Let’s talk about Douyin e-commerce distribution!

Tik Tok is now one of the most frequently used apps among the public, the other one being WeChat. Tik Tok’s daily active users have now exceeded 600 million, and it is now an era where almost everyone is watching short videos and live broadcasts on Tik Tok. Nowadays, if we don’t talk about short videos and live broadcasts when we go out to communicate and discuss, people will think we are traditional e-commerce people.

Our company has not yet carried out related business on Douyin, because we have not found a suitable entry point yet. The main reason is that our previous business was still based on WeChat private domain social Taobao and social e-commerce business, and there is currently no way to integrate it well on Douyin.

In my opinion, TikTok is actually an amplifier. As long as you have a skill, you can quickly amplify it through this platform. This is very important. Even if you can cook, decorate the house, or even make good PPTs, or are very knowledgeable about Word and Excel, you can create content through the TikTok platform, and then quickly amplify it to accumulate fans and realize commercial realization.

However, I am still more concerned about Douyin's e-commerce , and many of my friends are doing it. Among these friends who are doing Douyin e-commerce, I have seen that less than 5% can actually make money, and they are mainly concentrated in three directions: DP agency operation, influencer sales, and directly becoming influencers. The vast majority of the remaining friends have not yet made large-scale real money through Douyin (they have made a little money), and are basically in the stage of trying, exploring and paying tuition fees.

But everyone is still enthusiastically exploring it. In my opinion, the biggest reason is anxiety and gambling on the future.

Everyone believes that short videos and live broadcasts are the future, and Tik Tok is a huge traffic pool. If you don’t enter it, you may be out of touch with the times in the future. It is precisely because of this anxiety and the drive for a better future that friends around me are entering the Douyin track. One wave after another comes, and it is no exaggeration to say that wildfires cannot be extinguished and spring breeze brings new life.

To be honest, although we didn't find any business niche on TikTok, I was also very anxious.

Due to this anxiety, I opened a Douyin account before the New Year to play around with it. Since I don’t know anything else, I currently mainly talk about e-commerce-related trends, changes, and some small knowledge. I don’t update my post every day. I only post if I have something to say, and don’t post if I don’t have anything to say. That is to say, you should go out and explore first to get a feel for it. It is better to go into the water and swim to experience it than to watch it from the shore. This is the main mentality.

So far, he has posted more than 10 videos, and two of them have decent views, one with 350,000 views, and the other with more than 400,000 views. However, the number of fans has not increased much, only a few thousand at present.

The one with 400,000 views currently has 3,000 likes and 1,500 comments. The like ratio accounts for 0.75% of the views, the number of comments accounts for 50% of the likes, the completion rate is 8%, the number of shares is 398, and the number of fans increased is 525. I feel that the number of comments has a very high proportion of the distribution weight of the video. It would be even better if there were more comments and everyone was commenting on each other in the comment section. I don’t know what level my data is for bloggers who talk about professional knowledge, and I have no idea.

Because I haven't done it very well yet, and there is no clear segmentation and positioning, I will just do it this way for now. I won't disclose the name of the account here, otherwise if everyone pays attention to it, it will cause me psychological pressure. In the future, when I have figured out a direction, I will tell you all.

In short, after exploring for such a period of time, I feel that the traffic distribution of Douyin is more interesting. That is, at the beginning it is only displayed among your fans and friends, allowing you to run basic data first. If the basic data is okay, then it will enter the public domain and give you a wave of traffic for distribution first; if the data performance is good, you will be allocated a larger public domain traffic for distribution, and finally it will enter a relatively stable state, with occasional long-tail traffic.

I have talked so much before, mainly to talk about some of my personal feelings. Now let’s get to the point and talk about Douyin e-commerce distribution .

1. Taobao and JD.com’s shelf-based e-commerce VS Douyin and Kuaishou’s hobby-based e-commerce

Before officially talking about Douyin's e-commerce distribution, let's first briefly talk about the differences between Taobao and JD's shelf-based e-commerce and Douyin and Kuaishou's interest-based e-commerce, so that everyone can better understand what is to be discussed later.

Although I have mentioned this in some scattered ways in my previous articles, I would like to mention it here.

