How to build an e-commerce product cognition system?

E-commerce is an indispensable industry in our lives. In recent years, new categories such as community e-commerce and live streaming e-commerce have been developed, each of which has different business scenarios.

E-commerce is a major category of Internet products, and there are many categories within e-commerce. According to the industry, there are the recently popular community e-commerce and live streaming e-commerce, such as Douyin and Kuaishou. There are also different classifications such as C-end e-commerce and B-end e-commerce. There are many subdivision types and complex business scenarios. As a product manager, how should we establish a cognitive system for e-commerce products?

If you want to do e-commerce, it is best to understand the entire e-commerce industry. What is its form? What position does the module we make occupy in the entire industry?

1. Everything is e-commerce

First, let’s look at some data to see why we should learn e-commerce. The above picture is the market value ranking of all Chinese Internet companies as of January 1, 2021. As you can see, among the entire Internet companies, among the top 10 product companies such as Alibaba, Meituan, and Pinduoduo, basically most of the companies have e-commerce businesses. In addition to the most typical e-commerce products such as Alibaba, Pinduoduo, and JD.com, there are also Tencent's Xiaoe Pinpin, Xiaomi Youpin, Baidu Aicaigou, etc. The only ones who said they might not have an e-commerce sector are NIO and Beike. In fact, Beike is also an online trading platform, mainly for selling houses, but the payment process is not completed online, and many links need to be tracked online.

What did you find? Basically, well-known Internet companies have e-commerce businesses. E-commerce is the most widely used product system in the entire Internet field. Why study e-commerce? One is that e-commerce has good employment prospects and a broad range of applications. On the other hand, all industries will face a problem in the end. If they want to monetize and make a profit, they will eventually have some online trading business.

Everything is e-commerce. Let me give you an example. For example, Douyin and Kuaishou were just short video platforms for entertainment at the beginning. Why did they focus on the e-commerce field later?

It’s still for monetization. If some platforms have traffic, they will think about how to monetize it. There are several ways to monetize: one is advertising, one is membership service, and one is e-commerce. Many companies ultimately choose e-commerce because it is something that can generate long-term profits and is also a business with great development potential.

Let's take a look at Douyin after it went online. It officially integrated into e-commerce in 2018. In the beginning, it only connected to third-party platforms such as Taobao and JD.com and used their products for sales. Later, it gradually launched its own e-commerce product system such as Douyin Stores, internalized e-commerce capabilities, and developed its own e-commerce capabilities.

You can see such a process. Many companies are not e-commerce platforms at the beginning, but in the end they will develop in the direction of online transactions. We know that e-commerce has a very broad application scope, and most companies have online businesses. How do we understand the entire e-commerce ecosystem?

2. Understand and embrace the e-commerce ecosystem

I hope everyone can understand the entire ecosystem, and not just focus on what they are doing. For example, when making an APP, it is wrong to only do a good job of the internal things of the App. Everyone must understand that the product they are making runs on the existing game mechanism. You must first understand which players and modules are in the game. Only by understanding the rules of the game can we do well in our part.

First of all, the e-commerce system does not refer to a certain platform, such as Pinduoduo or Taobao, it can complete the circulation of the entire ecosystem by itself. E-commerce is an ecosystem. What roles does this ecosystem include?

supplier:

First of all, there are suppliers. Suppliers are divided into several types, including factory manufacturers, distributors, and some customized service providers. For example, if I am a big seller and I want to customize my own brand products, I have to cooperate with these manufacturers, right?

Shopping platform:

The second is the shopping platforms we use most frequently, such as Tmall, Taobao, Pinduoduo, and some vertical platforms, such as MissFresh. There are also some micro-businesses and SaaS service providers, such as Youzan, Weimeng, etc.

Operation:

In addition to these e-commerce platforms, there are some other companies, such as some agency operation companies. Some traditional enterprises or some brand owners do not have online operation capabilities and will hand them over to third-party agency operation companies. There are many types of agency operations, including full-process processing from customer service to delivery, only responsible for store operations, and third-party customer service.

Payment:

Payment companies such as Alipay, WeChat, and UnionPay. In addition to payment companies, there are also some third-party payment aggregation companies and some third-party account splitting companies.

logistics:

Logistics companies, such as the commonly used STO Express, which is a small-package logistics company, as well as large-package logistics and whole-vehicle logistics companies like Deppon Logistics, and some local logistics companies, are all logistics service providers in the e-commerce ecosystem. Those who engage in cross-border trade or overseas e-commerce need to use some international logistics services. There are also some crowdsourcing services, such as food delivery riders, which are mentioned by some crowdsourcing service providers.

Shopping guide:

There are some shopping guide platforms, such as Fanli.com and What’s Worth Buying, and some that specialize in distribution systems, such as Taobao Affiliate, Pinduoduo Affiliate, etc.

In addition to what is shown in the picture, there are also ERP services that provide system services to some small and medium-sized sellers, such as Kingdee, UFIDA, Jushuitan, etc. What services do they provide? If you are a seller, you will choose to open stores on multiple platforms. How do you centrally manage? These ERPs help you. It provides tools for product listing and order management, as well as promotional tools. It can coordinate many platforms. With just one ERP, you can get orders from Pinduoduo, JD.com, and Taobao, and participate in corresponding activities. This is a very important part of our e-commerce ecosystem.

