E-commerce is all about traffic and conversion - a review and summary of the development of e-commerce
E-commerce is all about traffic and conversions.
Logistics, supply chain, payment, etc. are all undergoing transformation. It is also the infrastructure of e-commerce.
1. Overseas e-commerce
1. Amazon
Long-termism, obsession with users, category first, and long-tail theory, these are probably the most important key points for Amazon’s success and continued success.
Recommend a book: "" written by Amazon founder and the world's richest man Jeff Bezoslong termism》. This book is a collection of letters written by Jeff Bezos to investors over the years. Each letter reflects Amazon's business philosophy as well as the problems and solutions encountered at the time. Well worth a look.
The user-obsessed concept and category-first business strategy, coupled with the traffic dividend at the time, were the keys to Amazon's continued acquisition of traffic and retention of users.
The establishment of affiliate marketing is also a way for Amazon to obtain a large amount of traffic from large and small websites/APPs around the world.
Obsessed with users, long-termism and focusing on the long tail, Amazon continues to explore user needs and continuously improve conversions and repurchases.
The creation of a supply chain system is one of Amazon's core competitiveness, and it is also Amazon's most important guarantee of converted traffic.
2. eBay
It is different from Amazon, which started as a one-sided market (to buyers) and later switched to both a one-sided market and a multi-sided market (to buyers and sellers). What eBay has done from the beginning is a two-sided market platform (buyers and sellers).
eBay's traffic relies on word-of-mouth and network effects. Of course, traffic dividends are also very important.
Network effects are unique to multi-sided market platform products and are also the most important factor in retaining users of platform products.
What is network effect? You can search it. Let’s take Taobao as an example to explain briefly (Taobao and eBay are platforms of the same nature): Taobao sellers open a store on Taobao, and in order to get others to buy, they will post advertisements everywhere through QQ, forums, etc., so that others, including many Non-Taobao users all click to open the link to his Taobao store, and even purchase the goods from his Taobao store. As a result, in this process, Taobao gained a lot of traffic and users.
This is the network effect.
Once you have traffic, distribute it to sellers for conversion.
This is eBay.
2. Development of domestic e-commerce
1. Taobao
To obtain traffic, in addition to the basic network effects and traffic dividends, Taobao once did one thing. In China, the entire network bought the volume and then distributed it to Taobao sellers for conversion. As a result, Taobao received a large amount of traffic and also attracted a large number of sellers to enter Taobao.
At that time, websites large and small were all Taobao pop-ups.
The concept of traffic business almost started here.
2. JD.com
JD.com is almost a domestic replica of Amazon.
What Amazon has done very successfully, JD.com has basically done very successfully in China.
Category expansion, platformization, alliance marketing construction, and logistics system creation are all key to ensuring that JD.com becomes bigger and stronger. These points actually do two things: obtain a large amount of and continuous traffic and ensure conversion.
3. Pinduoduo
Private domain traffic, sinking market, marketing products.
In the field of social e-commerce, Pinduoduo uses these three points to quickly obtain traffic and convert it. And then platform itself.
Today, it is the second largest e-commerce platform in China.
4. What is worth buying?
Affiliate marketing of shelf e-commerce has achieved content e-commerce.
Rely on content to attract traffic, and then import the traffic to the e-commerce platform through the affiliate marketing platform, and earn commissions after conversion.
This is content e-commerce.
Content e-commerce relies on specific content to attract precise users to achieve conversion.
The profit focus of many vertical online media companies is content e-commerce.
A large number of self-media, blogs, etc. also rely on content e-commerce to make profits.
Today's short videos and live broadcasts are actually a form of content e-commerce.
In terms of content e-commerce, what is worth buying can be regarded as a model.
5. NetEase carefully selected
Because of NetEase, NetEase Yanxuan has had a certain amount of traffic from the beginning. However, more importantly, NetEase Yanxuan does not solely rely on NetEase's traffic and the traffic of its own e-commerce platform. It also exports its own brand products. Go to various e-commerce platforms and get a lot of traffic and conversions.
There is a big difference between self-operated brand e-commerce and other e-commerce. Regarding this point, you can see the section "The Rise of NetEase Selections" later in this article.
3. Development of overseas e-commerce
With a valuation of US$100 billion - equivalent to one Meituan, or two Pinduoduo, or three Xiaomi - there is no doubt that Shein is the top e-commerce company in overseas markets.
