Tik Tok e-commerce predictions for 2022!

Let me first talk about the main logic behind writing this article. It is actually written for those friends who want to do well in Douyin e-commerce but are a bit too eager for quick success. Everything has two sides. There is no such thing as having all the good things in business. Any operating method has two sides. The quick results of the bold operations are quick, but they also lose their effectiveness quickly; the long-term management approach takes time to take effect, but it lasts longer.

Therefore, if you want to do a good business on Douyin and make your brand bigger and stronger, you will face many challenges, especially the improvement of awareness and the balance of operational methods. Lao Zhao is going to talk about his predictions for Douyin e-commerce in 2022 from the ten most important thinking dimensions, including user awareness, brand building, operational strategies, product research, content capabilities, business domain traffic, distribution capabilities, private domain traffic, supply chain and dividend implementation, and by the way, summarize some strategies for Douyin e-commerce in 2021.

Brand’s understanding of user perception

Many brands say they don’t know where their advertising dollars are spent, but in fact they are being spent on cultivating user awareness. In 2022, brands should put user awareness at the most important level!

Many friends will say that user perception is changing! right! That’s right! User perception is changing, but don’t miss the last two words: "grasp". No matter what strategy is used, it is inseparable from the brand’s grasp of user perception, which is also the first principle for brands to do well in Douyin e-commerce.

How to grasp user perception? The most intuitive quantitative model that Lao Zhao can think of is the O-5A model. All actions taken by brands and merchants are actually based on this O-5A model. Lao Zhao will write the detailed definition again for everyone: Group A represents the depth of marketing and usually also represents the willingness to convert. O represents the breadth of marketing, and is the target group that advertisers hope to attract new customers and build audience awareness:

1) A1 group: Passive group, who are aware of the brand but have not interacted further. They will interact after the brand has reached them many times and formed a deep understanding.

2) A2 group: people who have light interactions, have formed a brand impression, and have been created a short-term memory by the brand. After multiple three-dimensional touches, they will take further interactions or form long-term memories;

3) A3 group: Deep interaction group, whose curiosity is aroused and customers actively collect brand-related information. They are the closest to conversion and have the highest conversion efficiency. They are just one step away from conversion and are high-value groups.

4) A4 group: purchasing users;

5) A5 group: brand private domain users, users who follow brand accounts, post positive comments, and forward brand information;

6) O group: people who have relevant behaviors and are active in multiple interest areas on the platform, waiting to be attracted;

If there is no tool like Cloud Map, brands can still judge current users' perception of the brand from comments on short video content, user interactions on live broadcasts, user interactions in private domains, search engine search results, etc.

Make a trade-off between branding and selling goods

The difficulty for new brands has always been the trade-off between branding and selling products. Excessive pursuit of sales will gradually reduce the conversion rate and consume the brand mindset of users, which is already limited. Excessive pursuit of branding will be difficult to support financially. To play the hyperbola of brand and sales well is indeed an art of operation. In fact, the relationship between brand and sales is mutually reinforcing and mutually balancing. Why do I say that? it is known

Sales = Traffic * Conversion Rate * Average Order Value

Brand power and conversion rate are positively correlated. The stronger the brand power, the higher the conversion rate. Selling goods consumes brand potential. The more goods are sold, the lower the conversion rate will be. Therefore, when a brand enters the Douyin e-commerce ecosystem, it must first determine its current brand power and its ability to improve its own brand power. It also needs to determine whether it has the ability to sell goods through live broadcasts and short videos on the Douyin platform. We specifically divide it into four situations:

A1: Brands like FLAMINGO and Wyeth do have good brand power. They have a good brand foundation but have not yet mastered the sales strategy of Douyin. Such brands still have a chance to do well on Douyin. After all, they have a brand foundation and the sales ability is relatively easy to make up for.

B2: Brands like Guozhu have relatively weak brand power and have not accumulated long-term user awareness. They simply rely on low unit prices to increase conversion rates on the Douyin platform. The advantage is that they can sell a large number of goods, but the disadvantage is that brand power cannot be accumulated. It will become increasingly difficult to do business in the future, and ultimately it will only become a supply chain brand.

B1: Brands like TEENIE WEENIE/Winnie the Pooh have very strong brand power and have mastered the ability to sell products on Douyin. They can not only maintain brand popularity online, but also continue to sell products on Douyin, which makes them very suitable for development on Douyin.

A2: Brands like gushi/古仕 represent the status of most brands. They have weak brand power and do not attach importance to the accumulation of content capabilities. It is very unreliable to rely solely on live streaming to achieve product conversions. Judging from the data, the results are a mess.

Some friends may have further questions, how to judge brand power and sales power? Brand power can be judged from two dimensions: brand voice and brand reputation.

