Tiktok kills Ali Jingdong's house

Since the year before last, Tiktok has rapidly expanded its business boundaries in e-commerce, local life and other tracks. Correspondingly, Taobao, Alipay, Pinduoduo and even the recent Meituan have started to launch more "Tiktok" businesses, and try more content scenes from short videos to live broadcasts. What is behind it is not only Tiktok's grab for the incremental market, but also the changing consumption habits of Internet users.

01. What is the gold content of Tiktok shelf e-commerce?

In the past year, Tiktok has become more "low-key" under the spotlight, but its speed of seizing cities and territories is enough to make all major factories sound the strongest alarm.

On May 16, Wei Wenwen, president of Tiktok E-commerce, disclosed at the "Tiktok E-commerce Ecological Conference" that in the past year, Tiktok E-commerce GMV increased by 80% year on year. This speed has become an isolated example of the e-commerce industry, which is generally trapped in stagnation. On the other hand, in the 2022 fiscal year, Alibaba and JD achieved GMVs of 8.3 trillion and 3.6 trillion respectively - an increase of only 2.4% and 9.8% year-on-year.

More noteworthy change is that Wei Wenwen also disclosed that: GMV in the Tiktok shelf scene accounted for 30% of the overall situation; And reiterated that in the future, the proportion of GMV on the shelves of Tiktok e-commerce will reach half.

According to a recent data report obtained by "Market Boundaries", the target of more than 50% GMV of Tiktok shelf has been locked in the end of 2024 by the group. This means that Tiktok needs to attract more merchants to accompany it, issue a large number of red envelopes and coupons, and continue to improve the user penetration rate.

At the conference, Tiktok also presented a standard configuration of "10 billion subsidy". Unlike Pinduoduo, JD and other 10 billion yuan subsidies, which are mainly targeted at consumers, Tiktok's subsidy plan is mainly aimed at merchants, which are used to establish projects such as free commission for commodity cards.

A 3C small commodity merchant told the "market boundary" that in order to get enough exposure opportunities on Tiktok, it usually needs to spend about 10% of the GMV fee to purchase traffic, otherwise the commodity price will be low enough - and Tiktok's subsidy plan is likely to be used to subsidize more special price commodities on the line.

Tiktok's rapid entry into the shelf e-commerce has undoubtedly posed a strong threat and anxiety to Alibaba, JD, Pinduoduo and other e-commerce giants.

According to the "market boundary", the GMV of Tiktok E-commerce will be about 1.37 trillion in 2022. In 2023, the Group set a GMV target of no less than 2 trillion for Tiktok E-commerce.

If the proportion of shopping malls is further expanded on the basis of Tiktok's 30%, it means that Tiktok has completed the transformation and penetration of the shelf scene and successfully opened the closed-loop from content, advertising to commodity trading.

However, the conversion between content and transactions has always been a challenge for e-commerce giants. How can Tiktok conquer the shelf e-commerce city in just one year. At the e-commerce ecological conference, the management did not provide a very in-depth explanation.

For more time, Wei Wenwen emphasized that: from the perspective of exposure scenes, the commodity flow of Tiktok content scenes accounted for 56%, and the commodity flow of shelf scenes accounted for 44%. Tiktok's ability is to "smoothly connect" content and commodities.

According to the "Market", at least before the end of last year, the proportion of users who actively clicked on the "Mall" of the first level entrance of Tiktok was still very low. Many users only enter the mall for the first time through coupons.

Even many merchants have expressed that they are not very familiar with the operation of directly entering the "mall" from the homepage. The aforementioned 3C small commodity merchants told the "market" that 90% of their sales come from store broadcasting and experts planting grass. After planting grass, some users will directly search for products to enter the store

From the growth data classification of Tiktok, we may find more secrets of Tiktok Mall's growth.

Wei Wenwen disclosed that in all kinds of scenarios of Tiktok e-commerce, pictures and texts grew fastest, reaching 210%; Live streaming and short video traffic increased by 24% and 42% respectively. In the shelf scenario, search increased by 112%; Stores, shopping malls, and display windows increased by 83%, 76%, and 41% respectively. Wei Wenwen said that these flows are brought by "high-quality goods", and Tiktok does not want to separate the content field from the shelf field.

It is not difficult to infer that, in addition to relying on the direct pull of promotion and discount, the path transformation from "grass planting" to search should contribute a considerable part of GMV tasks.

02. Everything is "Tiktok"

In terms of figures, Tiktok has become the most successful Internet company in China this year. However, according to media reports, at the group's summary meeting at the end of 2022, Liang Rubo, CEO of ByteDance, is still unsatisfied with the development of Byte. Specifically, Byte's revenue growth rate has started to slow down, and business development is also lower than the expectations set by the group at the beginning of the year.

Behind it, as the most important business segment of byte, Tiktok is also facing the contradiction of how to balance content and e-commerce. In particular, e-commerce business contributes to Tiktok's important growth.

