Zhang Yiming finally launched a formal challenge to the field of e-commerce.

You know, this rational, pragmatic byte-beating CEO, which is called a bit like a robot, will not declare war in such a high profile until he has a clear judgment of the moment. In an interview with Caijing, he once mentioned the principle of expanding business boundaries: try not to do what others have already done, and not to do it better than others, unless it is business defense.

What is different this time is that byte beat not only seeks boundary expansion in addition to content, but also builds a moat when competition is coming.

An e-commerce division was set up on the eve of LatePost, which will be the first-tier business unit alongside Jinri Toutiao, Douyin, gaming, Zero (education and new business) and commercialization, reporting to byte-jump China CEO Zhang Nan and chairman Zhang Lidong, later on.

Prior to this, byte-bouncing e-commerce business was scattered in Douyin e-commerce in Taiwan and commercialization departments. After this adjustment, e-commerce's strategic position has been upgraded. The e-commerce division will be responsible for the uplink and downstream links on Douyin and other content platforms, such as live broadcast, e-commerce products, operations, platform rules, brand commerce and so on. Douyin shop is its key development product, byte beat hopes to build another e-commerce platform on Douyin.

This time, Zhang Yiming obviously has the expectation of "doing better than others". As a platform with a huge flow pool, it has the necessary traffic and users to be an e-commerce business.

However, there is no shortage of people who died battlefield in the e-commerce field, and there are also giants who have these two conditions, but there are also giants who want to get a piece of the pie in the e-commerce field, who have killed a Pinduoduo over the years.

The choice to join the Bureau at this time is not only the result of the development trend, but also Zhang Yiming's "have to".

The byte-beating revenue structure is still dominated by advertising revenue. When comparing with BAT, Zhang Yiming mentioned that byte is more like Tencent, including Huawei, which is doing the basic ecology, close to the basic needs of people's lives, but relying on information flow advertising is more like Baidu, Inc. 's model, the advertising model is single, the ceiling can be seen at a glance, this is not what Zhang Yiming wants.

If you want to have more initiative, you need to form a buying closed loop on your own platform, without having to jump to other ecommerce platforms through Douyin. If you want to support higher valuations, you need to get rid of the dependence on "advertisers" and have richer profit models.

From the perspective of the competition pattern, byte beating can not be lagged behind. In the competition with Kuaishou Technology, although Douyin DAU far surpasses Kuaishou Technology, the latter has an earlier layout in e-commerce and live streaming with goods. Kuaishou Technology launched Kuaishou Technology's store in June 2018 in the matter of leaving traffic on his own platform and building a closed loop for shopping. In the face of competition, Douyin not only can not lag behind, but also has the ambition to win.

In addition, in the overseas market, there is no precedent for the real success of Chinese e-commerce going out to sea, and it is not impossible to expand overseas e-commerce by relying on the rapid growth of Douyin overseas version of TikTok.

Whether it is the business layout, revenue model, competitive situation, or the traffic advantage of byte jump, the gap in the overseas market, Zhang Yiming has to seek a new growth point, and e-commerce is enough to carry this ambition.

Byte beat requires e-commerce

The three cash carriages on the Internet platform are advertising, games and e-commerce.

The huge volume of traffic gathered at the App factory has opened up the possibility of more diversified realization of byte jumps. in order to get rid of its dependence on advertising, the company has begun to lay out its layout in the gaming sector and will continue to hire more than 1000 people in 2020. In addition to mature advertising monks in the early days of the game business, e-commerce has become one of the most direct ways to cash in.

Among the three carriages, the ability of e-commerce to attract money is obvious to all. This can be seen from the fact that BABA is still among the most valuable companies in China.

At the same time, e-commerce has also attracted many giants to try, Tencent, Baidu, Inc. have repeatedly tried e-commerce.

Tencent's Paipai net and QQ Mall all ended in failure, but still did not give up e-commerce. On June 20th, connecting to Insight found that Wechat began internal testing of the "Wechat small store" Mini Program. After opening a small store, users can broadcast live and sell goods directly in this Mini Program.

