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「Core Tips」
Dewu, an e-commerce platform that once started out as a sneaker authentication service, recently announced that it will lay off 5% of its employees to optimize organizational efficiency. Facing competitive pressure from e-commerce giants, can Dewu achieve a comeback with this adjustment?

Author | Chen Fashan

Editor | Liu Yang

Not long after the Langfang warehouse "wage arrears and shutdown" incident passed, Dewu announced layoffs again.

Recently, Dewu issued a letter to all employees, announcing that it would streamline existing work items, start organizational efficiency improvement, and plan to reduce about 5% of positions. At a Dewu e-commerce investment promotion meeting on August 13, the on-site PPT showed that Dewu has about 10,000 employees, which means that about 500 employees will be affected.

Dewu was founded in 2015 and was originally named "Duwu". As an incubation project of the sports community Hupu, it has accumulated popularity and reputation among fans by providing services for authenticating sneakers and has developed e-commerce business. In 2020, the company was officially renamed "Douwu".

Initially, Dewu became a vertical e-commerce platform in the field of trendy shoes and apparel with its unique "small but fine" model. As the business developed, the company began to diversify its operations, and its product lines expanded to beauty, accessories, 3C electronic products, household goods, food and beverages, and other categories.

However, many vertical e-commerce platforms often face the problem of reduced organizational efficiency after expanding in scale, and need to face direct competition from large e-commerce platforms such as Alibaba and JD.com. In such a context, can Dewu, which has taken the initiative to "cut off its arm", remain unscathed?

1. 5% fewer jobs

In a letter to all employees titled "Notice on the Company's Initiation of Organizational Efficiency Improvement," Dewu announced a plan to cut 5% of its jobs.

The letter pointed out that the decision to lay off employees was made because the market environment had become more severe, and because the company had some branch projects with significantly low input-output ratios and inefficient division of labor and cooperation.Some projects with high input-output ratios have not received sufficient support.

In order to optimize resource allocation and focus on core business and high-return projects, Dewu decided to take measures to reduce investment in inefficient projects and adjust the organizational structure to achieve greater efficiency and streamlining.

Unlike some companies that are secretive about layoffs, Dewu chose an open and transparent approach in the hope of alleviating employees' anxiety.The letter mentioned that financial compensation would be given to laid-off employees, and that outstanding talents would be incentivized through salary increases, differentiated bonuses, options, etc.

However, not all employees agree with this approach. On workplace social platforms, users who are certified as Dewu employees expressed dissatisfaction, believing that the advance notice did not bring the expected positive effect, but instead increased uncertainty. Others believe that due to the complex organizational structure, it is easy to have redundant personnel and the efficiency is not up to expectations. This time, about 5% of the positions were cut, and the actual number of employees involved may be more than 5%.

In 2023, Dewu's annual GMV will be around 200 billion yuan.Although its scale is smaller than that of Alibaba and Douyin e-commerce, the low base has brought it a higher growth rate.At the above-mentioned investment promotion meeting, the person in charge of investment promotion for all categories of Dewu emphasized that Dewu's e-commerce business is still in a period of rapid growth. As of the end of the first quarter, Dewu's monthly active users increased by 53% year-on-year, and new categories such as 3C and wine maintained triple-digit growth rates.

In the view of Ma Kaiyue, founder of Lao Ma E-commerce Circle, Dewu is equivalent to the "male version of Xiaohongshu" and the "Tmall of Generation Z". It has a high influence among young groups such as those born after 1995 and 2000. Tapping into the purchasing power of young groups undoubtedly contains good growth prospects.

However, in the process from content community to vertical e-commerce and then to comprehensive e-commerce, each stage will face new challenges. As the overall growth of the e-commerce industry slows down and competition intensifies, not only are various trendy e-commerce platforms emerging one after another, but Taobao, JD.com and other platforms have also made targeted layouts, which has put considerable pressure on Dewu. Therefore, layoffs have become the most direct means of reducing costs and increasing efficiency.

2. Competition among models

"I bought Pegasus 41 online. Can someone please help me check it out?"

On platforms like Dewu and Hupu, users often post to ask for help in identifying the authenticity of sneakers, which is a secret code for fans. Under the title, the person seeking help usually provides detailed pictures of the sneakers, including the texture of the upper, size label, insole details, sole stitching, shoe box printing font, etc., so that other users or experts can identify them. The sneakers that are finally verified to be authentic are called "over-toxic".

For young consumers, online authentication after purchase has become a habitual consumption ritual.Even as other community websites gradually disappear, platforms such as Hupu and Douyin still maintain their active popularity, proving that their e-commerce combined with authenticity authentication model has lasting value and can adapt to market changes.

Zhao Rui, who just entered university, is one of the old users of Dewu. In his opinion, community interaction, trend sharing and even price are not the most important. The authenticity authentication service of sneakers provided by Dewu is the function he values ​​most. This service ensures that the sneakers received by users are authentic and there will be no quality problems after signing for them.

There are a large number of counterfeit products in the sneaker market, and the counterfeiting methods are endless, resulting in a large difference in prices. According to the Heze Daily, CLOT x Nike Silk AF1 is highly sought after by collectors and has become a hotbed of counterfeit goods. Some merchants have imitated special wooden shoe boxes and put genuine sneakers in them, making it difficult to distinguish the authenticity of the shoes.

