1. Shelf e-commerce vs content E-commerce
(1) Bitter, tired and curly, why do you want to do e-commerce?
From the perspective of the overall market, the e-commerce industry has a long slope and thick snow, the market is large enough, and a variety of transaction scenarios are extended. In 2021, China’s online retail sales are expected to reach 13.8 trillion, with broad market segments such as physical e-commerce, service e-commerce, live e-commerce and cross-border e-commerce.
From the way of flow realization, e-commerce realization is direct and relatively stable, and the entry threshold is low. The realization methods of mobile Internet mainly include advertising, e-commerce and games. E-commerce attracts users through commodities and completes the closed loop of transactions within the ecology, which is the end of traffic. We measure the liquidity efficiency of different liquidation modes in two ways, namely 1) gross profit / cash users: tiktok, advertising, Jingdong, NetEase and 2020, and the realizable efficiency of 161/231/464 is $8. 2) The realization efficiency of unit flow = revenue and gross profit / flow (dau * per capita use time per day), e-commerce > Advertising > < value-added, the realization efficiency of e-commerce is the highest, and the corresponding realization efficiency of advertising and value-added services is different according to the characteristics of the platform. E-commerce advertising revenue > Commission revenue, opening up advertising increment for content platform. According to our calculation, it is estimated that the head short video platform e-commerce advertising accounts for 30% ~ 40% of the overall advertising revenue, and the self operated e-commerce advertising revenue accounts for more than 20%. In 2021, e-commerce may be the largest industry for the head short video platform advertising.
(2) The logic of content platform cutting into e-commerce: the entry barrier of e-commerce on Chinese platform is not high, from 0 to 0.5, and from 0.5 to 1. By dismantling the four core costs of e-commerce entering the new platform: flow, matching, supply and performance, we believe that the development logic of shelf e-commerce is low supply cost + low performance cost, forming a tripartite pattern of Taojing competition. As an emerging country, China The market is a large manufacturing country, with rich manufacturing capacity, high quality and low price, open and low-cost logistics express system, which makes China’s express rate lower than that of developed countries for a long time. The development logic of content e-commerce is low traffic cost + low matching cost. The content platform accumulates large-scale traffic through content + anchor, and reduces the customer acquisition cost of incoming e-commerce through high user duration and stickiness. At the same time, the content platform accumulates a large number of users’ interactive behavior on content, forming large-scale user labels and efficient and intelligent interest matching. Shelf e-commerce is rational and active search shopping. Content e-commerce is more sensitive and passive interest recommendation shopping. It attracts consumers to tap potential demand through content, and the decision-making cycle is short.
(3) From the perspective of traffic, matching, supply and performance, shelf e-commerce vs content e-commerce:
Supply side: Taobao > shake fast. Taobao Kwai has abundant commodity channels, and the total number of third party businesses exceeds 8 million, far higher than that of the tiktok and fast hands, and the supply chain is complete. In terms of commodity categories, Taobao has a comprehensive coverage and a high degree of segmentation, and the shaking is still in the category expansion stage. At present, buffeting live broadcast e-commerce mainly focuses on categories with high re purchase and high gross profit. Categories with greater channel dependence and stronger information asymmetry are more suitable for live broadcast e-commerce.
Traffic end: [absolute size of users] Taobao > shake fast, [user stickiness and overall service time] shake fast > Taobao, Tiktok Kwai tiktok (electricity supplier DAUx), Taobao Electric Co., Ltd., Taobao Taobao. The Taobao MAU is 850 million /6.7 billion in the year. (tiktok per person per day is longer than 100 minutes). According to our calculations, the current Taobao electricity supplier’s flow of Kwai / jitter / fast hand is 5 billion 490 million /2.5 billion /2.0 under the neutral condition. The long-term electricity supplier’s flow volume is expected to reach 8 billion 550 million /25.2 billion /21.6 billion. Taobao is accelerating the content and community ecological layout to enhance user’s user time and user stickiness, and promote “content planting and ordering”. According to our calculation, the establishment of closed loop is expected to promote the per capita daily use time of Taobao to 30 minutes in the future. Tiktok focuses on tiktok tiktok and tiktok, the new customers of the live broadcasting sector are relatively high, and some businesses occupy more than 95% of the new customers in the live broadcast. In the short term, the jitter is developing the user’s mind, and there is a traffic bonus for the brand. In the long run, with the increase of the advertisers of the voice business, and the gradual recovery of other advertising products, it will push the overall bidding cost. The cost of long-term traffic still tends to rise.
