Editor’s lead: Xiaomi has products, which is a boutique shopping platform of Xiaomi Company and a part of Xiaomi’s "new retail" strategy. Relying on the Xiaomi ecological chain system, using the Xiaomi model to make consumer goods. The author of this paper analyzes the quality of Xiaomi to see how it can build a quality e-commerce road.
According to Xiaomi’s financial report in the third quarter of 2020, Xiaomi’s total revenue is 72.2 billion, of which nearly a quarter comes from Xiaomi IoT and its life shopping platform "Xiaomi Youpin".
Under the background of new consumption and new retail, why can Xiaomi Youpin rise rapidly in the e-commerce industry in just three years after its establishment, with the increasing cost of passenger traffic, shrinking incremental market and fierce competition under the stock market game?
This paper will take you to understand the operating logic of this company and the boutique e-commerce industry by analyzing the perspective of Xiaomi Youpin.
This article will analyze from the following aspects:
- industry analysis
- competitive product analysis
- User value analysis
- Commercial value analysis
- Product iterative analysis
- Product structure analysis
- Operational analysis
- summary
1. Industry analysis
Under the background of the new consumption era, the competition in the e-commerce industry is becoming more and more fierce, and the e-commerce industry is constantly refined, resulting in quality e-commerce. Quality e-commerce is different from traditional e-commerce. By infiltrating upstream manufacturing and supply chain management, reducing intermediate links, strengthening the dominance of platform selection, and relying on data technology to improve the response speed of suppliers to changes in market demand, the e-commerce model can improve the quality of goods in the whole station and provide consumers with high cost-effective goods.
The core is to optimize two points: the first point is to shorten the path from manufacturers to consumers; The second point is to endorse domestic manufacturers by "selecting" and "YEATION", which accelerates the process of establishing their own brands.
Xiaomi Youpin is a typical successful representative of this industry. Under what industry background did Xiaomi Youpin grow up? Why can quality e-commerce quickly occupy a place in the e-commerce industry?
Because the e-commerce industry is deeply influenced by macro factors, this section will use the PEST model analysis method to analyze the whole industry.
1.1 policy (Politics) level
- In December 2016, the Ministry of Commerce published the "Thirteenth Five-Year Development Plan for E-commerce", proposing to "encourage the development of quality e-commerce and brand e-commerce, and further play the positive role of e-commerce in guiding production and leading consumption". Under the new mode and new format, the national policy encourages the development of quality e-commerce, which further promotes the development of quality e-commerce.
- In August 2018, the E-commerce Law of the People’s Republic of China proposed that the state encourage the development of new e-commerce formats, innovate business models, promote the research and development, popularization and application of e-commerce technology, promote the construction of e-commerce credit system, create a market environment conducive to the innovative development of e-commerce, and give full play to the important role of e-commerce in promoting high-quality development, meeting people’s growing needs for a better life, and building an open economy.
- In January 2019, the "Electronic Commerce Law" came into effect, which standardized the operation of the e-commerce market.
- In November, 2020, the "Proposal for the 14th Five-Year Development Plan" proposed to improve the consumption environment, focus on quality brands, promote the development of green, healthy and safe consumption, and encourage the development of new consumption patterns and new formats.
It can be seen that the state encourages and supports the development of e-commerce industry in terms of policies, and encourages the development of new consumption patterns and new formats, which promotes the development of e-commerce industry and encourages e-commerce to develop into new formats and new models. The development of quality e-commerce in emerging segments of e-commerce industry has ushered in development opportunities.
1.2 the Economy level
According to the report of the National Bureau of Statistics, in 2019, China’s GDP reached 99,086.5 billion yuan, up 6.1% over the same period of last year. The per capita disposable income of national residents was 30,733 yuan, and the per capita GDP increased by about 5.8%. The per capita disposable income of urban residents in first-tier cities reached 70,000 yuan.
The improvement of income level drives residents’ purchasing power to increase, online shopping continues to grow and demand continues to expand; At the same time, people’s growing pursuit of high-quality life has gradually upgraded the consumption structure from price consumption to quality consumption.
1.3 Society and cultural aspects
With the development of economy and the increase of personal income, there are more and more new middle classes. In the new consumption era, some consumers began to change their consumption concepts to pursue quality life and refined life, and their demand level increased, paying more attention to the quality brand, sense of science and technology, sense of beauty and experience of goods, and seeking higher quality of life and higher spiritual pursuit.
Moreover, with the improvement of living standards, white-collar workers are rich, but they are busy with their work. They don’t want to spend too much time looking for goods, but want to find goods that meet their needs directly.
In order to ensure the quality, quality e-commerce meets people’s increasing consumer demand, shortens the time of commodity selection and increases efficiency for this part of the population, and has broad development prospects in the future.
In the current market, commodity quality problems and selling fake goods are still hot complaints about online shopping consumption. According to the "2019 China E-commerce User Experience and Complaints Monitoring Report", the number of e-commerce complaints nationwide showed an increasing trend from 2013 to 2018, with a year-on-year increase of 48.02% in 2017; An increase of 38.36% year-on-year in 2018; The number of complaints accepted in 2019 was slightly lower than that in 2018.
The improvement of product quality is an urgent problem to be solved, and the standardized control of self-operated and OEM mode of quality e-commerce can ensure product quality to some extent.
1.4 Technology level
Since 2012, China has entered the stage of rapid development of mobile Internet, and e-commerce has ushered in new development opportunities:
- With the development of internet technology, the online shopping market is becoming more and more mature and entering the stage of quality upgrading;
- With the continuous improvement and development of logistics and transportation technology, the storage coverage is getting wider and wider, which improves the timeliness of product transportation and provides strong logistics support for e-commerce;
- The rapid development of big data and AI technology, on the one hand, reduces the labor service cost of enterprises, on the other hand, improves the operational efficiency of enterprises; The e-commerce platform has also changed. Through the recommendation of complex machine learning algorithms, sellers can flexibly price goods, accurately recommend them, provide personalized shopping experience, and greatly improve shopping efficiency. Using the data to analyze and forecast commodities, the commodity inventory problem has been improved.
