Analysis of marketing channels for Taobao, Tmall, and JD.com (platform logic, customer quality, etc)
[Hua11.com Original] This series (Marketing Advanced Series) will conduct a comprehensive analysis of currently popular marketing and promotion channels.
Each channel and platform has distinct characteristics, attracting different types of people. Consequently, promotion costs and regional competition situations vary. Keep in mind that the content in this series serves as a reference only. Students should critically assess it in light of their specific circumstances.
In this article, we'll begin by analyzing the leading domestic e-commerce channels: Taobao, Tmall, and JD.com. We'll explore their "retail customer source quality" and platform operation logic to determine whether investing our time, energy, and even money in these channels is worthwhile.
First, let's clarify what "customer source quality" means. It involves a comprehensive evaluation of customers' general psychological expectations (product positioning) from this channel. Additionally, we consider their consumption levels, stickiness (repurchase rate), and other behaviors.
Now that we understand this concept, let's dive into the analysis:
1. Taobao
Modern individuals are inseparable from the internet, and online flower ordering has become a prevailing trend. Many flower shop owners and studio operators consider promoting their businesses and selling flowers online.
However, the online landscape is vast and intricate, with varying quality of customer sources. Especially if you're unfamiliar with it, achieving "high input and low output" in online promotion is all too common.
Undoubtedly, Taobao currently stands as China's largest e-commerce platform, boasting the lowest entry threshold.
Nevertheless, since its inception, Taobao's internal design logic has led to a series of inherent issues. What are these problems? Let's delve into Taobao's operational logic:
- Low Entry Threshold: Taobao positions itself as an all-encompassing marketplace, allowing free entry for merchants. Consequently, fierce competition ensues among these merchants.
- Competition Strategies: To stand out, merchants resort to tactics like paying for rankings or purchasing prime showcase positions. They often compete on price, engage in mild deception, or compromise product quality.
- Quality Concerns: Consumers are well aware that unless a product originates from an official brand store, its quality on Taobao is uncertain.
Given this prevailing mindset, consumer behavior tends to be short-term (often one-time transactions), hindering the formation of brand loyalty—even for small flower shops. Before making subsequent purchases, consumers continue to search and compare similar products, seeking the most "cost-effective" options based on similar images.
To mitigate quality risks, consumers often reduce their spending budgets on these platforms.
Despite Taobao's efforts to enhance overall platform operations and achieve some results, the underlying logic perpetuates the aforementioned problems. Furthermore, as more latecomers join, the overall quality of goods on the platform further declines.
Consequently, Tmall and JD.com emerged as alternatives, aiming to address these issues (though they too have their flaws, which we'll explore below).
For merchants selling flowers on Taobao, it's essential to recognize that consumer expectations and behaviors tend to be cautious, budget-conscious, and uncertain. From a psychological standpoint, this isn't advantageous for sellers. As a result, merchants often perceive Taobao customers as demanding and find that service input constitutes a significant portion of their efforts.
If you're considering opening an online flower store on Taobao, thorough observation of other stores' sales performance is crucial. Additionally, be mindful of potential situations like fake transactions or product modifications.
2. Tmall and JD.com
Now, will the situation improve for Tmall and JD.com, which have higher thresholds and positioning?
Let's delve into the operational logic of these platforms:
It's evident that these platforms have increasingly stringent restrictions on merchants to maintain a relatively high quality of customer sources.
This implies that if you're committed to investing more funds on these platforms, you'll gain higher-quality customer bases.
However, due to the growing number of merchants attempting to join (many transitioning from Taobao to these platforms), your operational challenges and costs will escalate.
Undoubtedly, the platform benefits the most.
Despite employing various methods to assist merchants in acquiring traffic—such as "thousand people, thousand faces," personalized recommendations, support for new stores, local area matching, diverse activities, and shopping festivals—the fundamental platform design logic remains unchanged.
Advancing one rank means other merchants move backward by one. The reverse holds true.
"These platforms are becoming increasingly challenging to operate." This sentiment echoes not only among merchants but also aligns with the platforms' ultimate design direction.
While some internet-famous stores may serve as exceptions, their proportion on the platform remains negligible. Publicly available statistics reveal that over 90% of platform merchants either don't turn a profit or even incur losses.
3. Further Thoughts
We have examined the design logic of the two main types of mall platforms, and the conclusion is relatively clear.
As operators of our flower shops and floral studios, when considering whether to join these platforms, in addition to the financial factor, we should also take into account the increasing operational complexity, the increasingly stringent platform regulations, and whether you have the confidence to disrupt the current competitive landscape, outperform other merchants, and win consumer favor.
These platforms boast extremely high traffic, reaching almost the entirety of the Chinese population. Therefore, if you are confident, you can cautiously attempt to engage with them.
However, for the majority of latecomers who lack sufficient funds, have no experience in platform operations, and do not have the advantage of being first to market, what should we do? Please continue reading the other chapters on marketing in this book, "How to Run a Flower Shop and Floral Studio," and you will gain a clear understanding.
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