and they prefer the "small amounts and multiple times" consumption model.

Fourth, the awareness of authenticity is strong, and Generation Z pays more attention to "making friends through circles". They promote authentic products in their choice of consumption platforms and stores, and the demand for brand authentication exists for a long time. After understanding the needs of Dewu’s main users, they have the following methods to meet their demand for trendy products.

(1) Demand for trendy products

There are the following solutions to meet the demand for trendy products:

① Purchase through official channels

It is relatively easy to buy some classic models and some regular trendy items through official domestic channels, but the release of some limited editions generally requires you to go to offline stores to queue up and buy them.

The disadvantages of the rush to buy in a queue are obvious: there are too many people buying limited editions, and there are also too many people queuing, which results in late consumers not being able to get the products and wasting too much time.

Another way is to get a number online, which is even more cruel. At the same time, the number of people online is not an order of magnitude more than the number of people offline. For those who have poor network or no buying skills, there is no chance to buy at all.

② Find a purchasing agent to buy

One of the important reasons why some international trendy brands have become addictive to consumers and even led to the emergence of trendy shoes is the brand's scarcity marketing. These brands often release limited editions in collaboration with well-known IPs, but they are sold in different places, so purchasing agents come into being.

However, precisely because of the brand's scarcity marketing and to prevent limited editions from falling into the hands of too many purchasing agents, the authentic offline channels will limit the sales quantity of purchasing agents in the later stage. In addition, because it is a purchasing service on behalf of others, the purchasing service fee will be relatively high, the waiting time for the purchasing agent to send the goods back is very long, and the after-sales service cannot be guaranteed.

③ Purchase from domestic e-commerce platforms

Domestic e-commerce giants like Taobao and JD.com also have individual sellers selling trendy products, but their quality and authenticity cannot be guaranteed. Many times, consumers are more worried about buying fakes at high prices.

(2) Product social function requirements

① Quickly obtain cutting-edge information on trendy products

Users can obtain information through official channels and public accounts, but because there are too many brands, users cannot obtain information in a centralized manner. This is especially unfriendly for users who have just entered the fashion circle in terms of obtaining accurate information.

② Share your personal life updates about trendy products

You can share your updates on social platforms such as Xiaohongshu, Douyin, and Kuaishou, but because the target users of these platforms are not vertical enough, and the new generation of consumers pay more attention to "making friends through circles", these social platforms cannot meet the needs of trendsetters to express themselves or share their fashion attitudes.

2. Seller

If the platform wants to attract and retain a steady stream of users, it needs to meet users' demand for fashionable products. In other words, the platform needs a stable supply of sellers. Stable supply means that sellers need to settle in.

There are two types of sellers on Dewu: individual sellers and B-side suppliers. Individual sellers want to resell their products, while B-side suppliers want to gain profits. So the needs of these two types of merchants can be solved in the following ways:

(1) B-side suppliers, their goal is to gain profits, so there are the following ways to gain profits

① Selling on traditional e-commerce platforms

Although Taobao and JD.com have a large user base, because these e-commerce platforms are full-category platforms and have a large number of sellers, the traffic diversion is quite serious, resulting in high traffic prices. In addition, the platform users are not vertical enough, so the traffic cost for traditional e-commerce companies to enter will be very high.

② Sold through official channels

The official sales channels mainly include the official website, mini programs and offline channels. However, the offline channels have been greatly impacted after the black swan event of the epidemic, and the offline channels have high store rents and labor costs. Compared with online channels, offline channels are less of a source of profit for the brand, but rather a channel to expand brand awareness and exposure.

In addition, offline channels are limited by time, space, and region. For busy office workers, online purchases will save more time, and the free allocation of goods in each region is easier to achieve through online channels.

(2) Individual sellers, resale of idle items

Xianyu Resale: Xianyu is a resale platform for second-hand goods. However, because Xianyu’s access mechanism is not strict enough and there is no process for authenticating second-hand goods, high-priced items such as trendy products find it difficult to gain the trust of users on Xianyu Resale.

Traditional e-commerce platforms enter and sell: Traditional e-commerce platforms such as Taobao are not strict enough in terms of the access of individual sellers. Although there is a deposit payment, because users cannot judge whether the trendy products are genuine and the platform does not have an identification process, users are afraid of buying fakes at high prices when buying trendy products on e-commerce platforms. Therefore, traditional e-commerce platforms have not established enough trust for users in the trendy product segment.

