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the war of words between simba and xiao yangge seems to be gradually heating up and even escalating. some industry scandals behind it are constantly exposed. this makes people realize that the internal war in e-commerce and even the retail industry has finally reached the forefront of the business model: the short video field.

this makes people sigh at the insignificance of business models and individual will in the face of the great tide of the times: once a trend is formed, it will always continue to reinforce itself as if by magic, until it is swept into every marginal corner and no one can stay out of it.

in fact, from the perspective of phenomena, the evolution of this period of e-commerce involution is extremely clear: starting from 2023, with the decline of the stress pulse growth caused by the epidemic and the continuous erosion and expansion of video e-commerce, the changes first spread from the traditional e-commerce platform:

1.0: pinduoduo, with its foresight, started its overseas market strategy. this move laid the foundation for its competition with traditional e-commerce peers in terms of strategic image and economic benefits;

2.0: after that, jd.com and taobao kept questioning, understanding, and imitating pinduoduo, and reflected on this theme repeatedly until the current situation of returning to their own endowments and making drastic reforms. a new balance is gradually taking shape;

3.0: pinduoduo's recent proactive lowering of expectations can be seen as a sign that the traditional e-commerce competition landscape has evolved to a new equilibrium stage, which indicates that traditional e-commerce platforms have initially built a defense project to deal with the internal circulation cycle. and this logic means that the expansion of short video e-commerce has finally encountered a barrier.

the symbol of this "barrier" is the collective turmoil of the leading mcn agencies in the short video e-commerce field: from dongfang zhenxuan and dong yuhui, to simba and three sheep xiao yangge, an era is coming to an end and a new era is beginning.

who is ending? it goes without saying, and the cold and warm know it. who is starting? with our tracking and insights, we symbolize it as: the fifth consumer era. regarding the fifth consumer era, we have previously conducted research through our first report "prelude: the fifth consumer era".

this article will follow up on the first article and explore in more depth the inner workings of the main landmark phenomena of this recent period.

01

what is sinking?

a key reflection of the fourth consumer era described by sanpu hideki is the rise of white-label products. the corresponding economic phenomenon is the market decline that has been clamoring for a long time.

undoubtedly, the typical representatives of the first to step into this round of major trend consumption dividends are pinduoduo, as well as new-era companies such as kuaishou, mixue bingcheng, and tongcheng travel that are inherently endowed with the genes of low-tier consumer groups.

in this process, learning and copying pinduoduo and mixue bingcheng has become a prominent business discipline.

we then gradually saw that even in the face of incomprehensible business logic and invisible market space, a number of companies still chose pixel-level imitation, from low prices, white-label products to service policies.

but in our opinion, most companies have only learned the basics, just as their understanding of the fifth consumer era that is about to begin is limited to a few books by hideo miura.

in fact, the most pressing question is: everyone is talking about sinking, but what is sinking?

from short video content e-commerce to traditional shelf e-commerce, all are pursuing the lowest price on the entire network. on the one hand, they believe that simplifying the decision-making chain can maximize gmv. on the other hand, pinduoduo has set an example and has verified the mainstream logic of low-price expansion for the market.

in contrast, most e-commerce brands often have to pay extra management and marketing costs when pursuing the lowest price on the entire network. in addition, the strategic development model of most e-commerce brands is from low customer unit price to high customer unit price. this reverse transformation is more or less forced by the market, believing that consumption downgrade is inevitable at a certain stage of social and economic development.

however, if we re-examine the reasons for the sharing economy and the pursuit of simplicity from the perspective of "three lows" and "underworld", we will find that the so-called change in consumption concepts is by no means a downgrade of consumption, but a downgrade of useless consumption, and demand has been granularized.

this sentence may be a bit abstract, but the core idea is that consumers in the "lower class" (miura hideo's description of the japanese economic phenomenon, in the domestic context it may be lying outside the fifth ring road) are forced to face environmental burdens (promotions are blocked, incomes are fixed), and continue to reduce consumption, living, and construction costs, but have not given up their pursuit of a colorful life.

there are gains and losses. the prerequisite for achieving both is to refine the supply side and break down the demand infinitely.

for example, if you need an s-size wrench to repair a computer, and you only need to repair it once, you usually need to buy a full-size tool box, and the cheapest tool box costs 19.9. but if a merchant sells you a plastic s-size wrench for 1.99, and it also includes shipping, do you need to care about the appearance of the wrench when you only repair the computer once, not every day? as long as it works, it's fine.

