Internet moguls are being held hostage by the entertainment system!

Chapter 399 Douyin's E-commerce Ecosystem and TikTok's IPO Expectations
On September 26, Pinduoduo, which had been listed for two months, suddenly announced a decision.

"Starting November 1st, Pinduoduo will officially launch the '11 Billion Yuan Subsidy' program, allowing users to directly see the lowest price after subsidies without having to painstakingly calculate discounts..."

This message was released by Pinduoduo through its official Weibo and Douyin accounts, and Huang Zheng also confirmed it on his personal account.

The decision to launch the 11 billion yuan subsidy plan on November 1st clearly indicates what it's targeting.

Then, that same evening, Pinduoduo announced that it would be adding consumer electronics brands such as Dyson and iPhone to its platform.

This series of actions can be considered as frequently throwing grenades in the e-commerce industry.

Although Ali and Jingdong did not issue a public statement on social media, the company was holding internal meetings to discuss whether to adjust the promotional plan for this year's Double Eleven shopping festival.

Douyin, which has already made clear moves to enter the e-commerce market, also held an internal meeting the following day.

The meeting also discussed the next steps for the development of Douyin's e-commerce ecosystem: whether to follow Pinduoduo's example of providing subsidies, or to choose a different direction.

"Currently, the stores on Douyin Mall are mostly small brands. Although the sales volume of live-streaming e-commerce has been increasing, many big brands are still taking a wait-and-see approach, and..."

At this point, the marketing director who had stood up to report suddenly stopped, looking troubled.

Seeing this, CEO Su Xiao waited a few seconds before asking, "Is there a problem?"

"In addition to major brands choosing to wait and see, some e-commerce platforms have also implemented unfair terms such as 'choose one of two' for merchants, which further increases the difficulty of attracting merchants."

"OK, sit down."

Su Xiao gestured for the other person to sit down, then stood up from her seat. She looked from left to right, first glancing at Chen Xiu, and then quickly scanning the other people in the conference room.

After a brief pause, she said directly without any further action, "Let me first confirm one thing with everyone: e-commerce is only a part of Douyin's ecosystem. Based on the current stage of development, we will not invest too many resources in e-commerce."

"Therefore, Douyin Mall will not be launching any new promotional offers for this year's Double Eleven shopping festival!"

As soon as he finished speaking, most people showed varying degrees of surprise on their faces.

The only two people who remained seated without changing their expression were Chen Xiu and Zhang Yiming.

The decision of whether or not to invest too many resources in e-commerce has been the topic they and Su Xiao have been discussing the most in their meetings these past few days.

The conclusion was reached yesterday when Pinduoduo launched its "10 Billion Yuan Subsidy" program.

After the people below had almost digested their surprise, Su Xiao continued, "Douyin is a content production platform, not just an e-commerce platform. Our e-commerce content is just an extension of our life sharing."

"If we really have to burn money on subsidies, we definitely can't compete with Pinduoduo, let alone Ali and Jingdong, which have ample cash flow. So we don't need to panic because of their various preferential plans."

"Maintaining the core content base, continuing to expand user traffic, and gradually increasing the proportion of e-commerce business is the most suitable strategic development for Douyin at present."

Just as Chen Xiu told Pony Ma a few days ago, Douyin's strategy for entering the e-commerce arena still needs to be slow, gradual, and rhythmic. It must not give up its biggest advantage and rush to compete with others.

Upon hearing the words "strategic development," the others in the conference room silently turned their heads and cast their gazes toward Chen Xiu, who was sitting at the head of the table on the left.

As Douyin's executive director and chief strategy officer, Chen Xiu is undoubtedly the main architect of the company's future development strategy.

Then, Chen Xiu's consistently correct actions made them willing to trust his judgment.

Seeing the changes in the expressions on the faces of the various department directors, Su Xiao realized that she no longer needed to explain the issues with Douyin e-commerce.

"OK, next topic."

Everyone straightened up and quickly put away the random thoughts in their minds.

Su Xiao opened the prepared document and said, "According to the latest statistics from last week, Douyin currently has 250 million daily active users and 500 million monthly active users. The total advertising revenue in July and August has already exceeded that of the second quarter."

"The fastest growing segment is Dou+ promotion for livestreaming e-commerce, but Dou+'s initial user base was aimed at livestreamers and influencers, and its traffic exposure level is not suitable for professional e-commerce."

"Many merchants have expressed a desire for greater traffic support. Based on this feedback, the product department is developing a platform called ByteDance's Intelligent Marketing Platform..."

As Su Xiao recounted the development of ByteDance's massive engine, Chen Xiu's lips unconsciously curled upwards.

Douyin has emerged as a giant in the short video market thanks to its massive user-generated short videos and precise recommendation algorithms.

Instead of competing with those already giant companies by burning money and issuing subsidies,

Douyin would be better off quietly staying in the background and selling traffic, then letting those streamers who are obsessed with live-streaming sales spontaneously build up the e-commerce ecosystem.

