By/Xu Wenwen

Edited by/Zhang Xiao

In early August, the founder of a renowned enterprise once again lambasted e-commerce platforms, using pointed language to describe them as 'undeniable special intermediaries' and advocating for 'curbing the power of platforms.'

Recently, in discussions with several business owners, the debate over e-commerce versus brick-and-mortar stores has become rather stale. Whether operating online or offline, the challenges remain largely the same: it's increasingly arduous to pinpoint target customers, and the costs of acquiring them are skyrocketing.

Ultimately, the most formidable obstacle remains 'traffic'.

Unlike in years past, in today's business landscape, traffic has shifted from being a 'bonus' to an operational expense that more and more enterprises must shoulder. When nearly all businesses depend on traffic channels to locate and retain consumers, traffic itself becomes a scarce commodity.

Hence, to a certain extent, this debate is merely superficial. What truly warrants reevaluation is:

How should traffic be priced and distributed? And how can we prevent it from becoming a 'monopolistic business' for a select few channels?

01

The Concentration of Traffic at the Top is Becoming More Pronounced

As discussions on the 'limits of platform power' resurface in the public arena, amidst the clash of diverse market voices, the truly pertinent issue is rapidly coming to the fore.

The crux of the matter is that in the era of traffic, everyone is being drawn into a fortress where 'traffic reigns supreme'—

Brands require traffic to sell their products; a restaurant must create content and promote itself to be noticed by consumers; tourist attractions must vie for topics to attract visitors; enterprises increasingly need to tap into the dissemination systems of content platforms to build brand awareness, and so forth.

However, a person's daily time is finite. The conflict between the limited amount of time and the escalating demand for traffic in business has emerged as the primary concern.

As the Chinese internet has evolved, two significant trends concerning traffic have become increasingly apparent:

Firstly, traffic has started to emerge as a scarce resource, no longer just a marketing tool, but even evolving into a universal benchmark for measuring merchant value across a growing number of industries;

Secondly, the 'concentration at the top' effect of traffic is becoming more and more evident.

Traffic doesn't appear out of nowhere. It originates from the content posted and interactions engaged in by billions of users, stemming from the attention of all netizens, which is highly focused on a few leading platforms. Naturally, the amount of time a person spends online daily is limited, so the total internet traffic is also capped.

Online, both e-commerce merchants and e-commerce platforms are buyers of traffic. For e-commerce merchants to be noticed by consumers, they must pay at every turn: bidding for search rankings, investing in recommended spots, paying for live streaming slots, and shelling out commissions and service fees for influencer endorsements. Without purchasing traffic, there is none; even with purchase, there is no assurance of conversion, and merchants' operational costs are piled onto the customer acquisition process.

The same rings true for the real economy; it's no longer the era where 'good wine needs no bush'.

No matter how delectable the food is at a restaurant, if it doesn't purchase listings or promote itself, it may be buried by algorithms beyond several screens; a street-side shop, no matter how skilled its craftsmanship, must first learn to perform in front of the camera.

In the internet age, the operations of various industries are inevitably influenced by traffic logic. Media research on a beef noodle restaurant in Chengdu revealed that with a profit of 5 yuan per bowl, the owner spent 15,000 yuan on agency operations, 28,000 yuan signing endorsement deals with bloggers, and 10,000 yuan on traffic acquisition. During peak periods, the two-week revenue was 50,000 yuan, but after deducting various expenses, there was a net loss of over 3,000 yuan.

Traffic is, of course, not inherently evil. The concentration of attention is a result of the internet's efficiency in information dissemination, and traffic can indeed assist in connecting good products, content, and services with consumers.

However, when traffic becomes a value metric that is increasingly close to being the 'only standard', when the link between traffic and growth becomes increasingly strong, and when 'the whole society is working for traffic' almost becomes the default consensus of modern society, traffic allocation is, to some extent, distorted.

As a result, from platforms to merchants, and then to offline physical enterprises and stores, e-commerce and brick-and-mortar businesses, while seemingly on two different fronts, are actually all caught up in this increasingly costly and concentrated traffic system.

02

We Need Traffic Fairness, But More Importantly, a Shift in Traffic Mindset

Let's examine a set of data:

Media reports indicate that in January of this year, a survey of over a thousand Chinese merchants revealed that 30.1% of them had negative net profits. When asked what most eroded their profits, 78% pointed to traffic costs, and 60.2% pointed to price pressure.

Over time, a vicious cycle stemming from traffic has formed—

The more expensive traffic becomes, the thinner the profits; the thinner the profits, the stronger the squeeze on product investment; the more homogeneous the products become, the more reliant they are on purchasing traffic. Not only are merchants trapped, but consumers are as well.

According to media reports, a craft beer bar in a second-tier city spent nearly 100,000 yuan on promotions across various platforms in its first year of operation, with keyword bidding costs reaching 2.5 yuan per click during peak periods, and monthly promotion fees nearing 20,000 yuan, leaving a net profit of less than 7,000 yuan.

From another angle, the efficiency gains brought about by traffic acquisition are also hitting bottlenecks.

Simply put, many merchants find that without reducing their advertising budgets, their ROI (Return on Investment) is continuously declining.

This is not a new pain point but has always existed. Two years ago, marketing expert Song Xing mentioned that the ROI of most advertisers hovered around 1:1.

He noted that it was not due to the advertisers' lack of advertising capabilities or limited expertise, but rather that the traffic platforms' mechanisms for controlling bidding and dynamic reserve price algorithms could all contribute to the inability to improve ROI.

Is there a way out? Is there a path to achieving the 'traffic fairness' that the entire industry needs and expects?

'Traffic fairness' does not simply mean allocating the same amount of traffic to all enterprises, nor does it mean merely reducing traffic costs to the lowest level.

What truly needs to be altered are the rules of the game in traffic competition.

For instance, can traffic allocation be more transparent and costs more 'predictable', rather than being unpredictable and elusive variables?

Can traffic allocation truly break free from the past dichotomy of 'can afford' versus 'cannot afford'?

More critically, the commercial evaluation system needs to shift from a singular 'traffic logic' back to a 'value logic', where product quality, service, reputation, and repeat purchases should once again become key measures of commercial value.

What a society truly needs is not for everyone to become a traffic player.

Rather, it is for a factory that diligently makes products, a restaurant that diligently cooks, and a merchant that diligently operates a brand to still have the opportunity to be noticed by consumers, even if they do not allocate all their profits to purchasing traffic.