My starting point is relatively simple, and I want to talk about the most basic business common sense to talk about whether the Chinese live shopping model will be directly transferred to TikTok, and there will be a situation of being inadaptability.

Step1: media analysis

According to the correct steps to analyze the problem, we should do media analysis as the first step, because the end of the media is the consumer, and the “circle” of the consumer directly determines which products to provide “the right medicine”.

Why is the first step in doing business not to find products, but to analyze medias, I have carefully analyzed this issue. Since this issue is very important, I will repeat it here. For example, a coat produced in the same factory costs the same, but it is several times more expensive in a shopping mall than in a flea market, because the product has not changed. The differences in the consumer groups corresponding to the medias have caused the final price of the product to be several times different.

The media here is an Internet media platform like TikTok, so let’s analyze the characteristics of this short video media:

A: Goods looking for people VS people looking for goods: Amazon’s platform for searching e-commerce is a model of “people looking for goods”. Since the demand is clear, the conversion rate is higher than that of goods looking for people. The reason why TikTok’s “goods looking for people” model that feeds information is called interest e-commerce, because users do not have clear needs, but the products they see at a certain moment arouse the desire to buy, and finally reach a deal. So the conversion rate is definitely not as high as search e-commerce.

B: TikTok is a model of finding people for goods, and products need to have the following characteristics: 1. Low value of goods can easily lead to impulsive consumption of consumers; 2. Products must have the characteristics of daily consumables with high repurchase rate, such as tissue cleaning Grain and oil and other products; 3. Large discounts on well-known brands, such as big-name cosmetics and well-known beverage brands. 4. New and exotic products with obvious differentiation or unpopular product application scenarios.

C: TikTok’s model of finding people for goods requires a strong traffic base and strong endorsement requirements. Due to the low conversion rate of the goods-to-people model, the live shopping mode of TikTok requires a particularly wide traffic and low seat in order to have considerable sales. Therefore, the video delivery model is a special head business. Due to the strong exposure effect of head agencies, everyone thinks that live shopping make money. In fact, only the top anchors make money, and it is not easy for anchors at the middle waist and below to actually make money. At the same time, the transaction needs to have a sense of trust. Therefore, the more well-known institutional users have lower trust costs, and the easier it is to make transactions. Therefore, it is not just a product video that can explode the order. We see many anchors who set up people, and at the same time deeply cultivate a vertical Categories are building consumer trust. (Note: Live streaming is a particularly heady business, but the production of good content has a long tail.)

Step 2: Basic Elements of the Business

After we have analyzed the characteristics of the media like TikTok, let’s think about what elements are needed for a business to succeed.

There are at least 4 basic elements of business. Information flow, logistics, cash flow and talent flow. I believe that the team that wants to do tiktok must still have talent flow and cash flow reserves. We want to focus on the analysis of information flow and logistics. In my opinion, these two elements are exactly the two sides of TikTok’s e-commerce.

Advantages: Based on TikTok’s huge user base in markets, TikTok is a particularly good information flow platform, and it is also what we often call traffic. Note that traffic is actually information. As long as your product can be seen by users in need, there will be a chance to make a deal. In my opinion, measured by the competition threshold of most products, whether it can be seen by consumers or customers is actually much more important than the processing level of the factory , because most factories have similar production levels and costs.

Disadvantages: Logistics has always been a shortcoming of cross-border e-commerce, especially in the current epidemic. The “expensiveness and slowness” of cross-border logistics is the biggest shortcoming that restricts the user experience of cross-border e-commerce.

Step 3: Judgment criteria for whether a business model is established

There are two criteria for judging the success of a business model: cost reduction and efficiency enhancement + shopping experience. There are actually three criteria for splitting it down.

A: Has it improved the user’s shopping experience?

B: Whether the transaction efficiency of the commodity circulation link has been improved.

C: Whether the transaction cost of the transaction link has been reduced.

In my opinion, the video mode of TikTok’s interest e-commerce conforms to these three standards. The video + manual explanation method can better display the selling point of the product, and the video can convey more information than the picture and text, so the shopping experience must be is raised. As for reducing costs and increasing efficiency, the use of the Internet is definitely better than the search for e-commerce in supermarkets or platforms. I don’t need to talk about supermarkets. I will focus on why the video mode of TikTok is better than that of search e-commerce. Better to reduce costs and increase efficiency. The reasons are as follows:

Compared with the location of search e-commerce (product ranking), the competitive landscape of TikTok’s multi-centralized traffic distribution model has a longer tail.

The logic of searching for e-commerce is very similar to the “location” logic of offline business. Location determines everything! Many sellers in the same category are going to grab several core positions on the homepage. The higher the ranking, the more traffic. If the ranking falls out of the top three pages, it is basically long-tail traffic, and mobile shopping on mobile phones is intensifying this competition, because the screen is smaller, the number of products that can be displayed on the first few screens is much less than that of the computer, and the search e-commerce has a strong first-mover advantage. After the old sellers occupy a favorable position, with the accumulation of transaction data, there will be more and more competitive advantage, the entry of new sellers will be particularly difficult, and the characteristics of the solidification of the competitive landscape are obvious.

TikTok’s model of popular content out of the circle + content with products has two characteristics. First, the product is subordinate to the content, so as long as the content can explode, there will be traffic, and there will be no solidification of the competitive landscape of search e-commerce. Second: The popularity of the content is out of the circle, there will not be a situation where a seller monopolizes good content, so the market resource allocation is longer than the search for e-commerce, and new products are easier to stand out.

Finally, let’s make a summary:

1. TikTok e-commerce is definitely a good business model.

2. However, the current TikTok e-commerce is not easy to do for TOC retail due to the limitation of cross-border logistics.

3. TikTok e-commerce is a model in which products are attached to content. The advantage is that the competitive landscape is relatively long tail. It is easier for new sellers to break the game than search e-commerce, but it requires high content production capacity. You can’t just post a few videos and you’ll be able to hit the list. You have to be prepared to nurture your video account for a long time.

4. It is a better way to cooperate with influencer. The other party is responsible for the content output, and the factory is responsible for the supply chain, so the success rate will be higher. If the influencer has a stable number of orders, adopts the TikTok overseas warehouse model, and improves the logistics and distribution timeliness, then the shopping experience will be taken to a new level.