If you register through JD.com, the review of merchants by JD.com is quite strict and the entry threshold is quite high. You need to pay a service fee of 200,000 yuan per year and a guarantee credit. For individual sellers, such high fees are too costly for reselling idle goods.

In addition, although the user scale of full-category e-commerce is large, the seller scale is also large, so the cost of traffic is very high. For individual sellers who want to obtain high exposure, it will lead to high traffic costs, which will put a lot of pressure on cash flow for individual sellers.

3. Platform

From the above analysis, we can conclude that the main needs of the platform participants are as follows:

• Can it be guaranteed to be authentic?
• Can I buy some limited edition styles that are not available normally?
• Is the service premium reasonable?
• Is the logistics fast?
• Quickly obtain trend information
• Can the platform meet users’ needs to share trends?
• Are there enough sellers to supply the goods?
• Is the user base large enough?
• Is the target user vertical enough?

How does Dewu, as a platform, better meet the above-mentioned needs of users and attract them to the platform?

(1) Improve the seller entry and identification process

Dewu has a complete seller access system and the first "C2B2C" e-commerce model, that is, identification before delivery. When the buyer places an order, the seller sends the goods to the platform for identification as authentic and then delivers them to the buyer by logistics. There is a strict review process for seller access. Individual sellers must use their real names and sign an agreement with the platform. The quality of supply from individual sellers is ensured by raising access standards and managing sellers. In addition, in addition to filling in relevant certification information, corporate sellers are also required to pay a deposit and undergo platform review.

(2) Ensure sufficient supply

Dewu ensures a sufficient source of goods on the platform by allowing both individual sellers and brand merchants to join. Brand merchants sell some regular products through the Dewu e-commerce platform, while individual sellers provide some limited-edition products or products that are not available through official channels.

(3) Price management and establishment of a student zone to ensure a reasonable pricing system

The prices of shoes on Dewu are set by the sellers, but the prices of some popular styles are driven up very high. Regarding the appearance of sky-high priced sneakers on the Dewu trading platform, the relevant person in charge of the Dewu APP will verify and handle the situation, and sneakers with excessive price fluctuations will be banned from sale.

In addition, the main consumer group of Dewu is Generation Z, which refers to people born after 1995 and 2000, many of whom may still be students, so Dewu has set up a special area for students, and the prices of merchants' products are half as low as those in the adult area.

(4) Establish a complete after-sales and logistics process

Dewu has a "four-piece anti-counterfeiting set", a commitment to "advance payment, triple compensation for fakes", an anti-counterfeiting platform, and professional logistics distribution. In 2020, a 7-day no-reason return policy was gradually opened up, aiming to maintain and protect the interests of consumers. This will undoubtedly improve the after-sales experience for buyers.

In addition, Dewu has launched a model of lightning direct delivery, whereby the seller first deposits the goods in the Dewu warehouse and completes the inspection. When the user places an order, the goods can be shipped directly, which greatly speeds up the logistics.

(5) Social sharing function and establishment of information column

Dewu uses the most important and prominent homepage function as the entry point for users to share, so that the trendy pictures and information posted by users can be intuitively displayed to users.

In addition, Dewu has set up exclusive information columns for trendy products of different categories. Users can obtain the latest information on trendy products through screening, and the information is concentrated, so there is no need to jump to different channels to obtain different information.

(6) Large user base

Dewu has a huge user base. According to data, the total number of downloads of Dewu has reached 9.26 times, and Dewu has begun to tap into low-end users to increase the number of users on the platform. The following is a screenshot of the Douyin App, which has long been in the top ten of the App Store rankings. Douyin has a huge user base and is also the most popular trading platform for trendy items.

(7) Vertical target users

In 2015, the "Du" APP incubated by Hupu was launched. Its main function is to serve as an information exchange and sneaker authentication platform. By then, it has accumulated a large number of trendsetters in vertical segments. After launching the e-commerce function, Dewu's product categories are all centered around trendy products.

Summary: Through the above analysis, we can find that compared with other e-commerce platforms, Dewu has accumulated a large number of vertical users and attracted a large number of sellers to settle in, meeting the needs of consumers, so Dewu is so popular.

