Analysis report on Dewu (Douyin) user operation strategy

1. Product Introduction

1. Product Background

1) Field

In the early community circles, Baidu was the only dominant player. Users who needed a discussion community in a niche field could only gather in Baidu Tieba. However, under the impact of Taobao, Sina and other platforms, a large number of buyers need to obtain community products in a niche field, as well as products for commodity authentication, so as to improve their subsequent experience after shopping on Taobao. Therefore, after that, a large number of vertical community products emerged, including "Zuiyou", Autohome, Hupu, Dewu, Nice, and Shihuo.

As for Dewu, the entire fashion market was already overcrowded when it was founded, and its emergence can only be said to be that of a latecomer. As a rising star, he was able to become the number one in the industry in just 5 years. This is truly a proof of the youth. As a dark horse, Douyin has accumulated 926,561,758 downloads. Behind this success is Douyin’s successful community transformation and acquisition of user pain points.

When Dewu was first established, it was positioned in the sports social sector for purchasing and sharing second-hand/new trendy clothing. It is a vertical community product based on the general e-commerce field such as Taobao. Taobao opened the door to China's e-commerce and changed the shopping habits of Chinese people. However, as time went on, Taobao gradually met the vertical needs of users. Therefore, around 2014, various vertical social products emerged. At the same time, faced with the endless stream of FAKEs on Taobao, users are helpless and cannot find a large authentication channel, and cannot guarantee their shopping experience and interests. Therefore, Dewu came into being and solved users' social and identification needs.

2014 was a year of great explosion, with a large number of community products emerging. Among them, Dewu was founded in 2015, Shihuo became independent in 2014, Youhuo was founded in 2012, and Nice was founded in 2013. In terms of time, Dewu's development is later than that of other competitors. The reason why Dewu can be ranked first today is due to its initial differentiated positioning and competition.

In the general sports field, there is no product that can provide product authentication. Dewu grasped the pain points of users and the market gap, and developed an independent branch with the support of Hupu Sports. It is the subsequent market demand for sneaker authentication and the scarcity of sneaker authentication platforms that support Dewu's leading position in this field.

2) Product positioning

After "Douyin" was renamed "Douyin", its definition of the product became clearer. It is no longer just a sports community, but a trendy community under consumption upgrading. The businesses covered include second-hand sneaker transactions, sneaker authentication, community sharing, and new product shopping guides. Under the pressure of Taobao's pan-e-commerce and WeChat business and other private domain traffic, we creatively carved out a path for sneaker authentication in the cracks, and then vertically divided the sports market, mainly attacking the basketball field. This is a software that almost all young people who love playing basketball cannot do without.

Yang Bing, founder and CEO of Douyin App, said that in the 20s, consumption upgrading will become one of the themes of China's economy. The younger generation represented by the post-90s and post-00s is becoming the main force of consumption upgrading. After satisfying the basic survival needs such as food, clothing, housing and transportation, young users will inevitably demand consumer goods with cultural value. Trendy culture and fashion consumption are important options for young users' consumption upgrade.

The Douyin App is committed to "helping users get (understand/acquire/communicate) beautiful things" and focuses on young people's yearning for a better life.

3) User groups

According to data provided by iResearch, Dewu's users are relatively young and their genders are relatively evenly distributed. Among them, users under the age of 30 account for 55% of Dewu, and users aged 31-35 account for an additional 28%.

Based on its vertical positioning and the fact that "basketball" is a sport with "age requirements", the user group is getting younger, which is also due to the strong vertical attributes of the product. In addition, with the consumption upgrade in recent years, "AJ, YEEZY and other trendy shoes have appeared one after another, and camera joints with fashion tycoons such as Trave Scoot, ASAP Rocky, and Edison Chen, as well as the promotion of major stars, have gradually brought some trendy items to the world. For example, in the Chinese hip-hop, MC Hotdog and Kris successively wore AJ black toes, which led to the AJ craze on the entire network; Kris wore a new sweatshirt from Ambush, and he alone made the Ambush brand popular.

Young consumers also desire spiritual and self-satisfaction needs in addition to their increasingly satisfied material needs. Driven by the desire to compare and the topics of conversation with their peers, they hope to gain a higher level of social status and honor. The trend of consumption upgrading has become the mainstream of development in the past 10 years; and the younger generation (those born in the 1990s and 2000s) has become the main force behind the development of consumption upgrading.

