For example, Taobao's Tmall flagship store and brand store, JD.COM. COM's self-operated and merchants. At present, in the stock market of the platform, online dealers and brands often face direct competition in order to compete for the same users, which also leads to behaviors that undermine market balance and brand value, such as billing, disorderly pricing and price war.
1) self-operated mode
That is, the internet platform established by the provider of products or services, in which the proprietary party buys products from manufacturers at wholesale prices and then sells them to consumers at retail prices.
Netease YEATION, for example, is a self-operated platform that strictly controls customers and makes products in YEATION.
2) Third-party mode
The transparency of price and other factors has prompted many retail platforms to choose the agent sales model, that is, allowing third-party sellers to sell products directly to consumers, but paying commissions to platform providers. For manufacturers, the opening of the retail platform has also given them more channels to sell goods.
Early Taobao was a third-party platform, which provided businesses with an online platform directly facing consumers.
3) Mixed mode
The platform owner adopts the self-operated mode, and the third-party seller acts as an agent to sell on the platform, that is, there are heterogeneous sellers on the supply side. This hybrid retail platform is defined as a multilateral platform.
For example, JD.COM and Suning are mixed-mode platforms, and the platform merchants are mainly composed of self-operated merchants and merchants.
This paper discusses how brands and distributors can achieve competition and cooperation through differentiated operation in multilateral platforms.
1) is the brand.
The direct competition between brands and distributors offline may lead dealers to rob customers through disorderly price reduction, thus increasing the management cost of brands. It may also lead to the short-sighted behavior of dealers to raise prices and withdraw from the market after harvesting users. Either way, it will directly damage the brand value of the brand and eventually lead to the loss of brand users.
2) For online distributors.
The price means and promotion means used by dealers to compete with brands for consumers not only reduce their low gross profit, but also may be fined by brands for violating price control rules, and more likely to be directly banned from brand operation qualification.
3) For the e-commerce platform.
The price confusion caused by the direct competition between online brands and distributors will benefit platform users and make the platform highlight its price advantage in the competition with other platforms. Compared with other platforms, the platform is also happy to see the competition between dealers and brands.
Then, under the situation of price control and commodity homogenization, what strategies should online brands and distributors use to avoid direct competition and realize the competition between brands and distributors?
Product/brand/prescription/strategy/strategy
1) differentiated authorization
In most cases, the products sold by brands and distributors online are highly homogeneous, and it is difficult to achieve differentiated competition. Brands can give different online distributors different rights to sell products. On the one hand, it can avoid disorderly pricing and short-sighted behavior of dealers; On the other hand, it can also stimulate the operating enthusiasm of dealers, screen out high-quality dealers and give them more product sales rights.
2) Platform specific products
In 2020, all platforms have joined the 10 billion subsidy channel to attract users to the platform with the power of capital. The subsidy war between platforms has brought rapid growth of users, but it has also caused confusion in market prices. The price of the same product is inconsistent on different platforms, users complain about the brand, and the platform requires the brand to control the price, which leads to double pressure from users and platforms.
The brand side adopts the strategy of customizing products for the platform and promotes different products on different e-commerce platforms. On the one hand, it caters to the subsidy plan of the platform and deepens cooperation with the platform, on the other hand, it can increase the number of brand users.
3) Market control
Brand is the most important thing to control the market and set a benchmark for other dealers, especially in terms of price, shops, products, visual maintenance and so on. We should establish a price anchor point in the price, and we can't lower the price at will. Brands are more likely to gain the trust of users, and trust can also bring a certain premium to brands. Therefore, in terms of price, the price of online brands can be higher than that of dealers.
Economics/marketing/business/strategy/tactics
1) community promotion
Dealers have their own advantages over brands in specific channels and regions, and dealers can use community promotion strategies by virtue of their own channel advantages. Provide standard services consistent with the brand on the platform, set up commissions for products in other channels, use the community to promote the community and drain their products.
2) Explosion area
Every store will have its own main explosion. Dealers should not only investigate the stores that really brand their products, but also investigate the explosions mainly promoted by brand owners and other dealers, so as to separate the core explosions of head stores, and choose the main explosions of dealers according to different price segments of the whole market, aiming at market segments as much as possible and expanding their target user base.
3) Content products
At present, most of the traffic actively searched by e-commerce platforms is occupied by head merchants, and the traffic growth has gradually reached the ceiling. It is difficult for weak dealers to get a piece of the search. Content products are booming, and the consumption behavior of "shopping" without purpose also accounts for a considerable proportion. Dealers have their own rights to make content and videos for products, and put them into the content section of e-commerce platform to drain the dealers themselves and improve the traffic conversion rate.
reference data
[1] Research on the Influence of Self-operated Competitive Entry on Third Party Performance —— An Empirical Analysis Based on a Large Mixed Retail Platform.
[2] "Competing with Supplements: An Empirical Study of Amazon.com"
[3] Threats from Platform Owners and Replenishments: Evidence from Mobile Application Market.
[4] Competition between B2C platform and third-party sellers considering sales efforts. 》
SMS Huang Jiawei.
Editor Yang Yuchi
Audit Li Xiaoling Zhou Yiting.