Recently, the hashtag #College Students Buy Out Mobile Storage Baskets from Taizhou Merchants# trended on social media. Today's college students are much more particular than before, even though their living expenses haven't increased much, they insist on living a refined life. For example, they buy various storage gadgets within their limited budget to keep their dormitories neatly organized.

Hot products often become the main growth driver for daily necessities merchants, and "foldable mobile storage baskets" have emerged as this year's hot product. Media reports have it that a Taizhou merchant achieved annual revenue exceeding 100 million yuan by selling storage products at an average price of 20 yuan each.

However, not all daily necessities merchants are enjoying a prosperous time; quite a few are struggling under pressure. This is because the average order value and profit margin in the entire daily necessities industry are generally low. To ensure limited profits, merchants can only strictly control investments in products and marketing, which in turn leads to insufficient competitiveness and creates a vicious circle.

It is unadvisable for daily necessities merchants to blindly raise prices as consumers are price-sensitive. A wiser approach is to minimize costs while increasing investments in products and marketing, breaking out of the vicious circle.

We can see that Douyin E-commerce is providing support to daily necessities merchants. Recently, Douyin E-commerce introduced a commission reduction policy for the daily necessities industry. Starting from July 1, 2024, merchants who open Douyin stores on the platform and maintain normal business operations during the policy period are eligible to participate. The commission deduction for orders in the primary categories of "Household/Personal Cleaning Tools," "Home Decorations," "Household Daily Necessities," and "Storage and Organization" will be reduced to 2%. Additionally, there is no upper limit on the commission reduction amount, allowing merchants to earn more by selling more and quickly recover funds, fostering a virtuous cycle of business growth.

△Douyin E-commerce Commission Reduction Policy for Daily Necessities

After communicating with four daily necessities merchants participating in the commission reduction program, Yidian Finance found that reducing commissions is just the starting point. More crucially, they are using the saved costs to create value in the following areas:

Product value, content value, and industry value.

These values have genuinely enhanced their internal operational competitiveness and fostered long-term development potential.

01

Strengthen Product Value

Products are the foundation of merchants and the bridge connecting them with consumers.

In fierce competition, hot products are crucial for merchants to distinguish themselves from their peers, attracting more consumers and creating incremental growth. In the daily necessities industry, hot products are also game-changers, and the key lies in:

Continuous differentiated innovation.

As the daily necessities industry has a relatively low entry barrier, many hot products attract imitation from peers once they become popular, easily eroding sales and profits. To avoid easy imitation, merchants must continuously develop differentiated and unique products to fortify their brand moat.

1. Muhuo: More Flexible New Product Development After Commission Reduction

For instance, Muhuo, a household daily necessities merchant specializing in warm products, offers a range of items centered around human joints, including steam eye masks, wrist warmers, foot warmers, and heat packs, targeting the mid-to-high-end market. According to Muhuo, roughly 65% of the company's total revenue comes from Douyin E-commerce.

After Douyin E-commerce introduced the commission reduction policy, Muhuo gained more funds to develop new products tailored to consumer pain points, further boosting sales.

Many office workers and programmers frequently suffer from tendinitis due to prolonged keyboard and mouse use. Following the commission reduction, Muhuo developed a wrist warmer specifically for tendinitis care, which gained popularity among consumers. Additionally, the company introduced new hand warmers that also received positive market feedback.

Innovation continues. As the seasons change, Muhuo is preparing new products derived from heat packs, readying for colder weather.

△Muhuo Team

2. Tianxi Ciyuan: Save on Commissions for Product Innovation

Designing and producing an innovative product is no easy feat, requiring significant time and resources, putting considerable pressure on many merchants. For instance, Tianxi Ciyuan, specializing in home decorations, told Yidian Finance that its best-selling home decoration sets are meticulously designed. However, many decorations are ultimately discarded, with only 2-3 out of 100 standing out.