2. Business Logic

Target users: Dewu’s target users are mainly distributed in super first-tier cities, first-tier cities and second-tier cities. The highest proportion is in first-tier cities such as Beijing, Shanghai, Guangzhou, Shenzhen, Chengdu, Chongqing, and Hunan, and the core CBD area of ​​each city is the area with the largest download volume in that city. After all, trendy items and shoes require a certain amount of capital reserves, affordable consumption concepts, and a certain social circle. Therefore, only young people in the city centers of first- and second-tier cities with high incomes and high consumption are the main target group for this product.

According to iResearch data, this user group is mainly under 30 years old, and user portraits can be roughly divided into several categories.

• Students: no pressure to save money, like to follow trends, compare with others, pursue fashion, like to interact and socialize
• Basketball enthusiasts: like playing basketball, like basketball and its surroundings, like basketball discussion community
• White-collar workers: stable jobs, hobbies, pursuit of style and quality of life
• Basketball Girl: A handsome guy who likes to wear basketball jerseys and sneakers, like basketball peripherals, and likes to play basketball
• Fashion bloggers: like to show off their outfits in social areas and are eager to be recognized

Demand scenario:

• I bought new shoes and want to show them off.
• I like shopping for basketball and fashion peripherals to fill my fragmented time.
• Buy shoes, sell shoes, shop for shoes
• Learn about dressing and makeup
• I think my outfit is great, and I hope there is a platform to share my outfit

Core features:

Buying and selling shoes are its core functions. Sneaker authentication is its differentiating function from other products. Sneaker community, as its derivative function, is also superior to other products.

Business Canvas:

2. Product Experience

1. Product structure diagram

2. Main flow chart

As a sports social product, its functions mainly include three parts: community sharing, sneaker trading, and sneaker authentication. The core work of Dewu is the transaction process and community management.

In the transaction process section, due to the C2B2C transaction model, buyers and sellers are easily affected by subjective factors, which may lead to transaction cancellation or emergencies, and then lead to a poor transaction experience. Dewu needs to start from this point and become the bond between the two parties, using tools such as earnest money to improve the certainty of the transaction and ensure the transaction experience of both parties; in terms of community management, Dewu needs to do a good job in community operations, improve post screening in each vertical section, improve the quality of posts, insert "police" in the community, and punish inappropriate remarks, advertising insertions, and those who deliberately destroy the community atmosphere.

3. Determine the life cycle

Time dimension: The product was created in July 2015, and it has been 5 years to date. During this period, it has undergone 158 iterations, 60 iterations in the past year, and the number of iterations is becoming more and more frequent.

User dimension: total downloads reached 926 million. The user scale is huge, and the user base has basically reached the industry ceiling. In the past two years, Dewu has begun to tap into the lower-end users and strive to work hard on them. The number of downloads in the past month reached 4.59 million, of which the vast majority came from first- and second-tier cities.

Product dimension: The products mainly engage in sneaker trading and community operations. It uses its unique sneaker authentication as its differentiated competitive advantage and has tapped into the needs of users across the entire market. Within the community, the popularity and quality of its posts are significantly better than other products. It is precisely these two points that have enabled Dewu to successfully capture a large number of users. In terms of product iteration and updates, it has been updated 60 times in the past year, with an average efficiency of one update per week. Product updates and iterations are relatively frequent.

Operational dimension: In terms of users, Dewu mainly focuses on community operations; in terms of user growth, Dewu mainly focuses on incremental operations. In the community operations section, based on Dewu’s recent optimization plans and physical experience, Dewu has added an algorithm push mechanism, improved the accuracy of post delivery, added hot comments in the upper left corner of the posts, and improved the playability of the posts. In terms of user growth, it has been competing fiercely with Shihuo APP in the past two years. It mainly pushes and embeds advertisements in Douyin, offering high-quality products at low prices, in an attempt to continuously tap into lower-tier customers and occupy lower-tier markets and market segments.

Business dimension: From the investment perspective, in April 2019, the sneaker trading platform "Douyin" recently completed its Series B financing. The investor is DST (Digital Sky Technologies). According to people close to the transaction, Dewu's post-investment valuation in this round has reached US$1 billion, entering the ranks of unicorns. In 2018, Dewu received tens of millions of dollars in financing from Gaorong Capital, Sequoia Capital China, and Proust Capital. From the perspective of commercial monetization, its monetization sector is sufficient. Advertising (open screen ads + built-in ads), sneaker cleaning and care, sneaker sales, and sneaker authentication. In terms of monetization, it has both toB and toC, so its LTV/CAC is obviously greater than 1.

