Interface News Reporter | Cheng Lu
Although the growth rate of China's e-commerce market has gradually slowed down in recent years, there have been more and more changes. Not only is the demand of consumers more complex, but the rise of new channels such as Tiktok and Xiaohongshu is also breaking the original balance.
This means that e-commerce needs to bid farewell to the extensive model of burning money for growth in the past, and instead seek deeper levels of value creation.
As the first generation e-commerce service provider in China, Baoshun E-commerce has witnessed the dividend period of Chinese e-commerce and successfully listed on NASDAQ and returned to Hong Kong for the second time. But in the new intense competitive situation, the company has to make changes - transforming its traditional core e-commerce business, expanding its brand management business, and seeking growth on the second curve, especially omnichannel growth.
In 2016, the company proposed the concept of omnichannel, but at that time, more attention was paid to the integration of O2O (online to offline). Zhang Zhiyu, Chief Marketing Officer of Baoshun Group, stated in an interview with Interface News that today's so-called omnichannel capability no longer even has the concept of channels, but instead uses digital forms to provide a unified customer experience throughout the entire purchasing process.
To this end, Baozun E-commerce has established a technology department called TIC (Technology& Innovation Center）， And equipped with nearly a thousand technical engineers. Based on the digital platform developed by the department, the company processes consumer, logistics, and flow data in a layered manner, enabling product tracking and linking inventory with orders.
As of now, the company has served over 450 brands, which often operate using Baoshan's OMS (Order Management System) and WMS (Warehouse Management System) systems. This also requires the system to adapt to the characteristics of different platforms and design each node on the link.
With the rise of content e-commerce, interest e-commerce and other models, the landscape of e-commerce channels is being reshaped. As "rising stars", platforms such as Tiktok, Xiaohongshu and Tencent have become important forces that cannot be ignored.
Baozun is one of the first e-commerce outsourcing companies to develop together with Taobao and Tmall, deeply tied to Taobao e-commerce. But as the consumption chain becomes increasingly complex, considering where consumers buy and where brands go, the workload and challenges for service providers continue to increase.
According to Zhang Zhiyu, currently Baozun has divided e-commerce channels into three categories, and has invested a lot of effort into each channel.
The first type is traditional shelf style e-commerce represented by Taobao, JD.com, and Pinduoduo, which are deeply tied to the brand's image and have high user value.
The second is interest e-commerce, which includes emerging channels represented by Tiktok, Xiaohongshu and Dewu. They pay more attention to attracting consumers through rich and creative content, which is the fastest growing channel type and has also led a group of service providers who have captured the new trend.
The third type is the private domain channel, although the traffic threshold is extremely high, it is also an important battlefield for brand building and service, which cannot be ignored.
At present, more than 40% of the partners in the brands served by Baozun are multi-channel partners. But the construction of omnichannel capabilities is not a one-day effort, and Baoshun E-commerce has also gone through some detours.
"The gene of Tiktok live broadcast is very different from that of us." Zhang Zhiyu mentioned that Baozun paid more attention to efficiency and the establishment of goods system in the past, but suddenly wanted to do Tiktok live broadcast room. It also requires the anchor to be very talkative and have a new live broadcast form, which is undoubtedly a huge transformation challenge.
In order to make up for its shortcomings, the company reached a strategic acquisition intention with Tiktok clothing category service provider Hangzhou Rocklink Company in November last year, and planned to acquire 51% of its equity. The latter was established in 2016, focusing on the direction of big fashion. Baozun hopes to use his ability to improve the content construction of Tiktok ecology.
For content creation and live streaming, Baoshun has also established a creative content business center, with a current team size of about 600 people.
Reflected in the performance of the second fiscal quarter, the revenue of Baozun Tiktok channel accounted for more than 5% of the total revenue of e-commerce business, achieving a high triple digit growth, and the revenue of Xiaohongshu channel also showed good performance.
For the next stage of challenges, Zhang Zhiyu believes that how to make good investment strategies, introduce more new talent partners, and form a joint force may be the problems that will be encountered in the future. The company plans to continue to increase its investment in the Xiaohongshu channel and seek incremental business opportunities through differentiation.
In addition to Baozun, other e-commerce outsourcing companies have also increased their investment in omnichannel channels in recent years.
In 2023, the proportion of non affiliated businesses of Ruoyu Chentao will basically double, while increasing the layout of brand management business and incubating new self owned brands. Another service provider, One Network One Creation, achieved a year-on-year growth of more than 60% in GMV (total commodity transactions) through emerging channels such as Tiktok, Xiaohongshu, WeChat and Pinduoduo. The revenue from emerging channels such as Tiktok accounted for more than 15% of the company's overall revenue, and the number of Tiktok stores continued to rise.
But in the fiercely competitive e-commerce market, whether e-commerce outsourcing companies can achieve sustained growth depends on the effectiveness of their transformation. Service providers can only keep up with the rapid rise of emerging channels by constantly exploring various possibilities and developing refined operational strategies.