Who will pay for the overwhelming number of cross store sales on the e-commerce platform? On June 8, the reporter of Beijing Business Daily found that if they want to participate in the "6.18" and also want to seize the traffic bonus during the promotion, small and medium-sized businesses have to pay their own money to participate in the full reduction in order to catch up with the e-commerce promotion. However, there are also businessmen who frankly say that it will further reduce the profit space to bear all the expenses by themselves. In addition, they will have to pay the marketing expenses at all stages. It is conceivable that the operating pressure.
Despite their own considerations, both businesses and platforms are keen on a series of full discount, hoping to attract more consumers and turn them into long-term traffic.
Merchants solicit customers out of their own pocket
During the promotion period, is the full discount received by consumers a platform subsidy or a business out of its own pocket? The reporter of Beijing business daily interviewed a number of Taobao merchants in food, digital and beauty categories and learned that if they want to participate in the "6.18" cross store full discount activity, the preferential part of the goods will be borne by the merchants themselves.
"Participating in '6.18' means that we have to bear the cross store full allowance reduction. We have no excess profits to participate." Mr. Zou, a beauty shop owner with 14 years of experience in Taobao, told the Beijing business daily.
What makes some small and medium-sized businesses afraid of the "6.18" promotion is simply the small profit space. "Usually, many products are special clearance prices or member discounts." Mr. Zou explained that the "6.18" cross store full reduction allowance will make the transaction price of individual products of participating businesses lower than the promotion price of the event. In addition to the operation, logistics and other costs, "there is no profit at all".
As of press time, Alibaba has not given a reply on who will pay for the preferential part of the goods during the "June 18" period.
In addition, Taobao also launched a "price protection system" this year. If you want to make up for the full reduction of losses, you must increase the unit price of store products one month in advance to meet the conditions of "one key price protection" in the later period. The price trend shows that, taking a certain water emulsion set in Winona's official flagship store as an example, the price of the water emulsion was 160 yuan at the time of pre-sale on May 26. Four days before the pre-sale, the price of the commodity was adjusted from 183 yuan to 494 yuan. Such price increase will not only affect the sales volume of the previous month, but also lose their reputation because of the "price increase before price reduction". Most businesses do not dare to ease the tension caused by the promotion by raising prices and then lowering prices.
In addition, the idea of "using discount money to make money from other goods" seems to be unworkable. The reporter of Beijing business daily learned from an insider in charge of brand business that the platform also stipulates that if businesses sign up to participate in "6 · 18", they must participate in the full discount for all goods in the store, without exception. According to the marketing practice, when the store arranges the product structure of the promotion activities, it will generally let the new products be sold at the positive price. However, the regulation of "full reduction of the whole store's product participation" undoubtedly makes the merchants no longer "pick and choose".
Exchange price for flow
It is better to say that the full reduction and cross store full reduction promoted by the platform is to exchange the price for traffic rather than to reduce the price by borrowing the hands of merchants. Even at the moment when the traffic bonus is at its peak, traffic is still an important magic weapon for the platform to retain "6.18" small and medium-sized businesses. Mr. Zhang, the principal of an independent clothing brand on Taobao, said: "traffic is hard won. We value exposure."
For the vast majority of small and medium-sized businesses in the rising period of development, traffic is the primary resource to open the market.
Businesses are eager for more traffic, while the platform suffers from more and more competitors sharing traffic, which has become a climate. "This year, Taobao and tmall are facing a lot of traffic pressure." The person in charge of a brand's live channel told the reporter of Beijing Business Daily that the live broadcast pattern has changed since June 18 this year. With the rise of jd.com, Tiktok and other platforms, the traffic of tmall Taobao platform has been divided.
Mr. Zhang told the Beijing Business Daily that there are almost 1-2 activities on Taobao platform every month, with different intensity. In order to compete for traffic, "e-commerce Festivals" and "category days" emerge one after another. In recent years, consumers have long been desensitized to the price after the live broadcast of the anchor and frequent platform activities, and their expectations of "6.18" are getting worse year by year.
In addition, the promotion time is gradually lengthening. Stores that do not participate in the "6.18" may face the possibility of declining popularity in the next month. According to the investment promotion rules released by Taobao, Taobao will tilt the flow of businesses participating in the "6.18" event, including opening the screen, focus map, guess what you like, etc. Businesses that did not participate in the "6 · 18" will naturally be excluded from the relevant traffic inclination.
Ms. Yao, who is responsible for the live broadcast of FMCG brands, told the Beijing Business Daily that in the past, brands only needed to be publicized at the three time nodes of warm-up, full payment and sprint period. However, as "6 · 18" is divided into more and more details, the brand must be well planned at each stage. "Commodities follow activities. If we don't cooperate well with the platform, it will be difficult to recover the costs we paid before."
When a reporter from the Beijing business daily saw a beauty shop owner interacting with fans on the microblog platform, he mentioned: "if you participate in the '6.18' event, you will lose money. If you don't participate in this month's traffic, it won't go up."
Get rid of single channel
In fact, the most important breakthrough for e-commerce to expand consumer value is to retain users and tap the possibility of stock market, and it is also the main starting point for small and medium-sized businesses.
"Since 2015, the store has started to establish a membership mechanism." Many members know Mr. Zou's Taobao store through microblogging and other platforms. Mr. Zou said that on the one hand, the store membership mechanism is to avoid brand price control and enable fans to buy goods at lower prices. On the other hand, it is to cultivate fans' loyalty and improve the repurchase rate.
As businesses' expectations of the platform and promotion have decreased, the reporter of Beijing Business Daily found that more and more small and medium-sized business owners have opened social accounts on platforms such as station B, Weibo, xiaohongshu and Tiktok, actively seeking some private domain traffic outside the station, and seeking transformation by accumulating popularity.
Mr. Zhang told the Beijing Business Daily that although his current main operation is on the Taobao platform, he has started shooting promotional videos on platforms such as Tiktok, xiaohongshu and wechat video numbers, and has actively opened fan groups on platforms such as Taobao and wechat. More and more small and medium-sized businesses choose to lay out the marketing matrix of private platforms, hoping to make up for the traffic limitations of a single platform by means of multiple platforms.
Mr. Zhang is optimistic about the transformation of private traffic. "From the current situation, the sales of 'June 18' account for about one fifth of the whole month, which is not insurmountable.". He believes that if the traffic of the private platform can be maintained and services can be provided, the sales volume of self built stores will not be lower than the sales proportion of "June 18" in the whole month, or even higher.
"The next step is to find a balance between public and private traffic as soon as possible. This will be an opportunity for us to break through." Mr. Zhang said.
Beijing Business Daily reporter zhaobaoping Intern qiaoxinyi