Rising costs and unabated competition: what is the solution to the traffic game between merchants and platforms?

In the era of thousands of people and thousands of faces, is the search value underestimated?

  Before each APP built a “walled garden”, the search engine was inseparable from the corners and corners of the Internet. The combination of browser and search engine connected the free and disordered information on the Internet.
  At that time, the Internet had just emerged in China, and the search results were only sorted based on the frequency of the search terms appearing in the webpage, and the top results were often not what users really needed. Baidu has opted to use “the power of the crowd” to solve this problem – the more pages that are shared and clicked on, the more pages will be considered better quality.
  The e-commerce platform that has not yet grown into a giant has also gone through such an “extensive” development path in the early days.
  In order to attract more merchants to enrich their own supply, and then attract more consumers, keywords and sales are important factors in the ranking of search results. At that time, the platform gave great support to merchants, and the on-site search contributed most of the traffic to the merchants, and consumers also searched for the products they wanted among the massive products.
  During this period, despite the lack of brand awareness, merchants could still rely on the platform’s early auction ranking or “popularity ranking method” to obtain low-cost traffic import and facilitate transactions through traffic conversion. It not only allowed many small and medium-sized businesses to complete the accumulation from 0 to 1, but also created the rise of early e-commerce platforms.

Platform Marketing Tools Evolution

  ”At that time, it was easy to figure out the rules for operating the starting volume. It was nothing more than buying keywords, investing money in direct trains, or writing more keywords, and then you could rank high in the search rankings.” He has been operating a clothing store on Taobao for many years. Fan Fan mentioned that he was not without emotion at the time, “There are also many training institutions and service providers that teach merchants how to create explosive models through search. This traffic entrance alone has a complete business ecosystem.”
  More than ten years later , the platform recommendation algorithm has become more complex, the e-commerce presentation form has also changed in synchronization with the media form, and search is no longer the only traffic entry for the platform.
  The old concept of “people looking for goods” has been replaced by the concept of “goods looking for people”, and emerging e-commerce platforms have begun to fully embrace information flow and contentization sooner or later. The e-commerce platform that started with the link of sharing “Chop a knife”, the initial traffic source is mainly the recommended information flow and activity pits that occupy almost full screen, and the search bar is just an inconspicuous icon in the bottom bar.
  However, for platforms, merchants and consumers in the consumption chain, the value of search cannot be replaced. In other words, at a time when everyone is talking about “thousands of people, thousands of faces” and focusing on finding people for goods, search has been underestimated by many people as the “big brother” in traffic that used to occupy an absolute position. And the platforms that are slowing down are also realizing this problem and trying to correct the deviation.
Long-termism of Rangli Merchants

  Since the birth of the e-commerce platform, there has been a game relationship between the platform and the merchants in the distribution of traffic: the platform wants to make as much profit as possible through the distribution of traffic, while the merchants want to obtain as much free traffic as possible.
  And search is the game field.
  The reason why search is important to the platform is that the user portraits established on the basis of big data are the key to the accurate delivery of Internet advertisements. The platform collects user tags, infers the potential needs of users, and intends to find consumers who are most likely to facilitate transactions. .
  At the same time, for a C2C platform with massive stores and commodities, search should be a tool to revitalize the stock and a tool to prevent the strong from becoming stronger. If there is no relatively fair search mechanism, it means that small and medium-sized businesses will almost never have “the day to come out”.
  However, at a time when the revenue growth of Internet companies is collectively slowing down, e-commerce platforms have the upper hand with absolute traffic control advantages.
  Brands with high premiums become platform C-positions. A person from the marketing department of the e-commerce industry said that brands have premiums, and premiums mean high gross profit, which is the key to maintaining high marketing investment for brands. “Under the current environment, platforms are also willing to screen consumers who are willing to pay a high premium for brands. Let this business logic form a closed loop on its own platform.”
  Driven by interests, e-commerce platforms continue to re-formulate rules based on their dominant position to determine the search rankings of merchants and products as well as platform placement. Once “easy to do business”, they began to use expensive traffic fees to persuade them to quit. Small and medium businesses.
  As a result, small and medium-sized merchants have become more and more intense in the traffic game with the platform in the process from 1 to 10 or even 100, and the traffic cost has skyrocketed.
  A cat food merchant who has been working on a comprehensive e-commerce platform for 8 years once revealed that the current traffic promotion cost on the platform is three or four times that of 4 years ago, but the cost performance is becoming more and more tasteless, and the conversion rate of small and medium-sized merchants is generally 6.6. %~10%. For example, for a bag of cat food costing 100 yuan, the merchant needs to spend 80 yuan to promote it, but the price is only 119 yuan, plus postage, pre-sale and after-sale human services are basically subsidized.