If livestreamers want to make money through livestreaming, they either need to approach brands or brands need to come to them personally to attract traffic and sell products.

A development model driven by profit will never lack internal motivation.

In this way, Douyin not only doesn't need to provide subsidies, but also benefits twice from traffic and platform commission, creating a win-win situation.

The only thing to do well is to conduct audits to prevent counterfeit goods from flooding the market and ruining this nascent e-commerce ecosystem.

"...Once the internal testing of ByteDance's advertising platform is over, the marketing department can encourage merchants and livestreamers to start using it. This is also the most important task for your department in the fourth quarter."

Su Xiao turned to look at the marketing director who had just gotten up to give a report.

After receiving a clear response, she nodded and put away the documents: "OK, today's meeting is adjourned." *Whoosh whoosh whoosh*

The crowd gave a brief applause, then got up and left one by one.

When only Chen Xiu, Su Xiao, and Zhang Yiming remained in the conference room, Su Xiao went to lock the door. Chen Xiu and Zhang Yiming exchanged a glance and began to chat about the topic they had just discussed.

Zhang Yiming asked, "Was it your suggestion to Huang Zheng about Pinduoduo's 10 billion yuan subsidy program?"

"Where did you hear that?"

“It was Pony Ma who told Wang Xin.”

Chen Xiu mentally criticized Wang Xin, then nodded and said, "This was my suggestion to Huang Zheng, but the specific details were discussed and decided upon by him in a meeting."

"Tsk, you didn't go and work part-time doing strategy at Meituan, did you?"

Zhang Yiming launched into a direct rant, his tone unmistakably sarcastic and mocking.

Chen Xiu knew he was in the wrong and had no way to refute it.

Su Xiao interjected, "Pinduoduo's development direction is different from ours. We can't use their money-burning subsidy scheme."

"Let's talk business."

Zhang Yiming responded sullenly, abandoning his original intention to tease Chen Xiuyi.

"Xiu, last time you said that merchants and streamers would help us improve Douyin's business ecosystem, and we only need to do a good job with Douyin's content ecosystem. Why didn't you let Su Xiao say that in the meeting today?"

"How can we say everything? What if there's a corporate spy among the people in the meeting just now?"

"Right."

Zhang Yiming nodded in agreement.

As the business grew and the volume of business increased, the number of middle-level managers also increased rapidly.

Most of these people have only been with the company for a short time. Their abilities are fine, but their loyalty is questionable.

For important strategic deployments like these, senior management needs to have a comprehensive understanding, while subordinates only need to know the work objectives for the next quarter.

After expressing his doubts, Zhang Yiming then asked a question about the strategic deployment direction discussed at the previous meeting.

"According to our plan, Douyin's business ecosystem will be gradually improved next year, and then we will promote TikTok's listing and start its overseas commercialization process."

Zhang Yiming stopped, his gaze shifting back and forth between Chen Xiu and Su Xiao, and said uncertainly, "Isn't this a bit too fast?"

You mean TikTok going public?

"Do you still think we're too optimistic about the development of Douyin's business ecosystem?"

Chen Xiu and Su Xiao each asked a question, addressing all of Zhang Yiming's concerns.

Looking at the two who, despite not deliberately showing affection, were able to coordinate perfectly, Zhang Yiming pouted and said, "I guess so."

"Ah."

Chen Xiu pursed her lips and pondered for a moment before explaining the idea of ​​TikTok going public.

"While TikTok's development is decent, it doesn't offer as many products overseas as it does domestically, and its logistics speed is far behind. If we want to establish an e-commerce model on TikTok, the initial investment will definitely be much greater than on Douyin."

"Moreover, TikTok's advertising revenue is not as high as Douyin's. Mark Zuckerberg seems to have realized the threat posed by TikTok. It will probably be difficult for us to advertise on Facebook next quarter."

"Is there anything wrong with raising funds through overseas listings to achieve faster development?"

Chen Xiu said with a dark look in her eyes.

In his plan, it would be best for TikTok to go public next year; if it is delayed until 20 years, it would be inappropriate.

Zhang Yiming knew that what Chen Xiu said was true, but he still felt it was a bit rushed: "It would be best to wait until Douyin develops smoothly before TikTok goes public."

"Let's see how things develop in the first two quarters of next year."

Chen Xiu nodded slightly, bringing the topic to a close at the opportune moment.

There's still one quarter left this year, and there's still time next year.

There's no need to rush into finalizing TikTok's IPO plans. Chen Xiu felt that they needed to find a reliable manager first.

Su Xiao glanced at Chen Xiu before continuing, "There's no need to worry too much about Douyin's commercial ecosystem development. Based on the current user growth, Douyin's daily active users will exceed 4 million next year."

"After the internet entered a stock market, every platform is vying for users' time. Douyin has done a good job in this regard. What we need to do is to continue to increase the number of users."

“Live-streaming e-commerce is a scenario-based e-commerce. As long as brands and live streamers can reach a cooperation agreement and the logistics channels are mature enough, Douyin’s e-commerce ecosystem will naturally follow.”

(End of this chapter)