Traffic is business.
Produced| Forefront of entrepreneurship< /span>
Author | Rickzhang
Edit| Total Egg
On the evening of October 10, a merchant named “Changhong Kitchen Appliance Flagship Store” on a large e-commerce platform released a sensational announcement.
According to the information, on October 8th, an electric kettle in this flagship store was sold more than 200,000 orders in a very short time. Almost every order was 7.9 yuan, which was far below the cost. At the price of 2.9 yuan, there is even an unimaginable amount of 2.9 yuan. Therefore, the store owner said that the event caused huge losses to the company and faced bankruptcy, begging consumers for refunds.
(Picture/Network)
After the news was sent, it is said that more than 30,000 consumers have chosen to refund, and many consumers are waiting for the follow-up situation before making a decision.
But what made the media feel “unusual” about this incident was that the distributor said something intriguing in the announcement. At the beginning of the announcement, it was pointed out that “this activity was maliciously deceived”, which caused such a huge loss, and the case has been reported to the public security organs, and the investigation result is awaited.
Interestingly, although the e-commerce platform has now intervened in the subsequent refund processing process, in the circle of e-commerce practitioners, everyone’s attention is no longer the event itself, but what the dealer has experienced behind it .
“It now appears that it is very likely that this distributor has chosen an unconventional hot search method on the e-commerce platform.formula. “Li Zhen, the person in charge of an e-commerce traffic operation agency, told the “frontline of entrepreneurship” that he thinks this dealer has found a traffic operation service provider to help design the entire promotion, but the result is “either the other party is not professional, or it is They have ulterior motives, in short, they have fallen into the hole.”
In the eyes of Li Zhen, this home appliance business traffic operation organization is very unprofessional, and it uses methods that were not on the table three years ago.
“This method of repurchasing orders at a low price will no longer be the mainstream of the industry after 2018.” Li Zhen believes that the current truly valuable e-commerce traffic operation company is more about finding ways Understand the relevant rules and algorithms behind the platform, and use the combination of various marketing tools to help Party A improve its ability to obtain traffic on the e-commerce platform.
After all, traffic is business.
1,The gameplay has long changed
In 2005, Taobao’s turnover surpassed 8 billion yuan, surpassing eBay eBay, Yahoo Japan, and Wal-Mart to become Asia’s largest online shopping platform.
That was seen as the beginning of a new era of e-commerce.
Subsequently, the size of China’s e-commerce seller groups has been expanding. By 2019, the number of e-commerce practitioners has exceeded 50 million, and the market transaction scale is nearly 37 trillion.
However, although the scale of transactions has gone up, the number of e-commerce sellers’ stores shows a strange balance on various platforms.
For example, Taobao, the number of sellers has been between 10.5-11 million since 2019.
This reveals an interesting phenomenon: No matter how fierce the competition among e-commerce platforms such as JD.com, Taobao, Tmall, and Pinduoduo are, the number of online businesses has been showing a steady trend.
The reason is simple. After all, since the e-commerce market peaked in 2017, more and more e-commerce platforms have realized that not only must they continue to find ways to expand new traffic sources, but also to stabilize the merchants on existing platforms.
The key is that the annual growth of user traffic on various e-commerce platforms has gradually tended to a very stable situation. In this case, the unlimited expansion of the number of businesses can only bring about vicious competition.
Together with the evolution brought about by competition and market development, the merchants remaining on the final platform become more and more rational and concentrated.
Of course, this kind of market monopoly and centralization will inevitably bring about platformsImprovement of relevant rules and management mechanisms. The increasingly mature and complete e-commerce platform “play” has gradually developed the operation of e-commerce sellers into a specialized field.
It’s all because the current e-commerce sellers are pursuing a traffic business.
Looking back in 2007, Taobao reached its first development peak, accounting for nearly 90% of the national e-commerce market that year. At that time, all sellers were in a stage of brutal development. The product search and related SEO optimization provided by Taobao itself could bring a lot of traffic and income to sellers.