Matching end: Taobao shopping tiktok, shake the voice, consider the purchase volume + live broadcast capability, and ultimately decide the user click rate, click conversion rate and merchant advertising ROI. Tiktok tiktok tiktok, Taobao, Taobao, Taobao, jitter, Taobao, Taobao, and Taobao were all found in the four typical industries: Food and beverage, cosmetics, shoes, bags and digital home appliances. We found that tiktok was stable, and some industries were slightly down. The industry is still growing. However, some industries have declined recently, and the overall volatility is higher than that of Taobao. In the long run, we think tiktok ROI will tend to be steady, but the ROI is expected to increase first and then decrease. The ROI will be the first to increase.
Performance end: Taobao > shake fast. Taobao’s tiktok logistics services are mostly working with third party express companies, and the difference in distribution efficiency is not large. However, Taobao has a one-stop logistics service app, which is wrapped by rookies. The user experience on the back-end chain such as checking, sending and returning goods is relatively better. In terms of payment, Alipay has a significant advantage and has long occupied the C end user mentality. Trembling tiktok on January 2021, “tiktok payment” marks the key link in building an ecological closed-loop business ecosystem, but there is still a big gap compared to Alipay.
(4) Research and judgment on the competition pattern of major e-commerce players: we believe that the growth rate of short-term content e-commerce is higher than that of shelf e-commerce, which has a certain impact on shelf e-commerce and has a long-term dimension Tiktok (2026) content business overall scale is about 6 trillion and 700 billion, accounting for 26%, the overall scale of the shelf business is about 19 trillion and 300 billion, accounting for 74%, and the proportion of GMV of two is stable. Among them, content providers Taobao, jitter and fast hand are 39%/36%/25% respectively, and shelf business Taobao, Jingdong and spelling Kwai are 44%/32%/25%.
2. Public e-commerce vs private E-commerce
(1) How to define public domain & private domain, Centralization & Decentralization: public and private domains are the strength of the platform relationship chain, and the core difference is the cost of traffic. Public platform traffic needs to be purchased in the public domain, and the price is relatively transparent; private domain traffic is relatively loyal, the cost of traffic is low, but it is difficult to set the price. Centralization and decentralization are the distribution methods of platform traffic, The core difference is that the platform has strong control over the flow. The centralized platform has strong control over the flow and high bargaining power; The decentralized platform has weak control over the flow, the flow stands on mountains of different sizes, and the flow master and the platform are interdependent. Public private domain, centralization and decentralization blend with each other, which are not completely equivalent and can not be completely separated. A platform dominated by public domain traffic is usually a centralized traffic operation mode, but the public domain is not completely centralized. The key depends on whether the platform is willing to participate in traffic distribution. Therefore, although the platform with traffic distribution right is centralized, it can also develop private domain and give KOL / brand a channel to accumulate private domain traffic.
