Editor’s note: This article comes from the WeChat public account “Connect Insight” (ID: lxinsight), author Liu Miaomiao, editor Shui Sheng.36 krypton released with authorization.
Zhang Yiming finally officially challenged the e-commerce field.
You should know that this rational and pragmatic byte-beating CEO who is called a bit like a “robot” will not be so high-profile “declare war” without a clear judgment of the moment.He once mentioned the principle of expanding business boundaries in an interview with Caijing: Try not to do what others have already done, and do not do it better than others, unless it is business defense.
The difference this time is that byte beating not only seeks the expansion of the borders other than the content, but also establishes a temporary moat for competition.
According to “LatePost” report, on the eve of 618, ByteDance established the e-commerce business department, which will serve as the first-tier business department in parallel with today’s Toutiao, Douyin, games, Zero (education and new business), and commercialization.Reported to ByteDance China CEO Zhang Nan and Chairman Zhang Lidong on two lines.
Prior to this, the byte-beating e-commerce business was scattered in the mid-stage and commercialization department of Douyin e-commerce. After this adjustment, the strategic position of e-commerce was upgraded.The e-commerce business unit will be responsible for the live broadcast of upstream and downstream links such as Douyin and other content platforms, live broadcast of China and Taiwan products, operations, platform rules, and brand commerce.Douyin Store is its key development product. ByteDance hopes to build another e-commerce platform on Douyin.
This time, Zhang Yiming clearly had the expectation of “doing better than others”. As a platform with a huge traffic pool, he has the necessary traffic and users for e-commerce.
However, there are many players in the e-commerce field who are fighting to death. At the same time, they have these two conditions, but there are also giants who are still not good.
Choosing to enter the game at this time is due to the development trend and Zhang Yiming’s “had to”.
The byte-beating revenue structure is still based on advertising revenue.When comparing with BAT, Zhang Yiming mentioned that Byte and Tencent are more similar, including Huawei, which is doing a basic ecology, close to the basic needs of people’s lives, but relying on information flow advertising is more like Baidu’s model. AdvertisingThe model is single, and the ceiling can be seen at a glance, which is not what Zhang Yiming wanted.
If you want more initiative, you must form a closed loop on your own platform without jumping to other e-commerce platforms through vibrato. If you want to support a higher valuation, you must get rid of the dependence on “advertisers”, With a richer profit model.
From the perspective of the competitive landscape, byte bounce can not be left behind.In the competition with Kuaishou, although Douyin DAU far surpasses Kuaishou, the latter has an earlier layout in the field of e-commerce and live streaming.In terms of keeping traffic on its own platform and establishing a closed shopping loop, Kuaishou launched the Kuaishou store in June 2018.Facing competition, Douyin not only can’t fall behind, but also has better ambitions.
In addition, in the overseas market, there is no precedent for the true success of Chinese e-commerce overseas. Relying on the rapid growth of TikTok overseas, it is not impossible to expand overseas e-commerce.
Whether it is the business layout, revenue model, competitive situation, or the traffic advantages of ByteDance, and the gaps in overseas markets, Zhang Yiming must seek a new growth point, and e-commerce is enough to carry this ambition.
Byte bounce requires e-commerce
The three monetized carriages of the Internet platform are: advertising, games and e-commerce.
The huge traffic gathered by the App factory has brought the possibility of more diversified monetization of ByteDance. In order to get rid of the dependence on the advertising business, this company has begun to lay out in the game field and will continue to recruit more than 1,000 in 2020people.In addition to the mature advertising monk’s early game business, e-commerce has become the most direct way to monetize.
Among these three carriages, e-commerce’s ability to attract gold is obvious to all.It can be seen from the enterprises that Ali still ranks as the highest market value in China.
At the same time, e-commerce has also attracted many giants to try. Tencent and Baidu have repeatedly tried water and electricity.
Tencent’s once pat network and QQ mall ended in failure, but still did not give up e-commerce.On June 20, Connect Insight found that WeChat began internal testing of the “WeChat Store” applet.After opening the store, users can directly broadcast and sell goods in this small program.