This is just the beginning. The production process that follows design is even more time-consuming and labor-intensive. Merchants need to create molds and make continuous adjustments during production. In short, the high costs from design to production constitute a significant "hard cost" for Tianxi Ciyuan and other merchants in the industry.

At this juncture, Douyin E-commerce's commission reduction policy alleviated Tianxi Ciyuan's pressure. Instead of hoarding the saved costs, the company invested them in research and development, ensuring monthly new product launches and enhancing price competitiveness and quality for similar products. Tianxi Ciyuan reported a 30% sales growth after the commission reduction, gradually entering a virtuous business cycle.

3. Other Merchants: Enhancing Quality, R&D, and Exploring Unique Services

Similar to Muhuo and Tianxi Ciyuan, other merchants also gained more resources to upgrade their products after the commission reduction. Nuanyou, a household daily necessities merchant focusing on seasonal products, joined Douyin E-commerce in March 2022. After the commission reduction, Nuanyou had more resources to develop 5-8 new products, offering consumers more choices and increasing the likelihood of hot products.

Nuanyu, a home decoration merchant targeting mothers and students, expanded its back-to-school offerings to 27 products and increased its essential summer and winter products to 42 after the commission reduction. The wider range provided more options for discerning mothers, enhancing conversion rates and user experiences.

Zhina, a storage and organization specialist with over 30 years of history, joined Douyin E-commerce in 2022. After the commission reduction, Zhina invested the saved funds in new product development, launching 1-2 new products monthly, offering consumers more choices.

In fact, for daily necessities merchants on Douyin E-commerce, the platform's unique features also facilitate product innovation.

For instance, the real-time interactivity of Douyin E-commerce live streams enables merchants to receive timely consumer feedback on products and make targeted optimizations, potentially leading to the emergence of personalized hot products.

Nuanyu plans to vigorously promote personalized customization, actively inviting consumer design suggestions to break the limitations of traditional e-commerce shelves and provide more practical and cost-effective products to consumers. In this process, Douyin E-commerce undoubtedly serves as a bridge.

In summary, to escape the trap of homogeneity, daily necessities merchants must continuously introduce differentiated products. Douyin E-commerce's commission reduction policy provides them with added impetus.

02

Unlock Content Value

If products represent a merchant's hard power, content is the indispensable soft power.

Gone are the days when a good product would sell itself. In today's landscape, merchants must leverage content to amplify their voices and forge emotional connections with consumers to boost sales.

This is because we now live in the era of "content is king." Rich and heartwarming content, distributed through targeted recommendations and other channels, can deeply nurture consumers' interest in products, deepen their understanding and affinity, and stimulate purchasing desires, ultimately enhancing conversion rates.

For instance, in June this year, a Douyin user encountered a heavy downpour while camping outdoors, but their tent remained dry and even floated on the water. They filmed this incident and shared it on Douyin, attracting significant attention. The video, titled "First Time Seeing Such a Waterproof Tent," ranked eighth on Douyin's "Must-Have List," and the relevant tent brand capitalized on this buzz, boosting its overall GMV by 36%.

The essence of effective content lies in its relevance to users, sense of gain, expressiveness, and appeal.

1. Tianxi Ciyuan: More Funds for Content Creation

For example, when Chinese people move into a new home, they like to place auspicious decorations in cabinets to signify good wishes. Tianxi Ciyuan recognized this and showcased the symbolism of home decorations through live streams and videos.

On Douyin E-commerce's official account, Tianxi Ciyuan created numerous short videos featuring home decorations. For instance, they displayed vases, ceramic swans, and other decorations in cabinets, using lighting and close-ups to showcase details vividly.

Simultaneously, Tianxi Ciyuan paired each decoration with a blessing message in the videos, such as "A set of screen window vases symbolizes completeness" and "A gourd decoration brings joy and prosperity."

△Tianxi Ciyuan Douyin E-commerce Flagship Store

These auspicious messages resonated emotionally with many users, enhancing their joy in their new homes and visions for the future. Some users commented, saying things like "I must get a set after renovating" and "Great decorations bring good luck."

