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Douyin (TikTok) E-Commerce: A New Playground for Brands

May 22, 2022
May 22, 2022

Douyin, the Chinese version of TikTok, is a booming short-form video app in China, with over 600 million daily active users. In 2021, Douyin was building its own e-commerce ecosystem, launched flagship stores for brand accounts, and created platform-owned payment solutions to close the loop on its e-commerce operation. Today, Douyin is used by brands to reach affluent Chinese consumers. More and more international brands are exploring Douyin's e-commerce services. Lancôme, Estée Lauder, Make Up For Ever, and Coach have all opened their official accounts and stores on the platform.

According to public data, Douyin's annual gross merchandise value (GMV) in 2021 is expected to reach 800 billion RMB ($122 billion US). In 2021, a large number of new brands achieved rapid growth in Douyin e-commerce. They connected with potential consumers efficiently and built relationships with them through short videos and livestreaming. From January to November 2021, the monthly transaction scale of new brands using Douyin e-commerce maintained steady growth, with an average month-on-month growth rate of over 24%, according to Douyin official data.

As a social giant that has captivated younger generations, Douyin may be an interesting testing ground for brands to develop their e-commerce business. Let's take a look at how brands leverage this new battlefield to attract consumers.

How is Douyin different from Tmall or JD?

On traditional e-commerce platforms like Taobao and, the sales format can be seen in the form of a supermarket where products are displayed on shelves. The main way of finding products through this medium is only through a clear purchase intent and an active search for the actual product.

How about Douyin? Douyin is a short-video social platform where everyone can share all kinds of videos. In terms of transaction nature, if users want to buy a specific product, they will search on Taobao or JD, which is a kind of active shopping. On the contrary, the user's purchase behavior in Douyin is unconscious. They will be attracted to the content in the short video or unintentionally drawn to key opinion leaders’ (KOLs) product seeding, where brands gift their products to these influencers. It’s also important to know the difference between interest e-commerce and shelf e-commerce.

Interest e-commerce: The product sales model of interest e-commerce is the "Product looking for people." According to the algorithm developed by Douyin, the app is far more effective at understanding customer demand, and provides users with tailored content that is relevant to their interests and preferences. For example, if a female user browses 3 to 5 short videos of skincare types every day for a month or even six months, Douyin’s algorithm basically judges that she has a strong interest in skincare. Douyin will also categorize customers searching for lipstick as potential interest customers for cosmetics, and increase the chance for these consumers to be exposed to cosmetics content and products. As such, for consumers, "interest e-commerce" can meet everyone's potential consumer needs.

The interests of users are diverse and changeable. On the Douyin platform, users show their interest and attitude towards content and products through purchases, product browsing, and other behaviors. These actions also enable the platform to continuously understand the user's changeable and diverse interests, thereby achieving in-depth exploration and accuracy of the user’s interest in product matching to the user’s interests to earn more efficient conversion and repurchase rates.

Shelf e-commerce: Compared to Douyin's interest e-commerce, Taobao and fall in to the category of shelf e-commerce. The sales model of shelf e-commerce is “People looking for product.” When consumers come to the shelf e-commerce platform, they usually have the purpose of buying a specific product. Through searching, consumers obtain the relevant brand and price information, and then perform a purchase behavior. It still applies to the classic AISAS model of Attention, Interest, Search, Act (buy), Share. The most classic shopping path for shelf e-commerce is to buy after searching. Conversely, since the interest e-commerce path extends from the beginning to the final purchase, there is almost no search behavior.

As China e-commerce has entered a mature stage of development, Douyin interest e-commerce creates new opportunities. For consumers, Douyin e-commerce can take "interest" as a clue to help consumers find potential needs. For merchants, interest e-commerce can help them reach consumers more accurately and efficiently. According to survey data, many merchants have gained new growth and customer acquisition opportunities after entering Douyin e-commerce. Among the consumers of this platform, more than 85% are new customers.

The opportunities of Douyin e-commerce

  • Douyin's short video model and rich number of KOLs help new brands to promote effectively, increase market awareness and achieve sales growth. According to data from Douyin, from March 2020 to November 2021, 23% of Douyin e-commerce consumers purchased new brand products, and this proportion is still increasing. In Douyin e-commerce, new brands can attract more users' attention by creating high-quality content, creating an image that fits the brand's positioning and establishing trust with more consumers.

On the other hand, all users in Douyin are creators. That’s because in Douyin, every user has the opportunity to gain attention and exposure through video creation. Lancôme once launched a "foundation holding time challenge" in Douyin. All creators could participate in the challenge, and the 30 creators with the highest video volume had a chance to win the full-size foundation.

The campaign attracted many Douyin creators to participate. The total number of short videos related to this challenge eventually exceeded 200 million views, and Lancôme’s official Douyin account grew by 28,000 followers.

  • For new brands, Douyin will provide several support programs, aiming to help 100 new brands achieve sales of over 100 million RMB in 2022. Specific support includes traffic support, branding resources, and marketing campaign exposure, etc.

Douyin has also launched marketing activities to promote important festivals throughout the year, such as Queen's Day, 6.18 Promotion, 8.18 Promotion, National Day, etc. Brands can use marketing campaign resources to gain exposure opportunities and drive sales growth. According to official data, during the Douyin 8.18 campaign last August, the GMV of L’Oréal Paris in a single livestreaming event exceeded 2 million RMB ($305,000), an increase of 110% compared with the 6.18 campaign last June.

  • Launch private domain functions to help brands deepen engagement and loyalty. Private-domain traffic allows brands to deepen their marketing by creating and maintaining their own customer database. Douyin's huge user base can help the new brand cover a wider consumer group, especially young users. In addition, many new brands have gradually started establishing membership systems in Douyin e-commerce to deepen their relationship with consumers.

Recently, Douyin has added an "e-commerce membership" function. Users can click on this page to recommend brand members and join immediately. After authorization, they can receive the merchant's membership card, and users can collect points and coupons. For merchants, setting up a membership system and providing multiple membership activities, such as membership points, birthday gifts, coupons, invitation coupons, and lucky draws, can strengthen customer loyalty and contribute to sales conversion.

How are niche brands growing their sales in Douyin?

Spes, a niche haircare brand, has achieved rapid sales growth on Douyin e-commerce. Its hero product, washing-free hair spray, sold 200,000 bottles during the Douyin 8.18 event, driving the overall GMV to exceed 20 million RMB. The real reason for the explosive growth of Spes is the integration of content strategy and Douyin’s scene-based experience. Spes transformed the product selling point from text description to short video content in terms of specific content presentation. The brand used short videos to launch more engaging content for young consumers, completing an efficient link from introducing selling points, to displaying effects, realizing product promotions, and sales conversion.

In addition to the content format, the traffic support provided by Douyin e-commerce has also provided great help to Spes. By participating in a series of promotional campaigns, Spes continues to amplify its brand voice and marketing effects. Secondly, Spes uses the characteristics of Douyin's interest e-commerce and KOL resources to form a talent matrix that matches the brand positioning. Spes cooperated with more than 1,000 KOLs in 2021. The high-quality video content created by KOLs brings users into a variety of real scenes, effectively reaches potential consumers, and motivates them to buy.

Key Takeaways

  • With the introduction of its native e-commerce functionality and platform-owned payment solution, short video giant Douyin has now expanded its reach to even more consumer touchpoints. 
  • Douyin e-commerce is a growing business, making it a good choice for niche brands as they can avoid big brands' intense competition on mature e-commerce platforms and get traffic support from Douyin.
  • As recommendation technology becomes more and more mature, personalized recommendations based on content interests can bring more incremental market influence to merchants.

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