4. Commercial Value Analysis

The current core business of Dewu is the C2B2C model, and its core business is the transaction of "fashionable sneakers". An important indicator to judge whether a business can develop healthily is revenue. The most commonly used data indicator of e-commerce is GMV to analyze whether Dewu's core business is healthy.

GMV=number of users*conversion rate*average order value. The improvement of any indicator such as the number of users, conversion rate, and average order value will have a positive impact on the growth of overall revenue. The following is a specific indicator chart of GMV. Next, we will focus on analyzing the means used by Dewu (Du) to improve these three key indicators.

1. Increase the number of platform users

In order to achieve sustained growth in revenue, a steady stream of new registered users is the most basic guarantee. So how does Dewu (Douyin) attract new users? There are mainly two ways: paid channels and free channels.

① Payment channels

Method 1: Cooperate with KOLs and video bloggers on social platforms such as Douyin and Kuaishou to promote trendy shoes, distribute benefits, and maintain authenticity, and continuously tap into new users to increase the exposure of the platform.

Method 2: Sponsorship of physical sports.

Method 3: Advertising on long video platforms.

Method 4: Charity activities to enhance brand reputation. In May 2020, the public welfare activity "Celebrating the Centennial of Jinggangshan Youth Sports" jointly initiated by the Douyin App and the Jinggangshan Youth League City, practiced social responsibility and helped rural revitalization from multiple dimensions such as education service supply, employment assistance, and industrial empowerment. Through a series of public welfare activities, Douyin has invisibly increased its brand awareness.

Method 5: Celebrity managers move in to promote the influence of celebrity trends. Dewu has attracted many celebrities to join, including William Chan, Lay Zhang, Joker Xue, Li Chen, Vanness Wu, Han Geng, and Chen Mengchen. They are all active users of the Dewu community, which has invisibly increased the platform's popularity. The stimulation of the fan economy will also drive the growth of platform users.

② Free channels

Method 1: Celebrities personally wear the clothes on variety shows, attracting attention and popularity through variety shows, thus attracting users' attention and paving the way for subsequent sales on the platform.

Method 2: Dewu is a gathering place for trendsetters, and most of the platform users are Generation Z users. Driven by their unique circle culture and a circle of friends, Dewu has attracted a lot of self-propagation among trendy users in the vertical category of trendy products.

Method 3: The average order value of trendy products is generally high, especially for sneakers, which are usually priced at around 800-1500. After users make a purchase on the platform and receive the goods, they will have a sense of superiority and distinction. The Veblen effect states that the more expensive a product is, the more consumers want to buy it, and the cheaper it is, the less they want to buy it.

The more expensive the product, the more it can show one's dignity and taste, and the more it can make friends and neighbors jealous, so they will satisfy their vanity by sharing it on platforms such as WeChat Moments. Such behavior also inadvertently helps the brand to spread for free.

2. Improve platform conversion rate

After guiding users to download the APP through various means, users are valuable to the platform only after they successfully complete registration and make purchases, that is, convert from a new user into a paying user of the platform. So how does Dewu improve its conversion rate?

(1) Guide login and registration

Only after the user logs in or successfully registers an account can the purchase be completed, so registration and login are the first step for users to make a purchase. So let’s take a look at how users can improve their login and registration success rate?

From the above picture, we can see that Dewu takes advantage of users’ desire to get a bargain by popping up a limited-time new user gift package worth 520 yuan on the user login and registration page. The amount is large enough to attract users to log in and register to complete the gift package.

(2) Guide users to the new user area

After the user logs in and successfully registers, he/she will be automatically redirected to the new user area. The new user area has many new user-exclusive coupons and benefits, which reminds new users of benefits and discounts once again. By continuously providing users with new user-exclusive benefits, users are encouraged to complete their orders.

Below the coupon on the new user page, users will be reminded of how many days the coupon will expire, creating a sense of urgency. The countdown tells users that if they don’t buy now, they may no longer have this low price offer, thereby promoting rapid user conversion.

(3) After-sales guarantee

Through service commitments and after-sales guarantees, we build user trust and a sense of security, allowing users to purchase with confidence and without any worries after sales. The most prominent identification and after-sales service slogan of Dewu is placed in the most conspicuous place on the homepage: "Identify before delivery, guaranteed to be brand new and authentic."