All these factors have jointly promoted the rapid development of quality e-commerce in recent years. With more and more middle classes, consumers’ demand for quality upgrading is getting higher and higher.
With the growth of domestic economic level and the maturity of e-commerce platform, online shopping has gradually become one of the most important shopping methods in people’s daily life. The scale of online shopping transactions has been expanding, and the penetration rate in the retail sales of social consumer goods has been increasing.
According to the data of iiMedia Research, the market transaction volume of China mobile e-commerce market is expected to exceed 8 trillion yuan in 2020, an increase of 19.7% compared with 2019, and the mobile e-commerce market continues to grow. It is estimated that the scale of online shopping transactions will further increase to 12.8 trillion in 2021, and the penetration rate in the total retail sales of social consumer goods will also increase to 27.2%.
Under the background of the increasingly mature e-commerce market, according to the survey, for online shopping, half of users are willing to get high-quality products at high prices, and nearly 40% of users like to buy professional products on professional shopping platforms, and more begin to pursue quality.
According to Aurora Big Data Q3 Mobile Internet Industry Data Research Report in 2020, Xiaomi has products in the top ten of the list of integrated e-commerce platforms, and its user penetration rate and DAU growth are also prominent, with user penetration rate of 2.8% and DAU growth rate of 16.7%.
It can be seen that the quality e-commerce market is developing rapidly and there is still much room for development and exploration in the future.
2. Analysis of competing products
The traditional e-commerce market is becoming more and more mature. With the rise of new consumption and new retail, and the national policy orientation encourages consumption quality, quality e-commerce has stood on the fast track and ushered in development opportunities.
Many players began to enter the game one after another, and more and more participants joined the ranks of quality e-commerce. Some new forces entered, and some traditional Internet e-commerce companies stepped up their layout, such as Xiaomi Youpin, Netease YEATION, Necessary Mall, Taobao Xinxuan, Beijing-Tokyo Manufacturing, Suning Polar Things and other companies.
According to the current App Store download ranking and IT orange data display, these products are roughly divided into the following gradients:
- The first echelon: the advantages of enterprise revenue and user scale are obvious: Xiaomi has products, Netease YEATION;
- The second echelon: as an important player in the industry, it has great influence: necessary shopping mall, Taobao heart selection;
- The third echelon: late entry, low market share: Suning Polar Materials, Beijing-Tokyo Manufacturing, etc.
Xiaomi Youpin and Netease YEATION are the direct competitors of this track, and their users are similar in scale. Based on the growth path and business model of these two companies, we will compare and analyze them, so as to deeply understand the differences between them.
2.1 Xiaomi Youpin
- On April 6, 2017, Mijia Youpin, a selected e-commerce platform owned by Xiaomi, was officially launched. Xiaomi Youpin always insisted on being a "good product that touched people’s hearts and was kind in price", and extended Xiaomi’s "extreme cost performance" to all aspects of life and home, bringing customers products that are free to choose, cost-effective, branded, tasteful and scientific;
- In August 2017, Mijia Youpin announced that "Mijia Youpin" was renamed as "Youpin" and the brand concept was "Youpin Life, Better Choice";
- In May 2018, "Youpin" was officially renamed as "Xiaomi Youpin";
- In June 2018, Xiaomi Youpin’s first offline flagship store in the world officially started trial operation in jianye district, Nanjing, displaying 15 popular commodity categories, with a total number of 3,000, covering all products sold online by Xiaomi Youpin APP;
- On November 6, 2018, JD.COM and Xiaomi Youpin, a boutique life e-commerce platform of Xiaomi, signed a strategic cooperation agreement in Beijing, and carried out in-depth cooperation from selected products, third-party brand incubation, reverse customization of goods, logistics and other aspects;
- In April 2019, it launched "There are products and fish" and embraced social e-commerce;
- On December 23, 2019, Xiaomi Youpin officially announced that it had reached a strategic cooperation with Indiegogo, an overseas crowdfunding platform, to complete an important step for Xiaomi Youpin to explore overseas markets and help high-quality enterprises go to sea;
- In the third quarter of 2020, Xiaomi’s financial report showed that Q3′ total revenue was 72.2 billion, of which nearly a quarter came from Xiaomi IoT and its life shopping platform "Xiaomi Youpin".
Xiaomi Youpin’s business model is "platform+ecology" model. By integrating platform resources, it supports the independent development of eco-chain brands and third-party brands and serves users together.
In addition to Xiaomi, Mijia and eco-chain brands, we also introduce a large number of high-quality third-party brand products with complete chain capabilities such as design, manufacturing, sales, logistics and after-sales, and support the independent development of third-party brands to jointly create a quality life for users.
- Source of users: As a mobile phone manufacturer, it has established an ecosystem with mobile phones as the core and lot, which has accumulated rice flour with high brand loyalty, and online Xiaomi Mall, Mijia and offline Xiaomi House have acquired users.
- Commodity source: Xiaomi has commodity sources, the first category is Xiaomi’s self-operated senior brand products, the second category is Xiaomi Mijia and eco-chain brand resource products invested by Xiaomi, and the third category is to introduce third-party enterprises and open them to non-eco-chain enterprises with high-quality third-party brand products with complete chain capabilities. Under these three modes, its shopping mall categories and SKUs are constantly enriched.
- Operation mode: Xiaomi has products that not only sell its own brands, but also sell smart digital and home products of Xiaomi, Mijia and the whole eco-chain partners after going online; The Costco model advocated by Lei Jun is also reflected in Xiaomi’s products, and the number of brands of each thing will not be too much; In addition, it also continues Xiaomi’s "explosive product" model, which advocates quality, not luxury, time-consuming, and scientific sense.
