There is a kind of anxiety called "the traffic bonus is going to disappear"

Does this kind of anxiety exist in the food and beverage industry? You can look at two news first: a bad news: the purchase has actually become less. According to the report of Kantar Worldpanel, in 2018, the sales of the food industry increased by 4.7%, and the sales of the beverage industry increased slightly by 1.5%, both of which were lower than the overall growth rate of the FMCG industry of 5.2%. Driven by the growth of , the frequency of purchases and the volume of single purchases have both declined. [1]

The good news: Online shopping still helps growth. In 2016, when the concept of new retail was first proposed, innovations in offline channels emerged one after another. New formats such as unmanned retail and fresh food retail have experienced ups and downs several times, and their performance remains to be seen. In terms of online channels, Kantar data shows that online shopping has a more obvious driving effect on the growth of the food and beverage market in 2018, contributing 73% to the growth in value, and there is still a lot of room for growth in the online e-commerce market. [2]

 

 

 

　　

However, if the food and beverage industry relies on online channels, will it be able to guarantee growth? The dilemma is that the traffic bonus of online channels is disappearing. QuestMobile data shows that in the first quarter of 2019, the MAU (number of monthly active users) of the mobile Internet increased by only 7.62 million, and the year-on-year growth rate fell below 4% for the first time. [3] One of the most important indicators of online channels: the growth rate of traffic is slowing down.
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For a time, the voice of "the era of traffic bonus is coming to an end" was everywhere. However, there is nothing new in the world. In 2003, when the online platform e-commerce represented by Taobao rose, offline stores were shouting the end of "traffic bonus"; when shopping centers rose in the 1990s, department stores were shouting "traffic bonus" "The end of...the traffic bonus is really over? Or, just moved to the next new channel?

 

 

 

 

 

 

　　

In 2012, Ma Yun and Wang Jianlin made a 100 million bet in public: see if e-commerce can account for more than 50% of China's retail industry in 10 years. Just 4 years later, Jack Ma proposed "New Retail". The game is no longer a battle between "Taobao" and "physical stores", but returns to the essence of retail: "people-goods-market". In the traditional retail transaction chain, "goods"→"market"→"people" is the mainstream. Merchants deliver "goods" and through channels, that is, "markets" where goods are sold, try to distribute goods with the largest number of contacts, so as to The "person" who purchased this contact. When the material was not so abundant, having "goods" meant having sales; later, the competition became fierce, and the "market" became the core, and only by striving for a good position could we win.
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With the development of the mobile Internet, consumers can shop at any time and in any scene. It is no longer meaningful to emphasize the competition between channels (including online and offline channels), so "people", that is, consumers, became the most crucial factor. The growth of new retail is to understand and meet the needs of consumers through data, and to create an undifferentiated shopping experience for consumers through online and offline collaboration.

 

 

 

　　

Therefore, the "new" of new retail is essentially the reconstruction of "people-goods-field". The retail transaction chain has changed from "goods" → "field" → "people" to "people" → "goods" → "field". Correspondingly, for channels, the rules on the "field" have also become "people". On the one hand, this is reflected in: the initiative of consumers has become higher. In the era of offline supermarkets, brands use shelves and materials to convey the information of "goods" to "people" in one direction; in the era of platform e-commerce, consumers begin to read reviews to understand products; after the emergence of social e-commerce, consumers' The initiative has been greatly improved, and interactive methods with obvious social characteristics such as selfie, sharing, complaints, and recommendations have been added to the purchase behavior, which has subverted the brand's previous method of communication and marketing based on "goods" and improved the shopping experience. On the other hand, the channel has also changed from "like flocking together" to "dividing people into groups". Whether it’s Pinduoduo’s teamwork, Yunji’s distribution, or Douyin’s content community, the underlying logic behind it is: “people gather people together”. Fission is produced under this logic. Compared with the traditional platform e-commerce where traffic is allocated by a center through algorithms, the "decentralized" innovative model of social e-commerce has improved the efficiency and cost of traffic drainage. Under the general trend of new retail, social e-commerce focuses on "people" and captures the essence of the retail model: consumers have a better shopping experience, and online merchants are more efficient and low-cost in the key "drainage" . This new channel, of course, has risen.

