From e-commerce to WeChat business to DouShang: the evolution and development of business models

In recent years, with the rapid development of the domestic Internet, it has not only changed people’s daily life, but also made China’s Internet penetration rate rank first in the world. No matter how the Internet develops, the competition among major companies is still essentially a competition for traffic, because in the current era where users are king, whoever controls a large number of users will be able to build their own business empire. In this process, the rise of emerging platforms has brought about three significant e-commerce dividend periods.

1. Representative of e-commerce—Taobao

From the end of the 20th century to the beginning of the 21st century, the rapid development of network technology and people’s increasingly accelerated pace of life have triggered the demand for a faster and more convenient shopping experience. Therefore, merchants have focused on the e-commerce platform with Taobao as the core, ushering in the era of e-commerce. E-commerce provides a variety of product choices, low prices and shopping convenience, attracting more and more consumers. The low cost of e-commerce has attracted many small merchants to participate, and even prompted some merchants to shift their sales focus to online platforms.

2. The representative of micro-business—WeChat

Unlike Taobao’s long development cycle, micro-business has attracted more than 10 million practitioners in just one year. As a derivative form of e-commerce, in addition to relying on the WeChat ecosystem, its essential feature is that micro-commerce relies on trust in social relationships to drive consumption. The current glut of goods requires consumers to make quick decisions when making choices. In the past, consumer behavior mainly relied on brands to build trust. Nowadays, micro-businesses have gained rapid development opportunities because they can make recommendations among acquaintances.

3. Douyin, the representative of Douyin

The rise of Douyin merchants is due to the uniqueness of the Douyin platform, especially its deep integration between communication and sales. The boundaries between communication and transactions are becoming increasingly blurred. Whoever can quickly attract traffic will take the initiative in today’s market. In the past, companies needed to invest heavily in traditional advertising to build their brands, but now, the decentralization and personalized needs of traffic have greatly reduced the efficiency of traditional communication methods.

Douyin, as a platform with a large user base, provides convenient shopping links such as shopping carts and product showcases. Users can place orders directly while watching short videos. As of January 2019, Douyin has more than 250 million daily active users and more than 500 million monthly active users, making it the largest short video platform in China and boosting the vigorous development of the Douyin business model.

To sum up, the evolution of various business models reflects the changes in consumer demands in the Internet era and the strategic adjustments of merchants in traffic competition. All of this revolves around trust building and communication efficiency in the market. In the future, business model innovation will remain an indispensable link.