(Picture/Photograph.com, based on VRF protocol)
“In 2011, platform search optimization is still the core technology of many e-commerce traffic operators.” On The Sea Family< /a> Zhang Shuchen, the boss of the veteran Tmall operating company, believes that at that time, it was only because all the consumer needs were relatively general, and the consumer’s idea was relatively simple. Segmentation to trigger consumer interest in buying.”
In his opinion, it was a good time to use platform rules to make money. “year 2011,Our customers spend an average of 30,000 to 50,000 advertising fees a month, but we don’t actually buy ads on the platform. Most of them use search optimization to help them achieve similar results. “
“2011-2012 is a watershed in the development of e-commerce operations,” Zhang Shuchen told the “frontline of entrepreneurship” that an important reason is that the agglomeration of merchants and users has caused the rapid explosion of users and merchants on platforms such as Taobao and JD. , And the linear search results in the past have prevented many businesses from seeing the hope of their products being selected.
“Because there are too many sellers of the same product, an ordinary seller may turn dozens or hundreds of pages and cannot be found by buyers.” Zhang Shuchen said.
Another reason is that the emergence of the mobile Internet has brought different competition spaces between platforms. “Especially after Zhang Yong became the general manager of Taobao’s large division, he clearly saw the advantages brought by the mobile Internet.”
Zhang Shuchen believes that what Jack Ma brings to Taobao is the idea of rising, and what Zhang Yong brings to Taobao is the future of development. “From 2011 to 2012, when all e-commerce platform PC traffic gradually peaked, whoever can get traffic on the mobile terminal will get the dividends for future development.”
Zhang Yong succeeded, which means that the operation of the entire e-commerce platform will undergo some fundamental changes. After all, in the mobile Taobao, search is no longer the main product to obtain information.
Since the development of e-commerce operation strategies, various merchant advertising methods with mobile Internet as the core, such as bans, live broadcasts, group purchases, hot searches, etc., are the conversion traffic that the entire e-commerce platform can provide to all merchants. channel.
On the one hand, this gives sellers more choices for promotion, on the other hand, it also forces sellers to increase their operating costs. “If the seller does not have traffic, there can be no business to do, then the relevant investment must be.”
Industry insiders revealed to the “Forefront of Entrepreneurship” that 30% of the cost of an e-commerce platform for a crown-level women’s clothing store is the cost of goods, 30% of the cost is marketing costs, and the cost of personnel and office is 12%. This is normal operation. result. However, if you encounter big promotions like “Double 11” and “618”, additional investment is required.
According to the statements made by relevant Taobao executives in public reports, it can be seen that 30,000 to 40,000 sellers are still flooding into Taobao every day in 2019.Bao Chuang industry, but it is increasingly difficult for new sellers to emerge from these e-commerce platforms.
It is no exaggeration to say that e-commerce platforms with Taobao, Tmall, JD, and Pinduoduo as the core have become the main battlefield of the traffic war. Every seller who enters the market, without exception, does not pay a lot of skill, from the solidified flow of the platform In the amount of , To obtain the maximum range of flow that you can absorb.
After all, there are too many users and too many sellers. If you do not get traffic, you cannot have business on the e-commerce platform.
2,Three stages of e-commerce agency operation development
“Now almost all e-commerce seller service companies, their core business is actually the optimization of e-commerce platform traffic,” Li Zhen said to the “frontline of entrepreneurship” , “In fact, this industry started from e-commerce agency operations.”
From the rise of Taobao in 2005 to the e-commerce war that started in 2008, all Chinese companies have been successfully educated and a large number of companies have the idea of ”opening online stores”.
However, on the one hand, companies do not understand the operation of online stores, and on the other hand, this demand is very strong. This makes the e-commerce agency operation industry emerge closely with the rise of e-commerce platforms.