2. Obtaining new growth is the essence of the birth of each "new channel"
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Time goes back to before 2015, when platform e-commerce was in its prime: the dilemma of traffic dividends has not yet appeared, and platform e-commerce has not yet been called "traditional e-commerce". Taobao, Tmall, and JD.com are regarded as different from "traditional offline channels", using new retail models to create new shopping scenarios and gain new growth channels. In just three years, online retail has experienced the gradual disappearance of traffic dividends. According to the data of "China E-Commerce Report", the year-on-year growth rate of China's e-commerce transaction volume has begun to decline from 36.5% in 2015: 25.5% in 2016, 11.7% in 2017, and 8.5% in 2018. Growth has slowed down year after year at this rate. [4]
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Also in the past three years, online retail has witnessed the gradual rise of social e-commerce. In 2015, Pinduoduo and Yunji were born. In 2018, Pinduoduo, which started as a "group fight", went public. Founded less than 3 years ago, the market value is close to half that of JD.com. In 2019, Yunji, which took the "distribution" route, went public. It was established 4 years ago, and its GMV (gross turnover) reached 20 billion, a growth rate much higher than offline and traditional e-commerce channels. [5]

 

 

 

　　

The "2018 China Social E-commerce Industry Development Report" shows that the scale of China's social e-commerce market in 2018 is expected to reach 1,139.778 billion yuan, an increase of 66.73% over 2017. [6] In contrast, the "last new channel" platform e-commerce in 2015, which was full of enthusiasm, only had a year-on-year growth of 36.5% in the transaction volume in the "China E-commerce Report". The development of social e-commerce can be described as quite rapid. Not only that, the Ministry of Commerce also predicts that the scale of China's online retail market will reach 9.6 trillion yuan in 2020, while the social e-commerce market is expected to reach 3 trillion yuan by then, accounting for about 1/3 of the overall market. [7] It seems that social e-commerce, which is expected to "share the world" in online channels, should not be underestimated in scale. Social e-commerce, represented by Yunji and Pinduoduo, has keenly discovered new traffic entrances at the node where the traffic dividends of platform e-commerce are gradually decreasing: it has a large base of 1 billion monthly active users and covers a variety of The WeChat ecology of the scene. In this new scene with social networking as the attribute and natural traffic advantages: Pinduoduo focuses on consumers, and is busy with "consumption upgrades" Tmall and JD.com have not noticed consumers in the sinking market, focusing on low prices, Quickly cut in by joining groups; while Yunji focuses on merchants and uses distribution methods to attract a large number of merchants who are difficult to obtain traffic. In this way, social e-commerce, based on the new retail logic of "gathering people by people", has opened up new growth in the new "social" scene like WeChat, which is different from "platforms". This also means that social e-commerce has taken over platform e-commerce and has become a new online retail channel.

What are the main ways to play social e-commerce? How does the food and beverage industry play?

1. Wechat business, firing the first shot at social e-commerce
Is micro-business considered social e-commerce? On the surface, Wechat merchants with Moments, WeChat groups, etc. as the main channels have their own social genes. However, due to irregular operations, Wechat merchants have overdrawn the trust of acquaintances. Their main interest-driven is that micro-businesses do not have the "human" nature of social e-commerce.
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Therefore, most voices hold a negative attitude in terms of whether WeChat business belongs to "social e-commerce". But it is undeniable that the "first shot" of the rise of social e-commerce was fired around 2013 by the rise of micro-businesses.

 

 

 

　　

In 2016, AKOKO Cookies, seeing the potential of this new channel, bypassed the traditional e-commerce with a large number of big brands and had begun to show signs of growth fatigue, and adopted a "Buddhist selling strategy" in WeChat Moments.
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Like most of the food and beverage industry, the entry barrier for baking is low and the homogeneity is serious. As an emerging brand, how can it stand out from thousands of cookies? AKOKO's approach is to cultivate initial fans into seed users and agents. Through these fans, AKOKO carried out word-of-mouth promotion and fission of attracting newcomers to its products, and gained more loyal fans efficiently and locally. At the same time, fans will be formed into a community, and according to the feedback from the community, the products will be fine-tuned and improved in a timely manner by "people" and "goods". This "people-oriented" channel strategy enabled AKOKO to successfully break through. In the second and third years after its establishment in 2016, it obtained a total of nearly 100 million yuan in financing, and even in 2018 during Tmall's "Double 11" , became the No. 1 sales in the category of cookies.