Therefore, overall, Douyin products are in the growth stage.

4. Analyze operational strategies

1. Start-up period (2015-2017)

1) User acquisition

In 2015, Dewu, which was based on Hupu Sports, was officially launched. With Hupu Sports as its background and backing, it accumulated the first batch of initial users and laid a solid foundation for the next stage of development.

At the end of December 2015, Dewu launched the “sneaker authentication” function, which is its core technology and also its differentiated strategic point that enables it to stand out as a rising star. It solves the problem that young people today have the desire to shop but have been harmed by FAKE for a long time, and there has been no appropriate channel or simple method to solve the problem of product pedigree.

Therefore, Dewu’s sneaker authentication function also starts from the user experience and explores the user’s biggest pain points. It is precisely because of this that Dewu has accumulated a large number of loyal seed users at this moment. By inviting two friends to engage in a user fission activity for free appraisal, we successfully fissioned a large number of loyal users of the same high quality in the initial stage. Combined with the picture community at the time, a relatively good community atmosphere was formed.

In the early stage, through the endorsement of Hupu, the diversion of early users, and the sneaker authentication + fission marketing model, Dewu acquired a large number of vertical and high-value customers in the early stage. After the item identification function was launched in version 1.9, it integrated the concept of commodity into the product for the first time, and also paved the way for future monetization business.

2) User activation

April 2016 to September 2016, versions 2.0 to 2.3. Dewu has started upgrading its social functions. As can be seen in the above table, during this period, Dewu has launched functions such as discovery, short videos, check-ins, private messages, live broadcasts, and Dewu coins. It aims to increase community activity, retain customers through activity, and drive customers to promote consumption and circulation. The upgrade of social functions has also enriched the content of the platform, especially the newly added live broadcast and currency functions, which increase the social interactivity of users.

From the early development, it can be concluded that Dewu’s development idea is roughly as follows: in the early stage, it uses Hupu’s endorsement + its own development to divert customers; it focuses on sneaker authentication, sneaker exchanges, etc. to retain customers, and in the later stage, it improves the discussion community, enriches UGC content, and shifts the overall style to the community.

It is very clear to see the direction of Dewu’s early development: community and identification.

2. Growth period (2018-2020)

1) Get users and activate users

In 2018, Nice transformed itself into a trendy product and brand sharing company and launched trading functions; Hupu Shihuo completed a new round of financing, and both parties aim to open up a new round of markets. The fashion market is further squeezed. At the same time, after three years of development, as well as with the help of trendy programmes such as The Rap of China and reality show stars, the number of registered users in the trendy market has basically reached its ceiling. Therefore, whoever can further develop the sinking market will be able to dominate this field. Just as Pinduoduo was able to break through the siege of Taobao in a short period of time, it was by tapping into the sinking market and doing a good job in user growth operations while maintaining the current high-quality vertical customers.

Therefore, a new round of battle to identify and obtain goods has begun. Both parties have been looking for KOLs and video bloggers on Douyin to promote trendy shoes and distribute welfare coupons, etc., and have been continuously tapping into low-end customers under the slogan of cheapness and authenticity. When users enter the interface, they are connected to price-sensitive low-end users through new user discounts/0 yuan lotteries/exclusive coupons, thereby locking in customers at this point, retaining users through the promotion of high-quality content on the community platform, and finally achieving the effect of occupying the market.

2) User monetization

After accumulating a large number of vertical customers and an increasing number of sinking customers, Dewu is ready to realize its monetization goals with its large customer base. In August 2017, Dewu officially entered the 3.0 version era and launched a new commodity trading function. The launch of this version also marks that Dewu has officially entered the e-commerce industry, rather than just a social platform and sneaker authentication platform.

Supported by its unique C2B2C transaction model, Dewu always puts user experience first. As long as the shoes are sold through Dewu, they must be checked by Dewu appraisers to ensure the quality of the goods and let customers know the quality of the goods they purchase. It is precisely the guarantee and cultivation of Dewu in this area that enables it to maintain a large number of loyal users in the fierce sinking market, and this group of users is still setting new records.

