Analysis of competitive products between Dewu and Shihuo

Nowadays, people are pursuing fashion more and more, the market for trendy brands is expanding, more people like to buy some trendy brands, and so on, trendy brand software has also emerged; in addition to trendy brand transactions, some trendy brand platforms also have some identification functions, which are deeply loved by users.

1. Introduction to Competitive Product Analysis

1. Competitive product analysis description

Analyze direct and potential competitors in the market, optimize the core structure and page layout of the product, and establish the core functional positioning of the product.

Understand the core needs of target users, explore their attractive needs, and prepare for product iteration based on the market status.

2. Test environment

2. Market

1. Analysis of the trendy brand market background

Above: Figure 2.1 Comparison of the market size of trendy brands and non-trendy brands in 2017 (Source: 199it)

Below: Figure 2.2 Trends in the global fashion brand market size from 2015 to 2017 (Source: 199it)

It can be seen from Figures 2.1 and 2.2 that from 2015 to 2017, the global market size of trendy products continued to grow rapidly. In 2017, compared with 2015, the global sales of trendy goods doubled (US$200 billion in 2017 and US$90 billion in 2015). In 2017, the growth rate of trendy brands was more than three times that of non-trendy brands.

From a macro perspective, the consumer market potential of the entire trendy brand is huge; for Dewu , the vertical e-commerce model mainly relies on the consumption level of the customer group. The healthy development of the trendy brand market and product characteristics will inevitably promote the rapid development of the secondary trading market.

Figure 2.3 Trendy brand popularity and transaction scale index from 2015 to 2018 (Source: 199it.com)

As shown in Figure 2.3, the transaction volume of trendy brands is spiraling upward, and the search popularity continues to increase, which indirectly reflects that trend culture is gradually transforming from subculture to mainstream culture.

As a B-end intermediary platform for domestic trendy brand transactions, Dewu uses resource integration as its profit model, which can not only effectively avoid market risks but also enjoy the dividends of the trendy brand market. In addition, every winter, the sales growth rate of trendy brands is the highest, which is the annual dividend period for profits in related industries. Dewu can also use it as a key period for marketing.

Figure 2.4 Transaction volume share of trendy brands by age group from 2016 to 2018 (Source: 199it.com)

As shown in Figure 2.4, the main purchasing group of trendy brands has gradually changed from those born in the 1980s to those born in the 1990s. The change in consumer groups will also affect the transformation of the target customer strategy of secondary trading platforms. Only targeted design products can grasp the actual needs of key users. Consumers in the new era pay more attention to personalization and experience, and have more stringent demands on product quality.

Analysis: Trendy culture (sneak culture, hip-hop culture) that transmits value through culture has created a huge trendy brand market, combined with the special sales methods of trendy goods (limited sales, hunger marketing); the vicious domestic trading environment (according to incomplete statistics: the consumption share of counterfeit trendy brands accounts for 20% of the total trendy brand market share) has brought market opportunities to the secondary identification and trading platform; and the target market of trendy brands is mainly composed of young new generation consumers, and personalized and unique service products will be the basis for establishing product differentiation advantages.

2. PEST Analysis

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 clarified the status of the e-commerce industry and clarified my country's goal of developing e-commerce; at the same time, it also improved the e-commerce industry service system, and thus a large number of e-commerce entrepreneurs 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.

2) Economy

• Against the backdrop of consumption upgrading, consumers' consumption concepts have shifted from the material level to the spiritual level, from the original "wearing warmly" to the current "wearing well". Young emerging consumers also pay more attention to the value of the brand and prefer the culture of the product itself.
• The popularity of trendy market culture continues to grow. According to Nielsen's global trendy brand big data report, the consumption growth rate of trendy brands in China reached 62% in 2017, which is 3.7 times that of non-trendy brands.
• Bain Consulting has also predicted that the size of China's youth clothing market will exceed US$500 billion in 2017, and trendy brands will account for around US$33 billion to US$35 billion.
• It can be seen that due to the upgrading of consumer consumption, the market has also undergone earth-shaking changes. More and more people have greatly increased their recognition of trendy culture and attach more importance to the value of the goods themselves.

