In the highly competitive e-commerce market, merchants must keep up with changes in consumer demand and upgrade the supply side in order to gain a foothold on platforms such as Pinduoduo. From the perspective of jade business, this paper analyzes how merchants adapt to market changes, use platform support policies to achieve new quality transformation and upgrading, and emphasize the importance of small and medium-sized merchants in the reform of e-commerce supply and the necessity of actively adjusting business strategies.
01 Demand is business
How fast is the change in the direction of consumption? My daughter-in-law’s jewelry box is a testimony.
There were more than 3,000 beeswax bracelets, platinum that was more expensive than gold at that time, and popular hairpins that cost hundreds of dollars a piece…… These jewelry, which has been popular in the past ten years, are now collectively referred to by daughters-in-law:
Tears of the times.
The 8mm wax bracelet was bought by me at the counter of a shopping mall in Beijing International Trade Center. Recently, I saw goods of similar quality in the big willow market, and the boss offered a three-digit price, and when he saw my hesitation, he took the initiative to give another 80% discount.
This eagerness to dump goods makes me, a jade peer, feel distressed.
What does a product manager need to do?
In the process of a product from scratch, it is not easy to do a good job in the role of product manager, in addition to the well-known writing requirements, writing requirements, writing requirements, there are many things to do. The product manager is not what you think, but will only ask you for trouble, make a request:
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In the past few years, I have realized more and more that changes in market direction and customer demand are the norm. As verified by the psychological “Guliege effect”: people’s feelings for new things do not always exist.
Fortunately, this is just like my daughter-in-law’s mood during her menstrual period, if you master the rules, you can find a way to deal with it.
For example, Hetian jade, in the past, buyers were mainly “uncles” from all walks of life, pursuing the seed material of “opening the door (at a glance)”, and the natural skin color and pores are the pluses of jade, but this seems to young people, and the seed material is no different from the stone. With the popularity of national style in the past two years, young people have also bought Hetian jade, but they prefer mountain materials with higher perfection and higher appearance, mainly Russian materials and Qinghai materials, which is also the current selection direction of Fat Donglai.
After being educated by the market, my pallet has now basically completed the “de-uncleization”.
Not just jade, in fact, most businesses are like this. In a world where even canned saury has to be marked with an expiration date, the shelf life of consumer demand is even shorter.
The money earned by luck will eventually be lost by ability. The dull sense of smell for changes in consumer demand, or misjudging the direction of change, is the beginning of a downhill trend for small businesses. So we see that many merchants can only make money at a certain stage, and in the long years that follow, they either barely keep their capital or lose their pants in blind attempts.
But in turn, there is an opportunity to earn money and develop.
Here I would like to take Pinduoduo, which makes countless small businesses love and hate, as an example. Whether it is fighting out of the seemingly stable e-commerce pattern at the beginning, or using “tens of billions of subsidies” to obtain “people within the Fifth Ring Road”, the essence of its rise is actually a subtle grasp of changes in social consumer demand.
Everyone has had the experience of swinging, right? The only way not to be thrown off by the swing is to hold on to it tightly and let the body achieve the same frequency as the swing of the swing, rather than confronting it.
This is also the reason why some small businesses feel pain in Pinduoduo: consumer demand is always changing, and Pinduoduo captures changing trends more quickly. If the product strategy is not adjusted in time, small businesses can easily be “thrown out”.
Lying down to earn money is impossible to achieve in Pinduoduo.
Of course, it is difficult to find an e-commerce platform that can realize the dream of lying down and making a day. I have a former colleague from a large factory who resigned and returned to his hometown in the south a few years ago, using his family resources to do B2B foreign trade business, only need to make two orders a year, and the rest of the time is to enjoy life. I used to envy him very much, but in the past two years, he has also sold insurance in the circle of friends.
02 Supply upgrade and dynamic balance
During this year’s May Day holiday, I made a big adjustment to the store shelves, dropping all the goods with advantageous prices but average quality, and only keeping the excellent quality.
In technical terms, I have made a supply-side upgrade. There are two main reasons:
One is based on user insights. Combined with the operating data of the past year, I found that high-quality products bring better traffic and conversion, because users are less likely to spend impulsively and have a lower return rate. In other words, the customers attracted by my jade shop pursue good but not expensive – good, it is the first;
One is based on my understanding of the current relationship between supply and demand.
In the consumption scenario with sufficient supply, blindly rolling the price is of little significance, because the lower limit of the price can be extended by sacrificing quality. A better choice now is: remove unnecessary costs and make good goods cheaper.
MUJI founder Seiji Tsutsumi expressed a point of view: true competitiveness lies in “smart cost reduction”, that is, on the premise of ensuring quality, making the price reasonable and making customers believe that there is a reason to believe that it is cheap.