Baidu also set up an e-commerce business unit in 2007. In the following years, it launched a number of e-commerce platforms such as “Yeah”, “Love Life”, and “Love Purchasing”, but all failed.
The red book betting on cross-border e-commerce eventually changed its direction, focusing on the community, supplemented by e-commerce; NetEase Kaola Haigou has also changed its owner Ali.
The latecomer to the rise of e-commerce is JD.com and Pinduoduo.
There are not many winners, but the market plate is always large enough.According to the “Statistical Report on Internet Development in China” released by the China Internet Information Center, as of March 2020, the number of online shopping users in my country reached 710 million, an increase of 100 million compared with the end of 2018, accounting for 78.6% of the total netizens.
This big cake byte jumps and doesn’t want to let go, nor can it be missed.
Huang Duo, founder of Pinduoduo, used the product form of today’s headlines to define its product model. “You can imagine replacing the information flow under today’s headlines with a commodity flow. This is Pinduoduo.”
E-commerce pays attention to “people, goods, field”, byte bounce occupies two of them, there are short video + live broadcast of e-commerce change scene, there is also enough traffic and users.However, at present, many users still mainly use Douyin to jump to Taobao for purchases, and have not completed delivery on Douyin. Douyin’s role is a diversion platform, and the main income comes from the marketing costs of merchants.
To get rid of the dependence on advertising, you need not be satisfied that Douyin is just a traffic distribution platform, but through short video + live streaming to create a complete closed loop of “short video + live streaming-e-commerce-delivery”.
In fact, in the field of e-commerce, this is not the first test of byte beating, and its exploration period is as long as 6 years.
In 2014, ByteDance launched the “Today Sale” function to guide the third-party e-commerce platform platform; 2 years later, the “Beijing Project” was launched, which was deeply tied to JD.com as its guide; in 2017, the wordThe festival jumped on the line to “buy with confidence”, began to launch its own e-commerce platform, the main high-quality low-cost, target users for the pursuit of cost-effective crowd, but was eventually split; e-commerce platform “value” and “new grass”, etc.There was no sound at all.
In 2018, Douyin and Taobao reached a cooperation to divert Taobao. In 2019, ByteDance launched the e-commerce monetization tool “Toutiao” of content creators.
In April last year, Douyin launched the Douyin store, which is a convenient tool for merchants to bring cash to cash.When the user places an order on the Douyin platform, if the product comes from the Douyin store, there is no need to jump to other e-commerce platforms, and the shopping process can be completed while watching the live broadcast.This was already recognized by the outside world as a sign of byte-beating plus e-commerce.
The official introduction of Douyin Store, Tuyuan Douyin App
Affected by the epidemic this year and the upsurge of live goods delivery, Douyin has further increased the intensity of live goods delivery.From Luo Yonghao’s high-profile entry into Douyin to start live streaming and delivery, to the fact that various stars started selling goods in the Douyin live broadcast room, the Douyin live e-commerce became hot.
At 8 pm on April 1st, Luo Yonghao officially launched live on Douyin. During the three hours of his live broadcast, he brought a total of 23 items and paid a total transaction amount of 110 million yuan.Of the 23 products he “banded”, 10 products pointed to Taobao links, and 13 products jumped to the Douyin store link.
It can be seen that since this year, the weight of Taobao’s external chain and Douyin stores has begun to change, and byte beating is gradually adding to the closed loop of the purchase of its own platform.
However, the previous attempts in the field of e-commerce have not been scaled up, and the e-commerce business has only been scattered in various departments. This time, Zhang Yiming made up his mind.
Bytedance is doing e-commerce, and there is pressure from a new round of high revenue targets in 2020. Expansion of new business is only possible to seek a new round of growth.
Zhang Yiming’s ambition
Behind the search for breakthroughs is the aggressive ambition of this company.
At ByteDance’s 2015 annual meeting in Okinawa, Japan, the theme was named “Age of Change”. Indeed, on that ever-changing Internet battlefield, ByteDance started a spoiler.
Zhang Yiming set several goals for himself and the company: globalization will be fully successful in 2019, and it can become the world’s first creative platform; hoping to seize 1/7 of the media time, through a stronger advertising system and a stronger businessThe system reaches 1/5 of the market revenue, and will reach 10 billion US dollars in 2020; the company’s market value will be 100 billion US dollars.