There are three types of commodity sources of Xiaomi’s products. The first is self-management to sell its own brand products, the second is to invest in Xiaomi’s ecological chain, and the third is to introduce third-party enterprises.
- Commodity category: As a company with a brand positioning in science and technology, Xiaomi has a higher proportion of scientific and technological products. Xiaomi has products mainly in the field of household appliances, and has now expanded to household appliances, home kitchens, furniture decoration, TV audio and video, digital mobile phones and computers, daily creative, clothing accessories, beauty care, outdoor sports, shoes and boots, health care, wine and food, maternal and child, driving goods, pet life and other commodities. The products of each category follow the mode of few but fine, which continues the boutique mode of Xiaomi’s special creation of "explosive products".
- Product control: Xiaomi goes deep into the supply chain, controls the enterprises and third-party brands in the ecological chain from the source of product production, and penetrates the concept of ultimate cost performance into every link. Through full chain quality control, manufacturing efficiency is improved, cost is reduced, and consumers can buy good quality goods without selection.
- Cooperation mode: For Xiaomi eco-chain enterprises, Xiaomi invests in the form of equity participation but not holding. For the selection of third-party enterprises, Xiaomi Youpin follows the development logic of its own products, puts forward three hard indicators-product quality, cost performance and certain scientific and technological content, and defines the products together with the manufacturers to ensure the product quality of Xiaomi Youpin. After confirming that the cooperative products are on the line, the products will gain revenue by means of platform deduction.
- Logistics and warehousing: Because Xiaomi Youpin is the source of goods and other supply chain modes, the warehousing management of Xiaomi Youpin includes two aspects. Xiaomi Youpin has warehouses in all regions of the country, and the self-operated part is Xiaomi’s own warehouse inventory. Based on the cooperative relationship, SF+Jingdong Logistics is used for near-warehouse distribution; Third-party enterprises take care of their own inventory, depending on the specific situation, and choose their own logistics methods.
- Offline layout: Xiaomi has accelerated the offline layout, and offline stores have landed one after another. The layout of offline stores has opened up the barriers between online and offline channels, which has become a big advantage. At the same time, the combination of offline and offline will also help Xiaomi to build brand awareness and promote the better development of Xiaomi.
Uniqueness: When Xiaomi was born out of Mijia, it took away a very core function of "crowdfunding". The early stage of crowdfunding is an important channel for Xiaomi’s ecological chain to show its face. The sales volume of crowdfunding determines the acceptance of this product in the user group. After crowdfunding, manufacturers will make a return visit to further improve the product.
A large number of product crowdfunding, so that the crowdfunding team has accumulated rich experience, can effectively help small brands grow rapidly, products quickly take shape, and can effectively push to the eyes of target users.
2.2 Netease YEATION
- In April 2016, Netease YEATION, a self-operated living and home furnishing brand owned by Netease, was officially launched, and always implemented the brand concept of "strictly selecting materials and living with heart";
- In June 2016, Netease put forward "three aesthetic concepts of life" in 618;
- In July 2016, YEATION and Fujian tea industry reached a strategic cooperation, and the original Qingyuan directly supplied good quality tea to YEATION users;
- In October 2016, Netease YEATION settled in JD.COM as a "flagship store";
- In August 2017, Netease YEATION and Atour launched the first Atour Netease YEATION Hotel in Hangzhou with the "what you use is what you buy" scene;
- In September 2018, Netease was strictly selected to realize the whole network coverage strategy, including Tmall, JD.COM, Netease Koala, Pinduoduo and other major e-commerce platforms;
- In mid-2018, Netease YEATION successively cooperated with youth communities, long-term rental apartments, home improvement companies, homestays and convenience stores to continuously expand its platform and product experience;
- In December 2018, Netease YEATION’s first offline store officially opened at the West Lake in Hangzhou;
- On January 19, 2019, Watson’s sub-brand "Watsons+" and Netease YEATION jointly launched the first e-commerce joint store in Guangzhou;
- In June 2020, Ding Lei, founder and CEO of Netease, will recommend the products of Netease YEATION on the live broadcast platform of Aauto Quicker in the Mainland.
- Netease’s financial report in the third quarter of 2020 shows that Netease’s revenue in the third quarter of 2020 was 18.7 billion yuan, up by 27.5% year-on-year, and nearly one-fifth of its business income came from innovation and other businesses including "Netease YEATION".
Netease YEATION’s business model is ODM "buyer system" model, and YEATION eliminates the premium of big brands and various intermediate link costs by directly connecting with manufacturers; At the same time, this model is the first in YEATION.
- Source of users: As a brand of Netease, Netease games, music, e-mail and so on have a huge user traffic group. At the beginning of its launch, it became a user group by importing users from Netease’s original platform (portals, games, music, etc.), which provided a rich user traffic input for Netease YEATION.
- Source of goods: Netease YEATION cooperates with flexible ODM original design manufacturer. YEATION strictly controls the whole industrial chain links such as raw material procurement, production, quality inspection, sales and after-sales, controls the quality of goods, directly connects consumers and manufacturers, and then sells them under the brand of Netease YEATION, and enriches its SKU by constantly looking for high-quality suppliers and design teams.
- Operation mode: self-operated ODM mode, with strict quality inspection and quality control links, even consumers and manufacturers’ factories, excluding layer-by-layer premiums; With the development, the unique "YEATION Model" is gradually explored, which is characterized by paying attention to design, emphasizing quality and low markup rate.
- Commodity category: Most of Netease’s carefully selected commodities are daily necessities, which have covered 12 categories including home life, clothing, shoes and bags, food and drinks, personal care and cleaning, mother and baby, sports travel, digital home appliances, YEATION Global, entertainment special, bedding furniture, clothing, kitchen and so on, with tens of thousands of SKUs. From hundreds of SKUs when it was first launched, the number of SKUs has now exceeded 10,000. The rapid expansion of SKUs in YEATION and the strict control of product quality can no longer keep up. At the same time, the after-sales and inventory of Netease YEATION broke out at the end of 18 years. Its reputation is no longer as good as when it was first launched.