The essence of shelf-based e-commerce is search logic. Users search and purchase products through category navigation and search, which is a rational shopping scenario. That is to say, in most cases, users come to platforms such as JD.com and Taobao to search for related products after they have the idea of ​​shopping, and then make a purchase decision after screening, comparing prices, etc., and finally place an order and pay.

Of course, there are also some users who don’t know what to buy, so they come to these platforms to browse and then make a purchase. Although the proportion of this group is gradually increasing, it does not account for a large share of the overall platform. The two platforms, Taobao and JD.com, and of course the current mainstream online shopping platforms such as Pinduoduo, are positioned in the same way in the minds of users. People come here to look for products only after they have clear shopping needs. It is a case of people looking for goods.

Platforms represented by Douyin and Kuaishou are interest-based e-commerce. In fact, I don’t like the name interest-based e-commerce. I prefer to call it discovery-based e-commerce, because while I’m scrolling, I suddenly get inspired and think that I want to buy this product or I have a demand for it. In essence, it is not that I go to Douyin just because I am interested in buying something, but Douyin officially defines it this way, so let’s just call it interest-based e-commerce.

I saw a passage from Fengnian on WeChat Moments a few days ago, and I highly agree with it.

The essence of interest-based e-commerce is to create something out of nothing. This demand did not exist at all originally, but when you see this short video or enter this live broadcast room, no matter whether it impresses you with the characters, scenes or words, it turns your original demand into a demand, thus generating purchasing behavior. This is called interest-based e-commerce.

In the past year, open your Douyin shopping records and see if you have placed a lot of orders? Anyway, I did buy a lot of goods on TikTok last year.

The reason I placed the order was that I often watch Douyin and saw a video that really touched me, so I placed an order. Many of the products I bought on Taobao, Taote, JD.com and Pinduoduo last year were originally purchased on Douyin.

Why was I attracted by something on TikTok, but went to Taobao and JD to buy it?

That’s because the products are more expensive on Douyin, but cheaper on Taobao, Taote, JD.com and Pinduoduo. This is because many stores selling goods on Douyin are essentially middlemen and stores without sources of goods. They purchase goods from 1688, Taobao, and Pinduoduo, and then add a price tag and sell them on Douyin through short videos or live broadcasts.

Of course, there are many prices that are the same as those on Taobao and JD.com, but I can also go through the Taobao Alliance and JD.com Alliance, use coupons and earn commissions, so it is still a lot cheaper. After all, I am an old Taobao customer, so I still have to take advantage of this.

Of course, some people may ask, why are many products on Douyin more expensive than those on Taobao, Taote, Pinduoduo and even JD.com, and why are so many people placing orders on Douyin?

This is very simple. That’s because Douyin follows the emotional shopping logic. Once you are attracted by a short video, there will be a shared bike selling the product directly below, and you can successfully purchase it with just a click. Or you are watching a host selling goods on a live broadcast, and her passion and explanation, and even certain discounts, make you feel excited, so you place an order.

In this case, most people don't remember to go to other platforms for price comparison and search. One reason is that they don't remember to search, and the other is that it's too troublesome. They need to close Douyin, open other platforms, enter keywords to search, then filter, and finally buy. This requires a lot of steps, so we can see that even if some products on Douyin are more expensive than on other platforms, there are still a large number of people placing orders.

Of course, there are also some experts or anchors who sell products that cannot be searched on other platforms, and the corresponding products cannot be found, but they only opened a Douyin store. This situation is another matter.

2. Taoke Distribution VS Douke Distribution

Okay, the above mentioned the difference between shelf e-commerce and interest e-commerce, everyone should have a basic understanding. Next, I will focus on the difference between Taoke distribution and Douke distribution, and why I said that now is not a good time to enter Douke distribution (Douyin e-commerce distribution).

Why did many teams want to enter the Douke distribution field after the Chinese New Year or even last year?

The reason is very simple. In fact, everyone can see the market share of Douyin in China. More than 600 million people are using Douyin every day. Compared with WeChat's 1 billion daily active users, Douyin's daily active users will continue to grow in the future, and the potential is huge.

According to relatively credible unofficial data I have learned, the overall GMV of Douyin e-commerce in 2021 was 700 billion. This data is a relatively clean data after removing other impurities. The GMV target of Douyin e-commerce in 2022 is 1.7 trillion, an increase of 1 trillion from 2021.

