From the Underlying Logic of Social E-Commerce, Analyze the Trend of ECommerce

PINDUODUO, the energy of social e-commerce has once again become the focus of media analysis. In the second half of the Internet, we need to first clarify the fundamental logic of social e-commerce, the applicability of the underlying logic. Based on this, the development potential of social e-commerce is analyzed.

According to the "2018 China Social E-Commerce Industry Development Report" released in July this year:

In 2018, the size of the social e-commerce market is expected to reach 1,117.778 billion yuan, an increase of 66.73% compared with 2017; the scale of practitioners is expected to reach 30.226 million, with a growth rate of 50.22%.

According to the statistics of the Ministry of Commerce:

In 2020, China's online retail market is expected to be 9.6 trillion yuan.

The "Report" estimates that the social e-commerce market will reach 3 trillion yuan, accounting for 31.3% of online retail transactions.

1. What is social e-commerce?
The main models of Chinese social e-commerce are mainly divided into three categories, namely product content, social chain, and personal head effect:

Social content e-commerce: Through the social tools with large traffic (such as: online live broadcast, Weibo, public number, etc.) to create product content, attract consumers to buy products, representative products have small red books (outside shopping Experience sharing combined with e-commerce mall development), gift said (to select gifts as the core of content creation for the mall to build), Taobao live broadcast (the store manager through the live trial live broadcast, to provide consumers with content reference and stimulate purchase).
Social sharing e-commerce: User sharing through social tools (such as WeChat, qq, Weibo, etc.), using social relationships to spread, so that communicators can get incentives in the communication chain, representative products have a lot of competition (through low The price of the group purchase method), Mushroom Street (by sharing the "trend" created by the head editor to spread the goods).
Social retail e-commerce: set up an online mall through the integration of merchants in the supply chain, through personal recruitment and promotion, so that each communication node can make the platform and promoters get the most benefit, representative products have onion OMALL (small shopkeeper through social Circle sales, the platform is delivered online).
With the gradual saturation of traditional Chinese e-commerce, social e-commerce has used the demographic dividend to harvest another wave. Critics are mixed. Some people think that the scale of social e-commerce will continue to grow rapidly and have unlimited scenery. Some people think that it is not a long-term to rely on "acquaintances to kill", and there is no trace after harvesting dividends. We can't draw conclusions about this model. Let's first look at the underlying logic of the rise of social e-commerce.

2. break the back and redefine the underlying logic of social e-commerce
"Broken": Seeing social e-commerce from multiple angles
Let's think about the characteristics of the more popular products recently. Netease Jung test, more listings, 88VIP membership, amazing depth of live broadcast, etc., all brushed the screen of the circle of friends, which seems to be a means of social e-commerce The effects are very similar and can be summarized in one sentence:

Each participant has a special social ID in these products. This social ID marks and defines us and compares or links with other nodes. In the process, we gain a sense of presence or incentive. To achieve the expansion of the boundaries of social circles.

"Standup": The underlying logic of social e-commerce lies in the interaction of specific scenes based on human nature.
From the perspective of insight, social e-commerce has not only been an electronic mall that spreads through social platforms (acquaintance economy + trust economy), but has derived a concept - a specific scene based on interpersonal relationships, human psychology insights. Interaction, and gradually developed into a low-level architecture, the essence of this architecture is based on the social scene of human psychology.

This underlying social scene logic can also be called "social e-commerce", "social retail", "social mobile games", etc., but the industry leaders have come to establish a benchmark for the industry and facilitate discussion. The core of the social scene logic I think can be summarized in one word - tonality.

Numerous classic cases emphasize a tonality: MUJI and Uniqlo are hot because price and quality are extremely competitive. I don't think it is necessary, but it will certainly convey the minimalist tonality of Europe and America. The rise of smart hotels such as Netease Adora is that the quality of service exceeds the price of a star hotel, not necessarily, but it is sure to pass on the idea of ​​pursuing fashion and fancy quality. This is enough.

And the NetEase Jung test can really reflect a person's personality and internality. Not necessarily, most people are not interested in the test content outside of themselves, but they will be able to highlight the user's pursuit of hotspots and Netease's literary atmosphere. enough!