Zhang Yiming, who is good at setting goals, sets a new goal for himself every year, just like drawing a finish line, and then running a race with himself.
Now, five years have passed since the “era of tremendous change.” According to Reuters, byte-beating achieved revenue of approximately US$5.6 billion (approximately RMB 40 billion) in the first quarter of 2020, an increase of more than 130% from the first quarter of last year.The company’s current valuation in the trading market is about 95 billion to 140 billion US dollars, equivalent to RMB 671.9 billion to 990.1 billion.
This number has even exceeded the goal set by Zhang Yiming.
Compared to talking about ideals, Zhang Yiming values revenue more, as he said, “our romance is a pragmatic romance, a romance that turns ideals into reality.”
According to several media reports from Reuters, Bloomberg, and Interface, the revenue target of ByteDance was 6 billion yuan in 2016 and 15 billion yuan in 2017. This figure has become more and more bold, and it is 50 billion in 2018Yuan, in 2019, became 100 billion yuan. Later, as revenue was better than expected, the target was raised to 120 billion yuan.
As early as January 9 this year, Interface News reported: ByteDance has completed the 2019 performance task, and its annual revenue exceeded 140 billion yuan, an increase of nearly 280% over the previous year.At the same time, in November 2019, the average daily revenue of ByteDance exceeded 400 million.
According to Reuters reports, in 2020, the revenue target of ByteDance is 200 billion yuan.
Behind the ever-growing numbers, although byte bounce has always been unpretentious to IPO, the centralized admission of international venture capital and PE institutions has to some extent indicated that byte bounce is getting closer and closer to IPO, while valuations are rising rapidly.To be able to prove the growth potential of revenue to the capital market, a more diverse revenue model is needed.
Since last year, ByteDance has increased its bargaining power in the fields of games, social networking, entertainment, etc. This year, new actions continue. It needs to establish a business model that can compete with Ali and Tencent to support higher valuations.And e-commerce has become the most effective grip.
E-commerce is also a necessary move in the competitive landscape.
At present, one of the big competitors of ByteDance in the field of short video + live broadcast delivery is Kuaishou. As early as June 2018, Kuaishou has already launched Kuaishou Store, and with the strong delivery capabilities of Kuaishou anchors, it has realized the e-commerce business.growth of.
According to the “Double 11 Station Outsourcing Agency TOP List” released by Kath Data and the Taobao Alliance, nearly 40% of the TOP50 sales figures from multiple platforms on the Taobao Alliance statistics come from Kuaishou platform.
Although the layout of Douyin is relatively late, it has developed rapidly since it was launched in April last year. Especially this year, celebrities and big Vs have launched live delivery on Douyin.
What Douyin and Kuaishou are currently doing is to strive to stay on their own platforms and complete closed-loop purchases on the platform.
Kuaishou e-commerce business once relied on Taobao, but it has been unable to access Taobao’s external chain since December 23.In this regard, Taobao said: We have always maintained an open and cooperative attitude; quick hands responded: Taobao products cannot be reviewed temporarily due to system upgrades.
But what can be seen is that Kuaishou has been doing “go Taobao” measures, including establishing its own product library, guiding net red and MCN to open stores in Kuaishou, and directing traffic to Kuaishou’s own stores.
Quick hands are in the layout, how can vibrato fall behind?
What Douyin currently needs to weigh is the competitive relationship with Ali.This is mainly reflected in the annual frame cooperation between the two parties. In 2019, Douyin and Taobao signed an annual framework agreement of 7 billion yuan. The new round annual frame of 2020 is still under negotiation. The outside world reported that the new annual frame quota is as high as 20 billion yuan.
However, byte bounce has responded “this information is inaccurate”.According to “Shenwang” report, the annual framework of cooperation between Douyin and Taobao will expire at the end of June. If the two parties do not renew the contract, from July 1st, Douyin will not be able to add Taobao links, while the two sides are still playing games.in.
This kind of cooperation is uncertain. After the quick hands “go to Taobao”, although JD.com was chosen, it still did not give up its layout from home appliance merchants, as did Douyin. Now it wants to go faster.
