There are always many people who, for various reasons, cannot spend a long time shopping in short videos and live streams.
Ding Ding, a person born in the 1970s, is one such individual. She lives in Jinan, Shandong, and belongs to a typical middle-class family in a second-tier city. From smartphones, floor scrubbers, fruits, seafood, to clothing, and alcoholic beverages, she basically gets everything she needs from Kuaishou.
Her shopping purpose is clear; she doesn't spend a lot of time watching short videos but prefers to search on the Kuaishou shopping mall or place orders in the live streams of a few fixed anchors.
In the first four years of e-commerce, Kuaishou maximized the advantages of live streaming and short videos, creating a new scene of "products finding people." Over the past year, Kuaishou has observed that users are actively searching and placing orders, shifting towards a new trend of "people finding products." Consequently, they introduced a wide range of shelves to meet a more diverse range of specific needs.
Recently, at the Gravity Conference, Kuaishou e-commerce announced its annual strategy - putting users first and revealed the "report card" of the wide range of shelves over the past year: in the first quarter of this year, the overall GMV share of the wide range of shelves, consisting of the mall, search, buyer homepage, and store scenes, has exceeded 20%.
In 2023, Kuaishou officially entered the wide range of shelves, interpreted by many industry insiders as the fourth significant move after transitioning to short videos, entering live streaming, and venturing into live e-commerce.
Before the emergence of live e-commerce, the internet traffic was relatively distinct between content and e-commerce. It was the entry of platforms like Kuaishou and Douyin that completely transformed shopping into content and scenes.
Now, to further deepen e-commerce, Kuaishou continues to "build bridges," connecting the three major scenes of short videos, live streams, and wide shelves, forming a comprehensive operating field.
With 700 million monthly active users and an annual GMV exceeding a trillion, Kuaishou is bridging the gap between content and shelves, igniting new business opportunities. This may become the core variable of the next round of competition for both platforms and merchants.
"Boosting" User Demand
Huahua (Kuaishou nickname: Huahua's VLOG) is a post-2000s veteran shopper. Unlike many others, every time she sees something recommended in a short video or live stream, she first searches for the same product on Kuaishou before placing an order.
After starting work, Huahua shops more frequently on Kuaishou, buying whatever she needs from food, clothing, to cosmetics. Kuaishou has also become a place for her to share good finds with her mother.
Previously, Kuaishou mainly focused on content dominated by live streams and short videos, catering to the "products finding people" scenario. However, from the perspective of user demands, it is not enough to meet the extended "specific needs" of users.
If we categorize consumer motivations into semi-specific, specific, and random, the content field mostly satisfies random or semi-specific needs. Users with specific needs know exactly what they want to buy and often compare and make informed decisions through searches.
Wang Wenbo, the head of Kuaishou e-commerce mall business, discovered an interesting data point: from midnight to 8 a.m. is a live broadcast gap, precisely the period of rapid growth in mall orders. Compared to the same period last year, the order volume has increased by 70%; nighttime order volume under the search scene has increased by 90%.
Users have needs, so businesses and platforms naturally need to adjust their business direction to follow the changes in user demand. In early 2023, Kuaishou's layout of a general merchandise shelf is precisely to cater to deterministic consumer needs beyond interests, that is, the demand for "people looking for goods." Kuaishou has gradually opened up the traffic entrance to the general merchandise shelf scene since the fourth quarter, and in December, the entire mall tab was fully opened.
Here, you can search and buy at any time, providing people with shopping goals a diverse merchandise shelf.
Capturing user demand is the first step, and improving user experience is the second step. From the competition logic of e-commerce players, low prices and service are the two key points of competition. Kuaishou Mall has been focusing on these two directions early on, such as launching a low-price special sale channel, allowing users to buy with peace of mind through methods like genuine product insurance and buy now, pay later.
In a little over a year, the mall and search have become actively sought-after scenes on Kuaishou with high conversion rates, which is fully reflected in user behavior and the final GMV results.