- Product control: Netease YEATION goes deep into all parts of the world and cooperates with the best suppliers in the world. Starting from tapping consumer demand, we participate in strict control from raw materials, production, quality inspection, sales to after-sales, etc. All goods on the shelves must be certified by global TOP quality inspection institutions, such as ITS and SGS, before they can be put on the shelves for sale.
- Cooperation mode: YEATION is responsible for providing product ideas and ODM manufacturers are responsible for design. In order to quickly respond to users’ needs and avoid a large inventory backlog, Netease YEATION usually tentatively places orders in small batches first, and then, according to the market reaction, if it gets good feedback, it will further add orders. At the same time, YEATION will guide the cooperative manufacturers to change their production lines according to the changes in sales and user evaluation.
- Logistics and warehousing: Netease’s warehouses in YEATION are located in different places, belonging to its own inventory, and Netease YEATION will choose the logistics distributor with more commodity locations.
- Offline layout: Netease YEATION also attaches great importance to the combination of online and offline development. In August 2017, Netease YEATION reached a strategic cooperation with Atour Hotel, which provided the venue to be responsible for the daily operation and consignment of Netease YEATION products. In October of the same year, YEATION cooperated with Vanke to design a hardcover model room in YEATION. Later, in 2018 and 2019, Netease YEATION also opened two stores under Netease Strict Line.
Uniqueness: Netease YEATION has joined the membership business and constantly optimized it. The exclusive rights and interests of members, such as monthly coupons and membership days, have stimulated users’ consumption to some extent.
Summary: From the above analysis, it can be seen that Netease YEATION entered the market earlier than Xiaomi Youpin, and both products focus on "quality e-commerce", strictly control the quality of goods, and advocate the characteristics of high cost performance, which belongs to direct competition.
In terms of business model, Xiaomi has the "platform+ecology" model, while Netease YEATION adopts the ODM "buyer system" model. Both business models have their own advantages, and Xiaomi’s quality model is more conducive to creating quality explosions.
At the same time, both of them rely on their own Internet customer traffic, and both of them combine the online and offline new retail models. However, Xiaomi has an advantage by relying on the strong and loyal rice noodle circle of Xiaomi brand, which makes it rise rapidly in just three years, quickly opening the gap with competitors and occupying a place in the e-commerce industry. In terms of product control, both of them strictly control quality.
With the increase of its own product categories, Netease YEATION will have great pressure on its inventory and capital circulation. In contrast, Xiaomi has more advantages in having products, making it easier to control goods and create explosions.
Finally, in exploring new business models, Xiaomi has the crowdfunding function and the fish. Through big data, we can observe the popularity of products in the user group, so as to grasp the product direction and inventory. Netease YEATION’s unique membership system can stimulate users’ consumption. But the specific effect remains to be seen.
3. User value analysis
In the boutique e-commerce industry market, there are mainly three participants: consumers, merchants and platforms. The business logic diagram of Xiaomi Youpin is as follows.
The platform provides services to meet the needs of all participants, and if the platform wants to seize the market and expand its scale to achieve rapid growth, it must meet the needs of consumers and businesses. Let’s explore the needs of these three parties respectively, and what solutions Xiaomi Youpin uses to better meet their needs.
3.1 Consumers
According to the Aurora data report, the main force of Internet shopping now is the young consumer groups after 1980s and 1990s.
In addition, according to the data of "Observation and Research Report on New Youth’s New Consumption" released by School of Journalism and Communication of Beijing Normal University, the number of new youth mobile Internet users is 650 million, which is the core group on the Internet. The new youth group has become the main force of Internet consumption in China, and many of them are from first-tier cities, and these consumers have certain economic ability.
According to the research of New Middle-class Report 2017, among the factors affecting consumption, product quality, time saving, cost performance and personalization rank in the top four, and these consumers pay more attention to quality, time efficiency, cost performance and personalization.
Aurora data shows that 66.4% of users think that the shopping time of boutique e-commerce is significantly less than that of integrated e-commerce. From the attitude of most users, it can be seen that under the background of a wide variety of goods on the traditional e-commerce platform, consumers want to quickly buy goods that meet their needs through the boutique e-commerce platform.
Most of the new young people are white-collar workers who have received higher education. First of all, their demand level has improved, and they pay more attention to the quality, brand, sense of science and technology, aesthetic feeling and experience of goods, seeking higher quality of life and higher spiritual pursuit.
Moreover, with the improvement of living standards, white-collar workers are rich, but they are busy with their work. They don’t want to spend too much time looking for goods, but want to find goods that meet their needs directly. Paying attention to quality, time efficiency, cost performance and personalization are the pain points of these consumers’ needs.
With these shopping needs, consumers currently take more solutions mainly in the following ways:
3.3.1 Brand official website and offline store shopping.
As mentioned earlier, new young consumers pay more attention to quality, price and brand, and have higher pursuit. If they like a brand, they will go to offline stores to shop.
In recent years, many boutique flagship stores at home and abroad have been actively deployed in major cities, such as Xiaomi flagship store, IKEA, Sam, Costco, MUJI, etc. The number of these offline flagship stores has grown rapidly in China, indicating that offline experience stores are very popular.
First of all, the offline flagship store is decorated, beautifully designed and has a good shopping experience; Secondly, consumers can directly contact the goods they want to buy at close range, which can guarantee the quality of products to a certain extent, and can directly find the goods they like that meet their psychological expectations, and avoid second shopping such as return.