In addition, on the product details page, before the user makes a purchase, a slogan to identify the after-sales service will be displayed again in a prominent place on the details page, which establishes consumer protection, enhances the user's trust in the platform, and speeds up the user's purchasing decision.

(4) Providing users with action instructions

There is no step of adding products to the shopping cart on the product details page of Dewu. This is because trendy products, especially trendy shoes, have a relatively high average order value, and many popular items and limited edition items are in limited quantities. The “Buy Now” button gives users a clear action instruction and reduces hesitation time, thus speeding up users’ purchasing decisions.

(5) AR try-on

Dewu has developed a new feature called AR try-on. The try-on process creates a post-purchase scenario for users. The process of allowing users to try on the product for a short period of time is also an intangible process that allows users to briefly own the product.

According to the endowment effect, once you own something, you will treasure it more and it will be extremely painful once you lose it. Salespeople are generally very good at using the endowment effect. When you walk into a store, the salesperson will usually let you try a product first. This creates a feeling that you own the product, and as a result, you are more likely to buy it.

(6) Demonstrate cost-effectiveness

Whether it is on the product details page or the page before the user submits the order and prepares to pay, there are discount information and discounts on postage reductions. People have a consumption principle of getting the greatest benefit at the lowest cost, which is commonly known as a good deal.

Highlight the value-for-money atmosphere by giving out coupons and offering postage reductions, and mark the countdown to the event to make users feel that it is a good deal to buy now, and that they would lose out if they don’t buy at this time.

(7) Create a popular and well-reputed atmosphere

The product details page of Dewu not only has user reviews, but also recent purchases and outfit selections. Recent purchases are the purchase records of all users. By displaying purchase records, an atmosphere of many people buying is created, and users’ trust in the platform can be established.

The outfit selections are photos taken by users who have purchased products on the platform and the cooperating KOLs, which are displayed on the product details page. They take advantage of the herd mentality of users and create an atmosphere that everyone is wearing the clothes, so if I don’t wear them, I won’t be trendy.

(8) Related recommendations

When a user clicks on a product detail page to view a product, and the product does not meet the user's needs and the user does not click to purchase, the platform will recommend related products to the user based on the user's product preferences, helping the user to quickly select the products they like and improve conversion rates.

The above are the core functions of some marketing psychology methods used by Dewu to improve conversion rates.

3. Increase average order value

The average order value is affected by two factors: the single purchase amount and the purchase frequency.

(1) Increase the single purchase amount

Douyin will provide users with discount coupons, which will increase the platform's average order value to a certain extent.

In addition, the platform also provides express delivery and normal 6-day delivery services. Since the express service is a value-added service, the price is relatively high, which also increases the average order value to a certain extent.

(2) Increase user repurchase rate

The most important function of the Douyin app is to provide users with authentic trendy products, so the authenticity of the products is an important indicator to improve user satisfaction and repurchase rate.

Dewu’s pioneering model of authentication before shipment has been recognized by many users, and cooperation with the national authentication team is the first step in ensuring authenticity for individual sellers. In addition, for B-side sellers, Dewu improves the qualifications of merchants through strict entry review.

Dewu’s requirements for merchants to settle in:

1. Possess a business entity;
2. Have legal brand authorization and procurement link certification;
3. Cooperation records on other platforms or good sales records.

Through rigorous quality and entry control, Dewu has resolved users' concerns about quality issues, thereby improving users' credibility and ultimately increasing repurchase rates.

In addition, the platform also provides cleaning and care services. Because the average order value of cleaning and care services is low and the user's decision-making time is short, it can make up for the low purchase frequency caused by the high average order value and long decision-making time of trendy products.

If users no longer want the shoes after buying them, the platform has 95% second-hand transactions. Users can sell the shoes they bought on the platform, thereby increasing user stickiness and usage frequency through post-purchase services.

5. Product Iteration Analysis

In order to deeply analyze the version iteration rhythm of Dewu and explore the product iteration logic, the author summarizes all the core version iterations of Dewu from V1.0.1 to V4.73.0 as follows:

According to the iterative versions and iterative contents of Dewu listed in the figure above, and the user growth curve of Dewu in the figure below, it presents a J shape, so we can divide Dewu into two stages: MVP verification and community ecology construction stage, and growth stage.

