Have you ever found yourself scrolling aimlessly through an endless sea of products, only to have your shopping desires instantly ignited by a short video or a live stream? This is the magic of interest-based e-commerce. While platforms like Taobao have dominated the traditional e-commerce landscape for two decades, newcomers like Douyin (TikTok’s Chinese counterpart) are challenging the status quo with their unique "content + commerce" model. Yet, behind the rapid growth in gross merchandise volume (GMV), interest-based e-commerce faces a critical challenge: profitability.
The "Scale Without Profit" Dilemma
Interest-based e-commerce excels at leveraging engaging content to boost GMV. However, high traffic does not always translate into high profits. In an increasingly competitive advertising environment, bidding costs continue to rise, forcing brands into a cycle of diminishing returns. The challenge of achieving sustainable profitability amid rapid expansion remains a pressing issue for this emerging model.
The Diversification of E-Commerce Platforms
China’s e-commerce market was once dominated by a duopoly of Alibaba and JD.com. Since 2021, however, the landscape has evolved into a more diversified ecosystem, with at least three or even four tiers of competition. This shift, marked by several pivotal developments, signals a new phase in the industry’s evolution.
Douyin’s Strategic Push into Traditional E-Commerce
At the core of Douyin’s live-streaming commerce is its ability to tap into users’ latent purchasing desires. The platform’s carefully curated environments are designed to prolong user engagement, thereby increasing conversion rates and improving store ratings. Simultaneously, Douyin is making strategic moves into traditional "shelf-based" e-commerce, aiming to strengthen its broader ecosystem.
The Enduring Dominance of Shelf-Based E-Commerce
Despite the rapid ascent of interest-based commerce, traditional shelf-based models remain the backbone of the e-commerce market. When consumers have clear purchasing intentions, they still prefer to search and browse through structured product listings. This format’s efficiency in meeting precise shopping needs ensures its continued relevance. Moving forward, the coexistence of both models is likely to drive further innovation and growth in the sector.