this is the logic of demand granularization, and it is also the core logic of the downward competition that we have always emphasized: the ability to discover prices, serve the widest range of people, match the broadest supply based on demand, and form the most reasonable price.

in the fifth consumer era, what the supply side lacks is s-sized wrenches, not 19.9-sized toolboxes.

whether it is content e-commerce or shelf e-commerce, the core theme of the past year has been low prices.

as for what is “low price”, the conclusion we have drawn from our ongoing research on market consumption in different countries is: matching the most refined demand with a wide supply to achieve a relatively lower and reasonable cost to meet the demand.

if we regard the current shift in consumption trends as a normal state, then there is another consideration for e-commerce platforms: how to achieve the optimal efficiency match to ensure the sustainability of reasonable and low-price supply.

the key question is: who will bear the cost of low prices?

this proposition requires a lot of data backtracking, statistics and calculations, and we will launch a research report later.

the research process is not provided here, only the conclusion is given first:

under the high-dimensional crush of short video content e-commerce technology, only pinduoduo seems to be able to "stay out of it". the essential reason is that the cost of its merchant operation is still the lowest, because its own revenue does not rely on the traffic of leading merchants like other e-commerce platforms. therefore, it does not assist the supply side in raising the average order value.

compared with the one-to-one cost reduction of content e-commerce, the festive cost reduction or so-called procurement and sales cost reduction of traditional shelf e-commerce is not sustainable.

02

what is a service?

the fourth consumer era expounds the shift in consumption concept from "material to service", and uses the logic of miura hideo's trilogy of consumption concept to explain the core driving factors of japan's consumption concept: after entering the fourth consumer era, japan has experienced a shift from material to people. this shift is particularly prominent after the epidemic era. more and more consumers have begun to pay attention to life and seek to invest more time and money in all aspects closely related to life rather than just desiring wealth appreciation.

this is also one of the core characteristics of entering the fifth consumer era.

for consumers, the shift from material to human actually means that the satisfaction of consumption behavior changes from single material satisfaction to self-fulfillment satisfaction.

the cycle of bubble consumption has been prolonged by the frenetic economy, but as schopenhauer said, once desires are satisfied, they will fall into endless emptiness. when consumers are tired of waste, they will seek new meanings, which may be the satisfaction of a sense of honor or a sense of happiness.

take the revitalization of domestic product consumption, which is prevalent in japan and china in the fourth consumer era, as an example:

in miura hideki's narrative logic, the background of the rise of japanese domestic products lies in the generation that "lost their hometown" and, after experiencing wandering, economic stagnation and living abroad, their sense of subjectivity has become increasingly strong.

in our view, the rise of domestic products in the domestic market actually has two connotations:

first, the logic of low-price consumption is continued. domestic products, whether time-honored brands or white-label ones, have long been superior to imported products in terms of simplicity and practical functionality, relying on their strong manufacturing strength. at the same time, the prices of most products are more affordable, which is in line with the consumption concept of the fourth and fifth consumption eras.

secondly, what domestic products need to tell is a story about a sense of belonging. in "the lonely society", sanpo sanpo spends a lot of space explaining the meaning of consumption. the core point he wants to express is that consumption pursues process satisfaction, and this satisfaction has different meanings at different stages.

taking japan as an example, the era characteristics behind the two peaks of the rise of domestic products were: it was difficult to demonstrate middle-class identity through consumer behavior, and the era of fiction (the economic bubble period of threatening to buy the united states) was wiped out, and even the identity of the second largest economy was deprived.

the underlying meaning is the reduction of ostentatious behavior and the desire to seek more self-recognition. japanese consumers and the country happen to be in the same historical cycle: they can no longer break through the bottleneck through their own efforts, and the upward channel is blocked.

therefore, for japanese consumers at that time, supporting local products, on the one hand, made up for the emptiness caused by the economic recession and the decline of national status; on the other hand, through consuming products, it demonstrated recognition of the value of one's own work, and the latter was the core.

whenever the rise of domestic products is mentioned, most consumer products and platforms only recognize the former. it is understandable that they put pride first, but they ignore the value of consumers' sense of identity and belonging.

if there is a brand that boasts of its product strength and craftsmanship far exceeding its global peers, it may not necessarily win the favor of consumers; but if there is a brand that ignores consumer value recognition (such as the "lack of effort" incident that caused heated discussion last year), then it will definitely be abandoned by consumers.

for e-commerce platforms, what they need to understand is that the service that consumers really need in the fifth consumer era is respect.