It is very undesirable for a brand to blindly focus on volume rather than word of mouth. In 2022, only brands with a loud voice and good reputation will have a chance to break through.

A1: Some brands blindly increase traffic and conversion just for the sake of sales, which results in a strong brand voice and good product sales, but they do not pay attention to their product quality and service, and have a very bad reputation. They will be rejected by many KOLs when they seek promotion, such as Nan Mou Ren and A Mou Fu. If they continue like this, their brand power will be exhausted.

A2: If the brand has a small reputation, it means that you are not prepared at all. You can think about and adjust your products and services before trying again.

B1: Some brands not only have a large voice, but also have a good reputation. Brands like Huawei and Bull will definitely do very well on the Douyin platform.

B2: Some brands have a small voice but a good reputation, and they are opportunity brands on the Douyin platform. For example, Juduo and Toumi can actually try to amplify their voice and increase GMV.

The brand's ability to bring goods can be judged from the dimensions of traffic acquisition ability and conversion rate.

The ability to acquire traffic includes two levels of content: one level is to produce traffic by yourself, and the other level is to utilize the traffic of others. Generating traffic by oneself requires brands to have a very deep understanding of live streaming and short videos. For example, Herborist, which has very strong traffic capabilities, obtained a large amount of live streaming traffic by performing Story of Yanxi Palace. Although the conversion rate is low, for Herborist, live streaming can help the brand to promote sales, so why not do it? Huaxizi has achieved the ideal state of high traffic and high conversion through its strong content and product capabilities.

There are many factors that affect conversion rate, ranging from users' demand for categories, inherent perceptions of brands, and third-party endorsements to the packaging of detail pages and promotional strategies. Although brands like Schwarzkopf have a good conversion rate for their products, their traffic capabilities are relatively weak and require further exploration. If a brand has poor traffic acquisition capabilities and poor product conversion rates, it is also recommended to improve content capabilities and adjust products to adapt to the TikTok platform.

In general, brands with brand power have a relative advantage in entering Douyin e-commerce, while brands without brand power need to survive first by mastering the Douyin platform's ability to bring goods, and then seek development. Of course, at a certain stage, they must gradually shift from a selling mindset to a brand mindset to build their own potential energy, otherwise they will not be able to sustain it. Look at the brands that sold goods very well in 2019, and how many of them are still influential in 2021. Therefore, Lao Zhao boldly predicts that whoever can play with the hyperbola of brand and sales in 2022 will have a better life!

The trade-offs of business strategy

Speaking of the summary of Douyin gameplay in 2021, there are actually N kinds. The first thinking dimension is combined with pure small store gameplay, short videos, live broadcasts, searches, and private domains, and the second thinking dimension is magnified with free and paid. The fewer elements selected, the easier the operation, and the more elements selected, the higher the requirements for the team.

There are actually many kinds of fancy operations, such as the live broadcast method of ab chain, the live broadcast method of abandoned stores, the short video method of plagiarized materials, etc. Although these methods are effective quickly, they will soon become ineffective; and the method of combining grass-planting with live broadcast is slow to take effect, but it is more lasting.

Therefore, if a brand wants to play the hyperbola of brand and sales well, it must make a trade-off in the business model, because for a brand, if it wants everything, it will get nothing. The first thing that needs to be weighed is whether to get financing or make cash. It is impossible for a new brand to have both sales and profits. Therefore, when choosing a strategy, you should choose brute force, refined operations, or slow cooking based on the core goal. In addition, we need to weigh the two dimensions of financial capacity and operational capacity, which can be divided into the following four situations:

A1: If a brand has strong financial resources but weak operational capabilities, it can choose a brute force approach, whether it is performance advertising or content advertising, just throw money at it, such as QuadHA/Quady, and use money to make up for the lack of operational capabilities;

A2: If the financial and operational capabilities are weak, it is recommended that the brand introduce funds or find a suitable operator to increase the probability of success, otherwise it will be difficult to succeed;

B1: If the brand has strong financial and operational capabilities, it can choose refined operations, such as Huaxizi, which will have a very strong advantage in Douyin e-commerce;

B2: If a brand has weak financial resources but strong operational capabilities, it can choose to slow down and simmer. For example, before the marketing event, Hongxing Erke had actually been tepid, which was a typical slow-cooking strategy. It was precisely because of this slow-cooking strategy that it was able to wait until the time of take-off.

The development after getting the money cannot be ignored, the foundation of the brand is still to make money.

In 2022, brands at different stages still need to make trade-offs in their choice of strategies. There is no best model, only a model that suits you.

Goods are the hard power of brand success, and this remains unchanged

If you want to do well in Douyin e-commerce, the factor of goods accounts for a very large weight, at least 60% of all weight.

In 2022, users' shopping logic will still rely on the demand triangle, which is to form a closed loop between sense of lack, solutions, and behavioral costs.