However, offline store shopping has some obvious disadvantages:
- The new youth consumer groups don’t have enough time, and most of the time is occupied by work, study and life. They usually have little time and energy to go shopping in these offline stores, and offline stores may be far away, with inconvenient transportation and more time-consuming;
- Most flagship stores under the brand line are located in commercial luxury areas in big cities, with high store operating costs, and more links are added from production to consumers, and the product premium is higher. These premiums must be transferred to consumers to bear, so the price is higher, and consumers need to pay higher money costs;
- It is difficult for offline shopping to compare similar goods horizontally, and it is not obvious for discount and preferential promotion;
- We can only choose the products of the same brand, which has certain limitations in diversified shopping choices, and it is difficult to meet users’ pursuit of personalization. Moreover, consumers may miss products that are more in line with their own needs without comparative choices of other brands.
3.3.2 Traditional e-commerce platform
With the rapid development of Internet technology, more and more people choose online shopping nowadays, especially the new youth groups. The major traditional e-commerce platforms occupy the mainstream market of the e-commerce industry, and most consumers use traditional e-commerce platforms as their first channel when purchasing products.
Compared with offline shopping, the advantage of the traditional e-commerce platform is that there are a wide range of products, such as price, style and brand, which can be selected by consumers. There are many kinds of choices, and the discount is strong, the price advantage is obvious, and it is more convenient and faster.
However, online shopping on traditional e-commerce platforms also has some disadvantages:
- The traditional e-commerce platform has a lot of merchants and a variety of goods, but it also leads to uneven quality and is difficult to distinguish. Faced with a wide variety of goods, it is difficult for consumers to identify and select products with good quality, which leads to consumers’ shopping time-consuming and labor-intensive, and the experience is very poor;
- The product control of the traditional e-commerce platform lies in the merchants, and the platform does not directly control the product quality, so the product quality is uneven. In this case, it is easy for consumers to pick products with poor quality, and it is relatively difficult to find high-quality and cost-effective products. Moreover, if the quality of the goods does not meet their expectations, then consumers are likely to choose to return them.
3.3.3 Recommendations from major content platforms, friends and evaluation agencies.
With the development of Internet and 5G technology, content, video platforms, evaluation institutions and so on are rapidly emerging. Some consumers look for products to shop by watching bloggers’ evaluation and friends’ recommendation, which enables consumers to know more about the information of products to be purchased and judge whether they are suitable or not.
But this method has the following problems:
- The major recommendation platforms are numerous and complex, and there are many recommended products, and the demand standards of each consumer are different. The recommendation degree is not necessarily in line with their own, and the ability to select good products is different, which requires a lot of time and energy to choose;
- In the era of information flow advertising where traffic is king, a large number of products that brand merchants quit for advertising may not meet the needs of consumers, and as consumers, they can’t well identify whether the products are really good products or not.
- These platform products may have quality problems.
3.2 merchants
Merchants with Xiaomi products include Xiaomi self-operated+Xiaomi eco-chain enterprises+third-party brand enterprises, and the platforms need to meet their different needs respectively.
Xiaomi’s self-operated products are Xiaomi’s own products, which do not belong to the main operation direction of platform merchants, so we don’t analyze this part too much. Let’s analyze the needs of this eco-chain enterprise and third-party brand enterprise respectively.
3.2.1 Ecological chain enterprises
Xiaomi eco-chain enterprises are mostly intelligent hardware enterprises and some high-quality traditional product manufacturers, such as Huami Technology, Yunmi Technology, Roborock and No.9 Robot.
1) Intelligent hardware enterprises
Products need to go through many links from conceptual design to mass production, such as conceptual design, demand confirmation, product definition, scheme selection, product development, prototyping, functional debugging and design optimization, qualitative mold opening, mass production, warehousing and logistics, sales channels, market promotion and so on.
Each of these links is very important. The most important thing for intelligent technology products is to preempt competitors to go public and seize the market, and then create their own brand value. Once there is a problem in a certain link, it will have a huge impact on the whole product life cycle.
Compared with the perfect resources of large companies, small and medium-sized companies have shortcomings in terms of capital ability, research and development technology, supply chain channels, sales and publicity channels, brand influence and so on.
2) Traditional manufacturers
Nowadays, China has developed into a manufacturing power, and the market of manufacturing and supply chain enterprises is very huge after years of development. China factory has rich experience in OEM for international brands, and has precipitated a number of manufacturers with high-quality production technology and design capabilities, and even many enterprises have the leading production and research capabilities in the world, and have certain advantages and capabilities in production and design.
However, with the upgrading of consumption and the disappearance of demographic dividend, the market environment is getting worse and worse, and enterprises have problems of low profits and overcapacity.
3.2.2 Third-party brand enterprises
For third-party brand enterprises, with the development of internet technology, traditional brand enterprises have great difficulties in connecting with internet technology, do not understand emerging consumer groups, and lack a platform, so it is difficult to grasp new consumer groups, and need brand transformation and upgrading to improve brand awareness.
And with the increase of demographic dividend and customer acquisition cost, the product profit rate is also relatively low, and the information asymmetry is overcapacity, etc., they need to expand publicity through multiple channels, increase traffic, observe user needs, choose product direction, and enhance brand degree.
Summary: With these needs, eco-chain enterprises and third-party brand enterprises usually adopt the following ways to solve them:
1) Set up offline independent brand retail stores.
The construction of offline independent brand retail stores is conducive to building independent brands, but at the same time there are also the following problems:
- The cost of offline stores is high;
- Brand awareness is low, and the risk of drainage effect is high.
2) Create your own brand website
Enterprises to establish their own brand website, can build their own brand, improve brand image, but at the same time there are the following problems:
- Compared with traditional internet e-commerce, it has no competitive advantage, low brand awareness, difficult to obtain customers and few users.
- It is difficult to maintain and operate brand websites, and the drainage effect is poor.
- Establish your own brand website and increase the company’s operating costs such as manpower and material resources.
3) settle in major e-commerce platforms
Enterprises can stay in Internet e-commerce platforms such as Taobao and JD.COM. Internet e-commerce platforms have very large user traffic, which solves the problem of enterprise traffic. With the help of the power of large platforms, the exposure and brand awareness of their products can be quickly improved.