3) Society

With the development of information technology, the NBA has become more closely connected with China, and with the introduction of NBA copyrights 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 spreading 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, the popularity of trendy and individual programs such as China's New Rap and Street Dance of China, and the effective communication of top stars from major IPs (Shawn Yue, Edison Chen, Kris Wu, etc.) have further brought trendy culture into the public eye.

4) Technology

With the rise of Internet payment, the three payment technologies of online banking, third-party payment and mobile payment have become more mature, making it easier for users to shop online and pay. Users also prefer online shopping, which is how the e-commerce industry has been able to thrive to this day.

With the development of short video and live broadcast functions, people are becoming more and more fond of short videos and live broadcasts. Real-time video processing allows people to experience video elements of different styles. This has also greatly increased the users' explosive growth in social interaction. Of course, Du has also launched short video and live broadcast functions, which have also had a significant effect on the social function sector.

Dewu has reached a cooperation with the China Inspection and Quarantine Agency and possesses the most advanced identification technology in the country. Ahead of other competitors.

5) Summary

In the macro environment, the e-commerce industry has a good industry development, and vertical e-commerce companies such as Douyin are more supported by the government. In the social and cultural environment, trendy culture is gradually becoming mainstream, and the rapid development of hip-hop culture has also promoted users' higher demand for such products.

In addition, the target customers of this type of product are the new generation of users, who have a stronger desire to consume personalized products and are less sensitive to prices, making it easy to induce them to consume; in terms of technical background, Dewu also has certain leading advantages.

3. Business Model

c2b2c: At present, the profit model of domestic trendy brand secondary trading platform apps is mostly c2b2c (such as: Dewu, Nice, Youhuo). The seller sends the product to a third-party platform, which authenticates the product before forwarding it to the customer. The service fees incurred in the middle are the main profit income of the product (inspection fees, packaging fees, authentication fees, etc.). This type of platform does not need to accumulate inventory or bear the market risk of sneakers, and faces relatively small market risks.

In addition, due to the limited release of trendy brands, there is a large demand for secondary transactions of trendy brands, and this is their profit model with relatively high profitability.

Profit model:

• Service charges: Sellers: technical service fee (5% of the product price), transfer fee (1%), inspection fee: varies with product type: 8-20 yuan, identification fee: 10-20 yuan, packaging service fee, cleaning fee (second-hand goods): 20-40 yuan, packaging service fee: 10 yuan;
• Equipment identification: Users can identify equipment by uploading product pictures: Sneakers: 5-10 yuan;
• Cleaning service: starting price for sneakers: 59 yuan, luxury bags: starting from 199 yuan;
• Live broadcast reward: 5:50 split between platform participants;
• Advertising charges: CPC per thousand times, 10 yuan per thousand times.

3. User Analysis

1. Purpose

Through user attributes, we can explore the essential needs of users and derive core functions; secondly, we can use user scenarios to analyze user pain points and extend special functions.

2. User Tags

Figure 3.2.1 The proportion of transactions of trendy brands in different age groups and the ratio of men to women (Source: 199it)

As shown in Figure 3.2.1, the main target group of trendy brands is leaning towards the new generation (those born after 1995 and 2000). Only targeted product design can capture the actual needs of key users. Consumers in the new era pay more attention to personalization and experience, and have more stringent requirements on product quality. In addition, the proportion of female users is gradually increasing, and the current male-to-female ratio is approximately 3:1.

Figure 3.2.2 Consumption scale and year-on-year growth rate of trendy brands in various cities

As shown in Figure 3.2.2, the main battlefield for trendy brands is first- and second-tier cities, which contribute more than 70% of consumption, but the growth rate is lower than that of third-tier and lower cities. To a certain extent, it reflects that the consumption level of trendy brand products in first- and second-tier cities is tending to saturation, and the focus of demand is shifting to third-tier and lower cities.