(2) There is no distinction between public domain and private domain. How should they be distributed? Public domain and private domain are not good or bad in nature, but pure public domain and pure private domain are not conducive to the development of the platform. There are too many public domains, brands / businesses need to continue to buy on the platform, unable to establish a private domain pool, resulting in a reduction in long-term repurchase rate and ROI; there are too many private domains, the platform cannot collect rent on a large scale, and the overall income is lower than that of the public domain Domain, and brands / merchants lack new traffic, so they can’t achieve the new effect through large-scale exposure, and their long-term growth is limited. Ideally, we assume that the only variable is the ratio of public and private domains. Brands / businesses can migrate freely on different platforms without migration cost. When other conditions between platforms are the same, the final “voting with feet” will form an ideal ratio of public and private domains on each platform, Thus, there is no significant difference in the launch or operation of brands / businesses on different platforms, so as to reach a steady-state stage, and the rent collection of the platform tends to be stable.
(3) The head platform tends to lay out public and private domains at the same time: wechat has the strongest private domain capacity and ecological closed loop, which is highly scarce as an infrastructure; Taobao has strong private domain capacity in the integrated e-commerce platform, “subscription” and “store member” And other measures help businesses precipitate private domain traffic, and interconnection will further make up for Alibaba’s weakness in the social private domain; Tiktok has strong public domain capability, single user advertising ARPU is much higher than other platforms, and has obvious advantages in the tiktok new and brand promotion. At present, the public traffic flow is still in the bonus period for merchants. Kwai Kwai platform has central distribution capability, but algorithm traffic is relatively tilted private domain. It will increase the two important indexes of long-term value and vermicelli value strongly by the traffic distribution mechanism. The private domain has brought long-term commercial value and social assets to the fast creators, contributing 80% reward, 70%GMV and 70% reviews.
3. Centralized e-commerce vs decentralized E-commerce
(1) China’s e-commerce industry has an obvious trend of centralization, and CR3 concentration is high: China’s e-commerce development stage is later than overseas, but the growth rate is fast, and the e-commerce retail sales and e-commerce penetration exceed that of the United States (the U.S. e-commerce penetration was 19.6% in 2020 and about 30.0% in China). China’s e-commerce platform CR3 accounts for more than 70% of the market, and the market concentration is very high, “centralization” The trend is obvious, the competition on the head platform is fierce, and consumers tend to buy one-stop on the comprehensive e-commerce platform. The top 10 e-commerce websites in the United States share 68% of the share. Amazon, the e-commerce platform, is the largest. Many brands build their own independent websites and operate. The market concentration is relatively low, highlighting the e-commerce sales model dominated by “Amazon platform + independent stations”.
(2) Factors causing differences between Chinese and foreign e-commerce: Chinese consumers tend to “wander” I. prefer integrated platforms and less rely on search engines. Chinese consumers prefer to explore browsing on integrated platform websites and prefer mobile shopping; The average commission level of American e-commerce platforms is high. The monetization rate of Amazon’s third-party merchants, eBay and Etsy in 2020 is 27.3% / 12.7% / 10.8%, which is not attractive to brands, and the overall monetization rate of Chinese e-commerce is low; The development of SAAS and marketing technology in the United States is mature, and supports brand self built websites; Foreign brands attach importance to private domain traffic. Users’ e-mail habits enable them to reach consumers efficiently. Chinese consumers need more public domain purchases.
(3) China’s centralized e-commerce has extended four modes: Amoy, Beijing, fight and shake. The space of decentralized e-commerce track still needs to be laid out: wechat multi ecology is interconnected, which is “decentralized e-commerce” Infrastructure is provided to further connect the applet with enterprise wechat and video number live broadcast, providing a way to connect users in multiple scenarios. Short video grass planting, talent sharing and live delivery are also integrated into the economic ecosystem of the applet to help enterprises obtain development momentum in the direction of DTC and private operation. In terms of commercialization, applet and wechat payment provide third-party SaaS service extension, and will provide more solutions and services for the brand in the future; Search and open the official brand area and product results page. At present, it has been connected to Jingdong applet, and more brand product search advertising ranking will be opened in the future.
4. Risk tips: increased competition risk, user loss risk, policy supervision risk, less than expected realization risk, Internet valuation adjustment risk, possible deviation risk between survey data and actual situation, risk that foreign companies do not have complete comparability, etc.