But the main problem in this way is:
- There are many similar products on the e-commerce platform, with fierce market competition and low product pricing initiative.
- The competition of e-commerce platform is fierce. Compared with well-known brands, the traffic acquisition cost of small and medium-sized brands is high, and it is also necessary to increase the expenses of marketing and operation.
4) Find and manage the supply chain by yourself
Enterprises can choose their own supply chain according to their own situation, but there are the following problems:
- For small and medium-sized enterprises, it is difficult to find a suitable OEM, and it is difficult to negotiate with the OEM, and there is no price advantage, so the quality of the OEM is not well grasped.
- Without a perfect and mature supply chain management system, it is difficult to predict the realizable cost and manufacturability of products, and the production qualification rate and product quality cannot be guaranteed, which makes it difficult to promote products.
5) Looking for investors
Due to the technical characteristics of intelligent hardware products, the investment in technology research and development is large and the cycle is long. Intelligent hardware enterprises are under great financial pressure and often lack project funds, which makes the project unable to proceed normally and smoothly. When looking for investors, the following problems will arise:
- Small and medium-sized intelligent hardware enterprises need to spend a lot of time and energy to find investors.
- For an emerging industry such as intelligent hardware, financing channels are limited, and the relationship between enterprises and investors is weak.
- It is difficult to estimate the value of intelligent hardware enterprises, which further increases the financing difficulty of intelligent hardware enterprises and affects their investment.
6) The product direction follows the fashion trend.
Enterprises need to quickly create products to go on the market to seize the market. Many enterprises will choose the current hot areas in product direction, and improving products on this basis will easily lead to the following problems:
- The flow of enterprise users is less, and the research information of market users is less, so the products made may not meet the market demand.
- It is easy to cause the problem of product homogeneity and it is difficult to seize the market.
3.3 platform
Based on the above analysis, it is found that in e-commerce shopping, the problems existing in the existing solutions mainly include,
For consumers:
- Whether the quality of goods meets the demand expectation.
- Whether the shopping process is fast and efficient.
- Whether the goods are cost-effective.
- Whether it meets the personalized needs such as high face value.
For merchants:
- Create a brand image.
- Increase profitability.
- Optimize the development mode of enterprises and transform and upgrade the Internet.
As a platform, how can Xiaomi Youpin better meet their needs and serve them better, so as to attract them to Xiaomi Youpin platform?
3.3.1 Strictly control product quality.
Xiaomi Youpin practices that all products are "fine and beautiful", which effectively avoids the homogenization problem of "many and miscellaneous" products. Xiaomi Youpin has its own unique advantages in controlling the quality of goods. The overall product quality control of Xiaomi, eco-chain enterprises and third-party enterprises is very strict.
Xiaomi Youpin will send a professional quality control and design team to the manufacturer to help the manufacturer improve the product design level and ensure the product quality.
Xiaomi’s quality control system is perfect. From early product design to product selection, production technology to later product testing, the quality control team is involved in the whole production process, strictly controlling product quality, and selecting manufacturers in the same category to ensure that every product is truly "quality", so that consumers can relieve their quality worries.
All products on the platform are selected products, and they are sold through the checks of Xiaomi. With quality assurance, consumers can buy suitable products without delicate selection, which greatly reduces the burden of consumers’ selection.
3.3.2 Refined SKU
There are fewer SKUs in Xiaomi’s product platform, and the principle of "fewer but better products" is practiced. Each category of goods only provides several choices. Compared with the traditional electronic goods platform, consumers can choose high-quality products that meet their own needs faster when shopping on this small but better refined SKU quality platform, which helps users reduce the decision-making cost, and the shopping process is fast and efficient, and the experience is better.
3.3.3 High cost performance
Pursuing high performance-to-price ratio is one of the values of Xiaomi’s ecological chain. By directly connecting manufacturers, Xiaomi has effectively eliminated brand premium and intermediate marketing links to benefit consumers. It is also to take advantage of its own ecological chain enterprises to control at the manufacturing end, reduce costs and create price advantages from the source.
Relying on its strong supply chain integration ability and long-term stable and all-round cooperation mode, Xiaomi can help first-class manufacturers to improve production efficiency and reduce fixed cost amortization through a large number of stable orders, thus reducing product unit price and improving product cost performance.
3.3.4 Personalized commodity design
In terms of design, Xiaomi has always maintained the concept of "high value", and the Xiaomi team has settled in the manufacturer to ensure that all products have the genetic concept of Xiaomi. Therefore, Xiaomi’s products are designed and screened by maintaining this concept, which can well meet the requirements of Xiaomi’s powerful rice noodle circle users for product appearance.
At the same time, Xiaomi Youpin team is committed to applying Internet technology to smart products, including Internet of Things, chips, cloud, APP, sensor technology, human body induction, etc., and using technological innovation and upgrading to create products. This novel and high-tech product can better meet the needs of consumers for smart technology.
3.3.5 Online+offline dual-channel layout
With the rapid development of new retail, Xiaomi Youpin has also begun to lay out offline retail stores, and established offline physical experience stores in Hefei, Shanghai and Nanjing. There are many kinds of offline store products, including Xiaomi, supply chain and third-party products. Consumers can get a close look at product information in online stores, and can also experience offline and purchase online to enhance the shopping experience.
The offline layout can reduce the cost of building offline stores by enterprises themselves, and relying on Xiaomi’s powerful rice noodle circle, the combination of online and offline can help the supply chain and third-party enterprises to promote their brands, enhance brand awareness and increase sales and publicity channels.
3.3.6 Brand Incubation+Investment
There are many eco-chain enterprises and third-party enterprises in Xiaomi Youpin platform. For eco-chain enterprises, Xiaomi implements the principle of equity participation but not holding shares, allowing them to develop independently.