What is the concept of 1.7 trillion? Just compare it with Pinduoduo's data and you will know. In 2020, Pinduoduo's entire GMV was only 1.66 trillion. In other words, if Douyin's e-commerce can reach 1.7 trillion this year, it will basically catch up with Pinduoduo. This is such a fast growth rate, it's really scary. Personally, I think Douyin may really be able to achieve this goal if it works hard.

So we see that TikTok is growing so fast and its size is so large, and almost everyone has no doubts and believes very much in TikTok's potential. So if there is an opportunity to enter the Douke distribution business in such a large e-commerce market (to make it easier for everyone to understand, we will call Douyin's e-commerce distribution business Douke distribution), wouldn't it be seizing the opportunity to make money in the future? This is why everyone wants to enter the Douke distribution industry, because it has a future and is still a hot topic at the moment. If you want to develop an agent team leader, this gimmick is enough.

But dreams are beautiful, but reality is cruel. Some teams have entered the Douke distribution field last year, but have not seen much improvement so far. I think it’s mainly because the timing is wrong.

The reason why Taobao distribution has achieved such a large scale is due to the leading position of Taobao e-commerce in China. I have talked about this many times in my previous articles, but many new friends may not understand it very well, so here I will popularize some basic logic of Taobao distribution.

Taobao affiliate distribution, such as Huasheng Diary, Miyuan, Fenxiang Life, Haosheng, Meiguang, Gaoyong Alliance, etc., which we see on the market, all belong to this category. Their main function is to provide users who shop on Taobao with tools such as hidden coupon inquiries and commission rebates. Its traffic source is based on the multi-level agent distribution system of small B. It completes the addition of new users to the APP by inviting people. On the surface, these agent users promote the products to WeChat groups and Moments for distribution and sales to earn commissions, and then distribute the commissions among multi-level agents to realize group profits.

But in fact, the proportion of commission earned purely by distributing and selling goods is not high. Most of the income and traffic of this type of Taobao distribution channel comes from users' demand for inquiries about coupons and rebate commissions, which accounts for almost more than 85%. In fact, it is not just Taobao affiliate distribution that accounts for a high proportion. Within the entire business scope of Taobao Alliance, I estimate that distribution from rebates and rebate-based business models accounts for at least 70% of Taobao Alliance's commissions.

Therefore, in this case, the scale of Taobao distribution can be expanded and upstream and downstream agents can make money. The core essence is that the popularity of Taobao shopping is very high, and users purchase through Taobao distribution channels whether it is to find coupons or get rebate commissions. At the same time, merchants are willing to make a loss to promote in Taobao channels, because after making a loss to promote in Taobao distribution channels, they can bring a large number of orders, sales, evaluations and other weights. Only through these weights can they obtain free traffic from Taobao searches. To put it bluntly, Taobao channels are a lever for merchants to leverage Taobao traffic.

On the one hand, users have a rigid demand to shop on Taobao, and it is also a rigid demand to check for coupons and get rebate commissions through the Taobao distribution channel; on the other hand, merchants are willing to make substantial concessions and promotions through the Taobao channel, and users can obtain a large price difference when purchasing through the Taobao distribution channel compared to the Taobao site. Only when these conditions are put together can Taobao distribution be done and made big, and the platforms and agents involved can make money.

But on the other hand, let’s take a look at whether Douke distribution now has the same conditions as Taoke distribution. Obviously, it does not have them at the moment.

First of all, users do not buy things on Douyin out of necessity. They just suddenly have the urge to buy due to the stimulation of seeing related videos and live broadcasts. In this emotional scenario, they almost forget to look for coupons and get rebate commissions through Douyin channels.

Secondly, Douyin merchants have no motivation to set up hidden coupons, high commissions or even sell at a loss on Douke channels, because even if they do so, it cannot serve as a traffic lever to persuade Douyin to allocate more traffic to merchants. Why? That's because Douyin e-commerce currently still has a fixed unified entrance, and users have not yet formed the habit of searching for products through Douyin and then purchasing them. When these two conditions are not mature, even if merchants lose a lot of money, they cannot obtain free search traffic like Taobao, and cannot make money from subsequent sales.