According to "the market boundary", in January 2022, every 10 Tiktok broadcast booths, there will be 3 e-commerce live broadcasts. Later, this proportion was adjusted to a maximum of 20% by the group.

In order to maintain the high experience and stickiness of customers, Tiktok has reached the limit of its support for e-commerce in terms of content. According to Caixin, Zhang Yiming had previously set the maximum exposure rate of Tiktok E-commerce at 10% on the content level, which has now reached 7%.

In fact, the internet itself has reached its peak in traffic and has become a bottleneck for all major manufacturers. According to the data of iMedia Consulting, the growth rate of live broadcast e-commerce has dropped from 122% three years ago to 16% expected in 2023 - even with the strength of Tiktok, live broadcast only grew by 24% last year.

Therefore, the "market boundary" learned that Tiktok's internal strategic positioning is more focused on benchmarking competitors, requiring that in the future growth, 60% - 70% will come from the increase of competitors.

In the face of Tiktok's "pressing step by step", the big factories' response is to try to "learn from Tiktok", further improve the weight of the "content field", or start from "planting grass with pictures and words" to achieve a closed loop from trade to content.

After the 2023 Spring Festival, Taobao's video and content content content have significantly accelerated once again. In addition to constantly bringing in Dongfang Selection, making friends and other live broadcast organizations rising from Tiktok to settle on Taobao, content categories such as "strolling" have also been given greater weight on Taobao's home page. In the middle of May, another news said that "Crazy Young Brother", the number one anchor of Tiktok, was also in contact with Taobao Live.

At the end of February, according to a later report, Alibaba clarified Taobao's five major strategies for this year: live streaming, private domain, content oriented, local retail, and pricing power. And clearly pointed out that this year, compared with the growth of GMV, the more important is the growth of DAU, in which the live broadcast and content are both related to the direct pressure from Tiktok.

At this year's "Tmall Consumer Electronics Press Conference", Taobao also stated that the overall strategy of Alibaba's mobile Taobao in 2023 will shift from graphics and text to video. In future revisions, search, recommendation, and live streaming will become the three major traffic portals of the entire Taobao series, and Taobao's internal traffic will also tilt towards live streaming and short videos.

According to media reports, Taobao recently released an upgrade notice to its "Hand Taobao" store, announcing that it will provide merchants with columnar organizational capabilities for content. Automatic updates and product lists no longer appear in store updates, but instead are mainly based on videos and grass planting graphics and cultural content. Short videos, live broadcasts, explanations, buyer shows, and other videos and graphic content are used to reconstruct the merchant's display window.

At the same time, Taobao also stated that it will continue to increase its code for "browsing" - although "browsing" has been upgraded to a first level entry point by Taobao as a content aggregation platform since early 2021. However, it is evident that Taobao has not invested much force in the operation of "shopping" in the future.

When "Market" recently opened "Stroll", it was found that although the short videos displayed on the homepage generally exceeded tens of thousands of likes, most of them were already "old". Some short videos still linger in February of this year, or even in October of last year. There are also some social news, such as the short video of "Hangzhou Fire Fighting", which has little connection with e-commerce, and it is naturally difficult to achieve the same popularity as Tiktok.

In fact, for example, Tiktok is worried about affecting the content experience, so it can only give limited exposure to e-commerce; The process of moving from shelves to content on Taobao is equally difficult. Even more often, the contentization of Taobao manifests as a mechanical "stacking" of materials.

But this cannot prevent the big factories from further "imitating" Tiktok.

For example, recently, even Alipay learned Tiktok. Open Alipay, and the "Life Number" channel is in the middle of the search bar. At the beginning of the year, Alipay announced a cooperation agreement with the NBA, and launched an NBA column on Life Channel. Users can directly watch NBA related short videos and event information. At the end of March, Alipay added a new "look" column on its home page. After clicking, users will jump to the life number to watch short videos or live broadcasts.

However, compared with Alipay, Pinduoduo is simpler and more direct. It directly focuses on people in the sinking market, and has started the business of making cash from videos.

According to a report by 36 Krypton, after the full launch of "Duoduo Video" in February 2022, DAU has exceeded 150 million from the end of 2022 to the beginning of 2023, and is currently stable at 100 million to 120 million. The peak user duration exceeds 40 minutes, and is currently stable at around 30 minutes.

However, Duoduo videos are mainly unfashionable videos such as funny, curious and beautiful women, and their use time is mostly completed by subsidies rather than content.

In March of this year, according to media reports, when opening the "Duoduo Video" at the bottom of Pinduoduo's homepage, the system will continuously prompt for words such as cash withdrawal, cash withdrawal, and continued earning, stimulating longer user stay time. However, these users who come for subsidies, after receiving rewards, are difficult to form loyalty to the content.

