After the consumption in first- and second-tier cities has become saturated, in recent years, various e-commerce platforms have set their sights on the sinking market.

  Traditional players represented by Pinduoduo, Taote, and Suning rely on the advantages of supply to attract users to influx; while emerging players represented by Douyin and Kuaishou rely on the platform's own content marketing attributes to challenge traditional players.

Data from QuestMobile shows that as of April this year, over half of the short video, e-commerce and other APP increments in the past year came from the sinking market.

  With the sinking of e-commerce platforms, the current rural online retail market continues to recover.

According to data from the Ministry of Commerce, in the first half of this year, the national rural online retail sales reached 975.93 billion yuan, a year-on-year increase of 2.5%; among them, the rural online retail sales of physical goods were 890.44 billion yuan, an increase of 3.6%.

The national online retail sales of agricultural products was 250.67 billion yuan, a year-on-year increase of 11.2%.

  "Users in the sinking market include non-high-end consumers in low-tier cities, central and western regions, and large cities. These people are mostly middle-aged and elderly people with relatively low income. To serve this group of people well, the platform needs to have products. It has the characteristics of high cost performance, guaranteed quality, strong supply chain control ability, and strong ground push ability." Wang Peng, a researcher at the Intelligent Society Governance Research Center of Renmin University of China, told Yicai.com.

Traditional e-commerce platforms seek new growth points

  The core of an e-commerce platform is to gather users.

The acquisition paths of traditional e-commerce platforms for users in the sinking market are generally similar, such as issuing subsidies and selling cost-effective products.

  The first to strike was Pinduoduo.

With the support of Tencent, the second largest shareholder, Pinduoduo has developed rapidly around the "social + e-commerce" model, and now the growth rate has begun to slow down.

As of the end of March 2022, the number of annual active buyers on the Pinduoduo platform reached 881.9 million, an increase of 7% over the same period last year; in the first quarter of 2022, the average monthly active users of the Pinduoduo APP reached 751.3 million, an increase of 4% over the same period last year .

  In the company's earnings conference call held in May, Pinduoduo executives said that the number of consumer users and monthly active users in the same period last year had reached a relatively high base and continued to grow this year; and in the long run, the trend is clear, that is, despite the There are seasonal fluctuations, but a slowdown in overall user growth is inevitable.

  At a time when the growth rate of Pinduoduo users slowed down, Taote, a subsidiary of Alibaba, began to catch up, and the gap between the two was gradually narrowing.

  In order to acquire users in the sinking market, in addition to acquiring customers online, Taote uses Ali-based formats such as grocery shopping business groups, express delivery sites, and retail stores to reach consumers.

  The latest data from Trustdate, a third-party data agency, shows that as of the second quarter of 2022, the number of Taote's monthly active users continued to grow and tied Pinduoduo.

According to Ali’s financial report, as of March 31, 2022, Taote’s annual active consumers exceeded 300 million.

At the same time, annual payment orders increased by more than 100% year-on-year.

  With limited room for growth in the number of users, Pinduoduo chose a strategic transformation from focusing on marketing to focusing on research and development, while Taote chose to "intensively cultivate" in the sinking e-commerce market segment.

  Pinduoduo's financial report data shows that in the first quarter of 2022, the company's marketing expenses were 11.2191 billion yuan, a year-on-year decrease of 14%; research and development expenses were 2.6685 billion yuan, a year-on-year increase of 20%.

R&D expenses are mainly used for "intangible assets" such as talents, algorithms, and systems, such as recruiting more experienced R&D personnel and R&D-related cloud services.

According to Pinduoduo's 2021 annual report, about 60% of the company's employees are R&D personnel.

  Different from Pinduoduo’s model of using community grouping, Taote changed the supply by opening up the 1688 factory in the M2C mode, allowing the origin to connect directly to consumers, minus the intermediate links, so as to achieve low prices.

  High-frequency and just-needed daily necessities have become important mental goods for Taote to open up the sinking consumer market. For the rice, flour, grain and oil that is just needed in the sinking market, Taote's official subsidies cooperate with the source factory to ensure product quality, stable supply, and sustained low prices. .

  Not only Pinduoduo and Taote, but some retailers are also opening their stores to sinking markets, such as Retail Cloud.

  The retail cloud under Suning.com started in 2017, mainly targeting the low-end market. A retail cloud store covers an area of ​​about 150-200 square meters and displays 230-260 items.

In terms of business model, "franchise store direct management" is adopted, that is, franchisees bear the operating costs of the store's rent, decoration, employee salaries, etc., but can share Suning's brand, products, sales, publicity, logistics, services, etc. item resource.

For Suning, the retail cloud model allows it to switch from the "heavy asset" to the "light asset" model, no longer need to bear expensive operating costs, and can give full play to its own supply chain, financial and other advantages; In the past, it was necessary to be responsible for multiple links such as purchasing, selling, and logistics, and now it only needs to sell.

  At present, Suning.com is actively strengthening the penetration of the sinking market. The retail cloud opened 444 new stores in the first quarter of this year and 667 in the second quarter. As of the end of June, there were 9,749 franchised stores.

Diversified competitive landscape

  If the traditional e-commerce platforms such as Pinduoduo, Taote, and Suning first gather the supply of merchants, and then attract users through advertising and subsidies, then emerging e-commerce platforms such as Douyin and Kuaishou first gather a large number of users , and then attract merchants to settle in and build their own e-commerce closed loop.