When the above logic is not valid, merchants will not set large hidden coupons and high commissions for the Douke channel. Then users will not be able to get a large price difference when purchasing Douyin through the Douke channel, because they will not save much money.

I feel that the current status of Douyin e-commerce is very similar to the second-tier e-commerce that engages in information flow delivery. It emphasizes the logic of explosive products. If a product becomes popular, more traffic will be invested in promotion, more stores will be opened, and more traffic will be invested in promotion until all the dividends and demand of the product are maximized. It does not pursue repurchase by a single user, nor does it pursue users to stay in the store to collect products and continue to retain and purchase them later.

Therefore, I personally feel that under the current circumstances, if we want to enter the distribution related to Douke, it may not be very mature at present and the relevant conditions are not yet in place.

3. When can we enter the Douyin e-commerce distribution

We have talked so much about the logic and differences between Taobao distribution and Douke distribution, and even some underlying analysis, so is the logic of Douke distribution valid, and under what conditions can we get involved? In this chapter I would like to share some of my personal views.

First of all, Douyin e-commerce distribution is something that can be done, and it is also a future direction worthy of attention, but the timing is not yet mature. When it will mature depends on the following two situations.

The first situation is that a unified entrance for Douyin e-commerce has been formed, that is, there is a dedicated mall channel and a large number of users are willing to search for products and make purchases through this centralized page entrance. Once the search volume increases, Douyin will inevitably need to sort the search results. Then merchants will have a strong motivation to improve the position of their products or stores in the search results, thereby obtaining more Douyin public domain traffic.

When merchants have such motivation, they will obtain Douyin e-commerce's public domain traffic through two paths.

One is paid advertising, which is simply the same as that of Taobao and Pinduoduo, such as Diamond Ads and Through Trains. Through this type of advertising, the exposure of individual products or stores is increased to acquire potential purchasing users. In this regard, Douyin can theoretically do better than Taobao and Pinduoduo, because they have collected a large number of tags from the long-term use and behavioral preferences of users, and can do a more accurate job in matching search results.

Another way is to learn from Taobao and develop a large number of product promoters through the Douyin Selected Alliance, which are the "Douyin agents" mentioned in this article. These Douyin agents can not only promote individual products in WeChat groups and Moments, but also in APP, website and other channels, and can also promote products to Douyin on Zhihu, Bilibili and other channels, thereby obtaining commission income. The logic here is exactly the same as the Taobao promotion logic I mentioned above, so there is no need to elaborate further.

From my current observations, Douyin is indeed working hard, hoping to develop a large promotion army like Taoke to help Douyin e-commerce to generate traffic and sales, but the problem in this direction is that the centralized e-commerce entrance of Douyin and related conditions such as shopping search volume that I mentioned above are not yet mature.

So even though Tik Tok is working hard to promote it, the effect is not yet so obvious.

The second situation is that if Douyin really wants to develop Douke distribution at the moment, it should change its thinking. It should not promote based on single products, but should focus on the live broadcast room and promote the live broadcast rooms of merchants and influencers in the same way as merchandise promotion.

It is more appropriate at present to allow a large number of Douyin users to participate in the promotion of merchants and influencers’ live broadcast rooms, because if the search volume of centralized portals and e-commerce shopping does not increase, the loss-making marketing logic and motivation of merchants will not be established. However, merchants and influencers still have a great desire for traffic in the live broadcast room, and each live broadcast requires a lot of scene closing, interaction and purchases.

Previously, these live broadcast rooms relied on Douyin to obtain relevant traffic, but now they can obtain traffic through Douke's promotion. At this point, merchants are willing to pay fees and are willing to suffer losses, because there is no guarantee of effectiveness in placing live broadcast rooms on Douyin, and it also requires a lot of cost expenditure.

So at this time, if "DouKe" can bring the necessary purchasing traffic to the live broadcast room, then merchants will certainly be willing to invest budget in this area and find ways to take over this traffic to increase conversion.

At present, Douyin has also taken some actions in the distribution of live broadcast rooms, and has opened up the tracking and settlement methods related to the distribution of live broadcast rooms, encouraging relevant channels to promote Douyin's live broadcast rooms for selling goods. However, the effect has not been very obvious, the conversion rate cannot keep up, and the channels still cannot make money. The excitement of the relevant channels that participated in it before is obviously decreasing.