• Lack of feeling: The user has an inner need to be satisfied, such as thirst

• Solution:

1) Category thinking: Users will develop a desire to consume certain types of products based on their motivations;

2) Brand thinking: users compare and select specific brand products in the selected product category;

• Factors influencing consumer behavior: Users decide whether to buy based on product cost-effectiveness and their ability to pay;

From this core logic, if a brand wants to do well in Douyin e-commerce, products are still a very important research object. If your product category is strong and the brand is strong, then you have a great opportunity on the Douyin platform; if the category is weak and the brand is strong, or the category is strong and the brand is weak, there are opportunities to start; if the category is weak and the brand is also weak, then this brand will have no advantage in the selection process of consumers, and there are too many shortcomings that need to be made up. Therefore, no matter what stage a brand is in, it is necessary to conduct product category analysis, product strength analysis, and competitive product analysis before launching a product. Missing any link will dig a hole for itself. Before joining the battlefield, brands should first understand their products clearly. We look at the competitiveness of products from two dimensions: category and brand.

Content capability is an important dimension of brand success

Content capability is the capability that brands need to accumulate most in 2022. If brands want to succeed in Douyin e-commerce, content capability is one of the most important capabilities. Whether it’s live streaming or short videos, the brand does what it’s good at. Live streaming can also be used to promote products, and short videos can also be used to achieve conversions. The value of no single method is singular.

Let’s talk about short videos first. Short videos are the most important part that brands need to focus on, including several aspects:

1) Videos promoting products posted on the account: The quality of these videos determines whether the brand can achieve GMV through the short video promotion model;

2) Materials used for placing information flow ads: The quality of this type of video determines whether a brand can increase its funding and is an important lever for paid traffic;

3) Brand videos related to brand tone: The quality of this type of video will affect user perception. However, the requirements for this type of video are very high at present. It is necessary to obtain natural traffic through the video and educate the user's mind through the video. In the past, brands often failed in the pursuit of tone and ignored the recognition of platform users, and could not get natural traffic;

4) Videos that promote products in collaboration with influencers: Brands still need to find influencers from all over the Internet to help endorse their products. Only in this way can the brand expand its business and allow influencers to influence their fans and spread the positive brand image among different groups. It can also be combined with search engines to use high-quality content from brands to satisfy users’ search loops and generate purchases.

5) Videos produced in collaboration with amateurs: The previous logic was to win by quantity, but in fact, for brands, there was a lack of endorsement and leverage;

6) Grass-planting videos in collaboration with celebrities: This type of video can not only help endorse the brand, but also have a certain conversion effect. By investing traffic, the effect of celebrity grass-planting videos can be amplified to achieve brand and effect integration. Through cooperation with Ouyang Nana, Ubras has maximized the effectiveness of e-commerce core data, and core indicators such as CTR, CVR, CPUV, store entry rate, and payment conversion rate have been comprehensively improved.

Short video content actually has opportunities every year. In 2021, people like Liu Yexi and Zhang stood out on Douyin with their outstanding content capabilities. Brands should continue to pay attention to such phenomenal accounts.

Speaking of live streaming, we usually regard live streaming as a means of conversion. In fact, live streaming also has content attributes. The live streaming rooms that left a deep impression in 2021 have all fully utilized the content attributes of live streaming, such as Herborist, Liu Yuanyuan, YaYa, Erke, the Big Wolf Dog Couple, etc.; brands should not simply regard the live streaming room as a vehicle for user conversion, but also regard the live streaming room as a product promotion platform.

In 2022, the brand’s content strategy will still focus on building brand personality and establishing user trust.

Traffic purchasing power is still an indispensable factor for brand success

If a brand wants to break through its own ceiling and achieve rapid growth, it cannot do so relying solely on natural traffic. Buying traffic is a refined craft that requires long-term iterative learning. It is never too late to start polishing it seriously. Many businesses made money by investing in DOU+ in 2019, in information flow advertising in 2020, and in Qianchuan in 2021. At this time, some friends will say, we did buy volume, but we lost money, and a lot of it. This is why Lao Zhao said that buying volume is a refined craft.

Let’s first talk about the timing of buying traffic. Because traffic is an important resource that is competed for by many brands, most brands can obtain a large amount of traffic through bidding advertising during the normal sales period. However, during the promotion period, more brands participate in bidding advertising, but the platform has a limited amount of traffic, so many brands will spend a high price to buy traffic or simply cannot buy traffic. Based on this situation, brands must purchase brand advertising traffic in advance before the big promotion period to prevent themselves from not being able to buy volume during the promotion period or simply having to sit back and wait until this stage is over before buying volume again.

Let’s talk about how to buy volume. In fact, building a plan is only the simplest step in buying traffic. Thinking about how to build a plan and how to improve the conversion rate is the core of this issue.

