Wei Wenwen, President of Douyin E-commerce, Shares Platform Strategies to Enhance Consumer Experience at the Third Author Summit

Breaking Internal Competition with 'Internal Strength'

Written by Chen Dengxin

Edited by Li Ji

Typeset by Annalee

The e-commerce landscape has witnessed new developments.

Recently, Douyin E-commerce held an internal communication meeting in Beijing, revealing business progress and data indicators for the first half of 2024, including a 10% increase in Net Promoter Score, over 60% growth in monthly active users in shelf scenarios, and a merchant retention rate of around 80%.

This signifies that Douyin E-commerce's strategy of competing for users has yielded results.

As competition in the e-commerce sector intensifies, ineffective internal competition has become increasingly unpopular, leading to widespread anxiety. By focusing on users, adopting strategies to enhance price competitiveness and optimize services, Douyin E-commerce continuously improves the consumer experience, enabling customers to purchase quality products at reasonable prices, thereby finding a way forward for the industry.

Undoubtedly, Douyin E-commerce breaks internal competition with 'internal strength'.

Price Competitiveness Strategy Creates Competitive Advantage

Users have always been the core of e-commerce growth.

To capture consumers' minds, the industry generally focuses on pricing, as price is not only a crucial factor in purchase decisions but also a direct driver for improving the consumer experience in e-commerce.

Douyin E-commerce is no exception.

In February 2024, media reported that Douyin E-commerce made price competitiveness its top priority for 2024. Since then, it launched initiatives such as the 'Super Value Buy' with billions of subsidies, group buys, live streaming price comparisons, and 'XX-day low prices,' all of which received widespread user approval.

This is evident from Douyin E-commerce's highest growth rate during the '618' shopping festival.

Official data shows that during the 2024 '618' period (May 24 to June 18), transactions on the 'Super Value Buy' channel increased by 150% year-on-year, while orders placed through the '10,000-person group buy' activity increased by 101% month-on-month compared to April.

Performance Data of 'Super Value Buy' During the '618' Period

It is evident that Douyin E-commerce has created a competitive advantage through its price competitiveness strategy.

It is important to note that the core of Douyin E-commerce's price competitiveness is not absolute low prices, low-quality products at low prices, or inferior products at low prices. Rather, it focuses on high quality, high value, and cost-effectiveness.

In simple terms, products must offer both quality and aesthetic appeal, while prices must be attractive and competitive.

Regarding this, Wei Wenwen, President of Douyin E-commerce, stated, 'Over the past few years, Douyin E-commerce has consistently emphasized enhancing the overall quality-to-price ratio from the user's perspective, with the core goal of enabling users to purchase quality products at reasonable prices.'

As a result, users favor Douyin E-commerce.

Indicators such as Net Promoter Score, reflecting user loyalty and satisfaction, and monthly active users, reflecting user scale, have both increased significantly, proving that Douyin E-commerce is on the right track.

In fact, Douyin E-commerce pursues an omnichannel interest-based e-commerce approach, driven by a dual scenario of 'shelves + content,' where the shelf scenario complements the content scenario to cater to users' evolving shopping needs from 'merely low prices' to 'good prices for good products,' thereby creating greater growth potential for the platform.

In short, Douyin E-commerce insists on doing difficult but right things.

Optimizing Services Continuously Stimulates Internal Drive

Apart from pricing, service is another crucial factor in enhancing the consumer experience.

In the era of rational consumption, a simple, efficient, comfortable, and hassle-free shopping experience significantly influences users' decisions. Therefore, thoughtful services are a vital support for Douyin E-commerce's 'good prices for good products' strategy, promoting healthy business growth.

For example, Douyin E-commerce introduced the 'Guaranteed Return for Defective Products' service for select categories. In the first half of 2024, this service continued to improve in seafood, meat and eggs, fruits and vegetables, flowers and green plants, driving related category orders to grow by over 80% year-on-year.

In short, optimizing services is the underlying logic for improving the consumer experience and the internal driving force for Douyin E-commerce's sustainable development.

Against this backdrop, Douyin E-commerce has made significant efforts in four dimensions.

First, no gimmicks.

Promotions often come with various rules and conditions, confusing many users. However, Douyin E-commerce stands out by avoiding complex calculations, offering a streamlined marketing approach.

By reducing the overlap of coupons, discounts, and rebates and simplifying complex group buying tools, Douyin E-commerce makes promotions straightforward and accessible, boosting user enthusiasm. In the first half of 2024, the conversion rate of Douyin E-commerce's marketing-covered products increased by 18% compared to the beginning of the year.