Summary: The new generation of male fashion brand consumers in first- and second-tier cities are the main target group for fashion brand products, but the user groups of female users and those in third- and fourth-tier cities are gradually expanding at a faster rate.

3. User Conduct

Figure 3.3.1 Trendy brand consumer preferences

As shown in Figure 3.3.1, in addition to clothing, trendy brand users also pay high attention to sneakers and bags, while their attention to trendy toys and accessories is relatively close; overall, the total categories of trendy goods are rich, and trend lovers have a certain desire to buy trendy products of different categories.

Figure 3.3.2 Growth rate of popularity of trendy brand users for different niche cultures

As shown in Figure 3.3.2, the preferences of trendy brand users for hip-hop and Chinese styles have changed the most. The rise of Chinese style also reflects the rapid development of national trends. In addition, the styles of trendy users are diverse, and hip-hop culture and street culture are still the pioneers of trendy culture.

4. User Group

Ordinary users: Basketball enthusiasts who have a great demand for sneakers and pay some attention to trendy brands, but do not have a high consumption level; they do not like shopping and want to buy basketball shoes online. They are more concerned about whether the basketball shoes are authentic and their price-performance ratio.

Fashion veterans - core users: collectors of trendy brand clothing and trendy toys, who pay high attention to sneaker culture products such as AJ, especially limited edition products, have a high consumption level, and do not care about the cost performance of the products; due to the long shipping time of purchasing on behalf of others, ordinary offline buyer stores do not have sufficient stock; they hope to have an online trading platform for purchasing limited authentic trendy brand products.

Sellers of trendy sneakers: professional buyers who manage their finances through sneakers, have professional channels to stock up on sneakers in large quantities, and have stores offline or on Taobao. Due to the prevalence of counterfeits, online stores are not trusted by the general public and have lost some consumers; they hope to have a formal and large-scale secondary trading platform to trade sneakers.

Trendy brand clothing anchor: If you want to be a anchor on a platform that specializes in trendy brand transactions, you can directly target the target customer base, gain more loyal fans, and realize monetization.

5. User scenarios

1) Ordinary users

Basic attributes: Xiaokun, male, 22 years old, from a second-tier city.

User behavior: Xiaokun likes to watch NBA. He comes from an average family and is interested in buying stars like LeBron and sneakers.

User characteristics: College students.

User scenario: Xiaokun particularly likes playing basketball and also likes many NBA stars. Once, when I was watching an NBA live broadcast, I saw a pair of James XV basketball shoes worn by LeBron James that were very eye-catching. After checking the price on the Internet, I decided to save money to buy them.

When he saved enough money to go to an offline physical store to buy the shoes, he found that the store did not have the sneakers he liked. After searching for the same style on Taobao, he discovered that many stores had consumer comments that the shoes were fake. With the recommendation of his roommate, he downloaded Dewu and found that not only did it have a service clause of "three times the compensation for fake products", but it also had all the color combinations of the sneakers. After the purchase experience, he also found that Dewu also had a VR try-on function, the packaging was also very sturdy, and the experience was good. After that, Xiao Kun became a loyal customer of Dewu.

2) Trendsetters - Core Users

Basic attributes: Xiao Ming, male, 36, from a first-tier city.

User behavior: They are keen on trendy brands and Air Jordan, and are willing to pay high prices for limited edition sneakers, trendy clothes and luxury bags.

User characteristics: A senior software engineer in a first-tier city and a loyal fan of Jordan.

User scenario: Xiao Ming has grown up in a wealthy family environment and has been exposed to basketball since childhood. He is a loyal fan of Jordan and often buys limited edition Jordan sneakers through overseas shopping or by looking for foreign friends to buy them for him. However, due to the long overseas shipping time and some shoe styles are difficult to find.

