news

The e-commerce industry is becoming more competitive. Recently, Tencent released the "Announcement on Upgrading Video Stores to WeChat Stores", planning to officially support merchants to upgrade their Video Stores to WeChat Stores starting from August 25.

This announcement revealed two important pieces of information: First, WeChat Stores will "support the circulation of store and product information in multiple WeChat scenarios such as official accounts (subscription accounts, service accounts), video accounts (live broadcasts, short videos), mini-programs, and SouSou, helping merchants to better meet user consumption needs." Second, the entry threshold and deposit for merchants will be further lowered, and even support trial operation with 0 yuan deposit for merchants who meet certain conditions.

Mo Daiqing, director of the online retail department and senior analyst at the E-Commerce Research Center of the China Internet Network Information Center, believes that the upgrade of Video Account Stores to WeChat Stores will help merchants better reach consumers, improve sales conversion rates, enhance the competitiveness and influence of the platform, and further promote the WeChat e-commerce ecosystem to become a more complete and closed-loop e-commerce platform.

In fact, as early as 10 years ago, WeChat followed the trend of mobile e-commerce and launched WeChat Stores, but it failed to successfully seize the market in the fierce competition at that time. In 2020, WeChat officially announced that WeChat Stores would be completely shut down, but at the same time, WeChat launched WeChat Mini Stores, which allows merchants to open stores and live broadcast through mini programs.

After years of struggle and lackluster success, Tencent seems to have a clearer direction for development this time.

Chen Hudong, a special researcher at the E-commerce Research Center of the China Internet Network Information Center, believes that where there is traffic, there is business. Currently, the video account is the best scenario for Tencent's traffic. Upgrading it to a WeChat store and linking it with other private domain traffic can not only solve the problem of the narrowing of the private domain of WeChat stores, but also expand the traffic pool.

WeChat is one of the largest social platforms in China, with a huge user base. Cao Lei, vice president of the China General Chamber of Commerce Live E-commerce Working Committee and director of the E-commerce Research Center of the China Internet Network Information Center, cited data analysis and said that the GMV of video accounts will exceed 300 billion yuan in 2023, and this upgrade should help boost GMV growth. However, as more and more merchants enter the market, competition for public domain traffic will become more intense.

The short videos and live broadcasts of video accounts attract public domain traffic, while WeChat Stores are the trading carriers of public domain traffic. Industry insiders believe that by incorporating private domain traffic scenarios into WeChat Stores, the latter may become a fusion of "interest e-commerce + traditional shelf e-commerce".

It is worth mentioning that, judging from the announcement, WeChat has lowered the entry threshold this time and supports merchants who meet certain conditions to enter with zero deposit, which is quite attractive to some merchants.

Industry insiders said that previously, if merchants wanted to open a store on WeChat, they either needed to use its SaaS system or develop it themselves, and the cost would start from several thousand yuan. Now, small and individual merchants can open a store with a low threshold and almost zero investment, which is obviously very attractive. In addition, the integration of scenarios is also very friendly to merchants. Previously, many merchants had to open video accounts to live broadcast and sell goods while opening mini-program malls. After the upgrade, they may only need to manage one background.

Some industry insiders also believe that the launch of WeChat Stores may affect purely private tools such as Youzan and Weimeng on WeChat. After all, with free official tools and formal platforms, some merchants may not choose to pay 3% to 5% technical service fees to external link third parties, and the migration of merchants is inevitable. However, it is still unknown how much impact this will have on the current e-commerce ecosystem of the platform.

New moves will inevitably lead to new competition. However, the industry is cautious about whether Tencent's move can have an impact on the e-commerce landscape.

Chen Hudong believes that traffic competition has become the norm in the e-commerce industry. Having a large amount of traffic does not mean having a large amount of business. The key lies in how to convert it. At present, WeChat stores have an overwhelming advantage and cannot threaten the top platforms.

"Today, the traditional e-commerce market is becoming saturated, and traffic is gradually changing from incremental competition to stock competition. Moreover, each platform is becoming more and more competitive. Although WeChat stores have certain advantages, they are also facing the challenge of intensified competition." Cao Lei believes that whether it is comprehensive e-commerce such as Tmall, Taobao, JD.com, Pinduoduo, or content e-commerce such as Douyin, Kuaishou, Video Number, Xiaohongshu, or social platform WeChat that wants to develop an e-commerce ecosystem, they all need to continuously launch innovative marketing tools and services to help merchants achieve differentiated competition. It is definitely not enough to attract merchants by reducing commissions and deposits alone, and it will only evolve into a price war among merchants in the end.

Liu Junbin, a special researcher at the E-commerce Research Center of the China Internet Network Information Center, said that WeChat has been slow to respond to e-commerce applications and has taken many twists and turns on the road to e-commerce, which has historical reasons. "Only by continuously improving innovation, creating a new traffic attraction mechanism, and forming characteristics that are more in line with new retail can WeChat stores stand out."

□ Our reporter Liu Xuying