In the domestic agency operation market, the most experienced Company Treasure was established in 2007. One year later, it was foundBaoshang has been launched in the city, and the e-commerce ecology has been continuously improved, which provides the soil for the development of e-commerce agency operations.
In the early days, the agency operating company only provided services around the opening and operation of online stores. However, in the process of development, many “players” in the industry have discovered that in addition to the daily needs of maintaining online store operations, companies are more hoping to increase e-commerce revenue through their services.
“The rise of hand-shopping and the emergence of’Double 11′ and ‘618’ have thoroughly demonstrated such a trend in front of the entire industry.” Li Zhen said that these demands were first generated after overseas brands entered China because of these Overseas brands don’t understand the Chinese market, so while they are seeking partners for online store operations, they also require these partners to have the ability to do branding and marketing on e-commerce platforms.
Nowadays, the services provided by online store operators for brands have been very comprehensive, not limited to the management of online shops, but also covering marketing and promotion, store operations, warehousing logistics, online distribution and other aspects.
(Picture/Photograph, based on VRF protocol)
From the perspective of e-commerce platform marketing and promotion, the enterprises operated by e-commerce agents have gone through three different stages of development.
The first stage is the search optimization stage. “Before 2011, the marketing optimization of e-commerce agency operations was very simple and rude. It was to find ways to achieve product reachability in e-commerce platform search through SEO.” Zhang Shuchen told the “frontline of entrepreneurship”, “That Money was goodEarn, the number of businesses in the industry is limited, and you can get ahead with a few simple optimizations. “
The second stage is the list stage. From 2012 to 2017, more and more e-commerce sellers joined the platform. “When searching, a product will show tens of thousands or even hundreds of thousands of results. Simple SEO alone cannot reach the e-commerce platform. The marketing purpose that the seller needs.” Zhang Shuchen said.
At this time, the ideas and concepts of traffic gradually emerged in the e-commerce seller group. Everyone thinks that traffic is very important, but “how to get traffic” is a test of the wisdom of the agency operating service company.
Of course, the platform has also made many innovations in order to solve the “traffic hunger” of all sellers. Alimama, a Taobao traffic collection platform and sales platform covering the entire network, was established during this period.
“The emergence of these platforms, on the one hand, has allowed e-commerce sellers to obtain traffic sources beyond the e-commerce platform’s own traffic; on the other hand, it has also virtually increased e-commerce sellers and agency operators’ The core of the gameplay is the list.” Zhang Shuchen said.
He revealed to the “Forefront of Entrepreneurship” that before 2017, as long as e-commerce sellers can enter the classified sales rankings on various e-commerce platforms, at least 48 to 72 hours will drive sales. The geometric number is increasing.
Therefore, at this time, the general agency service provider will choose a fixed time to help e-commerce sellers sell a batch of products at a very low price, and seize the position of the rankings. Then, through the extension effect brought by the subsequent hot sales, the sales of high value-added products can be used to make up for the previous shortfall and obtain profit.
“Since then, the number of orders has become the norm for many e-commerce sellers.” After all, the logic of playing the list is very similar to the discounted products in supermarkets. However, behind this behavior must be supported by high-value-added products, and the losses in the early stage of the guidance products must be compensated by subsequent sales.
Returning to the Changhong agent’s “vomiting blood for a refund” incident, all of its products were not high value-added. “He only performed the previous period of price reduction, but there is no plan to make up for it later.” Zhang Shuchen said that he thinks this may also be the core reason why the e-commerce agency operation service company thinks this dealer has fallen into a pit after the Changhong incident.
In fact, after Taobao began to rectify the “swipe amount” in 2018, almost all e-commerce platforms have imposed large-scale restrictions on the use of rule loopholes to grab the hot list.
Therefore, we are currently entering the third development stage of e-commerce agency operations-compliance operations. On behalf of operators, it is more important to find ways to choose from the tools provided by the platform and use The allowed rules are combined, and data analysis methods are used to build models to help e-commerce sellersAchieve your own sales goals.