Wang Jianwei, Senior Vice President of Kuaishou and head of the e-commerce business unit and commercialization business unit, revealed a set of data: In Q1 of this year, the number of products actively browsed by users in Kuaishou Mall increased by over 80% year-on-year, and over 25% of users placed their first orders through search. Ultimately, the overall GMV share of the general merchandise shelf composed of the mall and search exceeded 20%, meaning that out of every 4 yuan in GMV on Kuaishou, nearly 1 yuan occurs in the general merchandise shelf dominated by the mall.
From sensing user demand to tilting the traffic balance towards low-priced goods, to upgrading the search experience, Kuaishou's e-commerce fundamentally enhances "user" demand. This report card validates the power of integrating content scenes with merchandise scenes and has also sparked market attention to the next stage of the e-commerce industry.
The Integration of Three Traffic Scenes
Within the Kuaishou platform are three domains: short videos, live streaming, and merchandise shelves. Why is the importance of merchandise shelves repeatedly emphasized, and why is the integration of the three domains emphasized? Perhaps the answer can be found in the history of e-commerce development.
Starting from China's first online transaction in 1998, Chinese e-commerce has gone through nearly thirty years, transitioning from merchandise-based e-commerce to content-based e-commerce, and now to a new stage.
Merchandise-based e-commerce involves moving the offline shelves filled with goods online and using search to shorten the time people spend looking for specific products. Users typically enter the platform with a clear shopping need, such as when they want to buy clothing or cosmetics, they actively search, select products, and place orders in the merchandise area.
Platform-based e-commerce like Tmall, self-operated e-commerce like JD.com, social e-commerce like Pinduoduo, and flash sale e-commerce like Vipshop are all typical representatives of merchandise-based e-commerce.
Content-based e-commerce, driven by images, live streaming, and short videos, began in 2016, initially represented by Mogujie. Since 2018, Kuaishou and Douyin entered the market, becoming important participants in nurturing the content-based e-commerce format. In 2020, with the acceleration of online economic development due to the pandemic, live streaming e-commerce experienced rapid growth. In the following two years, the growth rate of live streaming e-commerce far exceeded that of the entire e-commerce industry, making it the focus of almost all e-commerce platforms and content platforms.
Unlike the text and image content on merchandise-based e-commerce detail pages, the core of content-based e-commerce is short videos, live streaming, and introductions by influencers and hosts, which are more vivid and emotional, thus more likely to stimulate users' impulsive shopping needs.
Merchandise-based e-commerce excels in transactions because it appeared earlier and has deeper consumer habits, making it still the most important foundation of e-commerce, currently accounting for 60% of the entire e-commerce market.
Content-based e-commerce captures more user engagement time. The biggest advantage of these platforms is providing a continuous stream of content. As users aimlessly browse short videos and live streams, similar to strolling in a mall, they are more easily influenced to make purchases and then follow the transaction path provided by the platform.
From another perspective, merchandise-based e-commerce is not good at influencing purchases, always facing traffic anxiety; content-based e-commerce is not good at "grouping goods," with relatively low supply chain efficiency.
Now, looking back at Kuaishou's move into the general merchandise shelf, a different perspective emerges.
Kuaishou's various actions in the general merchandise shelf indicate that it is not simply moving transactions from short videos and live streams to merchandise shelves, nor treating the past content scene and the newly established merchandise scene as two independent entrances. Instead, it leverages content to stimulate demand and merchandise to facilitate transactions, creating an effect where "1+1>2."
In the eyes of e-commerce practitioner Li Cheng, previously, Kuaishou may have only seen e-commerce as one of the means to monetize traffic. Now, it regards the comprehensive shelf as the next stop in the development of e-commerce. It has built a seamless connection between content ecology and commercial ecology, forming an integrated global shopping experience.
On the other hand, e-commerce platforms led by Taobao are no longer relying solely on traditional shelves. They are integrating algorithms and content ecology to enhance user engagement and stickiness.
In fact, this is also the direction of the future development of the entire industry: e-commerce evolving into a comprehensive stage of content + shelves.
The "new cake" to slice
With 700 million monthly active users, Kuaishou occupies about one-tenth of the total time spent on mobile internet consumption in China. When Kuaishou integrates short videos, live streaming, and comprehensive shelves, it will inevitably change the logic of e-commerce business and create new opportunities.