Baidu, Inc. also set up the e-commerce department in 2007, and in the next few years, he launched many e-commerce platforms, such as "you", "Love Life", "Love Purchasing" and so on, but all of them were unsuccessful.

Betting on cross-border e-commerce Little Red Book eventually changed direction, dominated by community, supplemented by e-commerce; NetEase, Inc koala shopping has also changed ownership BABA.

Only JD.com and Pinduoduo are the latecomers to the rise of the e-commerce field.

There are not many winners, but the market plate is always big enough. According to the Statistical report on the Development of China's Internet released by the China Internet Information Center, the number of online shopping users in China reached 710 million by March 2020, an increase of 100 million compared with the end of 2018, accounting for 78.6% of the total Internet users.

The bouncing bytes of this big cake don't want to be let go, and you can't miss it.

Pinduoduo founder Huang Zheng once defined his product model with the product form of Jinri Toutiao. "you can imagine changing the information flow under Jinri Toutiao into commodity flow. This is Pinduoduo." "

E-commerce pays attention to "people, goods, market", byte beat occupies two of them, there are short video + live e-commerce cash scene, but also have enough traffic and users. But at present, many users still mainly through Douyin, jump to Taobao to buy, and did not complete the delivery in Douyin, Douyin's role as a diversion platform, mainly from the marketing costs of merchants.

To get rid of the dependence on advertising, it is necessary not to be satisfied with making Douyin just a traffic distribution platform, but to establish a complete closed loop of "short video + live streaming-e-commerce-delivery" through short video + live streaming.

In fact, in the field of e-commerce, this is not the first test of byte jump, and its exploration period is as long as six years.

In 2014, byte jump launched the "Today sale" function, which directed the third-party e-commerce platform; two years later, it launched the "Jingtiao Plan", which was deeply bound to JD.com as its diversion; in 2017, byte jump launched its "rest assured purchase". Began to launch its own e-commerce platform, focusing on high quality and low price, targeting people who pursue high performance-to-price ratio, but it was finally split. E-commerce platform "value point" and "new grass" and other attempts are also silent.

In 2018, Douyin and Taobao reached a cooperation for Taobao diversion, and in 2019, byte jump launched Toutiao Xiaodian, the content creator's e-commerce cash-out tool.

In April last year, Douyin launched a Douyin store, which is a convenient tool for merchants to cash out with goods. When users place an order on the Douyin platform, if the product comes from a Douyin store, they do not need to jump to other e-commerce platforms and can simultaneously complete the shopping process while watching the live broadcast. This has been recognized by the outside world as the symbol of byte jump plus code e-commerce at that time.

Affected by the epidemic and the craze of live streaming this year, Douyin has further increased its efforts to carry goods live. From Luo Yonghao transferred to Douyin to start live streaming with goods, to various stars in Douyin studio to start selling goods, Douyin live e-commerce became hot.

Luo Yonghao officially launched the live broadcast on Douyin at 8 p.m. on April 1. during his three hours of live broadcast, he brought a total of 23 items and paid a total transaction amount of 110 million yuan. Of the 23 products he brought, 10 pointed to Taobao links and 13 jumped to Douyin stores.

It can be seen that since the beginning of this year, the weight of Taobao outside the chain and Douyin stores has begun to change, and the byte jump is gradually increasing the purchase closed loop of its own platform.

However, the attempts in the field of e-commerce have not been on a large scale, and the e-commerce business is only scattered in various departments. This time, Zhang Yiming made up his mind.

Byte jump to do e-commerce, as well as the pressure of a new round of high revenue targets in 2020, to expand new business, it is possible to seek a new round of growth.

Zhang Yiming's ambition

Behind the search for a breakthrough is the company's aggressive ambition.

At the annual meeting in Okinawa, Japan, in 2015, the theme was named "the era of Great change". Indeed, in that ever-changing Internet battlefield, Byte Jump opened a mess.

Zhang Yiming has set several goals for himself and the company: globalization is fully successful in 2019 and can become the number one creative platform in the world, hoping to seize the media time of 1x7. Through a stronger advertising system and a more powerful business system, it can achieve a market revenue of $10 billion by 2020 and a market capitalization of $100 billion.

