In the early days, Taoke was essentially a distribution He Tuber channel for B2C shelf e-commerce in terms of rebates and shopping guides. Its fate was in the hands of the platform. It was doing the job of a traffic ant porter and did not bring any essence to the supply chain or demand side. Although in the mid-to-late period, Taoke Alliance players are transforming into self-operated e-commerce or tool service providers, they cannot solve the targeted pallet problem that private sector retail most needs.

The S2B2C model proposed by social e-commerce is a brave attempt to escape the control of Taobao, JD.com and other platforms, and starts from the private domain scenario to try to reverse supply chain optimization. Although unsuccessful, it took a step toward an independent closed-loop private retail business model.

Given these positive aspects, why did social e-commerce fail again?

The reason is actually simple. The traffic model is unsustainable. Simply put, the money calculation cannot be settled.

Putting aside the policy aspect, even without policy supervision, the multi-level model of social e-commerce will not work, or it is destined to be unsustainable.

In fact, the designers of the multi-level model also know this very well, and the lifelong pipeline benefits advertised are impossible. The real idea of ​​the designer is to stop the high incentive policy after completing the new recruitment and transform to a stable model. Indeed, some platforms have settled smoothly. Similarly, it is not unclear to the participants. Those fission team leaders also know very well that the bonus period is limited.

In essence, retail is based on consumer demand, moving goods from the supply chain to the demand side. The lower the cost and the higher the efficiency of the intermediate links, the better. The result is that consumers’ shopping costs are economical and sustainable enough.

The multi-level incentives of social e-commerce are equivalent to the stacking of wholesale channels between the supply chain and consumers. The more layers there are, the higher the cost and the less sustainable it is. Especially if the scale cannot reach the break-even point, it is destined to suffer losses. In order to avoid cash flow being immobilized, multi-level social e-commerce is destined to adopt a pseudo-low price model or a partial or short-term subsidy model, which is destined to be unsustainable.

Although Pinduoduo is also classified as a social e-commerce company, its bottom layer is not a multi-level incentive model. Although it adopts a fission mechanism on the C-side, the actual rates are much lower than the multi-level direct sales model on the B-side. Moreover, Pinduoduo adopts bidding advertising logic, which forces merchants to cater to the platform’s low prices. The stability of this guarantees the stability of consumers’ minds.

Therefore, even if there is no policy supervision, social e-commerce that adopts a multi-level direct sales model will inevitably transform when it develops to a certain stage, otherwise it will only go bankrupt. Before the policy was introduced, some platforms experienced thunderstorms on their own, which also proves this point.

From 2017 to 2020, social e-commerce was booming, and after 2020, social e-commerce gradually began to enter a trough period. But it is not completely depressed. Some platforms have retained their core capabilities and are still making repeated attempts on some tracks, but they are more cautious and low-key.
During this period, a big event happened, the COVID-19 epidemic.

The epidemic has changed all walks of life and lasted for a long time. In particular, the pressure on the retail industry has exceeded imagination.

2020 is known as the first year of the private domain, and enterprise WeChat takes the stage as the protagonist.

Like Alibaba’s attitude towards DingTalk, Tencent has quickly elevated Enterprise WeChat to an unprecedented strategic level, with home office, remote collaboration, corporate management, and industry empowerment opening windows of opportunity for Enterprise WeChat. Enterprise WeChat, which was previously suppressed by DingTalk, has begun to develop its own characteristics, especially in the field of private retail.

In the past few years since the epidemic, offline retail formats have been under great pressure and customer flow has dropped sharply. In order to maintain sales operations, almost all offline retail formats use Enterprise WeChat for private domain operations of their own customers. Focusing on private domain operation scenarios, Tencent has also further accelerated the iteration of enterprise WeChat products, opened up the upper limit of the number of group members on Enterprise WeChat, and optimized customer management, group management, and data operations.

During this process, in order to achieve its strategic goal of helping enterprises and micro-enterprises develop, Tencent did not hesitate to use litigation to attack tool service providers in the field of personal WeChat. Platforms such as WeTool had to surrender and withdraw from the market to make way for corporate WeChat. Although the product experience of these third-party service providers is better than Enterprise WeChat in terms of distribution and other aspects. The freed-up enterprise users who want to operate WeChat private domains on a large scale can only turn to Qiwei.

From the nature of private retail, its main scene is on social platforms, especially the WeChat scene. Because of its decentralized and non-unified market characteristics, the infrastructure construction of private retail can only be undertaken by Tencent. Therefore, the rapid development of Qiwei after 2020 is actually a lesson that Tencent lacks in history.

Lao Zhang said before that the arrival of this opportunity is also related to Tencent's own strategic rhythm. Although Taobao has emerged in 2010, it has started to use QQ groups for private retail very early.

However, at that time, Tencent’s strategic focus was on 2C business, and it did not regard empowering the retail industry as its own responsibility. And during the years when it was trying to do e-commerce, which was the era of the Tencent empire, it repeatedly blocked and expelled Taobao customers. In the mid-to-late period, Tencent withdrew from self-operated e-commerce and began to take a laissez-faire approach to private retail infrastructure.

It was not until 2018 that Ma Huateng proposed an industrial Internet strategy and Tencent began a 2C+2B two-wheel drive development strategy. The retail industry, as an important scenario for 2B services, was officially mentioned in an important position.

In the retail track, in terms of specific empowerment content, payment, supply chain, technical computing, and marketing services for the retail industry are important directions. As an important carrier connecting users and enterprises, Enterprise WeChat has naturally been promoted to an important stage. Gradually extending from the positioning of internal management tools to 2C transaction connections.

The infrastructure construction of private sector retail needs to wait for the right time: the right time, the right location, and the right people.

Nowadays, when a black swan event like the epidemic strikes, retail business owners can first realize the importance of private retail operations and solve the most difficult problems of market awareness and resource investment willingness for Tencent.

The geographical advantage is to wait until Tencent completes the construction of payment capabilities and mini programs, especially in offline scenarios, to realize a closed loop of private domain retail transactions. As well as cooperation, Meituan and other cities have improved their instant delivery capabilities.