Xiaomi will help eco-chain enterprises, such as capital investment, product selection definition, brand promotion support, supply chain and marketing channel promotion support, etc., intervene in the upstream supply chain, export product values to eco-chain enterprises, help them find the right product direction with the help of big data, and help eco-chain enterprises to promote their own brands and obtain higher profits with the help of their own platform traffic.
For the imported third-party brand manufacturers, the standards for brand entry are also very strict, and Xiaomi will provide support from the design team, strictly control the quality of products, and provide online and offline sales channels and self-owned brands for third-party brands through the high-flow Xiaomi product platform.
Summary: Through the above analysis, we can find that compared with other traditional e-commerce operation methods, Xiaomi Youpin has grasped the pain points of consumers and businesses, and better solved their needs, which also explains why Xiaomi Youpin is welcomed by consumers and grows rapidly, and why a large number of businesses have settled in Xiaomi Youpin platform.
4. Business value analysis
As an e-commerce platform, Xiaomi Youpin is an important indicator to judge whether its business can develop healthily, which is also the embodiment of its commercial value. The core indicator to measure the competitiveness (market share) of the platform is GMV(Gross Merchandise Volume).
GMV= number of users * conversion rate * customer unit price
The improvement of any one index, such as the number of users, conversion rate and customer unit price, will have a positive impact on the overall revenue growth, so we will focus on the means by which Xiaomi Youpin improves these three key indicators.
In order to better analyze its commercial value from the perspective of products, GMV can be disassembled into the following figure:
4.1 Increase the number of platform users
Xiaomi Youpin has become the head player of the track in just a few years since its establishment. Relying on its powerful Xiaomi rice noodle circle, the number of platform users is growing, and the scale of its platform users still has a lot of room for growth.
In order to achieve steady and sustained income growth, retaining old users and attracting new users are the most basic guarantees, and a sufficient user base can provide guarantee for the indicators behind GMV. So how does Xiaomi keep existing users and attract new users?
4.1.1 Self-user drainage
As an Internet technology company, Xiaomi is the fourth largest mobile phone shipment manufacturer in the world, with numerous loyal users. The smart home ecology created by its Mijia brand is highly respected by the younger generation. Through the diversion of Xiaomi Mall and Mijia platform for Xiaomi Youpin platform, the awareness of Xiaomi Youpin in the vast number of "rice noodles" can be effectively improved.
Not only that, Xiaomi Group also launched social e-commerce "there are products and fish" and Xiaomi crowdfunding, which also attracted a large number of users in this way. This method, which is based on the influence of interpersonal relationships and driven by users’ own interests, has low cost and good effect.
The offline flagship store of Xiaomi Youpin has also been opened all over the country, and the artistic offline store experience and high-quality products are bound to attract more potential users for Xiaomi Youpin platform.
In addition to the rice noodle circle, Xiaomi Youpin can indirectly acquire new users by cooperating with the third brand. Many products of well-known third-party brands have their own loyal users, and this diversion has also brought new users to the platform; Therefore, Xiaomi cleverly introduced a large number of users directly into it by setting up the e-commerce entrance of "products".
Xiaomi Youpin also acquired new users by entering Tmall and JD.COM flagship stores, and attracted users of the other platform through a series of promotional activities to create brand influence.
4.1.2 Advertising Promotion
Xiaomi Youpin has carried out a lot of advertising and activity promotion, specifically in the following ways:
- Celebrity endorsements: For example, Lei Jun and Yang Yang, the biggest spokespersons, endorsed four sets.
- Shooting video advertisements: For example, Xiaomi Youpin remakes the advertisement of the new middle cover, which is full of creativity and enhances the goodwill and attention to Xiaomi Youpin.
- Title movie: inFace and Xiaomi Youpin jointly sponsored the movie "Finding You".
- Advertising marketing from media platforms: such as Today’s Headlines, Weibo, Zhihu and other media platforms constantly output content and put advertisements.
- Cross-border cooperation: For example, Xiaomi’s first brand co-branded card "Heart Card", which was created in cooperation with Shanghai Pudong Development Bank, entered the palm mall of Guangfa Bank and announced a strategic cooperation with Indiegogo, a well-known overseas crowdfunding platform.
- Helping public welfare: For example, during the epidemic, Xiaomi has a number of caring merchants on the platform to provide a variety of living materials to Wuhan.
4.2 Improve the conversion rate
After guiding users to the platform through the above-mentioned various means, the most important thing after the registration of new users is shopping. As long as users are allowed to purchase and consume, that is, they will be valuable to the platform after being converted into platform paying users, how can Xiaomi improve the conversion rate?
To improve the conversion rate, we must first know the target users of the e-commerce platform. E-commerce users can be roughly divided into two types: users with clear goals and users with uncertain goals, and their shopping processes are slightly different.
- Target-oriented: search-product list page-product details page-add shopping cart-pay;
- The target is unclear: browse the product-product details page … browse the product-product details page-join the shopping cart-pay.
The two kinds of user behavior path scenarios are different, and the decision-making process is different. It is important to optimize the decision-making process for users with clear goals. However, users with unclear goals will hesitate repeatedly in the middle of shopping, and need to improve their desire to buy through operational testing (coupons, explosive activities, etc.), and finally achieve the purpose of improving the conversion rate. Therefore, it is necessary to consider comprehensively when designing page flow.
According to the user’s shopping process, this paper analyzes how Xiaomi Youpin can improve the conversion rate through page layout design:
4.2.1 Newcomer Welfare
First of all, for new users who register for the first time, there are exclusive benefits for newcomers, which will stimulate consumers to spend by giving away coupons and gift packages for newcomers and purchasing them in 0 yuan.
4.2.2 Home Page
The homepage interface design of Xiaomi Youpin is very simple and beautiful, which is very artistic. Users with clear goals can search directly through the top search bar. For users with unclear goals, Xiaomi Youpin guides them to view related products through advertisements and display various preferential information. The navigation bar is detailed and not messy, which effectively improves the efficiency of users to find the goods they need.
