in the era of the rise of private domains, where is e-commerce competition heading?
2024-08-29
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since the beginning of this year, as competition in the e-commerce industry has become increasingly fierce, a new phenomenon has become increasingly prominent: more and more brands have begun to study and increase their investment in private domains.
an employee of mengxiang technology found that many big-name merchants who originally only focused on offline and leading e-commerce platforms have also begun to actively inquire about cooperation, and the conditions they offer are very generous. for example, a clothing brand has taken products that were originally only sold offline to the private domain and offered the lowest price in history.
this kind of behavior, which was rare in the past, has now become the norm. "now our sales in a brand sale in the private domain often exceed tens of millions, which is higher than our monthly sales on the public domain platform." a brand manager revealed the reason behind this.
the changes in the e-commerce ecosystem have made brands pay more attention to the private domain than ever before. however, the shift from the public domain to the private domain is not just a simple change in the sales platform, but also poses new challenges to the entire chain of the brand, including r&d, production, sales, and after-sales.
how to "dig for gold" in the new world of private domain and seize the commanding heights of competition first? some brands with a keen sense of smell have begun to seek solutions.
why is private domain rising?
in the past two years, the pragmatism of consumption trends has become an industry consensus. according to the "2024 china consumer trends survey" released by mckinsey, in 2024, consumers are relatively cautious about their own consumption growth expectations.
affected by this trend, the e-commerce industry has also faced huge growth challenges. however, the growth of private domains has shown a "rapid progress" trend. according to data released by the forward-looking industry research institute and iresearch consulting, the market size of private domain e-commerce will increase by more than 700% from 2020 to 2023, and the market size will increase from 800 billion yuan in 2020 to 580 billion yuan in 2023.
the rapid development of private domain e-commerce can be observed from many aspects: first, the scale of the user group of private domain e-commerce is constantly expanding. the "dianshubao" e-commerce big data database shows that the user scale of private domain e-commerce in 2020-2023 will be 168 million, 254 million, 321 million, and 450 million, respectively. in 2023, the user scale growth rate will still reach 40.18%.
second, the number of private domain e-commerce practitioners and enterprises has increased. from 2020 to 2023, the scale of private domain e-commerce enterprises will be 214, 269, 583 and 803 respectively.
third, the number of private domain-related practitioners has also increased significantly. taking mengxiang technology as an example, the number of store owners it serves has exceeded 3 million as of 2023, and many of them have joined the ranks of private domain sales in recent years.
peng xia, who runs a women's clothing store in xi'an, started to "go online" four years ago and do e-commerce sales in wechat moments and wechat groups. over the years, her income has continued to increase, from 7,000 yuan a month at the beginning to 100,000 yuan a month at the peak. it was the booming business in the private domain that allowed her to transform calmly and open up a second growth curve in her career when the women's clothing store business was sluggish.
a deeper look into the growth in the number of users and practitioners reveals that there are actually deeper driving factors. on the one hand, the private domain e-commerce industry has improved its service and innovation capabilities. on the other hand, the private domain caters to changes in user consumption habits and preferences.
from the former point of view, the improvement of private domain e-commerce in supply chain capabilities and operational services has brought consumers' service experience to a new level. from the latter point of view, private domain e-commerce meets consumers' needs for shopping convenience and personalization, allowing consumers to meet emotional value while meeting their commodity needs, thus enhancing consumer stickiness.
"i may not need this thing right now, but i trust you, so i am willing to support you." dongguan shop owner liu fangchi once received such feedback. compared with the purely consumer-oriented public domain e-commerce, the emotional connection of private domain e-commerce allows shop owners and consumers to be more closely linked together.
both quality and price are important, and private domains compete on "quality-price ratio"
in the past, many people were resistant to bringing goods to the private sector. a private sector practitioner said that this situation has changed significantly in recent years. "consumers have gradually discovered that many big-name products have also begun to enter the private sector, and there are more and more good products in the private sector."
of course, while they have requirements for brands, consumers in the private domain also hope to get affordable prices, that is, products with good quality and price ratio. when quality and price ratio became the key word of competition in the e-commerce industry, private domain e-commerce ushered in its own spring. the reason is simple - compared with the public domain, private domain platforms have natural advantages in traffic costs and advertising costs.