The changing consumption demands of 700 million users have always been the main theme driving Kuaishou's e-commerce development and commercialization. For the industry, it will also determine the future business and profit models for many merchants.
Since Kuaishou aims to create shelves and make the "mall" the second curve driving e-commerce growth, the richness of products is a challenge that must be addressed.
Which products and merchants can seize the first wave of platform dividends? Li Cheng, with nearly a decade of industry experience, suggests that this is likely one of the few incremental spaces for the development of the e-commerce industry.
The answer lies in the demands of users. Users like Dingding and Huahua not only represent the need for actively seeking goods but also have a key word in their shopping demands, which is "good quality at a low price."
To these users, a low price is not just about items priced at 9.9 yuan; "good quality at a low price" means ensuring high-quality products with good value for money. For example, Dingding buys cheaper fresh produce and clothes on Kuaishou compared to other platforms.
In reality, competition on pricing among merchants and platforms has always been present. Except for a few special categories, price plays a decisive role in the vast majority of retail products. The current consumer environment is increasingly sensitive to prices, with more and more consumers focusing on price comparison when making purchases.
However, Kuaishou's approach to offering low prices is not about replicating the peak period of live streaming e-commerce with top anchors leveraging traffic advantages to compete with merchants and drive prices to the "lowest on the entire web." It is also not about simply squeezing merchant profits for lower prices, as the outcome of "happy buyers, crying sellers" is not something the platform wants to see.
Kuaishou needs to find the niche for supplying good quality products at low prices. In fact, a large number of such products are concentrated in industrial belts and in the hands of small and medium-sized merchants. The challenge is that these merchants are unsure of what products to showcase in the mall, they do not know how to do self-broadcasting, and they cannot find suitable influencers for product promotion.
The key to overcoming this hurdle lies in reducing the burden on merchants and lowering operational barriers. At the end of March this year, Kuaishou Mall introduced a sales hosting model. In essence, merchants only need to be responsible for supplying goods, shipping, and after-sales service, while product selection, global product distribution, influencer distribution, and other operational aspects are handled by the platform.
The essence of the sales hosting model is "decentralization," making it more suitable for cost-effective and high-volume products.
Take the blueberry business related to agriculture as an example. The price of blueberries purchased online has always been high. Kuaishou found a seller from one of the main production areas, Fuhai Dahua in Honghe, Yunnan. The pain point for this seller was the lack of experience in operating an e-commerce platform. However, they chose the sales hosting model for the first time on Kuaishou and sold nearly 20,000 orders in just 10 days.
The blueberry business is just one of the numerous cases of the sales hosting model on Kuaishou, which is just the tip of the iceberg in Kuaishou's efforts to attract merchants.
Kuaishou aims to create a comprehensive e-commerce platform that seamlessly integrates short videos, live streaming, and general merchandise shelves. However, the majority of merchants are currently only proficient in one or two of these areas. Wang Jianwei stated that purely live-streaming merchants account for 20%, purely short video merchants 10%, and purely shelf-based merchants 32%. They found that if a merchant operates in two areas, user retention rates increase by at least 10%, and by operating in all three areas, user retention rates can increase by 30%.
To reduce the barriers and trial costs for brands and merchants to operate in all three areas, Kuaishou has developed a four-step mall operation methodology: proactive store operation (Store), enhancing product competitiveness (Ecommodity), active participation in platform activities (Activity marketing), and omnichannel distribution sales (Sale), abbreviated as SEAS.
According to Li Cheng's experience, if merchants follow this methodology, one tangible result is a more stable business growth.
"Kuaishou has abundant traffic, with user engagement ranking among the top tier on the internet; its rich content ecosystem means strong recommendation capabilities. Once the supply is in place, with the richness of brands and products following suit, the volume can immediately take off," Li Cheng said.
Just as live-streaming e-commerce has risen, making Kuaishou and Douyin the new poles, this time Kuaishou's early entry into the comprehensive e-commerce stage will also accelerate industry transformation, establishing new rules for "redividing the cake."
*At the request of the interviewees, the names Ding Ding, Hua Hua, Zhang Lu, and Li Cheng are pseudonyms.