  Kuaishou Technology’s financial report data shows that in terms of user scale, the platform had 346 million daily active users in the first quarter of this year, a year-on-year increase of 17%, and monthly active users reached 598 million, a year-on-year increase of 15%.

According to QuestMobile data, in April 2022, the number of monthly active users of Douyin reached 678 million, and the number of monthly active users of Douyin Express version was 214 million.

  The huge number of users has spawned the soil of e-commerce.

In the first half of this year, the number of live broadcasts on e-commerce platforms monitored by business big data exceeded 60 million, the cumulative number of viewers exceeded 517 billion, and the number of live broadcast products exceeded 47.5 million.

  "Compared with traditional players such as Pinduoduo, Taote, and Suning, the core advantage of emerging players represented by Douyin and Kuaishou is that they can achieve online and offline integration through socialized marketing and media integration. Goods." Wang Peng said that for merchants, Douyin and Kuaishou are traffic portals and have the advantage of publicity, but the disadvantage is that they are currently smaller than traditional players, which is reflected in the lack of supply and insufficient supply chain control. The price and quality control ability of commodities do not have the advantage of traditional players.

Therefore, emerging players can challenge traditional players on a small scale, but it is still quite difficult to challenge on a large scale.

  "Our main focus now is on Tmall, JD.com, and Vipshop. Douyin, Kuaishou, and Taobao live broadcast are only used as value-added channels, and they cannot be separated from the logic of flat sales." Those who have settled in emerging platforms such as Douyin Hangzhou clothing merchant Zhang Feng (pseudonym) told Yicai that live broadcast and short video are a tool. If you want to make good use of it, the merchant had better have a big market. You cannot develop a brand for this tool, otherwise the investment cost will be very large. .

  Tmall, JD.com, and Vipshop can help merchants achieve continuous sales. On platforms such as Douyin and Kuaishou, it is difficult to achieve the goal of continuous sales if you can’t create a store broadcast or account matrix.

  "From the brand's point of view, what is needed is a compound interest and steady growth. For example, the production capacity of the supply chain is 1 million yuan a day. If the sales volume reaches 3 million yuan a day, I may not be able to bear it; what I need is 800,000 yuan per day. Or 500,000 yuan in sales." Zhang Feng believes that Douyin and Kuaishou are explosive growth, and the flat sales logic of store broadcasts has not yet been established.

  The operation logic of Douyin lies in decentralization.

After the merchants have good traffic performance, they will bring more organic traffic.

Zhang Feng said that the ROI (return on investment) ratio of clothing categories on Douyin is about 3:1~5:1, that is, if you invest 100 yuan, there will be a return of 300~500 yuan; from an overall perspective, the ROI of different merchants is Different, the overall ROI will reach 20:1~40:1.

  However, this also places higher demands on merchants.

If merchants can do a good job in products, services, and content, they can drive good traffic with only a small investment cost.

However, if it is a business with poor products, services, and content, and blindly using advertising costs to leverage traffic, the ROI will naturally be unsatisfactory.

  Regarding the development trend of sinking the e-commerce market in the future, "the competitive landscape is still dominated by diversification, and it is impossible for one or two to dominate." Wang Peng believes that traditional e-commerce platforms are more about controlling the supply chain and taking the mid-to-high-end route. ; Content platforms with marketing attributes are more likely to follow marketing channels and take the mid-to-low-end route, each with its own positioning and market.

Activate the consumption potential of the sinking market

  Insufficient effective demand, including household consumption, is a major challenge facing the current economy.

The Politburo meeting of the Central Committee held recently also mentioned in the deployment of key tasks for the second half of the year that macro policies should be active in expanding demand.

Promoting consumption has become an important driving force for stabilizing the economy.

  In order to activate the consumption potential of the sinking market, government departments are also actively working.

  This year, the Ministry of Commerce, the Ministry of Finance and the National Rural Revitalization Bureau jointly organized and implemented county-level commercial construction actions to support localities in accelerating the improvement of shortcomings in rural commercial facilities and expanding the coverage of rural e-commerce.

In the first half of the year, 69 county-level logistics distribution centers and 65,000 village-level convenience stores were built and renovated across the country.

  In July, Ministry of Commerce spokesperson Shu Jueting said that in the next step, the Ministry of Commerce will continue to work with relevant departments to intensify efforts to guide local governments to focus on channel sinking, focus on counties and townships, and focus on digitization, chaining, and standardization. As a means, speed up the filling of infrastructure and public service shortcomings, and promote the improvement of the county business system.

  The first is to accelerate the digital transformation of county-level commerce.

Promote rural traditional commerce and trade enterprises to expand online and offline marketing channels, and create new models and scenarios for consumer services.

Promote the integration of e-commerce with leisure agriculture, rural tourism, etc., strengthen digital empowerment, promote industrial development and increase farmers' income.

  The second is to promote the chain development of county-level commerce.

Guide large-scale chain circulation enterprises to sink, transform a number of county comprehensive business and trade service centers, township business centers, and village-level convenience stores, develop shopping, catering, entertainment and other formats, and attract citizens to the countryside and farmers to urban (county) consumption.

  The third is to improve the standardization level of county-level commerce.

Adhere to high-quality development, encourage consumer goods, home appliances, home furnishing and other brand enterprises to sink into the supply chain, provide direct supply and direct sales, centralized procurement, joint distribution and other services, increase high-quality supply, and promote urban and rural residents to share quality consumption.