Zhang Yiming, who is good at setting goals, sets a new goal for himself every year, like drawing a finish line and running a race with himself.

Now, five years after the "era of upheaval", byte jump generated revenue of about $5.6 billion (40 billion yuan) in the first quarter of 2020, an increase of more than 130 percent from the first quarter of last year, according to Reuters. The company is currently valued at about $95 billion to $140 billion, or 671.9 billion to 990.1 billion yuan, on the trading market.

This figure has even exceeded the target set by Zhang Yiming.

Zhang Yiming pays more attention to revenue than talking about ideals, as he said, "our romance is pragmatic romance, is the romance that turns ideals into reality."

According to Reuters, Bloomberg, Interface and other media reports, the revenue target for byte jump is 6 billion yuan in 2016 and 15 billion yuan in 2017, which is becoming more and more daring, from 50 billion yuan in 2018 to 100 billion yuan in 2019. Later, due to better-than-expected revenue, the target was raised to 120 billion yuan.

As early as January 9 this year, Interface News reported that Byte Jump has completed its 2019 performance task, with annual revenue exceeding 140 billion yuan, an increase of nearly 280% over the previous year. At the same time, the average daily revenue of byte jump exceeded 400 million in November 2019.

According to Reuters, the revenue target for byte jump is 200 billion yuan in 2020.

Behind the growing numbers, although byte jump has been secretive about IPO, the concentration of international venture capital and PE institutions has shown to some extent that byte jump is getting closer and closer to IPO, and valuation is rising rapidly. At the same time, byte jump needs a more diversified revenue model to prove its revenue growth potential to the capital market.

Since last year, Byte Jump has increased its leverage in games, social networking, entertainment and other fields, and there have been many new moves this year. It needs to build a business model that can compete with BABA and Tencent in order to support higher valuations. E-commerce has become the most effective grasp.

Being an e-commerce business is also a necessary move in the competitive landscape.

At present, one of the biggest rivals of byte jump in the field of short video + live streaming is Kuaishou Technology. As early as June 2018, Kuaishou Technology has already launched Kuaishou Technology's small store, and with the strong ability of anchor Kuaishou Technology to carry goods, it has achieved the growth of e-commerce business.

According to the "double 11 outsider TOP list" released by Cass data and Taobao Alliance, nearly 40% of the Taobao Alliance's list of TOP50 talent sellers from multiple platforms comes from Kuaishou Technology platform.

Although Douyin has a late layout, it has developed rapidly since it launched its Douyin store in April last year, especially this year, stars and big Vs have started live streaming with goods on Douyin.

What Douyin and Kuaishou Technology are currently doing is to strive to keep the traffic on their own platform and complete the purchase closed loop on the platform.

Kuaishou Technology once relied on Taobao for his e-commerce business, but has been unable to access Taobao since December 23. In response, Taobao said: we have always maintained an open and cooperative attitude; Kuaishou Technology responded: Taobao products can not be reviewed for the time being due to system upgrades.

But what can be seen is that Kuaishou Technology has been doing measures to "go to Taobao", including setting up his own product library, guiding online celebrities and MCN to open stores in Kuaishou Technology, and directing traffic to Kuaishou Technology's own stores.

Kuaishou Technology is in the layout, how can Douyin fall behind?

At present, Douyin also needs to weigh the competing relationship with BABA. This is mainly reflected in the cooperation between the two sides. In 2019, Douyin and Taobao signed an annual framework agreement of 7 billion yuan, and the 2020 new year frame is still under negotiation, with outsiders reporting that the amount of the new year frame is as high as 20 billion yuan.

However, byte jumps have responded that "this information is not accurate". The annual frame of cooperation between Douyin and Taobao expires at the end of June, and Douyin will not be able to hang Taobao links from July 1 if the two sides do not renew their contracts, while the two sides are still in the game, Shenzhen reported.

