New Adjustment of Douyin E-commerce: Centralized Management of Brand Merchants and White-Label Merchants | Exclusive

Written by Li Xiaoxia

Edited by Qiao Qian and Yang Xuan

36Kr exclusively learned that Douyin E-commerce has made a new round of adjustments. The Industry Operation Group A and Group B will be uniformly managed by Zhao Rui, the former head of Group B, and report to Wei Wenwen, the president of Douyin E-commerce.

The official of Douyin confirmed this adjustment to 36Kr and stated that Group A and Group B will not be merged.

"In the past two years, many small and medium-sized merchants in Group B have grown and expanded, and the original management standards may no longer be applicable. The unified management of Group A and Group B by Zhao Rui can achieve better coordination. Additionally, some small categories may be merged," a person close to Douyin E-commerce told 36Kr. Another Douyin person close to Zhao Rui commented, "His execution ability is very high."

The division of Industry Operation Group A and Group B of Douyin E-commerce originated from the adjustment in the middle of last year. Brand merchants are classified in Group A and were previously managed by Mu Qing, the former operation head of Douyin E-commerce; Small and medium-sized merchants, white-label merchants, and industrial belt merchants constitute Group B, which was previously managed by Zhao Rui, who transferred from ByteDance's commercialization sales department to Douyin E-commerce. Group A mainly assesses GMV, while Group B pays more attention to the order volume.

In March of this year, Mu Qing was transferred to TikTok E-commerce, and Group A was temporarily managed by Wei Wenwen, the president of Douyin E-commerce.

The establishment of Group B reflects Douyin E-commerce's emphasis on white-label merchants, aiming to supplement the product variety and establish price competitiveness by introducing white-label merchants and industrial belt merchants with lower prices. This is also a task that Douyin E-commerce, which vigorously developed shelf E-commerce last year, needs to fulfill. Data shows that in the past year, the number of new small and medium-sized merchants entering Douyin E-commerce has increased by 83% year-on-year; In the just-ended Double 11 promotion, the number of small and medium-sized merchants participating for the first time increased by 33% year-on-year compared to last year, and the average daily sales increased by 45% month-on-month.

According to "LatePost" reports, at that time, Douyin also set up an independent strategy team for Group B, led by Huang Yuanjian, the former head of TikTok Brazil E-commerce; In terms of traffic allocation, the weight of order volume has also been increased.

Entering 2024, Douyin E-commerce launched a low-price strategy, making "price power" the top-priority task. Small and medium-sized, and white-label merchants have further become the core promoted by Douyin, and the importance of Group B has further increased. A person close to Douyin said that in the first half of the year, both in terms of the number of merchants entering and the number of merchants placing advertisements, Douyin E-commerce is benchmarking against Pinduoduo within the company.

On the other end of the emphasis on small and medium-sized, and white-label merchants is the reduction of traffic for big brand merchants, and the advertising budget and GMV growth brought by the former are not as good as those of brand merchants. A significant result is that the GMV growth of Douyin E-commerce has significantly slowed down. The growth rate in the first quarter was still above 50%, but it has dropped to below 30% in the second quarter; In September, it was even less than 20%.

A clear fact is that low-price white-label products cannot bring a positive GMV increment to the platform. On the other hand, there is also a phenomenon of brand merchants' goods rights flowing to other platforms.

According to informed sources, Douyin is aware of these problems internally, so this year's Double 11 adopted the method of an early start to retain the goods rights. According to 36Kr's exclusive understanding, the growth rate of Douyin E-commerce during this year's Double 11 has rebounded to around 25%, and the sales volume has exceeded expectations. In addition to extending the duration, Douyin E-commerce's Double 11 also canceled the pre-sale and used more subsidies for consumers rather than directly for merchants.

In the third quarter, Douyin abandoned the absolute low price and returned the products to the normal selling price. The aforementioned person stated that at the same time, Douyin shifted the resource focus back to brand merchants and non-brand big merchants. It is expected that next year, the traffic inclined towards brands will be raised to a new height to ensure that brands obtain a larger GMV scale. Regarding the assessment criteria for brand merchants, it has changed from the original GMV and order volume to GMV consideration.