1. MVP verification and community ecosystem construction stage

(1) Ecological construction

After Dewu was launched in 2015, it was initially an information exchange and identification platform. At this time, Dewu relied on Hupu to accumulate a group of trend-chasing users and expert users, and the minimum feasibility test was completed.

At this stage, the main functions launched by Dewu are mainly related to community information exchange and identification, in order to consolidate the ecological foundation of the platform.

(2) Product optimization

During this period, Dewu was mainly engaged in product optimization. By innovating new functions such as discovery, product display, check-in and ranking, it increased the duration and frequency of user visits, thereby improving the stickiness between users and the platform. On the one hand, it retained users who were attracted to Dewu through Hupu, and on the other hand, it attracted new target users to use the product through high-quality information exchange and identification experience.

(3) Resource accumulation

Dewu accumulates platform resources through the following functions:

1. The launch of live broadcast, live broadcast reward function, live broadcast red envelope and Ducoin withdrawal function attracted a group of live broadcast KOL resources to join the platform;
2. Launch authentic store recommendations online and start accumulating store resources and users with shoe-buying needs;
3. Modify the appraisal rules, increase paid appraisals, attract more appraisers, and continuously accumulate appraisal resources;
4. After the live broadcast function was launched, the KOL resources accumulated were fed back to the platform, and the KOL recommendation function and sneaker evaluation were launched, increasing the professionalism of the platform and attracting more users to the platform.

From the data on Kuchuan, we can see that during this period, the cumulative number of downloads by users increased fivefold.

(4) Conversion and monetization

Dewu launched the genuine sneaker trading function, creating the first "C2B2C", that is, the e-commerce model of first appraisal and then shipment, and the platform began to enter the conversion and monetization stage. Because Dewu is a platform-based e-commerce, we must consolidate the platform's e-commerce model. From the above iterative version, Dewu has summarized the transformation and monetization of the platform through the following methods:

• Optimize the transaction process of sellers and provide contract signing benefits to attract more sellers to settle in. Only when there are enough sellers on the platform can you provide sufficient supply to attract users to purchase on the platform.
• Optimize the purchase process and operation process, etc., to improve the user's purchasing experience; optimize the customer service system, to improve the customer's pre-sales and after-sales service, high-quality services are the cornerstone of customers' multiple purchases;
• Fashionable sneakers brands are mainly foreign brands. In many cases, sneakers transactions also need to rely on foreign market channels, and can also attract foreign trendy users and KOLs to join the platform.

According to the revenue data published by Dewu, the monthly GMV of Dewu APP in 2018 has reached nearly 200 million yuan. From this data, we can see that user conversion has achieved significant results after Dewu launches the transaction service.

2. Growth stage

The time of the maturity stage of Dewu is also the stage of the Internet entering the second half. An important feature of the market competition in the second half is the competition in the existing market, and many competitors have emerged in this track. So at this time, how can we retain the users accumulated by the platform become an important part of product and operation? How can Dewu maintain a dominant situation in the maturity stage? Let's analyze it:

(1) Brand influence

• Expand brand promotion, join hands with celebrity managers to enter the platform, and promote KOLs such as Douyin and Kuaishou to increase brand awareness and exposure;
• A new brand area is added to enhance users' trust in the brand through the entry of well-known brands and build a user's psychological account for Dewu. The corresponding psychological accounts for Taobao and Dewu users are different;
• The upgrade and optimization of the author center, by raising the threshold for creation and grass planting bounty, is conducive to attracting users to produce more high-quality content on the platform. The platform has enough high-quality UGC, which is also one of the channels to enhance brand influence.

(2) Old users

Ordinary users:

• More trendy products have been added, not only limited to sneaker transactions, but also trendy products for different user groups, broadening users' consumption scenarios;
• Relying on operational means, use users' consumption psychology to achieve user conversion, such as "limited-time shopping activities", "618, Double Eleven, Double Twelve" and other e-commerce activities, "name change activities", etc. to promote conversion;
• Innovative functions cater to the tastes of young groups, such as blind box removal activities, fun unboxing gameplay, increasing the fun of the platform, and arousing users' curiosity;
• Improve conversion, add Huabei payment and installment payment. Because the unit price of sneakers is relatively high, the user's purchase threshold is reduced by providing the function of installment payment, and the conversion rate that cannot be purchased due to price reasons is also built; and some on-site operation tools are built, such as broadening the sharing channels "invitation and cashback", hoping to reduce operating costs by actively attracting new users, and achieve user growth and conversion; and launch a special session for new people to increase the conversion rate of new users through price discounts;

Live KOL, creator, seller:

By optimizing the data output of the platform, more data support is given to the group that obtains benefits on the platform. With the data support of the platform, these users can better optimize their output content through data analysis, sell their products, and ultimately bring revenue to the platform.