Marketing Information for Douyin E-commerce's '618' Promotion in 2024

Second, improving after-sales service.

After-sales service is crucial, directly impacting consumer satisfaction and loyalty towards e-commerce platforms. To enhance trust and stickiness, Douyin E-commerce employs a comprehensive approach.

It strengthens proactive service capabilities, reaching out to consumers in case of disputes or shipping issues, providing simplified evidence submission, quick adjudication, and compensation. Currently, it proactively serves 620,000 consumers daily. It also introduces instant refunds for logistics delays and improves algorithm-based decision-making for after-sales responsibilities, balancing the experiences of both consumers and merchants.

According to the '2024 Douyin E-commerce Consumer Experience Report,' the overall perfect resolution rate for after-sales issues improved by 6.8 percentage points in the first half of 2024, visibly enhancing consumer experience.

Third, the 'N Times Compensation for Fakes' policy.

Counterfeits directly harm consumers, which Douyin E-commerce cannot tolerate. It has upgraded its 'Triple Compensation for Fakes' policy to 'N Times Compensation for Fakes,' with a maximum of 'Ten Times Compensation.' By the end of 2024, this policy will cover over 30,000 merchants, further fostering a clean shopping environment.

In fact, Douyin E-commerce's anti-counterfeiting efforts are noteworthy.

Relevant data shows that Douyin E-commerce's counterfeit feature library has expanded its brand authentication samples by 15 times, assisting authorities in cracking down on 55 counterfeiting gangs and removing 1,577 fake brands that deceived consumers.

Finally, focusing on 'Hourly Delivery.'

To better serve consumers, Douyin E-commerce is investing in 'Hourly Delivery,' meeting users' immediate needs through scenario penetration, category expansion, and service radius enhancement, fostering high-stickiness consumption habits and ultimately driving significant GMV growth for the platform.

This ensures that Douyin E-commerce excels in terms of 'variety, speed, quality, and affordability.'

Achieving a Virtuous Cycle of Mutual Prosperity with Merchants

It is crucial to note that enhancing the consumer experience also significantly benefits merchants.

For merchants, business vitality is paramount, which is closely tied to consumer experience. When consumers trust Douyin E-commerce's omnichannel ecosystem and develop long-term shopping habits on the platform, it enables high-quality growth for merchants, who can then better serve consumers as they progress towards sound development.

In short, users and merchants can achieve a win-win situation.

This requires Douyin E-commerce to adopt a high-level perspective, considering both consumers' rights and merchants' legitimate demands, striking a precise balance to foster a virtuous cycle of 'good prices for good products.'

In the first half of 2024, Douyin E-commerce achieved a monthly active merchant retention rate of around 80%, maintaining the same level as the beginning of the year, reflecting merchants' recognition of its efforts.

Douyin E-commerce Hosts User Experience Open Day in May 2024

Indeed, Douyin E-commerce has made considerable efforts to coexist and prosper with merchants.

On the one hand, it intensifies efforts to attract brand merchants.

In the first half of 2024, it opened 141 flagship stores of renowned brands and nearly 12,000 specialty stores, collaborating with over 110,000 brands to review store qualifications, further enhancing trust in authentic products on Douyin E-commerce.

Amid increasing difficulties in channel expansion, a strong partnership between brand merchants and Douyin E-commerce is the key to success, leveraging the latter's content and shelf scenarios to address issues such as customer acquisition challenges and inefficiencies.

On the other hand, it provides targeted support to small and medium-sized merchants.

From July 1, 2024, Douyin E-commerce reduced commissions for daily necessities merchants to 2%, benefiting 300,000 small and medium-sized merchants in this category without setting any task thresholds.

This helps merchants reduce costs and increase efficiency.

The head of 'Mrs. Liu's Home Daily Necessities Flagship Store' stated, 'The cost savings from commission reductions can be used to enrich product categories, innovate marketing strategies, and incentivize collaborations with influencers, thereby enhancing user experience and store competitiveness.'

It is evident that cost reduction and efficiency enhancement can motivate merchants, further paving the way for good prices and quality products.

In conclusion, facing increasing internal competition in the industry, Douyin E-commerce has found a way forward by focusing on enhancing the consumer experience through price competitiveness and service optimization, motivating merchants, and enabling users to purchase quality products at reasonable prices, achieving the strategic goal of 'only competing on value.'

'Enhancing the consumer experience is the basic skill of e-commerce platforms and the long-term direction of Douyin E-commerce's efforts.'