 

 

 

　　

Also in the past two years, many food giants such as Mengniu, Wahaha, Yili, New Hope Dairy and Daliyuan have also begun to test the waters of micro-business, and renamed this channel to a more acceptable "social retail new channel". The water-testing products include slow combustion (Mengniu), children's drink "Jingjing" (Wahaha), Xianyue Xiao V room temperature yogurt (Nestle), new food machine (Yili), etc. Among them, some have created 400 million sales in 6 months, and some have caused confusion in the product price system due to irregular prices. But the trying never stopped.

2. Under the WeChat ecosystem, a number of social e-commerce companies based on strong relationships have emerged

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After the rise of WeChat business, in WeChat, a super traffic pool with strong social attributes, many social e-commerce companies based on strong relationships have emerged. Community, circle of friends, personal account, official account, mini program... together constitute the WeChat ecosystem full of imagination in terms of gameplay. The most common and representative ones are Pinduoduo, represented by Pinduoduo, and distribution represented by Yunji. The group-joining model represented by Pinduoduo is mainly based on fission of strong relationships such as family members and acquaintances, and has found a new way in the market, quickly cutting into the sinking market with low prices, and realizing the traditional e-commerce that is transforming to high-end. Differentiation has gained opportunities for rapid development.
In essence, group buying is a C2B (customer-to-business) model, which reversely drives and influences manufacturers or merchants on the supply side from the user side, and then guides the reproduction of more accurate products. [10] For the food and beverage industry, which iterates more and more quickly and needs to get feedback quickly and make decisions, this type of social e-commerce can become one of the ideal channels for quickly testing new products.

 

 

　　

With the continuous influx of traffic, the "fight" game has brought rapid growth to many vertical food and beverage categories. In 2019, among the seven food and beverage subcategories, snacks/nuts/specialty products became the most popular category on Pinduoduo. [11] The distribution model represented by Yunji is also mainly based on strong relationships, but compared with the C2B (customer-to-business) model of group buying, the essence of distribution is the B2B2C (business-to-business-to-customer) model, which focuses more on the business Profit model design. For example, Yunji, Global Catcher, Beidian, etc., mainly rely on the rebates and coupons given to users by platform merchants, and use social software to promote and attract fans. Although this model is also controversial because it involves multi-level distribution. However, the most essential difference between distribution-oriented social e-commerce and micro-business is the upgrade of the "goods" link: in Yunji, the supply chain and logistics are standardized by the platform, and there is no need for shopkeepers to press goods. All are under the unified responsibility of the platform. It is reported that Yunji also has a strict control mechanism for "goods", and those with a return rate of more than 5% will not be put on the shelves. [12] Under this model, the link of "goods" is standardized and formalized, and the consumer experience is improved. They will not receive all kinds of three-no products that are flooded in WeChat merchants, and the efficiency and cost of shopkeepers are also optimized. You only need to share it with your acquaintances through social channels, and facilitate the transaction to get a sales share. Distribution-based social e-commerce has become a sustainable business model. Correspondingly, growth has become an inevitable answer. From 2016 to 2018, the number of active buyers in Yunji increased from 2.5 million to 23.2 million, and the GMV (gross transaction value) also increased rapidly, from 1.8 billion yuan, 9.6 billion yuan to 22.7 billion yuan. In 2018, the GMV increased year-on-year. The speed is as high as 136.5%. [13]

 

 

 

　　

This growth has also been seen in the food and beverage industry. On July 22, 2019, "Bright White Rabbit Toffee Flavored Milk" was launched on the "Yunji" platform, one day earlier than the Tmall flagship store and offline supermarkets.

3. In the non-WeChat ecosystem, social e-commerce based on weak relationships has also emerged
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Although the WeChat ecosystem with a daily activity of 1 billion is the natural home of social e-commerce. However, in addition to the WeChat ecosystem, there are also a number of different models of social e-commerce emerging: content-based social e-commerce represented by Douyin and Xiaohongshu. Because platform genes are more content-oriented than social. This type of social e-commerce is more based on weak relationships, relying on content, forming sticky communities through interests and hobbies, and accurately "planting grass" for consumers.

 

 

 

　

How good is the sales conversion of content? Take the live broadcast that has attracted much attention recently as an example:

From the perspective of platform conversion capabilities, during the 618 period in 2019, Taobao Live drove a turnover of over 13 billion, and Taobao Live also shouted the slogan "GMV broke 500 billion in 3 years";[14]

From the point of view of the conversion ability of individual anchors, taking Taobao’s No. 1 anchor Wei Ya who has cooperated with more than 5,000 brands as an example, the highest guided sales in a single 2-hour session was 267 million, and the highest sales of a single product was 27 million. The accumulated guided transactions in 2018 Amount of 2.7 billion...[15]

Why can content-based social e-commerce in the form of live broadcast become a super channel for drainage and conversion? The answer lies in its name: content, social, e-commerce.