Start with Google's SEO, get traffic, convert it into orders, get money, and then go to China to find goods and ship them.
In the following ten years, Shein continued to increase traffic through various channels while continuously improving its supply chain.
It is said that Shein’s current “real-time supply chain system” is far more efficient than its peers.
In fact, other overseas e-commerce companies are the same. They capture overseas traffic with one hand and build their own domestic supply chain system (to achieve efficient transformation).
There are basically several ways and channels to obtain overseas traffic:
- Google SEO
- Driving traffic through social platforms such as Facebook and Twitter
- affiliate marketing
- Advertising purchases
4. The decline of vertical e-commerce and the rise of self-operated brand e-commerce
1. Dangdang’s defeat
One reason is that it's cheaper.
Dangdang was once a banner of Chinese e-commerce. However, it eventually lost to JD.com.
Why?
Dangdang sells books, and JD.com also sells books. But the same book can be sold cheaper on JD.com than on Dangdang. Therefore, users who buy books do not buy books on Dangdang, but go to JD.com to buy books.
The question is, why can JD sell it cheaper than Dangdang?
Because Dangdang only sells books, while JD.com sells everything.
Yes, you read that right, that’s why.
JD.com can sell books cheaper, make no money, or even sell books at a loss. In this way, Dangdang users will be attracted to JD.com, and then the long-tail value of traffic will come into play.
Users who buy books will also need to buy clothes, food, and mobile phones. . . . . . . .
The money that JD.com makes less and loses from selling books can be found out from these. But users and traffic have actually been snatched away from Dangdang.
Therefore, JD.com’s books can be sold cheaper than Dangdang’s books.
In addition, there is another reason, which is the algorithm.
Vertical e-commerce companies, including Miya, Jumei Youpin, Secoo, Daily Fresh, etc., have emerged because of their brand name of “professional e-commerce that meets the needs of professional users.” However, this brand name is not Comprehensive e-commerce big data and algorithms seem so helpless.
Therefore, vertical e-commerce has become a false proposition.
2. The rise of NetEase’s carefully selected people
It’s still a traffic and conversion game.
Vertical e-commerce does not sell its own branded products, so it needs to introduce traffic from everywhere into its own platform and then convert it.
Self-operated brand e-commerce is completely different. You can introduce the traffic of the entire network into your own platform and then convert it, you can also directly use private domain traffic on various social platforms for conversion, or you can enter various e-commerce platforms and use the traffic of the e-commerce platform for direct conversion.
For vertical e-commerce, their own platform is the carrier of traffic and users. It competes with comprehensive e-commerce platforms.
For self-operated brand e-commerce, the brand itself has become the carrier of traffic and users, so self-operated brand e-commerce can penetrate into various traffic platforms. Maximize traffic acquisition and convert in the most efficient way. It and the comprehensive e-commerce platform need each other more.
Moreover, self-operated brand e-commerce must, on the one hand, conduct in-depth research on user needs to help create products that better match user needs; on the other hand, it must go deep into the supply chain and be able to create products that better match user needs. Therefore, self-operated brand e-commerce companies are more capable of increasing conversions and repurchases.
Therefore, self-operated brand e-commerce is easier to obtain traffic than other e-commerce platforms, and it is easier to convert and repurchase.
5. The e-commerce path of vertical online media/community
Advertising, e-commerce, games. Over the years, this has been the three major profit models of the Internet.
Vertical online media/communities use vertical content to quickly obtain traffic in vertical fields. Most of the traffic will not be too large, so they will not make much income from advertising, and e-commerce has become very important to them. A way to monetize.
Therefore, over the years, vertical online media/communities, whether websites or APPs, have been engaged in e-commerce in various ways, and some have directly introduced traffic to JD.com through affiliate marketing. Some are running their own self-operated e-commerce. It’s just that few are particularly large. The reason is that they have not deeply explored the supply chain and do not have their own e-commerce brand. In the end, they can only play the role of a salesperson, working for others.
6. Summarize
E-commerce is all about traffic and conversions.
In the direction of e-commerce, there are only three problems.
- How to get traffic quickly, massively and continuously?
- How to convert efficiently?
- How to get users to keep making repeat purchases?
