Core view
Tiktok, a fast growing e-commerce provider, is one of the biggest changes in China's Kwai Kong market in recent two years. In this report, we try to answer three questions about content e-commerce: the essence, value and scale of content e-commerce.
The most fundamental difference between content e-commerce and traditional e-commerce is that the first mind of the content platform is still "content", that is, users come to the platform for content consumption / social needs, which belongs to [scenario e-commerce]. Users naturally use the content platform for much longer and more frequently than traditional e-commerce platforms, which affects users' mind The content platform is more advantageous in helping users make shopping decisions; On the other hand, because users do not come to the content platform for pure shopping purposes, the overall order conversion rate of content e-commerce will naturally be lower than that of pure e-commerce platform. Due to the differences in platform attributes, we believe that it is not possible to simply compare horizontal indicators (such as conversion rate, merchant ROI, etc.) between content e-commerce and traditional e-commerce.
Value creation of content e-commerce: under some categories (unplanned, non-standard, short decision-making link, story / content / brand) can facilitate transactions more efficiently. The advantage of the content platform is that it occupies a large amount of front-end time of users + rich user tags + accurate algorithm recommendation ability. Therefore, it cuts into the multi SKU category of unplanned purchase scenario, non price sensitive, low commonality of user needs and higher difficulty in information matching, which is more difficult than traditional electricity Business platform can bring more obvious improvement of utility and efficiency. Therefore, we believe that content e-commerce can create differentiated value (for example, it can help users find demand and find demand for long tail SKUs) in the categories with rich and fast iteration SKUs such as large clothing, beauty, food and jewelry accessories.
One of the ceiling influencing factors (upper limit) of the scale of content e-commerce lies in which transaction scenarios the content e-commerce platform can achieve higher efficiency than the traditional e-commerce platform, and how high the efficiency improvement is. After all, only the efficiency improvement can lead to the migration of transaction scenarios (we believe that this determines the long-term ceiling of the scale of content e-commerce). We classify the retail scene according to commodity categories, and through analysis, we conclude that the category of "big clothing" is the core advantage category of content e-commerce. Based on the assumption of the penetration of clothing categories, we believe that the actual transaction scale of content e-commerce under optimistic and neutral scenarios (excluding refunds, returns, orders, etc.) is expected to reach a scale of more than trillion.
The second influencing factor of content e-commerce scale (lower limit) comes from the traffic supply of the content platform. Subject to the platform attribute, users' contact with e-commerce on the content platform is more through the traffic distribution mode than the active search mode. Therefore, the scale of e-commerce on the platform will be subject to: the scale of the platform's own traffic pool, the proportion of the traffic pool allocated to e-commerce, and the e-commerce transaction efficiency per unit traffic. We give the traffic in this paper From the perspective of the method of measuring the scale of e-commerce (but the measurement results are highly sensitive to assumptions), we expect that the transformation efficiency of e-commerce (because the output quality of e-commerce related content and the matching degree of content and goods are not high) if the improvement speed is not fast enough, the traffic supply of the platform may become a short-term ceiling for the growth of e-commerce scale, which needs to be gradually opened by content / operation optimization.
Investment proposal and investment object
Tiktok has brought about improvements and efficiency in some scenes / categories under certain scenarios / categories. But the degree of optimization needs further study. We infer that the content business market is above the trillion level and is in a period of rapid growth. We should pay attention to the relevant companies of the internal capacity industry chain: 1) short video content platform: Kwai, -W (01024, buy). Wechat video number (Tencent Holdings (00700, buy); 2) New traffic platform marketing service provider and MCN organization: Saturday Co.Ltd(002291) (002291, not rated); 3) New brands that grasp the dividend of new traffic field in time.
The risk indicates that the growth of e-commerce slows down, the content-based ability of businesses does not meet expectations, and the change of calculation assumptions has an impact on the results