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"Content"-higher dimension: Compared with graphics and text, live video is a more dimensional medium such as sound + image + text, which can attract attention more efficiently, reach users' minds, and resonate. In addition, the live broadcast has a hidden dimension: time. The real-time live broadcast strengthens the sense of urgency of the purchase scene, avoids cross-platform price comparison and other actions that are easy to cause loss to a certain extent, and further strengthens the conversion.

"Social" - more trust: anchors, like Internet celebrities, KOLs, and big Vs on other platforms, have their own star effects, and the interaction with consumers is the same as the "fan economy", which can generate "one-on-one" "The illusion of communication, and the people gathered by the anchor also have certain commonalities, which can form a community. These all improve consumer trust and make conversion easier.

"E-commerce" - more convenient: the purchase path of the live broadcast is shorter, and there are not many cross-platform actions such as "copy the link-jump out of WeChat to Taobao-place an order". When watching the live broadcast, consumers often "receive" Planting grass to stimulate" → "click the link" → "order and pay", the "what you see is what you get" purchase process is more convenient and smooth, and the conversion is naturally efficient.

 

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In 2018, a short video recommended by netizens on Douyin quickly rose to 260,000+ likes, and at the same time, it made Coco Milk Tea's "Pudding Highland Barley Sugar-Free Caramel Milk Tea with Ice" a hit. Happy Lemon × Douyin’s “Record Your Half-cooked Life” themed event even increased its total turnover during the event by 70% month-on-month. [16]
For the food and beverage industry, this model is worth learning from:
Find the content channels with highly overlapping audiences and brand audiences, and select content topics that can trigger active sharing
Internet celebrities/KOL/big V drive users to generate a large amount of UGC content

Display high-quality content in offline stores to achieve online and offline mutual drainage

Where is the "new" of social e-commerce? How can the food and beverage industry take advantage of it to detonate new growth?

The most direct manifestation of the difference between social e-commerce and traditional e-commerce is the attraction and conversion of traffic. For the food and beverage industry, if you want to understand the innovation points of social e-commerce, and use it to achieve greater growth, you might as well look at it from the perspective of traffic.

1. New traffic flow, the natural advantage of social e-commerce

In terms of attracting new traffic, one of the main pain points for merchants on traditional e-commerce platforms is that traffic decreases, making it difficult and expensive to obtain traffic. For social e-commerce, in terms of traffic acquisition, it has two natural advantages: horizontal "sharing fission" and vertical "sinking access". On traditional e-commerce platforms, such as Taobao, there is generally one traffic center. To gain traffic, sellers need to passively follow the platform’s algorithm, optimize keywords on and off the site, optimize rankings, etc., in order to seek more exposure. However, the growth rate of the number of buyers is slowing down now, and a large number of sellers are still there. The cost of obtaining a traffic is getting higher and higher, and most of the merchants will be submerged out of the sight of consumers. The way of social e-commerce drainage is "decentralized", that is, it is not obtained through a certain traffic center, but based on social platforms or content platforms, actively creating and relying on online and offline multiple traffic portals, and using group building, Distribution, content community and other methods make drainage easier and cheaper. In August 2018, Dali Group adopted the method of "three-level distribution" to launch the social e-commerce project "fuluota" platform to test the water of micro-business. How is the drainage effect?
In less than 12 hours since the initial launch of the project, the number of registered users exceeded 60,000, nearly 100,000 boxes of products were sold, and the WeChat index climbed to more than 300,000 on the day of the event. In the end, even because the popularity exceeded the operator's estimate, the platform system crashed twice successively. [17]
The three squirrels have a longer-term layout. Since April 2018, they have started to deploy social e-commerce business. By the 2019 New Year's Day, 190 million were sold through social e-commerce in one month. In February of this year, it officially signed a strategic cooperation agreement with Yitao Daily. On the one hand, data analysis shows that there is almost zero overlap between the users of Yitao Daily and the old users of Three Squirrels. This cooperation can help Three Squirrels seek new incremental markets through social e-commerce. On the other hand, the three squirrels can also use the communication attributes of social e-commerce to create "super explosive" snacks. At present, the giant snacks of the three squirrels have become one of the most sold items on Yitao every day. [18] Not only that, the innovation point that makes social e-commerce companies rise rapidly is not only to discover new retail scenarios and develop new drainage models, but also to locate new target groups: to turn to sinking markets. It was established in 2015. In September 2016, the number of users exceeded 100 million. In March 2018, the number of active users exceeded 300 million, second only to Taobao and JD.com. It was listed in July 2018...Behind the amazing growth rate of Pinduoduo is WeChat The 400 million people who do not overlap among the 1 billion and 600 million active users of Taobao. Young people in small towns, middle-aged and elderly people, housewives... These people are highly price-sensitive, have great potential for fission, and have a large number of people, but they have been ignored by traditional e-commerce companies that take the high-end route in the wave of "consumption upgrading"... Once upon a time The marginal power of retail has turned into the incremental dividend of social e-commerce. According to the "Brand Growth Logic in the New Retail Era" report released by Kantar, in 2018, the value contribution of lower-tier cities (prefecture-level cities, county-level cities and counties) to food and beverages increased from 50% to 57%. Shen market is a very objective growth engine. [19] To reach the blue ocean of consumption in lower-tier cities, the food and beverage industry can cooperate with Pinduoduo and Douyin, and can also use the power of new channels to reduce local sinking more efficiently.