for consumers in the fifth era, the origin of service is respect, and the best embodiment of respect is to think about what users think first and worry about what users worry about. if you can be the first to give users respect and understanding, you will occupy the minds of consumers for a long time.

in the past period, whenever an e-commerce platform promoted consumer priority, there was always a feeling of "i want to buy osmanthus wine, but it is not like the travel of youth".

the reason is, as mentioned above, the profit-generating model around consumers and the profit-generating model around merchants are fundamentally different. if the platform that generates profits around merchants is allowed to copy the model, it will not be similar but not true. after all, no one wants to go against their own rice bowl.

against this background, the logic becomes clear as we try to understand why "c2m", "low price", "10 billion subsidies" and "refund only" have gradually become the deciding factors in competition in different periods: in the face of competition, the biggest opponent is not others, but ourselves who are so conservative that we have lost our sense of the times.

02

what is going overseas?

there has always been a saying in the market that cycles create gods, and the success of some platforms is just because they hit the big cycle of consumer stratification. if the economic cycle reverses, e-commerce platforms will usher in a new round of reshuffles, and even new dark horses will emerge.

the core logic is as stated by sanpo miura in the lonely society:

"young people ten years ago barely felt the aftertaste of the bubble period when they were children, so the tendency towards simplicity can make them feel a new value of life. but young people now have only experienced the lost thirty years, and their lives are simple to begin with, so they are unlikely to want to live a simple life. they may want to experience life during the bubble economy."

if we only use the consumption cycle as logic, no internet company or retail company has long-term investment value, because cyclical fluctuations are inevitable, which is true for the economy, consumption habits, and groups. however, this does not prevent a number of retail companies such as amazon and walmart from achieving longevity.

the key to the problem is not whether a certain enterprise perfectly matches a certain cycle, but why this enterprise can match this cycle.

the period of pinduoduo's rise was a period when others could not find any competitors even with a telescope, but the facts have proved that relying on the awareness of oversupply and the difficulty in meeting market demand outside the fifth ring road is enough to create a trillion-dollar enterprise.

for example, when all companies were exploring the development trends of the japanese consumer market and trying to find ways to survive in the cracks of the involutionary market, it directly followed the ultimate path of development for japanese companies: going overseas.

if we look at it from a time perspective, pinduoduo is not the earliest domestic e-commerce platform to go overseas, but the overseas market that pinduoduo has planned for is one of the largest single markets in the world that many internet giants are trying to avoid. in addition, temu has proved to the market with its excellent performance that going overseas does not necessarily mean choosing high dimensions over low dimensions and only going to southeast asia or africa. even in the united states, our supply chain and manufacturing advantages are very obvious.

if you want to pan for gold, why not go to the place with the most money in the world? is it because you are not confident enough or you don’t know your own ability? in our opinion, it is because big companies are obsessed with superiority and are afraid of failure. they always want to achieve the smallest success at the smallest cost to maintain their unfounded and worthless titles.

diamond's "guns, germs, and steel: the fate of human societies" contains enough inspiration: the core reason why eurasian civilization ultimately survived and defeated other civilizations was not the superiority or inferiority of the human race, but the advantages of agricultural civilization brought about by environmental advantages. settlement, dense population and optimized social division of labor released a large number of laborers to engage in a series of "non-livelihood-related" work such as technology and cultural inheritance, thus creating an insurmountable advantage.

the rise of many companies in the mobile internet era relies on the foresight of individuals and entrepreneurs under the iteration of new infrastructure and new technologies. with the stagnation of technology and the saturation of the market, the companies that can achieve longevity, from p&g to nintendo, from volkswagen to tesla, are all entrepreneurs or teams with foresight of the times, and have cultivated an internal environment that can maintain the efficiency and stable development of the company and maintain the animal spirit. even in the face of different cycles and different markets, they can make the choices that best meet the characteristics of the times and historical trends.

this also explains why, in the face of different cycles - low prices, consumer services, and going global, some people can always maintain logical consistency, while many others will inevitably lose their footing. for example, even though short video e-commerce has relatively high-dimensional technology and business models, it is still difficult to remain immune to the tide of the times:

the fact that this internal war has begun to spread to the so-called darlings of the era, such as oriental selection, dong yuhui, lao luo, simba, and xiao yangge, is self-evident evidence.

the general trend of the world is vast and unstoppable. those who follow it will prosper, and those who go against it will perish.

but it's okay.the historical prelude to the fifth consumer era has just begun, and the exciting new historical opportunities belong to everyone.