(3) New users

Dewu has enabled the tourist mode for new users (the target user of this mode is a user who is sensitive to forced login to use the APP) and puts the community function on the homepage. Then the first step for tourists to enter the APP is not to register and log in, but to understand the overall functions of the APP first, and through the launch of the newcomer guidance function, users can have an in-depth understanding of the Dewu community in advance.

In psychology research, there is a model that is the ELM model as detailed as possible, which means that consumers often process information through two modes, one is the edge path and the other is the central path.

The edge path refers to consumers making decisions through non-core information such as appearance, voice, and spokesperson. This model consumes less information and has a short decision cycle, but people are also prone to changing the decisions they make; the central path is contrary to this. Consumers will collect a large amount of information before making decisions and make decisions cautiously over a longer period of time.

However, once a decision is made, it will last for a long time. Before generating registration and login, users of Dewu browse Dewu's community, information and other content through a large amount of content. This is a decision-making model of the central path. Users under this decision-making mode have higher conversions and lower churn rates after signing up.

• The most core operational methods for Dewu's new user conversion are newcomer zones and newcomer discounts. By constantly displaying discount information user registration copy reminders, browsing page sections, pop-up window reminders, message reminders, etc. to achieve timely and fast conversions.
• The upgrade of the 0 yuan lottery is essentially a way to use interests to induce user fission, which will also promote the platform's new recruitment.

Overall, Dewu has a particularly good sense of rhythm during the MVP verification and growth stage, and has continuously incorporated new elements that conform to the trend, such as live broadcasts, celebrity managers' entry, etc.

The most important thing is that in addition to the new business model, innovation has enabled the brand to break through the circle and achieve huge revenue and user growth. When it reaches its growth stage, it is not only limited to the sneaker field, but also explores and explores and explores new areas to meet the different needs of different users. The above is the overall iteration path analysis of the harvest.

6. Product structure analysis

In iterative analysis, we analyzed the iterative steps of Dewu's product functions. Next, let's take a look at what users' needs meet and how they are distributed throughout the app.

This is mainly analyzed through product structure. The following figure is the product structure brain diagram of Dewu V4.73.1:

For the sake of analysis, the author will get the following table by re-examining the product structure of Dewu according to users, scenarios, needs and functions:

1. Overall analysis

Because Dewu's main target user is the buyer, the focus is on meeting the potential needs of buyers.

When a buyer uses a product, there are three scenarios:

1. Before purchasing, you need to understand the platform through the APP;
2. You need to know product information during purchase;
3. After purchase, you need after-sales service and some value-added services.

2. Scenario 1: What needs does the buyer have before purchasing and what functions does the harvest meet this needs?

Before purchasing, the buyer may have just heard of the name "Diwu", but he does not know about this platform. He can understand Dewu through the community of the Dewu page, find his own circle by watching the content of the community and interact with people in the community to understand the platform; when the platform successfully logs in and registers with the user, there will be a novice task to help users become familiar with and use the platform.

After having a preliminary understanding of the platform, buyers also need to understand whether the platform is trustworthy and whether the products provided by the platform are guaranteed. These needs can be understood and viewed through the service instructions page of "Appraisal first, shipment later" on the purchase page.

After a rough understanding of the platform, buyers will have great doubts about the platform's appraisal service. In order to better meet the needs of users, Dewu provides appraisal services. Regardless of whether you place an order on the platform or not, buyers can appraise the trendy products in their hands on the platform, and experience the platform's appraisal service in advance, so as to decide whether to buy trendy products on the platform.

Before creating the need to buy trendy products, when users do not know about trendy products or want to obtain the latest trendy products information, they can enter the latest trendy product information through the information portal provided by the platform to browse. When they see their favorite trendy products, they directly provide the purchase portal in the information information to reduce users' operations.