After the commission reduction, Tianxi Ciyuan gained more funds and motivation to create content that conveys the creative spirit behind its decorations and its attitude towards life. The results are evident, with one of Tianxi Ciyuan's Douyin videos achieving 3 million views, 70,000 likes, and 24,000 shares.

2. Other Merchants: Commission Reduction Boosts Content and Marketing Innovation

Besides Tianxi Ciyuan, many daily necessities merchants also intensified their content development after the commission reduction. Zhina saved more resources for short videos and live streams, further exploring connections between products and consumers' daily lives and emotional touchpoints. Nuanyou reported more funds for promotion after the commission reduction, gaining more room for influencer marketing and short videos. Nuanyu also allocated extra profits to influencers and marketing efforts.

In terms of content, Douyin E-commerce has an inherent advantage.

Leveraging the platform's content foundation, Douyin E-commerce excels in integrating content and products, making it easier for merchants to touch consumers through storytelling and create more resonating effects. Meanwhile, merchants can capitalize on trending topics on Douyin E-commerce to drive business growth and achieve high product popularity and rapid sales.

Especially with Douyin E-commerce's upgraded traffic mechanism, "good content" will become the primary driver of business growth in the new environment.

03

Create Industry Value

On Douyin E-commerce, daily necessities represent a lucrative business segment.

With affordable prices, rigid demand, and frequent purchase cycles, daily necessities rank among the most popular categories. For merchants, this market is vast, covering a wide range of consumers and offering significant growth potential.

However, some merchants remain trapped in low-price competition across the industry. Those genuinely seeking innovation face higher costs, hindering industry progress.

In reality, the daily necessities industry must strive for upward breakthroughs, transcending low-level competition and advancing towards high-quality, high-margin competition. This breakthrough requires courage and confidence. Choosing the right platform to support and boost confidence is crucial for merchants, and Douyin E-commerce is the right choice.

On one hand, Douyin E-commerce's commission reduction policy enables cost-saving merchants to embrace innovation and seek growth opportunities. In Yidian Finance's view, this commission reduction serves as a "flywheel effect," creating industry value as a "catalyst."

The so-called "flywheel effect" refers to the initial effort required to set a stationary flywheel in motion. Each rotation is arduous, but each effort accumulates, gradually accelerating the flywheel's speed. Douyin E-commerce aids the daily necessities industry in spinning this flywheel, achieving exponential growth.

On the other hand, as a thriving sector in e-commerce, the daily necessities industry has consistently demonstrated robust growth, albeit with varying cost pressures for different merchants. Douyin E-commerce, with its vast user base and comprehensive ecosystem, coupled with its commission reduction policy, provides robust support to daily necessities merchants, driving business growth.

As Muhuo revealed, positioning itself in the mid-to-high-end market, the company's new product development costs are generally higher than the industry average. However, by leveraging economies of scale to control and reduce costs, it can still achieve considerable profits and growth potential. Douyin E-commerce's massive daily active users and diverse user demographics offer Muhuo ample opportunities for expansion.

For instance, Douyin E-commerce hosts diverse user groups, including silver-haired seniors, urban white-collar workers, and meticulous mothers. Some belong to low-income brackets, while others are high-income earners. Like Muhuo, daily necessities merchants can tap into growth potential by accurately targeting their consumer segments and price ranges.

In summary, Douyin E-commerce's commission reduction policy and vast ecosystem instill more confidence in daily necessities merchants, which is more valuable than gold. This unique value give by Douyin E-commerce spurs the industry forward.

As more daily necessities merchants gain confidence to compete upwards and develop more innovative, high-quality products, the entire industry will purge inferior products, fostering a more prosperous and high-quality landscape.

Looking ahead, the demand for daily necessities on Douyin E-commerce remains robust. Merchants who enter the market early will be better positioned to seize growth opportunities amidst the platform's rapid expansion.