This kind of cooperation is uncertain. After Kuaishou Technology went to Taobao, although he chose JD.com, he still did not give up the layout of his own e-commerce, as is Douyin, which now wants to go faster.

Can byte beat do a good job in e-commerce?

E-commerce businessmen are good at telling stories, from Jack Ma's "do not like money" to Liu Qiangdong's "employees are all brothers" and "you can call me low, but you can't ignore me". They all know how to set up "people".

But Zhang Yiming is different. he is not good at talking about feelings, and this trait may eventually make the byte-beating e-commerce have a different face.

Douyin plans to cut off all third-party converted goods by June 18 next year, leaving only small shops that come with the platform, China Business and Economics reported. At present, the platform has begun to "lay its hands" on higher-selling categories such as beauty makeup, snacks and furniture, restricting its external e-commerce jump, but byte jump denies this. In addition, the newly established e-commerce business unit currently mainly serves Douyin e-commerce business, in order to meet users' shopping needs on Douyin, while Toutiao and watermelon e-commerce demand is relatively small.

In addition, the overseas market, the territory that belongs to Chinese e-commerce players is still a blank, when the domestic e-commerce market is difficult to break through, it is possible to overtake in the overseas market.

Li Chengdong, founder of the dolphin think tank, expressed a view in an interview with China Business News: the establishment of the e-commerce department with this byte jump is mainly aimed at the international market. In the domestic market, BABA's e-commerce ability is very strong, Douyin e-commerce may not have much chance to win; in addition, the relationship between byte and Ali is more cooperative, there is no need to directly compete to highlight the relationship. Therefore, Li Chengdong believes that Douyin e-commerce is not only aimed at the domestic market, but also to manipulate global plans.

Byte jump to set up an independent e-commerce department is also in line with Douyin's huge overseas users and shopping needs.

According to CITIC's research report, byte jumping relies on the overseas TikTok of Douyin to grow at a high speed overseas. In 2019, it has achieved 700 million global daily active users and has business in 150 countries and regions, leading Chinese science and technology Internet companies and gradually narrowing the gap with first-tier giants such as Facebook Inc and Alphabet Inc-CL C.

Relying on the launch of advertising products and the expansion of user traffic, TikTok will start the commercial realization of information flow advertising in 2020, and gradually transition from the current brand advertising to small business owner advertising. With the advance of TikTok product iteration, overseas realization is expected to accelerate.

Whether to set up a new e-commerce App, or rely on Douyin to expand e-commerce business, or enter overseas markets, further detailed planning remains to be seen.

Doing e-commerce with byte beating is a challenging qualifier.

On the one hand, the traffic of Toutiao is different from that of e-commerce. Users have formed the habit of shopping on Taobao, Tmall, JD.com, Pinduoduo and other platforms. Whether Douyin or a new shopping App can make users change their habits is a big difficulty.

On the other hand, the e-commerce platforms that can survive have distinct characteristics. BABA's "shopping" model, massive goods will make users think of it first when there is online shopping demand, JD.com 's "3C home appliances" characteristics, attracted a lot of male users, become the choice to buy home appliances, quality goods, Pinduoduo low-price group shopping will make consumers feel that buying things in Pinduoduo is the lowest price.

Can byte beat create a trait that belongs to it?

In addition to users' habits, the challenge of doing e-commerce with byte jump is also reflected in payment and logistics. The mainstream payment tools are Wechat and Alipay, at present, Zhang Yiming can not be separated from these two payment tools, re-creation is not easy.

The byte jump in logistics is also lack of support. at present, logistics services are provided through third-party partners. However, JD.com and Ali have a say in logistics through either self-management or holding acquisitions.

The meat of e-commerce is delicious, but it is also difficult to eat. Although there are challenges, Zhang Yiming is not afraid of challenges. He is good at breaking through. Like Baidu, Inc., Tencent and traditional portals are good at information distribution business, Jinri Toutiao rises by virtue of machine algorithm recommendation, surrounded by game giants such as Tencent, byte beat has also found a way out in the game field.

Therefore, the byte beat to do e-commerce is still expected, what will it be like in the future? What kind of innovation will it have?