“Now, I call it the 3.0 era of e-commerce operations.” Zhang Shuchen believes that some generation companies have not yet figured out the laws of the market and are still using the methods three years ago to do business. The cause of the problem.
And whoever can better adapt to the current laws of development of the platform, who can take the lead.
3,New traffic business brought by live broadcast
Entering 2020, the marketing development law of e-commerce platforms has undergone new changes.
Li Zhen told the “Forefront of Entrepreneurship” that companies currently serving e-commerce sellers have expanded into service areas centered on live broadcasting. “Because each platform has already thought very clearly, using the live shopping of shopping to bring goods, each platform can perform a second upgrade to the existing consumers.”
He believes that for merchants, the increase in customer acquisition costs in the e-commerce field makes these sellers willing to privatize customer assets, so as to tap the value of each customer. “As Meituan Wang Xing said, at the moment when the demographic dividend disappears, the number of users cannot double again, but the value that users can create is far more than doubled.”
Of course, this is not only the idea of e-commerce sellers, but also the business philosophy of current e-commerce platforms.
“Traffic itself has no purpose, so we pay attention to what commercial value we can create for them after the traffic finally becomes a consumer. If there is no commercial value, it is completely recreational and entertainment. This is actually not the value for us It’s too big.” In an interview with the media in June, Taobao’s director Yu Feng expressed his views on the traffic of the live broadcast itself.
He believes that traffic must become consumers in business scenarios, which is an important factor in business operating systems. Traffic that does not have this capability is not of high value to the “commercial field”.
“Going back to the business itself, Taobao Live’s guide to store entry rate and product opening rate is 60%. No advertising or other platforms, channels, or marketing methods can achieve this ability. This is Taobao Live. Business value.” He said.
And this has also become the operating consensus of platforms such as Taobao, Tmall, and JD.com.
Therefore, since the live broadcast on Double 11 last year, almost all e-commerce sellers on the platform are upgrading their stores to live broadcast rooms.”Live broadcasting has become the standard for store operations on various e-commerce platforms. This is a very big trend we see.”
(Picture/Photograph, based on VRF protocol)
Taobao data shows that 70% of Taobao live broadcasts are self-broadcast by merchants, and 30% are live broadcasts by masters. Therefore, now How to help help e-commerce sellers do a live broadcast, and use the live broadcast to attract visitors and obtain private domains The purpose of traffic is the new topic most concerned about by agency operators and e-commerce service companies.
“Live broadcast is completely different from the previous marketing strategies of e-commerce platforms.” Li Zhen believes that live broadcast on e-commerce platforms is similar to DouyinKaishou is a world of difference between these short video platforms for live broadcasting. “The purpose of e-commerce sellers for live broadcasting is very clear, which is to sell goods. But live broadcasting itself cannot sell goods. But to achieve this goal through the design of live broadcast.”
In his opinion, capable agency operation and service companies will help e-commerce sellers first establish their own brands through live broadcasts on e-commerce platforms, and then guide consumers to pay attention to the products in their stores, and ultimately promote conversion and Sales.
“This logic can’t be wrong.” Li Zhen emphasized.
Because if you don’t pressAccording to this logic, what the merchant leaves to consumers is only a product introduction. Among the massive product information on the e-commerce platform, the influence and attractiveness for consumers are not enough to make them stay on this page and make a purchase.
“Now the most powerful service companies are even acquiring live broadcast teams and MCN agencies.” Li Zhen told the “Frontline of Entrepreneurship” that in the past, those who used to put ads or operate stores to enter Luggage The functions that can be achieved by repairing the design now require a very large team to solve.
“This is a sign of the specialization of social division of labor.” He said.
After all, the current e-commerce business is built on the basis of traffic. If you can’t win in this traffic battle, then the e-commerce sellers may die and the company will go bankrupt.
*The title picture in the article comes from: Photograph.com, based on the VRF protocol.