By chance, during a break at work, Xiao Ming learned about the Douyin APP while chatting with a young colleague. After downloading it, he found that many shoe models that were not available could be searched on Douyin. Although the prices were higher than those of overseas shopping, Douyin had an authentic authentication function and the sneakers could be received within a week. Since then, Xiao Ming has become a loyal fan of Douyin and often buys sneakers, clothes and bags on the platform.

3) Sellers of trendy sneakers

Basic attributes: Xiao Ma, male, 36, from a first-tier city.

User behavior: He is passionate about the sneaker market and is a senior sneaker collector. He has opened his own sneaker reselling store and wants to sell sneakers on the Internet.

User characteristics: sneaker merchant.

User scenario: Due to the impact of the epidemic, the real economy has been hit to a certain extent. Xiao Ma, who is located in a first-tier city, not only needs to pay high rental costs when opening a sneaker buyer store, but also faces the dilemma of shrinking customer base. So he plans to turn to the Internet market. After weighing the pros and cons, he decided to sell sneakers on the Douyin app. Douyin has an authentication service, which can dispel consumers' skepticism to a certain extent.

4) Fashion anchor

Basic attributes: Xiao Wang, female, 30, from a second-tier city.

User behavior: Want to share my daily outfits.

User characteristics: Urban white-collar workers, keen on trendy brands and luxury bags.

User scenario: Xiao Wang is a professional woman who works as a fashion blogger as a side job. She often shares her fashion tips on Bilibili, but with the comprehensive development of Bilibili, it is difficult for her to obtain a stable customer base.

With the introduction of my best friend Xiao Zhang, I got to know Dewu, a secondary trendy brand trading platform that integrates a trendy lifestyle community. After posting my own dressing tips on the platform, I gained a large number of fans. And gradually became a Dewu anchor, making it his new side job.

6. User pain points

Ordinary users:

• There are too many counterfeits online, and offline stores have low discounts and limited styles.
• There is a lack of information on sneaker releases.

Core users:

• Limited edition sneakers are hard to get as there are no online or offline purchasing channels.
• Overseas shopping takes too long.
• Direct transactions online and offline are prone to being deceived.

Seller:

• The rental costs of offline stores are high.
• Without professional online sales channels, users do not trust us.

Host:

Mainstream live streaming platforms have a wide range of users, making it difficult to accurately target them.

4. Product Analysis

1. Comparative analysis of competitive product positioning

2. Comparative analysis of competing product structures

Figure 4.1 Product structure diagram of Dewu

Although Dewu has many functions, its product structure is designed to be very consistent with user habits, and target customers can quickly access the core functional modules of the product.

The four major functional modules of Douyin are Douyin, Purchase, Service, and Me. Each functional module revolves around profitable business, avoiding the large-scale loss of users to the greatest extent.

Figure 4.2 Nice product structure diagram

Nice's product structure design is more inclined towards communication and sharing. Nice's structural design is inclined towards user experience, but it also leads to more complicated process steps for Nice users to purchase products. In addition, Nice's identification function is not designed reasonably. It is set in my function module, and the function layout is not prominent, which is not conducive to customers to quickly enter the function page.

Figure 4.3 Product structure diagram of Shihuo

Shihuo has various functional modules that meet users' diverse needs for trendy clothing, sports information, shopping, etc. It is more inclined towards sports enthusiasts in terms of communication communities. Its functions revolve around basketball shoes and sportswear, and focus on providing users with convenient information collection and sharing. Compared with nice and Dewu, it is more flat.

analyze:

The structural design of Dewu revolves around core functions and is designed to suit the user's usage habits. It has many functions but the intuitive experience is not complicated. Users can easily use each sub-function without any guidance. The core functions occupy a larger area, which is convenient for users to use.

Nice's functional structure is designed to be more social, which is consistent with Nice's early positioning. However, users' consumption on Nice becomes more complicated, and the entry to the identification function is deeper (this is consistent with Nice not focusing on identification services, but it weakens its profitability).