If you are selling products through short videos, the short video content script + comment area maintenance are the keys to refined operations. The more difficult it is to pass the review of the short video content, the more likely it is to become a hit material.

If you are selling goods through live streaming, materials or lead-generating videos are very important. If it is a direct-invested material, the more difficult it is to pass the review, the easier it is to become a hit material; if it is a traffic-generating video that then enters the live broadcast room, the traffic-generating video must take on the task of arousing the user's sense of lack and clearly introducing the solution, while the live broadcast room will take on the task of resolving the user's behavioral threshold.

In addition, all plans have a life cycle, so there must be new forces when building plans. When one part of the plan declines, another part must be used to fill the gap.

Finally, any material must weigh the click-through rate and conversion rate. Maximizing their product really tests the level of material production. A plan that can beat consumption is a good plan.

Only brands with distribution capabilities have brand power

In order to build a good brand in 2022, distribution capabilities are essential, and in fact, the requirements for the brand are quite high. A brand needs to build brand potential. Only when the brand potential is built up will people be willing to follow and sell the brand's products. You can study UNNY’s playing style. Due to limited space, I will share it with you when I have the chance.

A brand needs to build up momentum, and both sales volume and voice are essential. In terms of sales volume, there must be a benchmark flagship store; in terms of popularity, one must be willing to invest in building brand popularity, creating user awareness, and conducting natural searches to attract users to distribution stores or flagship stores and ultimately achieve sales. Tmall distribution is suitable for this set, and Douyin is also suitable for this set.

Lao Zhao found several examples of brands that have done well in distribution and direct sales on the Douyin platform, such as Chando, Blue Moon, and Barumi, which you can use as a reference.

A1: AVON/Avon, Mary Kay

A2: Dermarun

B1: Blue Moon, Chando

B2: Master Kong

Indispensable private domain capabilities

To build a good brand in 2022, you must do a good job in private domain. There are several reasons:

1) In 2022, traffic will become more and more expensive, and the competition for public and commercial traffic will become fierce. Merchants will have to reuse traffic and deposit it in private domains to make multiple transactions and brand promotions;

2) The brand’s reputation largely comes from the continuous referrals from successful users (A4 group) and loyal users (A5 group);

3) Collect real feedback from the frontline about the brand from the private domain and establish a good communication channel with users;

4) Not all categories are suitable for private domain. You must think clearly before doing so. If the purpose of private domain is to increase profits, products with high unit price, high gross profit and high repurchase rate are suitable. If the purpose is for exposure, you can choose according to your financial resources. It does not have to be for making money, but for brand empowerment. The money that should be spent must be spent.

5) In 2021, brands with private domains will use the private domain users of old brands to help new brands get off the ground, such as Toumi;

Sales capabilities and supply chain capabilities must match

The reason why a brand cannot develop in the long run is not because it cannot sell its products, but because of the mismatch between its sales capabilities and supply chain capabilities. To give a simple example, selling goods through live broadcasts or short videos on Douyin is very explosive. Once you are lucky enough to come across a hit product, but the supply chain cannot keep up, it will be sold out, resulting in untimely delivery. The store's rating will plummet, which will in turn lead to restrictions on live broadcasts and short videos, and the store will enter a vicious cycle. Supply chain capabilities are the brand’s hard power and also determine the lower limit of brand development. The reason why a brand like Peacebird can have such outstanding sales on the Douyin platform is inseparable from its strong supply chain. The 361° brand places orders on a quarterly basis and does not replenish stock in between, which leads to a mismatch between sales and supply capabilities.

The ability to discover dividends and the ability to land dividends must match

In 2022, brands still need to cultivate the ability to discover dividends and realize them. Because everyone wants growth, whoever can discover and seize the dividends will have an advantage in the competition. Brands are often able to find opportunities. For example, in the first half of 2021, the combination of brand self-broadcasting and massive Qianchuan was an opportunity. It was a simple and crude way to sell goods, but few brands could reap the benefits. There are actually many reasons, some of which are because they didn’t understand, some because the team is not good enough, and some because they need to take a closer look. Brands that have not entered the market before the second half of 2021 will find that the simple and crude approach in the first half of the year will no longer work. So let me remind you again about the benefits of search advertising. The current ROI is above 1:10, but the scale is still not large. If brands do not follow up, they will miss the opportunity to make money next year.

Final Thoughts

Although it is estimated that the scale of Douyin e-commerce will triple or quadruple by 2022, competition is becoming increasingly fierce. If brands want to achieve some results, they cannot just rush forward. They must stop and judge their position, strengths, and weaknesses, and then take targeted actions.

Author: Lao Zhao Marketing Notes

Source: Lao Zhao's Marketing Notes