Beijing is happy to open up its manufacturers to the outside world, and e-commerce is heading "downward"

The sinking market has become a colosseum, with major e-commerce giants fighting openly and secretly. On November 3, Jingxi, which had just completed its integration with the WeChat first-level entrance, opened its manufacturers to the outside world for the first time. Just a week ago, Juhuasuan provided support to manufacturers in the Chaozhou industrial belt. As "Double 11" approaches, the downward sinking market and front-end manufacturers have become the high ground for e-commerce companies to attack. In order to achieve cooperation, manufacturers and e-commerce companies choose to re-develop customized products. Long-tail markets and subdivided categories where users are easy to migrate have become the targets of e-commerce companies, using popular products to compete for market share.

Although the factory products have gained exposure with the support of e-commerce, cost has become a stumbling block hindering its expansion. Merchants frankly said that in order to enter the e-commerce market and gain access to the consumer market, manufacturers will try their best to lower ex-factory prices and retail prices; on the contrary, manufacturers have to rack their brains to find a price balance between manufacturers, brands and consumers, so that profits and Price parity.

“Transforming” manufacturers

Customizing products and transforming production lines are the link between e-commerce and manufacturers, and are even the key factors for both parties to hit it off. Facing the huge traffic pool of "Double 11", manufacturers who cooperate with e-commerce companies actually have their own small calculations, hoping that these customized products can be quickly digested by the market.

If you want to increase sales and output, transforming production lines and even supply chains has become a required course for manufacturers. Zhang Xiangfa, brand CEO of Jiangxi Cattu Baby Products Co., Ltd., said in an interview that traditional assembly lines require 60 people to work at the same time, and it takes at least 60 days from the arrival of materials to completion; after the demands of e-commerce forced the transformation and upgrading of the assembly line, the production capacity was insufficient. Under the changed circumstances, each assembly line only requires 12 people, and the time for materials to become finished products is shortened to 7 days. It is reported that Cattu has rearranged process production, equipment research and development, process formulation, and personnel management.

E-commerce’s demand for customized products has led many snack companies to join the “renovation” army. Yang Kai, the e-commerce director of Liuliumei, introduced a custom-made extra-volume version of the Liuliumei large bucket, saying that this plum family bucket, which mixes a variety of flavors, is a new product developed after the cooperation between Liuliumei and Juhuasuan. Based on the consumer appeal of Juhuasuan and Tmall, the packaging has been changed from bags to barrels, and the sweetness and sourness of the products are clearly marked.

Regarding the launch of customized products on e-commerce channels, Yang Kai further explained: “Consumption data provided by e-commerce shows that users have become accustomed to using plums to entertain relatives and friends or give them to friends in daily life. E-commerce users are more interested in gift boxes. New demands have arisen for packaging, so they try to improve packaging and enter e-commerce. "In addition, e-commerce is a natural sales channel, and customized products jointly developed by brands and e-commerce companies will have a "guaranteed" sales. channel.

Create hot-selling products to seize the market

The original intention and purpose of manufacturers and e-commerce companies to choose customized products is to focus on selling products with hot-selling potential. To a certain extent, it is possible for e-commerce companies to cooperate with manufacturers because customized products can become hot items that instantly ignite consumer enthusiasm. For e-commerce companies, hot models can bring new customer groups and new traffic, and can also reflect the role of consumption big data provided by e-commerce on the production side; for manufacturers, hot models mean that they can use a single brand, that is, at least By paying the lowest cost, you can gain market recognition for your brand and reduce the inventory pressure on warehousing.

Lu Xiang, the person in charge of the home appliance category of Jingxi 3C, said that from the perspective of home appliance category, the more subdivided categories in this category are the broad scope for Jingxi to cultivate hot products. In Lu Xiang's view, there are many brands in the more segmented categories that are in the climbing stage, but there is no brand that can occupy the minds of consumers, which provides opportunities for manufacturers to create hit products.

It is worth noting that e-commerce companies have already figured out how to choose customized products that can become popular products. E-commerce companies will explore long-tail markets and categories that users can easily migrate to in broad categories, and look for more subdivided categories from mass categories. There is no doubt that e-commerce companies give priority to categories that have not yet formed the Marseille effect. In this category, no big brand has absolute say, and small brands are still in the exploratory stage. At the same time, consumers have extremely high consumption demands for emerging sub-categories, and e-commerce channels can grasp timely data to guide manufacturers' production. When the two major factors are superimposed, hot products emerge, which becomes an opportunity for manufacturers to participate in the "Double 11".

Regarding the categories that can produce popular products, Wang Lin, head of brand promotion at Jingxi, explained the platform’s selection criteria. She explained that e-commerce companies will select high-frequency consumption categories based on big data, and then the company will search for manufacturers in the corresponding industry belt that are willing to connect to the Internet, and then invite the manufacturers to send samples. Next, the platform and institutions will evaluate the samples and compare them with wholesale prices online. The e-commerce merchant will price the selected manufacturer's products lower than the wholesale price. The above process is the first step in generating hot sales.

Multiple interests need to be balanced

Price is a ruler for consumers to measure whether it is cost-effective for e-commerce to sell manufacturer products, and it is also a ruler for e-commerce companies to judge whether manufacturers can become their partners. . For the sinking market, consumers' sensitivity to price is amplified. E-commerce companies that are struggling to compete for sinking users naturally attach great importance to price.

In fact, low-priced products are everywhere on e-commerce platforms such as Pinduoduo, Juhuasuan, and Jingxi, and most consumers stay away because of the affordable prices. However, when the price reaches the standard of sinking the market, how to make a profit becomes the thinking point of the manufacturer. Zhang Xiangfa admitted frankly that when he entered e-commerce as a manufacturer and used the latter to explore the sinking market, he faced the balance between the company's need to survive and the product's cost-effectiveness.

"In order to achieve a balance between company survival and product cost-effectiveness, and a balance between product price and quality, the company needs to coordinate in many ways. Make the factory and company profitable, and make consumers realize that the goods are cost-effective The balance between advantages and value for money is the most difficult thing. Therefore, product development and supply chain management require repeated adjustments," Zhang Xiangfa explained.

Wanting to profit from prices close to industry cost forces manufacturers to plan from design to material selection. Zhang Xiangfa gave an example of a toddler shoe made of imitation suede leather. For the same shoe size, the cost of a big brand is 20 yuan. After Carter Rabbit and the material supplier re-study the material, the price of the material is only 1/3 of the imitation suede leather. . At the same time, Carter Rabbit directly cut off decoration and complex craftsmanship that were unimportant but would increase costs, focusing on experience rather than visual beauty.

An unnamed manufacturer said that if there is a price war on the manufacturing side, manufacturing companies and e-commerce companies will fall into a stage of vicious competition. Ensuring the same quality and lowering prices is a feasible route. Zhao Zhenying, a researcher at the National Engineering Laboratory of E-commerce Transaction Technology, said that low-price impressions will consume the popularity of factory brands and factory-direct products, and will also affect consumers’ judgments of quality. Package purchases, group purchases, and 9.9 yuan free shipping all have price tags. The keywords may restrict the transformation of small and medium-sized manufacturers.