Shihuo is positioned as a shopping guide platform. It has a lot of information content, which also leads to complicated functions. However, the design of functions such as rankings and widgets is worth learning from.

3. Comparative analysis of main functions of competing products

1) The main function of Dewu (buyers purchase)

Figure 4.1 Interactive design of the purchase function

analyze:

The design of the Douyin APP is simple, the user experience is good, and the details are handled in a way that has been lowering the user's defenses against purchases, step by step inducing users to pay for purchases.

The Douyin APP has almost no unnecessary functions and pages. The page jump logic is simplified as much as possible to reduce the user's purchasing and usage process. The subtraction design is the main reason why the Douyin APP is ahead of other similar APPs in interaction.

In terms of size recommendations, the Douyin APP paid too much attention to streamlined design. Since the sizes of different categories of goods are different, and Douyin does not have detailed reference specifications for size recommendations, users need to inquire and ask other buyers for purchase recommendations; this has caused many users to jump out of the page to inquire in other functional areas, resulting in the loss of some users.

2) Nice’s main function (buyers purchase)

Figure 4.2 Nice purchase function interaction design

Nice allows users to directly select the size of the product on the list page, or quickly find the product they want to buy through the category options; however, when Nice users enter the purchase page after selecting the size, the size chart will still be displayed for users to re-select, which reduces the user's quick purchase experience.

analyze:

Dewu can add a module to recommend the product rankings that the general public likes on the search page. The design of Dewu’s product search page is relatively simple. If a recommended list is added, users can stay on the page longer, which may promote user re-consumption.

In terms of size recommendations, Dewu can prioritize users' preferred sizes and display the prices of their sizes, allowing users to set the general sizes they use in advance: users may frequently buy shoes and clothes for themselves and others, etc., optimizing the user's purchasing process.

Douyin can set up a product price increase chart for users' reference; Douyin only has historical purchase transaction prices and cannot intuitively feel the price changes.

3) The main function of identifying goods (shopping guide)

Figure 4.3 Interactive design of product identification and shopping guide function

Although too many classification options allow users to browse more product information, it is easy for users to go through unnecessary processes when they want to search for a specific product. (As shown in Figure 4.3, if a user wants to buy Kobe 4 Bruce Lee in black and white, he needs to select the model on the list page and the color on the information page). In addition, Shihuo has set up a soaring list on the search page to cater to the trendy user group's enthusiasm for popular products.

Improved user page retention rate. When setting the default size, Shihuo will reset it based on the user’s last choice, which is very beneficial to the user experience.

analyze:

The size of the goods that the user has purchased in the past is used as the user's default size, which is convenient for users to purchase goods quickly and simplifies the purchase process. In addition, different types of shoes have different sizes. Dewu can provide users with default shoe sizes and recommended sizes to avoid size mismatches after shopping, thereby optimizing the user's purchasing experience to the greatest extent.

When users search, we recommend the hottest products list to attract users to browse other products again (same analysis as in the Nice section).

V. Summary and Analysis

1. SWOT

VI. Conclusion

Dewu was the first to grasp the pain points of user needs, and through the c2b2c operating model, it avoided market risks and met the needs of the target customer group; in addition, the prevalence of trendy culture and the development of domestic hip-hop variety shows have promoted the rapid development of the trendy brand market, and the development of Dewu has also promoted the sinking of sneaker culture and hip-hop culture to second- and third-tier cities.

As the market capacity gradually expanded, Dewu was ahead of its competitors in building target customers and established a large group of loyal target customers in the early stages. In terms of product design, Dewu focused on the user experience of target customers and was ahead of its competitors in details, thus ensuring customer retention.

However, Dewu should also optimize its products by combining the designs of other competing products (designs that are more in line with target customers) to ensure micro-iteration of the products.

Author: Mamba PM

Source: Mamba PM