All the functions mentioned just now can be easily found at the top of the product-level page, which is quite reasonable in this design. Because as a brand new user who has not yet made purchases, after registering, you can directly enter all the first-level pages of the Quick Browse Platform, and all the content users want to know can be quickly found, and the operating cost is very low.

3. Scenario 2: What are the needs in purchase and how does the platform meet it?

Because the unit price of trendy products is relatively high, and the user's decision-making time increases with the increase of customer unit price, Dewu will have a special purchase page. So next we analyze how Dewu meets the needs of users in the following purchases?

High-intention users: When users have clear purchasing goals, method 1 can search their target products through the search box to understand and purchase; method 2 can click on categories and product categories to choose. There are 14 major categories in categories, and thousands of subdivided product categories have been subdivided under the 14 major categories.

By combining the primary and secondary categories, users can quickly filter out the products they want. When filtering out their target products, click on the corresponding product list to get product information, user purchase information, user reviews and user's upper body effects. If the corresponding product has no goods, you can initiate a purchase. After purchasing, the product will be shipped immediately. The user does not need to stare at the time when the goods will come, which will help users save time.

Interested users: For users who purchase for the first time, but still have a distrust of the platform, but they want to try to purchase. At this time, users will want to try to use the platform functions at the lowest cost, so what helps them is to provide coupons; in addition, some users who want discounts can find coupons that suit them through the category bar.

Low-intention users: When users have no goals at all and just want to browse the users who know about them on the platform, the platform will have recommended products. Users can drop down to browse the products. When you see products you like, you can click the corresponding product list to enter the product details page to learn about product information, user purchase information, user reviews and user's upper body effects. Dewu will list the user's purchase information in a list and the user's upper body effect is listed through filtering. The filtered information can speed up the purchase decisions of users with weak purchasing intentions.

For users who want to try it on, AR try it on is currently only open to some sneaker products. Since the technology is not yet mature, the effect of the try it on needs to be improved, so this function is not listed in the purchase column, but is placed in the service column to avoid users who are interested in purchasing and preparing to place an order using the try it on function and reduce their desire to buy.

For users who want to buy but don’t have enough money, or can’t accept the following money, Dewu provides installment and Huabei payment functions, meeting this part of the need for not having enough money but not wanting to be denied.

For these functions, Dewu puts the purchase function independently into a first-level function and puts it on the bottom navigation bar, which shows the importance of this function. It also divides the area into three sections corresponding to the needs of high intention, medium intention and low intention, and lists the corresponding functions in the upper, middle and lower positions to meet the different needs of the corresponding users.

4. Scenario 3: What are the needs after purchase and how does the platform meet it?

After-sales service is a very important link in e-commerce platforms. There is a saying in psychology called the peak-end law. User experience memory is determined by two factors: peak (whether positive or negative) and the experience at the end. After-sales service is the experience after the user is finished, so only by doing a good job in user after-sales service can you maximize the user's experience.

After the user makes a payment, the status after payment and the logistics status after payment need to be queried, so that the user can feel a sense of security after purchase. Users can click on my page to find the corresponding function entrance for query. If the query portal of my page cannot meet all user's questions, the user can click on the customer service center in my page to conduct detailed inquiries.

When users find that the size of the thing they purchased does not match, buy the wrong style, or want to refund for other reasons, they can click on the refund entrance of my page to apply for a refund.

If a user finds that the trendy products he has purchased for a period of time, he or she finds that they are dirty or damaged, then he or she can click on the platform's cleaning and care service to purchase the corresponding service.

After purchasing trendy products, users find that they don’t like them or want to take advantage of them for other reasons. They can click on the platform’s 95-point second-hand transaction to publish and sell.

The service functions after purchase are basically distributed on my page, and there is no need for users to operate multiple pages, saving users' time.

From the above analysis, we can find that Dewu's functional design can well meet the needs of users in the three scenarios before, during and after purchase. At the same time, the high-frequency functions required by different users have a prominent focus and reasonable distribution in the product structure, which can be considered a product with relatively excellent design.

7. Operational Path Analysis

The saying "Products are responsible for giving birth, and operations are responsible for raising them" also indirectly reflects the close relationship between products and operations. So how did Dewu operate this product so that it can grow rapidly in a short period of time?

The author has sorted out the main operational activities since the establishment of Dewu, according to the AARRR model.