▲ MUJI’s affordable daily necessities shelves
This is implemented in my store: straight man-style management.
I didn’t find a beautiful model (and I couldn’t afford it), the product pictures were all taken directly with my Apple mobile phone, at most I borrowed my daughter-in-law’s arm, and there was no exquisite post-processing. But I find that some customers like this roughness: they are more sure that they are not paying for any additional items outside of the product.
▲ A picture of the product taken with the help of a friend
In fact, from the operation of a jade shop to the health and stability of the whole society, the relationship between supply and demand is the top priority.
Friends who pay attention to investment should know that in recent years, our country has continued to optimize the supply and demand structure to accelerate the formation of a higher level of dynamic balance of “demand drives supply and supply creates demand”. This year’s “Government Work Report” also mentioned that it is necessary to continue to deepen supply-side structural reforms and strive to solve the structural contradictions between consumption and supply.
E-commerce platforms also have their own supply-side reforms.
Since the beginning of this year, JD.com has done takeaways, Taobao upgraded flash sales, and the two e-commerce platforms have successively devoted themselves to the hard business of local life, and the core goal is not to grab Meituan’s cake, but to upgrade its own supply.
At a time when e-commerce competition is fierce, whoever can meet the needs of users to the greatest extent, and even guide and create needs, will be closer to victory.
The same is true of Pinduoduo’s 100 billion support plan for merchants in April this year. According to the official statement, in the next three years, it will invest more than 100 billion yuan in funds, traffic and other resources to help small and medium-sized businesses achieve new quality transformation and upgrading.
It’s important to note that this is not a single move. Since last year, Pinduoduo has successively launched actions such as tens of billions of reductions, e-commerce westward expansion, and new quality merchant support plans, plus technical service fee reductions and exemptions, promotion software service fees, etc., it can be said that it has rolled up to a new height on the battlefield of “benefiting business”.
It also had to roll. The dynamic balance of supply and demand structure, without reference answers. The more you take a step forward, the more likely you are to touch the door of the new world.
03 Merchant: The smallest component of the supply ecosystem
Finally, let’s talk about the status of small and medium-sized businesses in the reform of e-commerce supply.
Summary in one sentence: the smallest constituent unit is also the most important constituent unit. Because their quantity is large enough to directly affect the quality of supply of e-commerce platforms.
In the two years since I became a small businessman, I have begun to understand business from the perspective of a businessman.
When the home of e-commerce competition gradually shifts from the growth track of investment and customer acquisition to the supply-side benefiting business track, it seems that the outlet of the times has finally blown to the side of small and medium-sized merchants, and e-commerce platforms are rushing to deliver meals to everyone, but in the eyes of us small businessmen, there are pros and cons coexisting.
The benefits are of course opportunities. If small and medium-sized businesses can borrow from the platform and get more resources, they can drive transactions and even drive the development of industrial belts. There have been many similar cases in recent years, and there are many peers around me who have made money by making explosive money on different platforms, and I call them lucky ones.
But the challenge also comes from this: how to ensure that you have a chance?
The key is platform selection.
Birds choose good trees to roost. Choosing a platform that matches your pallet and operational capabilities is the basis for business maintenance.
However, in my exchanges with peers, I found that even though the e-commerce business has sunk to the level of townships and villages, many small businesses do not have real digital operation capabilities. They are still stuck in the traditional sales model of putting goods on the shelves – waiting for someone to take pictures – delivering – signing for receipts, and cannot analyze business data. For the various operational activities launched by the platform, it is often silly and unclear.
If you zoom in on all e-commerce practitioners, I believe this is a big group.
Compared with the impulse means of benefiting business, the longer-lasting supply reform should be more friendly to most small businesses. Because everyone has time to “copy homework” and cross the river by touching the stones. For example, Pinduoduo’s “100 billion support” plan is actually an upgraded version of last year’s “10 billion reduction”, which has a certain degree of continuity, and the threshold for small and medium-sized businesses to understand and participate is naturally lowered.
Finally, I would like to say: it is not easy to do business now. The upgrade of the supply side depends not only on the platform, but also on itself.
My daughter-in-law recently bought blueberries from Pinduoduo, but there was serious damage during transportation, and there were not many edible parts. She applied for a refund. While waiting for the merchant’s confirmation, she was ready to fight several battles over the amount of compensation. After all, now the e-commerce platform has completely eliminated the refund-only function.
As a result, the merchant quickly apologized and refunded the full amount. This made her quickly come out of the guilt that I might accuse her of “buying blindly”:
“I choose tens of billions of subsidies when I buy fruits, that’s right.”
Then she placed another order.
In this way, a businessman who met the needs of users beyond expectations got his most loyal repurchaser.