in recent years, due to the fierce competition for traffic, public domain e-commerce platforms have more thorough control over traffic, and platform traffic costs are becoming increasingly expensive. merchants have to pay high traffic fees, but many of the fees do not result in transactions.
in contrast, in the private domain, the payment-per-transaction model is usually adopted, and the merchant's commission will not be wasted. not only that, platforms represented by mengxiang technology have also opened up traffic resources, allowing merchants to independently operate traffic assets, thereby gaining the right to speak and directly connecting with fans.
the cost reduction allows merchants to have better flexibility in the private domain, while giving up more prices and protecting merchant profits, achieving a win-win situation for merchants and users.
in july this year, camel, a well-known outdoor sports brand, and mengxiang technology jointly held a super brand day event. camel achieved sales of over 10 million yuan in just a few days. in addition to the platform's strength, the key to achieving this performance is the high-quality and price-performance products provided by the brand. at that time, camel launched nearly 1,500 products, of which nearly 30% were launched for the first time. through full discounts and fixed prices, users felt the charm of high quality and low prices.
similar situations are not isolated cases. the person in charge of mengxiang technology said that the platform currently cooperates with more than 30,000 brands, including domestic brands, international brands, emerging brands, mature brands and other types of brands. many brands have found new growth curves in the private domain and achieved new development paths.
for example, tianmu shengpin, a new brand in the dairy industry, recently joined forces with mengxiang technology to jointly create the "super brand day" event. during the event, the two parties' cooperative sales performance exceeded 10 million yuan, and more than 400,000 boxes of milk went out of the northwest and reached thousands of households.
good content, the next commanding height of private domain competition
in the e-commerce industry, there is a recognized formula: gmv=traffic×conversion rate×repurchase rate×average order value.
therefore, traffic is the starting point of everything, so where does traffic come from?
traditionally, the way to obtain traffic in the e-commerce industry is nothing more than two key words: "goods" and "currency". goods are good goods, which are used to attract people. there are two types of goods that can attract consumers: one is high-quality goods, and the other is exclusive goods. goods test the supply chain capabilities of platforms and merchants.
currency is money. whether it is using subsidies to attract consumers or spending money on investment, the route is to invest in the early stage and recover later, which tests the funds and financial strength of the platform and merchants.
as the e-commerce industry has developed for more than 20 years, the competition among major e-commerce platforms in terms of supply chain and financial resources is now almost equal. from the perspective of goods, opening stores on multiple platforms has become the mainstream, and it is difficult for a single platform to monopolize the supply; from the perspective of currency, users are becoming more and more "resistant" to advertising bombardment and spending money on subsidies, and the monetization efficiency is also getting lower and lower.
at the same time, content has become a new traffic gold mine, so players in the e-commerce industry have begun to focus on content - new content forms such as pictures, live broadcasts, short videos, and short dramas are constantly innovating to attract users' attention.
decentralized private domain e-commerce also has unique advantages in terms of content. compared with brand merchants producing their own content, the traffic owners of private domain platforms directly contact consumers, understand their content preferences better, and can produce good content that is closer to users.
among the many shop owners in mengxiang technology, many have excellent ability in material production. one shop owner once brought in 500,000 yuan in sales with just one picture. another shop owner sold 10,000 pairs of shoes in one day using a study tour video, and the merchant's products were sold out instantly.
content that is closer to users can better meet users' emotional values, thereby bringing better conversion rates and achieving a virtuous cycle. taking mengxiang technology as an example, in recent years, the platform has invested heavily in content around the idea that "good content is explosive power." through comprehensive upgrades in content quality, content presentation, content distribution, and content rhythm, it not only helps merchants gain insight into users' content preferences and enhance content influence, but also provides material support for traffic owners, helping them create their own content and ip, allowing them to produce materials more efficiently and improve their efficiency in bringing goods, thereby bringing more commercial value to brand merchants and achieving a win-win situation.
there is no end to e-commerce competition, but the direction and context of the competition are already very clear. whoever can bring long-term value to merchants and users and whoever can occupy the commanding heights of competition in a timely manner will become the next winner.
xinmin evening news reporter jin zhigang