3. what is the logic of PINDUODUO?
In the fierce competition of online merchants, Jingdong's 3C, Taobao's omnipotent, Vipshop's special sale... Every home appliance dealer has its own path, and the fight is much more through the C2M mode of small profits but quick turnover, cut into daily use, The department store market, etc., has become a supplement to the industry, filling the gaps in Taobao.

A lot of mechanisms include: power-assisting, punching, splitting, spelling, and bargaining. The essence of these is the game mechanic. This fast and effective traffic spread is just amplifying the advantages of this C2M model. For example, Xinrou Paper Co., Ltd., after a lot of investigations, has developed a “28 pack” marketing plan for Kexin.

Because the user group is sensitive to the large quantity and practicability, it can be used as a selling point for the "28 packs of one box, there are big and small" on the platform, and put different kinds of paper towels together for sale, to cater to consumers. Buy a single and take a variety of psychology.

This explosive paper towel costs 29.9 yuan, the average price per paper towel is 1.067 yuan. The fight provides a cost analysis for the interface journalists: the express logistics cost per pack of paper towels is 0.125 yuan/bag, the production cost is 0.91 yuan/bag, and the net profit is 3.2 cents.

That is to say, the specification of 29.9 yuan 28 packs, the profit per order is 9 cents. However, in the tens of millions of sales, this C2M advantage is very obvious. For the traditional enterprises that are dying, it is undoubtedly a "life-saving medicine that does not talk about side effects". It is a very competitive one for many platforms. Entering the enterprise, the consumer has met the demand for low-cost, high-quality and cost-effective, and even filled with "surprise."

4. how does the second half of the Internet force?
After the concept of the underlying architecture social scene, the second half of the Internet e-commerce will return to the essence of social-trust logic.

(1) The differentiated positioning of the e-commerce platform is derived from the trust advantages accumulated by the platform in the past. For example, the 3C products bought in Jingdong, users do not bother to consider whether he is fake or not, whether the logistics is fast and safe; Xiaomi has products, users do not have to work hard to compare prices; in Suning Tesco do not have to worry about the price is so low, quality is not a bad problem.

In the future, the characteristics and trust costs of each major e-commerce platform will be further amplified.

(2) After the micro-business and P2P cut a large wave of leeks, the cost of making decisions by the platform and ordinary people gradually increased after the disclosure of China-Limited information. Information security and information costs have become the core concerns of the market, relying on the traditional central enterprises. The storage, use, and maintenance of all information may have become a thing of the past. There are new influees in the market to provide new ways, services, and technologies to reduce information security costs and improve risk management.

(3) For products other than e-commerce, the use of social underlying logic still plays a large role.

Observing the trends of major domestic manufacturers, we can find a very interesting trend: the design trend of “feminization” is obvious, including exploring the design that emphasizes feminine feelings, and the Yin and Yang divisions go further in the exquisite style and pleasure experience.

Even if it’s not a clear female-to-game, there are quite a few designs that appeal to female players—social and refined, and thus improve the public, including eating chicken, king glory, etc. The reason behind this is to improve the underlying social logic. The level of trust, in this product that emphasizes socializing between men and women, does not take women's feelings as a design factor, but only causes the loss of female players and thus exacerbates the imbalance between men and women, resulting in the consequences of bad money expelling good money.

With regard to the second half of the underlying design, the extension products with blockchain socialization as the core have broad prospects for development (just to solve social trust and traceability problems).

Take social e-commerce as an example: in an environment where product competition is fierce and business boundaries are gradually blurred, more vertical e-commerce will be well developed. The so-called vertical refers to commercial products with high quality requirements and high information security costs. For example, agricultural products, Haitao, and luxury goods all require higher logistics levels and information costs.

The blockchain can mark the user's every operation with time, and each operation is recorded on each user's distributed ledger, and the information cannot be tampered with. It effectively circumvents the dissemination of false information, and can trace the source of the information to the source of the information according to the propagation record of the information, so as to find the propagation node of the false information.