Illustrated by Canva
The concept of “single shopping” has been revived recently after the event of “celebrity singles” went viral online. Due to the impact of the epidemic this year, people’s pursuit of cost-effective consumption momentum after the epidemic is more than ever before, which has brought a wave of real development opportunities to e-commerce companies that focus on “sinking single purchase”.
According to Trustdata, between January and September 2020, e-commerce in the sunken market added more than 90 million net active users and 500 million MAUs. With the rapid penetration of e-commerce shopping in the sinking market, the old problems of product quality and after-sales service are facing many e-commerce giants. In this case, how to break out of the siege, they will face a prominent problem.
E-commerce is once again targeting sinking consumption
The outbreak of COVID-19 has had a profound impact on all walks of life. During the pandemic, people have fewer sources of income and a corresponding decline in their standard of living. In this situation, people’s consumption concept has become more rational and restrained. In the specific consumption decision, the pursuit of cost-effective more obvious characteristics.
Below this background, special price platform homeopathic rise. As large e-commerce platforms have gradually saturated in the first and second tier cities, it is urgent to find new incremental markets. And the potential of the infinite sinking market, it has become an inevitable choice to tap new increment.
According to data from Guotai Junan Securities Research report, more than 70% of the people in China are in the sinking market, which represents a large consumer demand, and many people do not enter the mainstream users of e-commerce. If we can attract them to the e-commerce platform, it can bring incremental space.
The rise of Pinduoduo also proves the effectiveness of this approach. In the past few years, while all e-commerce companies were struggling in the stock competition in the first and second tier markets, PINDUoduo developed rapidly in the sunken market and gradually became the third pole of Domestic e-commerce companies. This shows the great potential of the sunken market.
And the flagship of cost-effective specials, the price sensitivity of the sinking market crowd can be imagined. According to official data, 80 percent of the country’s population had less than 3,000 yuan in disposable income per month in 2017, and with infrastructure lagging behind, people have fewer spending options. Therefore, for the price-sensitive long-tail group, even slight price fluctuations can make them change their consumption decisions. And e-commerce companies in the sinking market focus on low-price explosion, it is to cater to these people’s consumption concept.
In fact, after the rise of Pinduoduo, domestic giants began to focus on the “sinking market”. Platforms such as Alibaba’s Taobao Special Price, JINGxi and Suning’s Pinggou, Tencent’s Penguin Pingping and Netease’s Yan Selection have all flooded into the sinking market. These Internet giants in the sinking market, the domestic sinking market of the electricity business scuffle has also kicked off.
E-commerce giant sinking scuffle and upgrading
In order to cope with the soaring Pinduoduo and find new and incremental users, e-commerce giants have taken measures to sink. For example, Taobao launched a special price version to actively defend, while JINGdong also launched Jingxi, Suning Shopping to launch a collective purchase, the target of each is the sinking market.
Although it is the choice to follow up the fight more, but in the specific play is different. Specifically, Taobao special edition used to pull new people get red envelopes and shopping sharing mode, to expand three or four lines of incremental users; Like Pinduoduo, Jingxi and Suning Pinduoduo use social media to achieve transformative communication, so as to acquire a large number of users at a very low cost. Compared with pin-Duo, which relies on wechat’s massive flow pool, the social relationship chain of Taobao special edition is a little weak.
However, Pinduoduo, Taobao special edition, Jingxi and Suning Are similar in their business models. For example, both use the Customer to Manufacturer (C2M) mode. As the first shopping APP in the whole network with C2M goods as the core supply, Taobao special edition is with the help of Ali’s comprehensive data analysis ability and industrial belt advantage, with “rhinoceros” manufacturing empowered, and the launch of “Tao Factory” after the 1688 depth linkage, promote the linkage development of industrial belt.
Pinduoduo implements its C2M model by releasing “New brand plan”. Demand-side reform should be adopted to promote supply-side reform of micro, small and medium-sized enterprises. “channel customization” and “industry freezing price” featuring high subsidies should be used to help micro manufacturing enterprises grow rapidly. Jingxi is to launch the direct and excellent product plan for industrial belt factories, and help to build a new digital industrial belt through special cooperation with local governments, C2M and marketing empowerment for sunken markets, the creation of a new ecology of direct broadcast of industrial belt, the transformation of foreign trade sales channels and other measures.
And Suning Buy through the layout of “fight factory”, to create “new quality manufacturing plan” to open C2M investment activities. With the full-scene, full-channel and full-category integrated retail model, we provide multi-directional industrial chain support policies for enterprises in the market, such as promotion and logistics.
Although pinduoduo has advantages in hardware such as data capability and industrial chain, pinduoduo cannot be compared with taobao Special Edition backed by Alibaba, Jingxi backed by JINGdong, And Suning Pinggou backed by Suning. But in terms of subsidies, Pinduoduo clearly outperforms others, which is one reason for its rapid rise.
Pinduoduo not only offers many preferential activities and offers large discounts, but also obtains the trust of merchants and users through subsidy policies and promotional activities. Taobao special edition and Jingxi and Suning buy together although there are many preferential policies, but with the fight duo duo comparison, there are still not too many advantages.
Although each has its own way of fighting, e-commerce giants have their own irreplaceable advantages in the layout of the sinking market, and it is probably still difficult to win or lose in the short term. Although at present each home appliance business is still difficult to win or lose, but the common concern of the sinking of e-commerce has appeared.
E-commerce companies are sinking behind the worry
Every year, the “Double 11 Shopping Carnival” all the e-commerce companies will try their best to focus on promotion, and this year is no exception. In this year’s “Double 11” approaching, the sinking market has become a new hot. E-commerce giants such as Taobao and Pinduoduo have stepped up marketing efforts to prepare for the sinking market, while other e-commerce companies have also piled in. However, behind the influx of e-commerce, the problem of e-commerce sinking has become more and more prominent.
First, the quality of the goods. The influx of a large number of merchants into the e-commerce platform will cause the situation of good and bad goods, and online shopping can not let consumers directly feel the quality of goods. Although there are layers of standard inspection, but inevitably there are omissions and quality risks.
Secondly, it is the problem of after-sale service. Generally, the after-sales process of e-commerce is complicated, for example, it is difficult to obtain evidence of quality problems of goods, it is difficult to guarantee the professionalism of after-sales service team, and it is difficult to reach the standard of express service, which will cause difficulties for consumers to protect their rights. In addition, low-price free delivery is originally a gimmick for the sinking platform to attract consumers, but once the logistics price is higher than the commodity itself, the commodity cost will be too high, so that its after-sales service advantages lag behind those of physical stores.
Such problems can not be ignored for e-commerce platforms. Although at present, the e-commerce platform is still in the wild expansion stage in the sinking market, and the negative effect of this problem is not obvious, the contradiction will eventually emerge when it develops to a certain stage.
After all, in an era of increasingly strict e-commerce laws and consumer protection laws, it’s hard to go far if you just blindly expand without considering user experience and feedback.
Article/New Retail foreign correspondent Wang Qian, public ID: XlSwaican