The increasingly anxious "Tiktok" action of large factories is forced by the reality of the expanding user duration of short videos. According to the 2023 China Network Audiovisual Development Research Report, as of December 2022, the number of short video users reached 1.012 billion, a year-on-year increase of 77.7 million, with a growth rate of 8.3%, accounting for 94.8% of the total number of netizens. The average daily usage time of short video users is 168 minutes, far ahead of other applications.

The daily average is 2.8 hours, which is something big factories don't want to lose.

03. Struggle for Local Life

Apart from e-commerce, Tiktok seems to be ready to be the "enemy" of all Internet companies. Recently, Tiktok has begun to accelerate its entry into local life, and has launched a positive collision with Meituan and OTA.

In May this year, it was reported by Hu Xiu that Tiktok's take away business has been officially upgraded to an independent department parallel to catering, wine and tourism and other business lines, with sub departments such as business, operation and business strategy. The overall launch time of Tiktok take away business plan will be at the end of June this year.

At that time, first tier cities such as Beijing, Shanghai, Guangzhou, and Shenzhen, as well as new first tier cities such as Changsha, Chongqing, and Wuhan, will open up businesses to settle in, mainly concentrated in the catering industry. Among them, light catering accounts for 40% of the total catering volume, and hot pot, barbecue, and local dishes will form a parallel delivery and dining mode. The platform will prioritize the coverage of high-quality catering brands in the delivery business.

In response to the attack of Tiktok, Meituan launched its first live broadcast of goods on April 18. On that day's event, Meituan sold a total of 86 million yuan in takeout vouchers, 100 million yuan in Honey Snow Ice City, and 1 million cups of Lucky Lucky Coconut Latte. On May 11th, Mother's Day, Valentine's Day on the 19th, and the "Shopping and Eating Festival" on the 26th, Meituan successively launched three live group buying activities.

In the live broadcast, Meituan also revealed a lack of experience in cultivating content bloggers. For example, in the live broadcast on April 18, Meituan invited many external bloggers, such as the famous food blogger "Theft Moon Society" of Station B and Wu Lala, the Tiktok food anchor, etc.

However, after years of accumulation, Meituan's advantages in the field of takeout, especially in algorithm, rider line allocation, business resource accumulation, etc., may not be that Tiktok can be shaken for a while.

According to the understanding of the "market boundary", the once optimistic goal set by Tiktok take away in 2023 is now being gradually reduced due to factors such as sluggish development and limited business support.

A catering merchant said to "the market" that Meituan's takeout is more about lunch, dinner and other just needs, while Tiktok is more about the flexibility of content and impulsive "light food" orders. However, its advantage is that the customer price of many orders of Tiktok will be significantly higher than that of Meituan, and there are many delivery items of more than 100 yuan - which is also the reason why Tiktok focuses on the first tier cities as the pilot cities for takeout.

In addition, people close to Meituan Office interviewed by Caixin reported that the ceiling of Tiktok take out is still very low. "Meituan may have 40 or 50 million orders a day now, and Tiktok's magnitude is only several million."

Tiktok's ambition is more direct for the hotel market, which can significantly drive the customer price. A person in the wine and tourism industry revealed to the "city boundary" that Tiktok is now fully inviting Marriott, Hilton and other top hotel groups to open flagship stores in Tiktok, so as to greatly enhance Tiktok's GMV of local life.

However, the above people also said that at present, many high-end hotel practitioners still mainly use Tiktok as a platform for display and grass planting similar to Little Red Book, rather than a trading platform. Especially high star hotels have always been Ctrip's stronghold, while medium and low star local hotels are occupied by Meituan, and hotels are a very resourceful industry

In fact, there is also a complex game between the platforms of High Star Hotels and OTA. Gaoxing Hotel has been committed to building its own membership channel system, which can establish a more complete data system and marketing strategy. But at the same time, high star hotels also need to maintain close channel relationships with OTAs such as Ctrip, which have a high level of service and a thorough understanding of the tourism industry. "Therefore, it is not easy for Tiktok to place too many orders in Gaoxing Hotel in the short term."

However, apart from e-commerce giants who are anxious to go on live broadcast and short video, as well as local life companies such as Meituan, Tencent's "video number", which seems to be the most in need of confrontation with Tiktok, has recently become the most "Buddhist".

A live streaming merchant told "Marketplace" that the number of video accounts has been increasing significantly in the past year. In the private community, they have made many achievements and can quickly help merchants form some transactions and brand exposure. But what merchants expect more is that video accounts can connect with more mini programs, enterprise WeChat, QQ and other products.

In addition, this merchant feels that Tencent seems to lack sufficient experience in e-commerce. How to sell and distribute products of different categories, push algorithms, provide advertising feedback for merchants, and provide continuous brand exposure in addition to traffic will be the challenges for video accounts.

(Author | Li Yuan, Editor | Dong Yuqing)