In addition, Dewu also cracks down on shoe speculation and cancellations. After the buyer and seller of Dewu confirm the transaction, they will need to submit a deposit (the buyer pays the full amount directly, if they give up the transaction, the deposit will be deducted). If one party gives up the transaction, the deposit will be deducted (5%-10% of the product price). This also ensures that some sellers will deliberately hoard goods and speculate on shoes due to market fluctuations.

In December 2018, the platform was upgraded again, with "Classification" added as a first-level title on the homepage, and sneakers, trendy clothes, trendy toys, watches and other businesses as second-level titles. It has formed a wide range of businesses focusing on sneakers and fashion, supplemented by trendy peripherals, making the platform more diversified. While the business is constantly upgrading, it also meets the peripheral needs of vertical users. The design concept has truly changed from "If you want to play with shoes, one Du is enough" to a strategic shift of "If you want to ride the trend, one Dewu is enough". This transformation also means that Dewu is interested in commercial monetization needs.

Overall, Dewu relied on Hupu's incubation in the early stages and developed steadily. Rely on Hupu to acquire a large number of accurate users and accumulate users. In the medium term, it won a good reputation by virtue of its "identification function". In addition to the upgrade of social functions, the company then deepened its social and identification functions, winning unanimous praise from users. Later on, it launched the transaction function in one fell swoop, optimized its own structure, and finally won a share of the fashion e-commerce market. The whole process is steady and down-to-earth. Every step is the most painful point for today's young people, and every major change and development of Dewu is based on it. Therefore, the successful development of Dewu is inseparable from its precise positioning recognition and acquisition of future trends.

From this we can see the development direction of Dewu in its growth stage: community sales + user sinking.

5. Advantages & Disadvantages Analysis

1. Content Operation: Advantages & Disadvantages Analysis

In terms of content operation, Dewu focuses on the optimization and operation of community UGC content.

By improving the screening of community posts and using algorithms to increase the accuracy of push notifications, we can improve the user interactivity and overall circle quality of the entire community. Improve the quality of UGC creation through rewarding content and other means; promote original creators through the Creator Academy. Optimize content using a series of techniques to improve its readability and aesthetics.

In terms of UGC creation, the overall pictures, texts and positioning are more pleasing to the eye and can better capture users (especially the psychology of sexual users, and perhaps the algorithm has also recommended many beautiful girls to me). On the other hand, the community of Shihuo is more about sneaker reviews and product peripherals. It can also be clearly felt from the number of likes that Dewu has done a better job in community operation and community quality. Creators get high returns (likes/follows/rewards) and will work harder to create excellent posts. Users are more willing to stay in Dewu because of the excellent posts.

However, while the exposure and popularity of posts are increased through beauties, it also has a sense of overshadowing the main focus, with users no longer focusing on shoes and clothes but on beauties. Therefore, Dewu needs to provide guidance on the creation of UGC, otherwise the entire community will be in chaos.

2. Activity operation: advantages and disadvantages analysis

At the event, combined with the recent battle for sinking users launched by Dewu and Shihuo, welfare activities such as low prices/lotteries/coupons are mainly used to achieve the purpose of increasing revenue and promoting activation.

By means of 0-yuan raffles, daily limited-time vouchers and discount coupons, etc., we capture price-sensitive users, and at the same time explore the surrounding markets of sinking users through activities such as forwarding messages and attracting new users.

The overall activity is relatively ordinary. This type of activity is beneficial for locking in low-end customers, and because of the coupons and lottery incentives, they have a greater desire to consume in Douyin, which is beneficial to improve LTV and ARPU. However, since the loyalty of this type of customers is not high, their awareness of Douyin's entire product has not reached a certain threshold, and they are prone to churn. At the same time, this type of activity through 0 yuan lottery and low-price coupons has existed 3 or 4 years ago, and was even more overused during PDD's fission marketing. Such activities still exist now, and Douyin should optimize its event operations.

3. User Operation : Advantages & Disadvantages Analysis

In terms of user operation, Dewu provides creative opportunities and platforms for original creators. For ordinary consumers, Dewu optimizes the interface to ensure their surfing experience.

For users who have ideas in the KOL field and fashion bloggers, Dewu provides a creative platform where they can learn video production, copywriting and typesetting in the Creator Academy. They can choose recent hot topics in the topic column to increase the exposure of their posts. At the same time, Dewu has joined the grass-planting bounty program, which is similar to the Douyin recommendation link and Xiaohongshu link. The product link is inserted below the post, and users can earn grass-planting fees by purchasing the post. In short, Dewu is interested in cultivating original creators within its community.