Can byte beating do good e-commerce?
E-commerce merchants are very good at telling stories, from Jack Ma’s “don’t like money” to Liu Qiangdong’s “Employees are brothers” and Pin Duoduo Huang Zheng’s “You can say I am low, but you cannot ignore me”, they all know how to stand up”People”.
But Zhang Yiming is different. He is not good at talking about feelings. Such traits may eventually make byte-beating e-commerce have a different face.
According to the first financial report, Douyin plans to cut off all third-party jump-type products before 618 next year, leaving only the shops that come with the platform.At present, the platform has begun to “start” on categories with high sales such as beauty makeup, snacks, and furniture, restricting its external e-commerce to jump, but ByteDance has denied this.In addition, the newly established e-commerce business department currently mainly serves Douyin’s e-commerce business. In order to meet users’ shopping needs on Douyin, Toutiao and watermelon have less demand on e-commerce.
In addition, in the overseas market, the territory of Chinese e-commerce players is still blank. When the domestic e-commerce market is difficult to break through, it is possible to enter the overseas market to overtake in the corner.
Kuaishoudian shop page, Tuyuankuaishou App
In an interview with the first financial reporter, Li Chengdong, the founder of Dolphin Think Tank, once expressed a point of view: The establishment of the e-commerce department by byte beating is mainly aimed at the international market.In the domestic market, Ali’s e-commerce ability is very strong, and Douyin may not have a great chance of winning as an e-commerce. In addition, there is more cooperation between Byte and Alibaba, and there is no need to directly compete to identify the relationship.Therefore, Li Chengdong believes that Douyin e-commerce not only targets the domestic market, but also plans to manipulate the global market.
The establishment of an independent e-commerce department by ByteDance is also in line with the huge number of overseas users and shopping needs of Douyin.
The CITIC Securities research report shows that ByteDance relies on Douyin’s overseas version of TikTok to grow rapidly overseas. The entire system in 2019 achieves 700 million daily activities worldwide. Its business spans 150 countries and regions, leading Chinese technology Internet companies, and leading giants such as Facebook and Google.The gap gradually narrowed.
Relying on the introduction of advertising products and the expansion of user traffic, TikTok will start the commercialization of information flow advertising in 2020, and gradually transition from the current brand advertising to the main SME advertising.With the iteration of TikTok products, overseas expansion is expected to accelerate.
Whether it is to establish a new e-commerce app, or rely on Douyin to expand e-commerce business, or enter overseas markets, further detailed planning remains to be seen.
Bytedance to do e-commerce is a challenging breakthrough game.
On the one hand, there is a certain difference between the traffic of the Toutiao system and the e-commerce traffic. Users have developed the habit of shopping on platforms such as Taobao, Tmall, JD.com, and Pinduoduo. Can Douyin or a new shopping app let usersChanging habits is more difficult.
On the other hand, all the e-commerce platforms that can survive have distinctive characteristics. Ali’s “purchasing goods” model. The large amount of goods will make users think of it when they have online shopping needs. Jingdong’s “3C home appliances” characteristicIt has attracted many male users and has become the choice for buying home appliances and quality products. Fighting at a low price will make consumers think that buying at a low price is the lowest price.
Can byte beating create a trait that belongs to it?
In addition to user habits, the challenge of byte-beating e-commerce is also reflected in payment and logistics.The mainstream payment tools are WeChat and Alipay. At present, Zhang Yiming is still unable to leave these two payment tools. It is not easy to recreate.
There is also a lack of support for byte hopping in logistics. Currently, logistics services are provided through third-party partners.However, JD.com and Ali both have the right to speak on logistics through self-operated or controlled acquisitions.
The meat of the e-commerce is very fragrant, but it is also difficult to nibble.Although the challenge exists, Zhang Yiming is not afraid of the challenge, he is good at breaking through.Just like Baidu, Tencent, and traditional portals, they are good at information distribution services. Today, Toutiao rises with the recommendation of machine algorithms. Surrounded by Tencent and other game giants, ByteDance is also killing a blood in the gaming field.
Therefore, it is still exciting to expect byte beating e-commerce. What kind of face will it be in the future?What innovations will it have?