So how do we make the distribution of live broadcast rooms a reality? I will dare to talk about this in a fanciful way here. If there are senior executives of Douyin e-commerce or friends in charge of distribution in the Selected Alliance who have seen this, they can refer to it. Of course, you will evaluate whether it is feasible or not.

Taobao Alliance and JD Alliance have been able to achieve such a large scale today. On the surface, the settlement is done through pure CPS. Taobao agents bring an order to Taobao and JD, and you will be given a commission. It seems very normal and logical. There is nothing wrong with it. It is very normal.

However, when they started the alliance in the early days, many channels were very reluctant to do e-commerce CPS marketing, because at that time the CPM, CPC, and CPA marketing models were very profitable, there were many sponsors, and the monetization efficiency was also very high. These channels were simply unwilling to do this pure CPS e-commerce marketing.

So how do Taobao and JD solve this problem? It is definitely impossible to reach an agreement on the commission settlement method based on the CPS of each product simply for the relevant channels, so they will combine multiple settlement methods, such as placing advertisements to the channels and paying advertising fees. If the traffic brought by the advertisements is sold, they will pay the subsequent CPS fees. At the same time, they even open up 15 days of cross-store permissions for channel tracking and settlement. This is all throwing money at the channels.

Only when some media and traffic channels make money by promoting Taobao and JD.com will they attract more and more small and medium-sized channels to participate. Taobao and Tmall will also give certain support to related channels. Although this support is not as large as that given to portal websites, it also makes many small and medium-sized channels very excited, so they will participate in this promotion to make money.

When more and more people and channels participate, and Taobao and JD themselves become very large, they will gradually reduce the relevant support policies and finally transition to CPS settlement of pure commission for single products. Of course, some high-quality channels still retain some special permissions.

So, having said this, you may understand that not all alliances start out in their current form. If a new alliance or a new platform starts out by learning how to play from other mature platforms, that is not advisable and you will most likely not be able to succeed. The paths that others have taken are the result of years of accumulation and huge marketing budgets. Can you just do the same thing when you launch a new platform and immediately increase the volume? Isn't this a bit too optimistic?

So for Douyin, if it wants to allow Douke to develop live broadcast distribution at the moment, I think it cannot adopt the logic of pure commission settlement, that is to say, Douke will only get commission after the transaction is completed after bringing traffic to the live broadcast room. The conversion rate is relatively low. Only the celebrity live broadcast room, such as Luo Yonghao’s, may be effective, because the quality of the products in the celebrity live broadcast room and the trust of the anchor can help promote Douke. The celebrity gimmick is naturally good for attracting traffic, and the conversion rate will be higher after the traffic enters the live broadcast room, so the income of Douke will also be higher.

But there is a problem here. That is, the celebrity live broadcast room itself does not need traffic. Even if it needs traffic, it will be delivered through Douyin. This can also increase the weight and obtain more free public domain traffic. Why do they need these small and medium-sized "Douyin users" to promote and distribute?

Once "DouKe" participates in the promotion and distribution of live broadcast rooms, these live broadcast rooms will have to take out a portion of the commission income to distribute to them, and their own income will become less. Moreover, once celebrities open live broadcast rooms for distribution, it will also divert some users who originally wanted to buy things in the live broadcast rooms to buy through the "DouKe" channel, which of course the celebrities don't like.

If celebrity live streaming rooms don’t work, then is it possible for ordinary small and medium-sized live streaming rooms to open “DouKe” distribution? Of course, they need traffic badly, but for the downstream "DouKe" promoters, I am not willing to promote these small and medium-sized live broadcast rooms. One reason is that they do not have the halo of celebrities, and the other is that the conversion rate is relatively low. Even if a lot of traffic is introduced, there may not be any transactions. Who is willing to promote it? Are you out of your mind?

Even if you use all kinds of gimmicks to attract some channels and experts to participate at the beginning, they will naturally stop after a long time when they find that they can't make money.

