1. Current situation of e-commerce

Some time ago, I saw a classmate in a circle of friends share her shopping experience in Taobao:

She spent four years in a store in Taobao, and after receiving this short message from customer service, she felt instantly lowered in her mind.

let's not say that the customer service caused the action deformation for KPI. Such a phenomenon just reflects the current market competition of e-commerce. If you still can't understand, then I'll share another set of data.

I have seen such a message before. A senior e-commerce person cited a case:

In a crown-class women's clothing store on Taobao, 31% of the cost was product cost, 31% was marketing cost, and the cost of staff and office was 12%. It seems that the gross profit was more than 21%. However, if a merchant has to brush a bill in addition to advertising in marketing, the cost will increase by 11%, and the overall marketing cost will exceed 41%.

Therefore, after comprehensive accounting, the gross profit of this women's clothing store is only 5%-11%, and after deducting the operating costs such as logistics, the net profit is almost a loss.

yes, the biggest difficulty in starting a business in the field of e-commerce now is traffic. The sharp increase in the cost of obtaining customers and the high operating costs of merchants have led to only 2% of the sellers who really make money.

How fierce the competition of e-commerce is now, I don't need to cite the data any more. An online mall customer I serve can clearly feel these changes (since 2117, the traffic channels have been rearranged), and people who have done e-commerce naturally understand. Therefore, conscious businesses have begun to make adjustments.

2. The essence of e-commerce

Why has the e-commerce that once made some people successful become so painful for countless businesses? Didn't e-commerce subvert many industries? Why is it difficult to survive in Taobao now?

In order to answer this question, I would like to start with my experiences around me and restore the underlying logic of e-commerce:

When I was about eight years old, my parents made some money and started a small business in Guangzhou for several years, that is, opened a store (convenience store).

I remember, they drove in different places many times, and each time they made some money. I remember three places most clearly: one is in Luochongwei, the other is in Haizhu and the other is in Tongdewei.

every time, as long as they feel that the turnover has declined, they will choose to transfer it out, and then find a new location to open a shop. The shops they open are all in the concentrated area of foreign population. I tossed it over and over again for four or five times, and I did make some money, not only from the transfer fee, but also from opening a new store.

why?

because the underlying logic of retail is: always look for new traffic dividends. My parents were constantly looking for new lots, but they were actually looking for new traffic bonuses.

maybe they didn't know the business logic or the business concept at that time. However, when I started my business, after thinking about the nature of business carefully, I found that this was the best business lesson they had given me.

well, e-commerce is the same logic. When the real economy is facing overcapacity, the emergence of Taobao is a new traffic dividend for many businesses (in the past decade, the sharp increase of netizens in China has formed a dividend period for e-commerce).

it's like opening a new shopping mall offline with a new traffic bonus. After a small number of people began to try, they were surprised to find that selling things in Taobao didn't cost rent, and they could make money.

For example, if you are a shoe seller, you open a shop in Taobao and sell your products on Taobao. At this time, someone wants to buy a pair of shoes in Taobao and search directly in the search bar. There may be only a few merchants coming out, and they just place an order in your Taobao shop.

because customers find your products through search, the customer acquisition cost of this order is almost negligible, that is to say, this time belongs to the bonus period of Taobao sellers, so it is easy to do.

However, with a keen sense of market, businessmen think that Taobao will be a huge business opportunity, and they have started to enter Taobao. Because you make money, and there is almost no cost, it will naturally attract everyone to share a piece of it.

For a time, merchants on Taobao have sprung up like mushrooms after rain, and there may be hundreds of them after a casual search. If you have no credit and no traffic, naturally there will be no customers coming to your store.

so, what do you want to do to get traffic-"promotion, of course."

whether it is external drainage or Taobao advertising display, Taobao merchants start to spend money on publicity for traffic. As a result, the cost of getting traffic has increased sharply, and there is no traffic even without spending money on publicity. The operating cost has been the same as that of physical stores.

The traffic used to be actively searched, but now it is passively accepted, which directly leads to the increase of operating costs. After the operating cost becomes higher, the profit will decrease, and everyone will find it difficult to do it. So, this is the fundamental reason why people think Taobao is difficult to do now.

The underlying logic of retailing is to constantly seek new traffic. The past tradition is a new traffic bonus for many businesses, but now the dividend has almost been wiped out, which is one reason for the fierce competition among e-commerce.

so, why are the traffic dividends of e-commerce getting less and less? There are many reasons, such as overcapacity, the decline in the growth rate of netizens, and the increase in businesses.

However, there is a most important essence behind it that many people don't realize: the Internet only does stock market, and it can't solve incremental market. In other words, the market to eat on the Internet is always an untouched part offline, not because of new growth.

For example, some big brands didn't enter platforms such as Taobao and Tmall at first. If you start a business on the Internet, you will take their share. Once the big brands enter, their market share will still belong to them.

However, many traditional enterprises or people who want to start a business in the field of e-commerce do not realize that the Internet is actually a "stock market", and they rush into the trend of Internet entrepreneurship when their minds are hot.

3. The future of e-commerce

Faced with the traffic dilemma (the traffic dividend basically disappears), policy changes (the introduction of the e-commerce law) and fierce competition, do you feel that you have no chance after entering the e-commerce field?

of course not.

