Is there a future for e-commerce now?

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

She stayed in a shop in Taobao for four years. After receiving this short message from customer service, she felt that her position in her mind was instantly lowered.

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

I have seen such a news before, and a senior e-commerce person gave a case:

In a crown-class women's clothing store on Taobao, 30% of the cost is the product cost, 30% is the marketing cost, and the staff office cost is 12%. It seems that the gross profit is above 20%. However, if a merchant has to brush a bill in addition to advertising in marketing, the cost will increase by 10%, and the overall marketing cost will exceed 40%.

Therefore, based on comprehensive accounting, the gross profit of this women's clothing store is only 5%- 10%. 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 e-commerce field now is traffic. The sharp increase in customer acquisition costs and the high operating costs of businesses have led to only 2% of sellers who really make money.

How fierce the competition of e-commerce is now, I don't need to mention the data. An online mall customer I serve can clearly feel these changes (20 17 traffic channel rearrangement), and people who have done e-commerce naturally understand. Therefore, conscious businesses have begun to make adjustments.

2. The essence of e-commerce

Why do e-commerce companies that once made some people successful now make countless businesses feel extremely painful? Didn't e-commerce subvert many industries? Why is it difficult to survive in Taobao now?

In order to answer this question, I want to start with the experience 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 that they drove many times in different places and made some money each time. I remember three places best: one in Luochongwei, one in Haizhu and one in Tongdewei.

Every time they feel that their turnover has dropped, they will choose to transfer out and then find a new place to open a shop. Their stores are all in areas with a concentrated foreign population. I tossed and turned for four or five times, and I did make some money, not only the transfer fee, but also the money to open a new store.

Why?

Because the underlying logic of retail is: always look for new traffic dividends. My parents have been looking for a new location, but they are actually looking for a new transportation bonus.

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

Well, e-commerce is also this 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).

Just like opening a new mall offline, there is a new traffic bonus. After a few people started trying, they were surprised to find that they could make money by selling things on Taobao without paying rent.

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. Maybe only a few merchants come 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, which means that this time belongs to the bonus period of Taobao sellers, so it is easy to do.

However, with a keen sense of market smell, businessmen feel that Taobao will be a huge business opportunity and have begun to settle in 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 appeared like mushrooms after rain and herpes after whoring, and there may be hundreds of them at any one. If you have no credit and no traffic, naturally no customers will come 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 have begun to spend money on publicity for traffic. As a result, the cost of obtaining traffic has increased dramatically, and there is no traffic even without spending money on publicity. The operating cost is already the same as that of a physical store.

It used to actively search for traffic, but now it is passively accepting traffic, which directly leads to an increase in operating costs. After the operating cost became higher, the profit decreased, and everyone felt that it was not good to do it. Therefore, this is the fundamental reason why people find Taobao difficult to do now.

The underlying logic of retail is to constantly find new traffic. The past tradition is a new traffic dividend for many businesses, but now the dividend is almost wiped out, which is also a reason for the fierce competition of 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 is only a stock market, but it can't solve the incremental market. In other words, the market for eating on the Internet will always be an untouched part offline, not because of new growth.

For example, some big brands did not settle in platforms such as Taobao and Tmall from the beginning. When you start a business on the Internet, it means that you have taken their share. Once the big brands settle in, their market share still belongs to them.

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

3. The future of electronic commerce

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

Of course not.

It's not without a chance. Just like the bonus period of the official WeChat account has passed, some people can still make it large. In the same way, after the dividend of e-commerce is smoothed out, it can only be said that it is more difficult to share a piece of the Red Sea category.

The change in policy is that businesses have to operate according to standardization. It turns out that formal ones cost a lot of money, but informal ones need to adapt to this process. Those who couldn't adapt were finally forced out.

In fact, ordinary people start businesses, and e-commerce is still the best choice. 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 a chance to get traffic.

Future e-commerce will change from "traditional e-commerce" to "new e-commerce". In fact, someone is already practicing. 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, without a strong team and funds, if you want to start a business in the field of e-commerce, the future direction will mainly do the following two things.

1) niche market

The future is to subdivide more and more niche markets. As long as you stick to the end in a subdivision and carefully polish your products, it will eventually be useful.

Competition is fierce and dividends disappear. 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 a previous article about how to find entrepreneurial opportunities: If you start a business in a mature industry and find that the product homogeneity is too serious or the competition is too fierce, what should you do? Give up the enviable mass market and seize the humble niche market.

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

Might as well seize the niche market, such as selling sweet potatoes. Some people really sell well, and then you tell your friends in the circle of friends that you sell sweet potatoes. 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? Break geographical restrictions and make information more and more symmetrical.

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

If you do an effective little thing on a large scale in the future, you can make it bigger. The long-term success of all businesses is due to a deep understanding of an industry, far exceeding that of peers.

How deep is your understanding of the industry? Understand the needs.

You know your market, what kind of customers you have and what kind of products they need. And you know what differentiated products you can use to serve a class of customers, which is the essence of understanding an industry.

Excellent entrepreneurs, know how to serve minority customers and go deep into the field.

2) Self-built process

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

For example, the changes of offline traffic in the past 20 years: 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 shops, the flow of people is naturally not enough. Therefore, in order to ensure that their customers are not easily lost, merchants set up traffic pools with the help of membership mechanism.

Among them, "membership system" is a familiar way of self-built traffic pool, and it is also an important way for merchants to establish traffic pool.

Then, what should we 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 begun to try the membership economy. Of course, this is what the platform does (just like the membership card of the offline mall, not a single merchant).

For ordinary merchants, the most important and effective way is to establish their own traffic pool through the membership system, and lock customers in your system (that is, divert private domain traffic such as WeChat group and their own platform).

When you regard Taobao as the conversion end, not the traffic end, you will be completely relieved.

Why?

Because the platform is centralized, the traffic on the platform will always belong to the platform. No matter whether you get the traffic bonus of the platform or the paid promotion traffic at the beginning, you will definitely find such a fact:

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

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

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 relying solely on the platform, it is better to establish your own traffic pool (that is, as mentioned earlier: treat the platform as a conversion end, not a traffic end).

Therefore, whether you promote Weibo, Xiaohongshu, etc. for free or paid, your hard-earned customers will definitely struggle in the end if they don't know how to maintain and establish 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 (e-commerce new traffic dividend). This is why the niche market is the big market in the future.

One of my clients is engaged in farm, catering, fresh food and online shopping mall. When laying out fresh food stores last year, I suggested using WeChat group to accumulate the first batch of users. Because of the good products and its own channels, it soon opened 30 branches.

The biggest advantage of establishing your own traffic pool is that you can participate in the interaction in time, regardless of platform restrictions. After interaction, you can have a desire to buy, and after buying, you can spread it. Finally, when others see you buy it, I will buy it, and then continue to share it interactively.

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