The huge damage caused by Douyin to China's commerce is attracting increasing attention.

Following Nongfu Spring founder Zhong Shanshan's call to Zhang Yiming, directly pointing out the huge damage caused by Toutiao and Douyin's indulgence of negative content, MINISO founder Ye Guofu has also begun to speak out against the huge impact of Douyin E-commerce on the retail industry.

According to Ye Guofu, "Wake up, people! ByteDance collected 400 billion yuan in advertising fees on 2 trillion yuan of GMV last year!" He then added, "That's just GMV, and more than 40% of the goods will be returned, so there are only 1.2 trillion yuan in actual transactions."

It can be said that Ye Guofu's criticism of Douyin once again reveals the significant issues inherent in Douyin E-commerce itself.

Ultimately, Douyin E-commerce is merely a transaction of traffic, reaping both upstream merchants and vast numbers of users entrapped by algorithms.

If this logic continues, upstream merchants in the retail industry will focus not on developing new products or improving their services, but on studying how to sell and reap traffic.

Through Ye Guofu's criticism of Douyin, we should not only see ByteDance's unrestrained harvesting of advertising fees but also the tremendous impact of the Douyin E-commerce model on the retail industry and even the entire industrial chain.

By merely selling and harvesting traffic and acting as a platform and matchmaker, Douyin E-commerce may have reached a point where change is imperative.

I

We all know that with the rapid rise of short videos and live streaming, especially as algorithm mechanisms mature, the balance of traffic is increasingly tilting towards content platforms represented by Douyin.

It is no exaggeration to say that the ByteDance ecosystem, represented by Douyin, has become the leading traffic giant in China's current internet industry.

Benefiting from this, we are witnessing the rise of traffic monetization mechanisms represented by Douyin E-commerce, with short video and live streaming e-commerce becoming the dominant so-called content e-commerce model, which has become an excellent way for ByteDance to monetize traffic.

Whenever you open Douyin, you either see short videos primarily used for product promotion or live streaming sales. For a time, almost all content forms on Douyin have converged on a common goal—product promotion.

Admittedly, it is not wrong for Douyin, with its huge traffic, to monetize commercially.

However, it is puzzling that Douyin repeatedly recommends products to users through intelligent algorithms and recommendations, products they have mentioned or searched for before.

From this perspective, it is more accurate to say that Douyin is using technical mechanisms to engage in brute-force marketing towards users rather than recommending desired content to them through intelligent algorithms.

An in-depth analysis reveals the internal logic behind Douyin's approach. It is not difficult to see that the reason why Douyin repeatedly recommends related products is not only because upstream merchants purchase its traffic packages but also to achieve transactions through recommendations and obtain a larger share of the profits.

Based on this logic, both merchants and consumers inevitably become targets for Douyin to reap, and Douyin can earn substantial profits simply by selling traffic.

However, we must ask, is an e-commerce model dominated by selling traffic truly the essence of e-commerce? Does e-commerce based on intelligent algorithms really bring new changes to the development of the e-commerce industry?

Through the above analysis, it is not difficult to see that such a business model not only fails to bring any essential progress to e-commerce or even the retail industry but may even cause a regression, pushing the development of the e-commerce industry back to an era dominated by traffic.

II

If merely selling and harvesting traffic leads to commercial regression, then merely acting as a platform and intermediary without any involvement in the industry causes even greater commercial setbacks.

According to Ye Guofu, Douyin merely plays the role of a marketer in this process, focusing solely on transactions without any involvement in even a sliver of the upstream or downstream of the industry.

In other words, once business with Douyin begins, Douyin has already earned its share of the money. Only upstream production and downstream services have no connection with Douyin at all.

This undoubtedly gives us a clearer view of the essence of Douyin E-commerce—it is merely a platform.

This claim sounds familiar.

During the barbaric growth period of e-commerce, almost all e-commerce platforms defined and interpreted themselves solely as platforms.

However, things have changed dramatically now.

Today, we can no longer simply define e-commerce players represented by Taobao, Tmall, and JD.com as platforms.

Whether it's their in-depth empowerment of upstream merchants, their development of industrial and supply chains, or their deep involvement in downstream services, today's e-commerce players are no longer simply platforms in the traditional sense.

However, against the backdrop of the evolution of e-commerce, we see that Douyin, relying on its traffic advantage, stubbornly insists on seeing itself as a platform. Besides focusing on transactions, it has no interest in the upstream or downstream of the industry.

Obviously, Douyin has caused a regression in e-commerce, pushing it back to a development stage dominated solely by platforms, negating the efforts of e-commerce players in developing industrial and supply chains and undermining the trend of digital-physical integration.

For someone like Ye Guofu, who started as an offline retailer, Douyin's platform model undoubtedly deprives him of the competitive advantages and conditions to compete.

It is foreseeable that if Douyin's platform model is simply indulged in and its functions and roles are excessively amplified, it will not only cause a regression in the e-commerce industry but may even lead to a regression in the entire retail industry.

III

Douyin has always distinguished itself from shelf e-commerce represented by Taobao and JD.com by emphasizing content e-commerce.

In fact, one of the important reasons why Douyin tirelessly emphasizes and defines itself through content e-commerce is that, in its context, content e-commerce is a more efficient and lower-cost form of e-commerce than shelf e-commerce.

It must be said that with the help of intelligent algorithms and the platform's low cost, Douyin E-commerce can indeed facilitate faster and more efficient transactions. However, we must also recognize that the ultimate goal of e-commerce is never transactions or efficiency.

This point is becoming increasingly prominent as the development of the e-commerce industry enters deeper waters.

Nevertheless, Douyin still regards efficiency and scale as its ultimate goals and continues to dismiss shelf e-commerce in favor of content e-commerce.

In reality, content e-commerce can only be built on the foundation of scale and efficiency, and it can only operate under a mechanism dominated by traffic and platforms. As the ceiling for traffic approaches, content e-commerce is facing increasing problems and challenges.

The reason is that content e-commerce is only effective for single products, only works online, and can only operate with the support of traffic.

As the integration of online and offline gradually becomes a trend, especially when offline and online start to converge, content e-commerce does not have many advantages over shelf e-commerce.

When traffic transactions become unsustainable, the key to truly ushering the development of the e-commerce industry into a new stage of healthy development lies in how to adopt the approach of shelf e-commerce, how to escape the traffic trap, and how to find a breakthrough from an industrial perspective.

For Douyin, insisting on promoting itself through content e-commerce ultimately boils down to viewing traffic as a panacea and a golden rule, completely ignoring the essence of e-commerce and the broader trends in its development.

It is almost certain that when Douyin's content e-commerce can no longer rely on traffic, especially as it shows increasing disadvantages in shelf e-commerce, Douyin will inevitably find itself in a dead end regarding traffic.

Conclusion

When Ye Guofu criticizes ByteDance, we need to see the regression caused by a development model dominated by the sale and harvesting of traffic across the entire business landscape.

For Douyin, a business model with traffic as its lifeline has reached a point where change is imperative.

By blindly adhering to traffic as the criterion and technology as the harvesting tool, ignoring business and respect for people, ByteDance, represented by Douyin, is doomed to fail in the long run.

History has proven this point time and again, and it will undoubtedly repeat itself with ByteDance.