1. Attract new customers (A)

In 2015, a group of early users were accumulated based on Hupu Sports. At the end of December, through the online identification function, a group of young people who have the desire to shop but have been hurt by fakes have been attracted.

In 2018, Dewu has been looking for KOLs and video bloggers to promote trendy shoes and distribute welfare to connect with price-sensitive down-sinking users on Douyin.

The 2021 Dewu APP and smart jointly launched a prize-winning topic collection activity, and recruited new Weibo users through Weibo topics.

Share the behavior of winning coupons and sharing lottery to enhance new attractions, so that you can get coupons by sharing. Whether users who are willing or unwilling will have the mentality of not taking advantage of them.

Through the "Blind Box Free Delivery" activity of WeChat public account, users can share with their friends through benefits.

2. Stimulate activity (A)

In 2016, Dewu began to upgrade its social functions. Dewu launched functions such as discovery, short videos, check-in, private messages, live broadcasts, and Dewu coins, aiming to increase the activity of the community;

3. Improve retention (R)

Dewu launched a game with some shoes to make gold, and opened blind boxes and other games to obtain platform coupons. The improvement of the game level requires going to the platform to complete tasks every day, which has well attached some users;

In 2020, Dewu launched the Creator Center, encouraging users to publish high-quality content on the platform through benefits. Dewu's algorithm will not only tilt traffic to big Vs and KOLs.

Therefore, when many ordinary users are paid attention to the content posted by the platform, the more users will actively produce content, the higher the user stickiness will be, and high-quality content will attract more new users. The more users, the more UGC, forming a closed loop, which greatly improves the retention of the platform;

4. Increase income (R)

In December 2018, the platform was upgraded again, and the homepage added a "category" as a first-level title, and used sneakers, trendy clothing, trendy toys, watches and other businesses as second-level titles. A wide range of businesses have been formed, mainly focusing on sneakers and trendy products, supplemented by trendy products, making the platform more diversified.

While the business is constantly upgrading, it also meets the peripheral needs of vertical users. The real meaning of the design concept of "playing with shoes, one poison is enough" to the strategic transformation of "playing with trends, one thing is enough". This change also means Dewu’s intentional demand for commercial monetization;

And we are constantly introducing trendy brands and celebrity managers to settle in, and deepen our efforts in the vertical categories of trendy products to meet the "trendy products" purchase needs of different users.

5. Sharing Communication (R)

Weibo posted a series of lottery activities, which enabled users to repost comments and likes to achieve user fission; the "0 yuan lottery" of Dewu APP is a prize-winning activity to friends by sharing Dewu's links.

In May 2020, through public welfare activities, the brand reputation was enhanced. The "Jinggangshan Youth Movement Praises a Century Year" charity event jointly initiated by Dewu App and Jinggangshan League City, practiced social responsibility from multiple dimensions such as education service supply, employment assistance, and industrial empowerment, and helped rural revitalization. Dewu invisibly increased the brand's popularity from a series of public welfare activities.

8. Future prospects and suggestions

Through the above analysis, we have understood the reason for the rapid rise of Dewu. So where will this "head" unicorn go in the future? Next, the author will use the SWOT model to conduct a system analysis, hoping to draw effective conclusions from it.

Through the above analysis, we can see that if Dewu wants to develop continuously, it must develop advantages and opportunities to avoid disadvantages and external threats.

Taking advantage of the crowd dividends of Generation Z, as the saying goes, born in the 1995s are natives of the Internet, so this group of people still have high demands for product experience. So we need to deeply explore the needs of millennials. For example, the popular meta universe at this stage, can we try to expand the meta universe social networking to make our own circle culture more stable and better meet the needs of users to "make friends through circles".

With the development of AI technology, Dewu also needs to explore more technology for the application scenarios of the platform, form technical barriers, and improve the product's moat.

Dewu needs to strengthen the management of appraisal services and improve the platform's after-sales service. For example, it can establish an appraiser number. Each pair of sneakers identified corresponds to an appraiser number, so as to achieve the role of responsibility tracking.

Not only can we optimize the immediate appraisal service, but we can also incubate our own national trendy brands; increase cooperation with brand owners, make the Wu platform a channel for product supply, make Dewu more platform-oriented, and create a brand barrier that "users will think of Dewu if they want to buy or understand trendy products."

Author: Wang Zai9536

Source: Wang Zai 9536