For ordinary users, Dewu’s simple and elegant UI design reduces user thinking and clicks, and enhances user immersion.

Based on the user experience duration and region, the communities that are most widely used and longest-used by users are placed on the entry interface, while purchase and shoe peripheral care identification are placed in the navigation bar below. There are no fancy decorations or blank areas under each interface. The fonts of "sneaker identification" and "sneaker care" required by users are clearly displayed, making it convenient for users to choose and use.

It is not difficult to see that Dewu is transforming, gradually transferring its previous differentiated competitive sneaker authentication to the trend community, and further monetizing it through the popularity of the trend community.

6. Summary & Suggestions

With the government's 11th Five-Year Plan policy support for the development of e-commerce and the macro-background of the people's growing spiritual and cultural needs, coupled with the endorsement of products by major celebrities and the media's deliberate creation of hot topics, trendy social platforms have emerged one after another. One of the young players behind the major trendy platforms was able to break through the siege in just five years and target the pan-social networking platform, Xiaohongshu. The potential energy here is inseparable from the support of the macro-background for trendy things and the profound views of Douyin CEO Yang Bing on the future market - brand upgrading is the way for Douyin to open up the new decade.

Judging from the development focus and trends of Dewu in the past two years, it will pay more attention to the monetization of the community and the pan-trend areas in the future. The sale and authentication of sneakers alone can no longer meet the increasingly diverse social needs. Decentralization and consumption upgrading are the trends.

1. The path to commercial monetization: social e-commerce

As a dark horse in the trendy social platform, Dewu’s social section is much more active than other products, so it can start from the community section and expand its strengths.

We focus on cultivating high-quality independent creators, and launch posts with background and connotation and knowledge, rather than just beautiful pictures to attract likes. On this basis, we add live broadcasts or product recommendations, combine KOLs with e-commerce, and achieve immersive consumption, allowing users to complete consumption comfortably and freely without realizing it. After all, decentralized and de-platformed consumption will definitely be the main trend in the future.

Similarly, for the discovered low-end users, we will cultivate creators suitable for them. When the entire community has been rolled out, we will recommend the most suitable KOLs and products to users through algorithm push and data support. Allow users to place orders while browsing. Consumption is becoming a part of daily life.

2. Development of early warning path: identification and anti-counterfeiting

As the largest and oldest sneaker authentication app in the country, Dewu plays an immeasurable role in China's growing sneaker culture. As the spiritual support and psychological guarantee for consumers, it effectively defends the information asymmetry and news gap between consumers and merchants, and protects the reasonable rights of consumers.

However, a group of criminals still secretly infiltrated and colluded with Dewu sneaker authenticators to sell counterfeit goods in a high-profile manner. As time goes by, the fact that Dewu products are counterfeit will eventually reach the ears of users, which is bound to have a great impact on Dewu's future development. After all, it has been mentioned before that whoever controls the lower-level markets will control the world, but few people know that the loyalty of lower-level users is not high, and a large number of lower-level users will definitely be lost due to fraud and assisting in fraud. Therefore, how to protect the interests of consumers and ensure the peace and stability of the sneaker authentication circle has become a hurdle that Dewu must face.

For this issue, we can start with public opinion supervision and public appraisal.

From the perspective of public opinion, a supervision and reporting mechanism can be added, and users can report and provide feedback based on relevant information. If the evidence is solid and the situation is true, the reporter will be rewarded with 10,000 yuan or a pair of limited edition sneakers. At the same time, we can use the huge community to play the role of public opinion monitoring. I believe that under the supervision of public opinion, we can definitely control the industry.

From the appraiser's perspective, the appraisal process and reasons for the judgment can be made public, and users and other appraisers can discuss it below. If you have any objection to this appraisal, you can file a lawsuit against Dewu, and we will send the highest-level appraiser to conduct an appraisal and finally make a judgment on the product. Contrary to the original ruling, those who file lawsuits and discover clues can be rewarded with cash or sneakers, or given a position as an appraiser. Regardless of whether the final decision is different or not, at least it can deter some merchants and appraisers from acting rashly in this area.

Author: Wangzai8766

Source: Wangzai8766