There are also some ISV service providers who provide some personalized plug-ins, such as intelligent customer service, independent sites and other tools.

When we usually talk about e-commerce products, we are specifically referring to e-commerce platforms. In fact, there is little discussion about how to connect with the many service providers outside of e-commerce platforms.

When building an e-commerce platform, you need to remember that we need to embrace the entire e-commerce ecosystem and utilize the existing infrastructure instead of doing everything by yourself. Let me give you an example. There are many customer service tools on the market like IM customer service tools. If you make IM yourself, the ROI will be relatively low. If the problem can be solved by spending money, a service fee of tens of thousands of dollars a year may be enough to achieve results worth millions.

In the entire process of doing e-commerce, many needs can actually be solved by using third-party services.

3. Taking live e-commerce as an example, understanding the e-commerce service ecosystem

Having said so much just now, let’s take a specific example to understand the practical application of the e-commerce ecosystem, taking the most typical and familiar live broadcast platform: Douyin as an example.

Make purchases on live streaming platforms and complete your purchasing needs through short videos or live streaming. There is a service system behind it to support it.

For example, some upstream suppliers, such as wholesalers, brand owners, distributors, factories, etc. Xinxuan, which has been very popular recently, actually directly finds factories to produce and label many of its products, and then sells them on the platform.

Before the product services were launched on Douyin and Kuaishou, merchants were actually supported to directly obtain third-party products, such as those from Taobao, JD.com, and Pinduoduo, and sell them directly on the platform. There was no need to rebuild a new one on the live streaming platform. When users make a purchase, they are directly redirected to the third-party merchant platform.

Now these platforms have their own stores like Kuaishou Stores, Douyin Stores, etc., and some Youzan, which we call ISV service providers, provide some live broadcast tools to these live broadcast platforms.

In addition to this, there are some third-party service providers, such as data service providers, transaction service providers, and operation service providers, similar to the agency operations mentioned earlier, and some system support, such as SAAS tool service providers, like Youzan Weimeng, etc., and third-party payment service providers, such as WeChat Alipay, etc.

From this example, we can see that for the Douyin and Kuaishou platforms, the internal is only one link in the entire chain, not the whole. Similarly, when you are building an e-commerce platform, you will find that what you are doing is not enough to complete the closed loop of the entire chain, and you need to rely on the services of a third party to do it.

To sum up, first we study e-commerce from the perspective of the entire business ecosystem, see the position of our e-commerce platform, and then start from the entire ecosystem and embrace the entire e-commerce ecosystem.

4. E-commerce business model & typical companies

How to understand e-commerce? E-commerce has different business models, and the required system knowledge and system processes are different.

There are many ways to classify e-commerce, the most typical one is based on participating roles, such as B2C, B2B, C2C, O2O, C2M, etc.

There is also a very typical classification, which is distinguished by industry vertical fields, such as community group buying. The most popular ones nowadays are Meituan Youxuan, Chengxin Youxuan, etc. Live streaming e-commerce, such as Douyin and Kuaishou, cross-border e-commerce, such as Amazon and Shopee, fresh food e-commerce Dingdong Maicai, social e-commerce Yunji, etc.

Whether it is based on user roles or industries, e-commerce has different classifications. What are the differences? Can we use the same solution to adapt to these areas? Actually, it doesn’t work.

5. Taking community group buying as an example to understand the business model

We can adapt to business areas and business models. Let's take a typical example, which is the most popular community group buying, the most typical of which are Meituan Youxuan and Duoduo Maicai.

Let's take a look at its information flow, which is supplied by suppliers to the community group buying platform, which then provides sales services. The platform recruits group leaders and attracts users through them. After the users purchase, the community group buying platform will allocate the goods to the group leader, and then the users will pick up the goods at the group leader's side.

It involves the interaction of information flow, cash flow and logistics. I just gave a brief introduction. There are many complicated links in community group buying, such as logistics. Compared with our normal purchases on JD.com, JD.com will send it to you directly. The community group buying model is more complicated. It is divided into several ends. To give a simple example, it is divided into small programs operated by users, the management end of the group leader, the operation background of social group buying, the supply chain background, the TMS end of driver delivery, and different warehouse WMS. Warehouses are also divided into various levels.

It requires a very complex system to support it, and the solutions of ordinary B2C e-commerce platforms cannot be applied to this scenario.

This example illustrates that product solutions for e-commerce businesses require an understanding of the business model of the entire business. We will not discuss community group buying in detail here, as we can discuss it in detail later.

E-commerce is an Internet product with a wide range of applications. Everything is e-commerce. As long as there is a need for monetization, there will be transactions. If we want to make good e-commerce products, we must understand the position of our e-commerce products from the perspective of the entire e-commerce ecosystem and embrace the e-commerce ecosystem. Provide corresponding solutions based on business scenarios.

Author: Bouny_Yuan

Source: Sui Sui Lian Products