 

 

 

 

The "recommendation" behavior model of social e-commerce is behind the "trust" psychological mechanism. Different from micro-business channels with trust overdraft, social e-commerce based on "recommendation" emphasizes the trust mechanism more, and then deposits traffic, from the public domain traffic with increasing customer acquisition costs, to its own "small fish pond" In ", it is transformed into "identifiable, accessible, and operable private domain traffic" as mentioned by Weimob CEO Sun Taoyong. For this model, Guan Yu, the CMO of Youzan, said more bluntly in an exclusive interview with Southern Metropolis Daily in 2018: "The bonus period of online traffic growth has passed, and the era of 'single-customer economy' has arrived. Business, let this group of people bring more business to themselves, is the only business model that is still growing.” [20] Once trust is in place, transformation will be easier to achieve. From this perspective, the conversion from public domain traffic to private domain traffic, and the formation of communities for refined operations, is an iteration of CRM under the new channel model. And through social e-commerce, the practice of diverting consumers from traditional channels to "private domain traffic pools" such as personal WeChat accounts, WeChat groups, small programs or independent apps can also become a new growth driver for the food and beverage industry. The role is in two aspects: improving communication efficiency and upgrading data insight. In terms of improving communication efficiency: As a fast-moving consumer product, the food and beverage industry has already had a surplus of marketing information such as promotional discounts and new product promotions, while merchants still face the situation of fragmented channels and a large number of distracted consumers. The establishment and operation of the "private domain traffic pool" can help accurate, multiple, and low-cost contact and communication, and then trigger repurchase, related consumption and social fission more efficiently. In terms of upgrading data insight: the data accumulated in the past is mostly concentrated on big platforms such as Taobao and JD.com, and brands are relatively passive in grasping the data. The gameplay and the user groups that are different from traditional channels make the data more dimensional for reference. Using the "private domain traffic pool" to collect and deposit the data of these new channels will help the brand to more timely and comprehensive Data insight, and then feed back business decisions.

Summary: Understand new channels and unlock new blue oceans

In the context of new retail, "people-goods-market" has been reconstructed, and social e-commerce, as a new channel centered on "people", has risen rapidly. The new model of "gathering people with people" has brought new growth for social e-commerce players in the second half of e-commerce when the traffic dividend of traditional e-commerce is gradually disappearing. The difference between social e-commerce and traditional e-commerce channels is that it is easier and cheaper to attract new traffic, and more efficient and lower-cost conversion. In terms of attracting new traffic, social e-commerce companies have discovered new retail scenarios such as WeChat ecology and content platforms, "decentralized" traffic, causing fission, and moved to the sinking market, opening up a new incremental market. Reap the traffic bonus. In terms of traffic conversion, social e-commerce uses "recommendation" to iterate "search", uses "private domain traffic pool operation" to iterate "traditional CRM", and uses a more active, more accurate, and thus more efficient retail method to help drive growth. Among them, food and beverage companies have been practicing new ways of playing and gaining new growth. At the same time, the traditional industry pain points in terms of "people", "goods" and "fields" have also obtained new solutions worth trying in the new online channel of social e-commerce.