To deal with this situation, Dewu provides a set of identification processes and charges service fees to users or sellers.Leopard Change once tried to apply for an authentication of a pair of Adidas sneakers on Dewu. Without uploading photos or filling in price information, the system gave a discounted authentication price of 48.3 yuan. The authentication fee will be automatically adjusted according to the price of the goods. For example, when applying to send an LV bag for authentication, the system gave a discounted price of 99.5 yuan. However, some users reported on the Black Cat complaint platform that Dewu's service fees often change and lack transparency.

Although Dewu is committed to providing accurate identification services,Due to differences in the professional level and experience of appraisers, contradictory situations sometimes arise.For example, a user posted on Hupu that a pair of running shoes he bought on Dewu were considered authentic during the first appraisal, but were judged to be fake during the second appraisal. This situation has aroused users' dissatisfaction and controversy.

Two identifications, showing opposite results

In addition, the unique sneaker culture of Dewu has been questioned by the outside world for the existence of a "shoe speculation" trend. According to Zhao Rui's observation, the prices of ordinary sneakers with high sales volume on Dewu are not expensive, but some limited edition sneakers are highly speculated on Dewu.

Fan Zhe, a post-90s user, is one of those people who are discouraged by the price. As a fan of NBA star Kyrie Irving, Fan Zhe was attracted by Anta's "Irving" series. The price of ordinary color matching models is around 1,000 yuan, which has refreshed his perception of domestic sneakers. Some exclusive new color matching models on Dewu are priced at nearly 2,000 yuan.

The prices of some popular brands in the sneaker collection community, such as the AJ series, are even more staggering. A pair of black retro basketball shoes is priced at nearly 60,000 yuan. The page shows that more than 6,000 people want to buy them, but the actual number of transactions is very small. This reflects the strong demand for limited edition sneakers in the market, and also reveals the complexity and potential risks of the sneaker market.

3. Where to go?

Competition in e-commerce is becoming increasingly fierce, and many vertical e-commerce platforms that were once popular are gradually losing the attention of users. As the sneaker market returns to rational consumption, can Dewu's unique sneaker culture become a talisman?

Previously, the Shanghai branch of the People's Bank of China issued a briefing, pointing out that there was a "shoe speculation fever" in the resale of sneakers, and that "shoe speculation" was actually a capital game of passing the ball, reminding all institutions to guard against such risks. Many authoritative media also published articles to remind the public to be vigilant about the financial risks brought about by shoe speculation.

According to Guangming Daily, in September 2021, a pair of "Lightning Hook" sneakers originally priced at 1,599 yuan were sold at 69,999 yuan on Dewu, a premium of more than 40 times, and became a hot search on Weibo. Dewu issued a statement saying that the price was set by individual sellers and no buyers were sold at that price, so the product has been removed from the shelves.

It can be seen thatDewu is working hard to downplay the negative impression that it has of "shoe speculation."At the same time, the sneaker market is facing many challenges and changes.

First, there is the impact of live streaming. Many well-known basketball commentators and program hosts have started live streaming. For example, basketball commentator Wang Meng has conducted many live streaming sales on Douyin, selling brands including Under Armour, Skechers, Anta, Warrior, 361, Li Ning, etc. For users, each vertical anchor is equivalent to a small vertical e-commerce company. The traffic plus price advantage will inevitably attract many potential customers.

On the other hand, comprehensive e-commerce platforms such as Taobao and JD.com are much stronger than vertical e-commerce platforms in terms of categories, traffic and operations. When large platforms focus on categories such as sneakers and fashion, it means that if Dewu only sticks to its own small territory, it will be difficult to resist the "invasion" of its competitors.

For consumers, there is no significant difference between limited edition sneakers and regular ones in terms of functionality. The main difference lies in the design and color.When consumers' purchasing decisions are subject to budget constraints, they are more inclined to consider cost-effectiveness.Fan Zhe said that he now pays more attention to cost-effectiveness rather than limited edition sneakers, because some limited editions often only make minor adjustments based on the original design and lack innovation.

Recently, Taobao and Douyin e-commerce have gradually downplayed the "price power" strategy and set GMV as the most important indicator of their business. At the same time, Pinduoduo has also shifted from pursuing commercialization and increasing profits to putting GMV back as the first goal. This shows that when industry growth slows down, various platforms will enter a fierce competition to grab the market, and the retail industry will usher in more brutal competition.

Dewu's GMV in 2023 is about 200 billion yuan, which is far from e-commerce giants such as Alibaba, JD.com, and Pinduoduo. If it wants to narrow the gap, it needs to seek breakthroughs in all categories.

Usually, most football fans are male, and the “male” positioning will inevitably limit the categories of Dewu e-commerce.In Ma Kaiyue's view, some female users will become users of Dewu in order to buy gifts for their partners, thus incubating the female market.In the authentication area of ​​Dewu, in addition to various types of sneakers, there are also many beauty products such as SK-II, Estee Lauder, LV, La Mer, etc. seeking authenticity authentication.

However, many female users around 30 years old told Leopard Change that they usually choose fixed shopping channels, such as online Sunrise Duty Free Shop, purchasing agents or offline Sephora counters, rather than looking for third-party authentication services. These users believe that the demand for authenticity authentication is redundant to some extent.

In the current e-commerce environment, if "small and beautiful" platforms want to feel safe, they need to enhance their competitiveness through diversified layout and expansion of scale. When the leading platforms are increasing their investment and competing for market share, Dewu needs to strike a good balance between maintaining its tone and expanding its scale to avoid being forgotten by users due to homogeneity.