So what should Douyin do at this time? I suggest that it should invest a large amount of marketing budget and do free-flow marketing, rather than overly pursuing a pure CPS method based on transactions. For example, as long as Douyin brings traffic to the relevant live broadcast room, relevant coupons available on the entire Douyin e-commerce site will be popped up directly to users, including 1 yuan, 2 yuan, 3 yuan and 5 yuan coupons with no threshold, as well as coupons with certain threshold restrictions, such as 50-10 yuan for purchases over 50 yuan, 100-20 yuan for purchases over 100 yuan, etc. Users can directly receive them when they enter the live broadcast room.

After users receive these coupons, they can settle promotion commissions with the relevant "Douyin" for any subsequent transactions in any live broadcast room or for any product. This promotion commission is not only the commission set by the seller, but the official Douyin e-commerce will also give additional subsidies. Following this path, tens of billions or even hundreds of billions will be spent, so I believe that "Douyin" distribution will definitely be very popular.

Because of this operation, both sellers and influencer live broadcast rooms will obtain huge off-site traffic, and they will only pay CPS fees when transactions are completed for this traffic, which they are very willing to do.

For Douyin, through such a marketing investment, the promotion of "Dou Ke" in the market will be in full swing. The popularity will gradually increase, more and more channels and influencers will participate, and the potential energy will become greater and greater.

For channels, promoting Douyin live broadcast rooms can really make money, and if the policy is relatively long-term, even if it is only for a year, everyone will devote themselves to this track. This is a win-win or multi-win strategy.

Since the above statements are so bold, I would like to make an even bolder suggestion. That is, as long as the user enters the live broadcast room and receives the coupon, Douyin official will give the promoter a certain subsidy reward. If the user subsequently uses the coupon to make a transaction, a certain CPS commission and official subsidy will be given.

At the same time, the time of cross-site and cross-store settlement permissions will be extended, and additional CPA rewards such as new user purchases will be added. Not to mention the promotion on the channel side. I dare say that those who have joined the game will spend a lot of money to do it, and those who have not joined the game will try their best to join. Hahahaha, if that were the case I would participate myself.

Of course, if they really do what I said above, Douyin will have to invest a lot of marketing budget, and they may not be willing to do so. In fact, most of these budgets are paid by Douyin officially in the early stage, and can be passed on to merchants in the later stage. Even part of the costs in the early stage can be passed on to merchants, such as the cost of receiving coupons and official subsidies. There are relevant ways to pass them on to merchants, thereby saving marketing budget for Douyin official.

But I think Douyin needs to consider carefully whether it will do this, because merchants and influencers setting up live broadcast rooms on Douyin can directly help Douyin generate advertising revenue. Douyin is essentially a media advertising company, and its revenue mainly comes from advertising. If the traffic distributed by "Dou Ke" becomes larger and larger, the proportion of merchants or influencers' live broadcast rooms purchasing Douyin advertisements will decrease, which will affect Douyin's advertising revenue and cause Douyin to compete with its left and right hands.

In fact, there is a way to solve this problem. That is to refer to the way Taobao works. Merchants spend money to buy advertisements on Taobao and place orders through trains, and the weight of orders brought by these orders will be high. When searching and ranking, the weight of orders brought by these Taobao advertisements will be given priority. The weight of orders brought by Taobao customers can be given, but it is relatively low. For example, the weight of 10 Taobao customer orders is equal to the weight of one through train order. In this way, merchants are still willing to place advertisements on Taobao.

The same is true for Douyin. By buying advertisements on the Douyin website to direct traffic to the live broadcast room, the weight of the live broadcast room will become higher, and more traffic from the Douyin public domain will be allocated to the live broadcast room. The traffic promoted by "Dou Ke" will have a lower weight for the live broadcast room, so that an effective balance can be achieved.

By the way, there is actually another way to distribute Douyin currently, that is, even if the conditions I mentioned above are not met or mature, it can still be done. However, this kind of gameplay is relatively niche and sensitive. I guess there are channels doing it now, although not much has been seen publicly, so I won’t elaborate on it here. I am still researching and thinking about whether the logic is valid and whether it can be done in the long run. It is not convenient to disclose it to the public when there are no results. I will tell you when there are results, at least I will share them within a certain range.

Author: Lao Hudipan

Source: Lao Hu's territory