It's not that there is no chance. Just like WeChat official account's bonus period has passed, some people can still make it into a large size. By the same token, after the dividend of e-commerce is smoothed out, it can only be said that it is more difficult to get a share in the Red Sea category.

and the change of policy is to make businesses have to operate according to standardization. The original formal ones cost a lot of money, while the informal ones need to adapt to this process. Those who can't adapt have finally been forced out.

in fact, e-commerce is still the best choice for ordinary people to start a business. For most people who lack funds, contacts and resources, as long as you provide real value to consumers and let them recognize you, they will have the opportunity to get traffic.

in the future, e-commerce will change from "traditional e-commerce" to "new e-commerce". In fact, some people are already practicing it. As mentioned earlier, the traffic dividend of traditional e-commerce has been smoothed out, and a new traffic dividend is slowly forming.

for ordinary people, if they want to start a business in the field of e-commerce without a strong team and funds, the future direction is mainly to do the following two things.

1) niche market

The future will be niche market with more and more segments. As long as you stick to the end in a subdivision and carefully polish your products, you will eventually be useful.

The competition is fierce and the bonus disappears. If ordinary people want to enter the Red Sea field of e-commerce, they need to rely on team, operation and marketing capabilities. For example, you should at least know the logic of paid search.

I mentioned in my previous article about how to find entrepreneurial opportunities: What should you do if you start a business in a mature industry and find that the product homogeneity is too serious or the competition is too fierce? Give up the enviable mass market and seize the humble niche market.

For example, if you want to sell things in a circle of friends or Taobao, and you don't know what to sell, you will find many people selling fruits and snacks. If you also choose to sell fruits and snacks, it is very likely that you will become like most insurance salesmen (only doing acquaintance business) and no one will care about you later.

why don't you seize the niche market, for example, selling sweet potatoes, and someone really sells them well, and then you tell your friend that you are selling sweet potatoes in a circle of friends. If he is surprised, do it boldly. For example, if you have any handmade products, you can choose to cut in e-commerce.

what is the biggest change brought by the internet? Breaking the geographical restrictions and making information more and more symmetrical.

Some niche products may be rarely needed, but the popularity of the Internet and smart phones has broken the geographical restrictions, and small demands can be quickly collected, and each small demand will eventually accumulate into a large demand.

Only by doing an effective little thing on a large scale in the future can we be big. The long-term success of all businesses is due to the deep understanding of an industry, far exceeding that of peers.

what is the depth of understanding of the industry? Understand the needs.

you know your market, what kind of customers you have and what kind of products they need. Moreover, you know what differentiated products you can use to serve one kind of customers, which is to understand the essence of an industry.

excellent entrepreneurs, who know how to serve minority customers and deeply subdivide fields.

2) Self-built traffic

Looking at the business world, all changes are around traffic, and every traffic change hides new opportunities.

For example, the changes of offline traffic in the last two decades: from street shops to shopping centers, from traditional Internet to mobile Internet. But no matter how it changes, every time the dividend brought by the change of traffic gradually disappears, it will encounter the ceiling of traffic.

because there are more and more stores, the traffic is naturally insufficient. Therefore, in order to ensure that their customers are not easily lost, merchants establish a traffic pool by means of membership mechanism.

Among them, the "membership system" is a familiar way to build a traffic pool, and it is also an important way for merchants to build a traffic pool.

so, what should I do in the face of the traffic dilemma of e-commerce (although e-commerce merchants basically have their own electronic membership cards now)?

In fact, the familiar membership mechanism will not be out of date, and a future trend is membership-based e-commerce. For example, "PIUS member of JD.COM" has started to try out the member economy. Of course, this is what the platform does (just like the membership card of an offline mall, not a single merchant).

for ordinary merchants, one of the most important and effective ways is to set up their own traffic pool by means of membership system, and lock customers in your system (that is, direct the private domain traffic such as WeChat group and their own platform).

when you regard Taobao as a conversion terminal, not a traffic terminal, you will be completely relieved.

why?

because the platform is centralized, the traffic on the platform will always belong to the platform. Whether you get the traffic bonus from the platform at the beginning or the traffic from paid promotion, you will surely find the fact that

among many sellers, it is difficult for consumers to remember where they bought things.

Moreover, the traffic on the platform is easily intercepted by competitors. For example, after a competitor has put in a through train advertisement, it is likely that consumers will choose your opponent. Moreover, each platform has traffic distribution rules. For example, Taobao's traffic distribution rules are: according to the data such as the number of old visitors and the repurchase rate.

in other words, the e-commerce platform has absolute traffic control. If you want to survive on a platform, you can only adapt to the rules of the platform and always need to spend money to buy traffic. Or, instead of simply relying on the platform, establish your own traffic pool (that is, as mentioned earlier: regard the platform as the conversion end, not the traffic end).

So, whether you are a free promotion or a paid promotion such as Weibo and Little Red Book, your hard-earned customers will definitely struggle in the end if they don't know how to keep and build their own traffic pool.

why?

Because the current trend is obvious, there will be more and more "online celebrity economy", which may focus on WeChat groups, small programs, or platforms built by businesses themselves.

in the future, every smart business will have its own customer base (a new traffic bonus for e-commerce). This is why the niche market is the big market in the future.

One of my customers is engaged in farm, catering, fresh food and online shopping mall. Last year, when making the layout of fresh food stores, I suggested using WeChat group to accumulate the first batch of users. Because the products were good and they had their own channels, they soon opened 31 branches.

the biggest advantage of establishing your own traffic pool is that you can participate in the interaction in time without being limited by the platform. After the interaction, you will have a desire to buy, and after the purchase, it will spread. Finally, others will see you buy, so I will buy, and then continue to interact and share.

in short, whoever can deeply cut into a niche market, who can effectively establish his own traffic pool and who can provide value to users will win in the second half of e-commerce.