Brands with higher marketing budgets are favored

  In fact, in the eyes of industry insiders, there is also a balance of interests between platforms and merchants, which is the comprehensive affordability of brands and small and medium-sized merchants. If the platform excessively grabs the operating profits of the merchants, once the e-commerce platform with lower traffic cost and faster growth rate emerges, there will be a loss of merchants, which is not a long-term solution for the platform operation.
  Now that it is difficult to form a virtuous circle by exhausting the water and fishing, choosing a more friendly traffic distribution method to reverse the imbalance between the platform and the merchants has become a new choice for some e-commerce platforms.
  Taote, an e-commerce APP launched by Ali for the sinking market, has made changes to reduce the operating costs of merchants in a profitable way. Recently, some people who have been doing e-commerce for a long time have found that the first pit display position for keyword search on Taote station does not need to be obtained through platform bidding, but is open to all merchants that meet the basic requirements. “As long as the product has a price advantage, there is a chance to get The first pit, enjoy the recommended traffic support for free.”
  Although the deepest motivation for this move is to attract merchants to settle in and strengthen the price advantage to retain users, judging from the results of Taote’s attempt this time, it is actually many long-tail merchants that make the most of the profit.
  A tea merchant who opened a shop in Taote for two years told reporters that in the past two years, he did not spend money to buy traffic from the first pit, but he bought advertisements, which cost one or two hundred yuan a day. On the evening of September 3, his tea entered the first pit, “I entered without spending a penny. In the past few days, both the search traffic and the order volume are quite impressive, almost a 100% increase.”

After a Wujiang mustard shop got the first pit, the traffic increased by 390%. Source: Taote merchants grow

read Taote’s official data and found that after getting the free first pit, not only popular items, but even stores have achieved a large increase in traffic. After a Wujiang mustard shop got the first pit, the traffic increased by 390%, and the order increased by 350%.
Supplementary course “search”, difficult to learn the essence

  In fact, there are many e-commerce platforms for supplementary course searches, but not many can really pay attention to the interests of long-tail merchants on the site.
  Since the rise of short video e-commerce companies such as Douyin and Kuaishou, “interest e-commerce” has emerged. But this model also has shortcomings in practice.
  For example, due to the heavy reliance on the traffic of short videos or live broadcasts, the sales of short video platform merchants are not stable. Some merchants have expressed this contradiction to the media: “If the video is not popular, it will be difficult to sell goods; but if the video is popular, we have to bear the surge of delivery and after-sales pressure. Generally, there are many returns for this impulse consumption. In order to solve this problem, Douyin
  launched the “Douyin Mall” in August last year, and the pages and functions are the same as those of traditional e-commerce APPs. There is a search bar and shopping cart entrance at the top. The two-column information flow shows the form of the product. Search, the traffic portal closer to the transaction has once again gained attention.
  Another friend who was born in the sinking market also started to search for supplementary courses two years ago. Although in 2018, its search traffic has accounted for more than 30%, the most important traffic entry is still the classified navigation page; by 2020, the proportion of search traffic has surpassed recommendation and become an important source of traffic, and friends and businessmen are also doing their best. In the search bar, the option to search for stores and the function of “Following Stores” have been added.
  It is an inevitable option for many e-commerce platforms to make up for the short board of search after the richness of commodities is improved. “Only the entertainment provided by the ‘sense of discovery’ and ‘mini-games’ provided by the information flow cannot support continuous transactions.” GF Securities Analyst Hong Tao believes that search traffic entry has become important again. On the one hand, it is an additional source of traffic for small and medium-sized businesses that joined early, but on the other hand, if the search entry continues to tilt towards stores, small and medium-sized businesses will eventually become The old way of working for marketing.
  ”Players who are in the sinking market generally want to attract consumers in high-tier cities, they will focus on promoting the quality of products, and the search traffic will be tilted to stores, so as to attract brands and big merchants to settle in. Relying on brands to ensure quality is definitely the easiest way. It is not good news for small and medium-sized businesses.” Hong Tao analyzed.
  In this competitive environment, only platforms that are truly deeply cultivated in the industrial belt can have the confidence to continue to support non-brand merchants while ensuring the quality of products, ensuring a virtuous circle within the e-commerce platform.
  Taote, which is backed by 1688 merchant resources and a large number of industrial belt white-label factories, is one of them. Zhang Xiaohan, the head of a plush toy factory located in the Hebei industrial belt, told reporters that in 2021, he has two factories in Yiwu and Weihai, and he settled in Taote with the advantage of the factory’s source goods. In less than a year, the company is in Taote. Channel sales accounted for more than 10%, reaching 7 million yuan.
  ”After the epidemic, we have tried various channels such as Taote, Tao factories, cross-border e-commerce, and group buying. Taote and other channels are profitable, but overall they are still in the loss-making stage. We will definitely do subtraction and close some in the later stage. Unnecessary platform channels.”