In addition, the recommendation function at the bottom of the homepage can better recommend products that users may be interested in according to the data records searched by users according to the big data technology, and improve the purchase rate of users.
4.2.3 Commodity List Page
After the user enters the keywords of the goods he wants to buy through the search box on the home page, he jumps to the list page of goods.
The design of the search list page of Xiaomi Youpin is very simple, which only provides photos, names and prices of goods, and the number of the same category is not much. This is also in line with the product concept of Xiaomi Youpin, which has always been respected as a boutique e-commerce platform.
When users search for keywords and enter the product list page, which product should they choose in the face of a dazzling array of products? What function points are designed on Xiaomi Youpin page to quickly help users make decisions and thus enhance users’ purchase intention?
There are three factors that affect consumers’ decision-making: commodity style, price and popularity.
The prominent picture shows the desired target product, and secondly, the prominent price font, followed by comments and favorable comments, reflects the popularity and reputation of the product, which are all means to help consumers make quick decisions; At the same time, in order to further help users make quick decisions, sorting functions are designed for new products, prices, sales volume, personalized customization (screening) and other dimensions.
4.2.4 Product Details Page
After selecting the products that users are interested in, they will click on the products to enter the product details page. The product details page is the user’s consumption experience page, which persuades consumers to place an order. The quality of the design will directly affect the user’s purchase behavior. What about Xiaomi’s products to help users make quick decisions to join the shopping cart and improve the conversion rate?
1) Show cost-effectiveness
The consumption principle that everyone can get the maximum benefit at the least cost is commonly known as cost-effective. The atmosphere of cost-effective is highlighted through special price bidding, second kill of products and preferential activities, and there are new gift packages for new users, all of which make users feel that it is cost-effective to buy now. If you don’t buy at this time, it will be a loss.
2) Create a popular and word-of-mouth atmosphere
Through the popularity list of products, user evaluation and user satisfaction, on the one hand, users’ trust in goods is established, on the other hand, a strong popularity atmosphere is created.
3) establish consumer protection
Make the service promise provided by the product transparent, explain to the manufacturer of the product, and return the product for 7 days without reason, etc., to solve the after-sales worries, establish the user’s sense of trust and security, and let the user buy with confidence.
4) manufacturing time sense of urgency
Tell users through time countdown that there will be no preferential price after this time period, thus improving the conversion rate.
5) Create commodity scarcity
Tell users through the quantity in stock and the quantity in stock that if you don’t buy it now, you can’t buy it once it’s sold out, creating a scarce atmosphere.
6) Shaping the consumption scene
Through the product details page, the use scene diagram of the product is displayed, so that users can experience the use state of the product in life to a certain extent, tap users’ demand for product use scenes, and promote users’ desire for consumption.
7) Taste evaluation and comparison
The function of taste evaluation circle shows consumers the data such as experience and evaluation of goods, so that consumers can better understand the related functional experience of goods and promote users’ desire for consumption.
8) Commodity recommendation
Product recommendation on the product details page has two functions. For similar products, the main purpose is to improve the conversion rate. Consumers may be dissatisfied with the product display or have better products to recommend, so they recommend similar related products to users to improve the conversion rate.
4.2.5 Shopping cart page
Through the previous column design, users have been successfully attracted to add the goods to the car, and the last step is the payment! How does Xiaomi have products to improve the conversion rate through design?
1) Display coupon information
By allowing users to receive coupons, it shows the profit-making of merchants and improves users’ willingness to buy.
2) Show preferential price
When there is a discount or special price, the amount of the activity discount is displayed in the shopping cart, and the number is used to stimulate the user’s willingness to buy, so that the user feels cost-effective. Now it is quite cheap to buy, and there will be no such price if you don’t buy it. So as to improve that conversion rate of ord..
3) Payment display details
In the payment page, the service guarantee, coupon usage information, activity preferential information, red envelope discount, delivery method and final price settlement method are clearly marked for users, which eliminates users’ doubts and improves users’ payment rate.
4.2.6 Grade Page
Xiaomi Youpin has set up a "Taste" page in the bottom navigation bar, in which there are the experience and recommendations of researchers on various products. Users can learn about the product information on this page and improve the conversion rate of users.
4.3 Increase the unit price of customers
The unit price of customers is influenced by two factors: the amount of single purchase and the frequency of purchase. Then, what methods have Xiaomi Youpin taken to increase the unit price of customers in this respect?
4.3.1 Single purchase amount
1) Free shipping bill collection
In the shopping cart page, Xiaomi’s products will prompt users how much money they still need to be free of charge, prompting consumers to buy more products for free of charge.
2) Multiple discount promotions for activities.
Guide users to purchase more goods to increase the unit price of customers through multiple discount promotions.
3) Full reduction of coupons and multiple coupons
Give users full discount coupons, display multi-coupon information, and increase the order amount to meet the preferential conditions after receiving them, thus increasing the customer unit price, so as to encourage users whose consumption amount does not reach the full discount standard to buy additional goods.
4) increase the price to buy
Shopping carts increase the price to buy accessories and other goods, so as to encourage the consumption of extra goods.
5) Recommended products
For the product recommendation on the shopping cart page, the purpose is to analyze the user’s consumption preferences according to big data, and then display the product recommendations that meet their consumption preferences under the shopping cart. The purpose is to dig up the user’s consumption needs again before the user completes the consumption, and urge the user to buy more products, thus increasing their consumption amount.
As for the product recommendation on the product details page, as mentioned above, the purpose of similar product recommendation on the product details page is to improve the conversion rate; In addition, there is a kind of complementary recommendation of goods, which recommends other related configuration goods of search goods, such as keyboard and mouse, etc., to encourage users to buy more goods, thus increasing their consumption amount and unit price.
6) Purchase additional services
Add unexpected protection, extended warranty, cloud hosting service and other services on the product page, and increase the customer unit price.
7) Package recommendation
Based on Xiaomi’s powerful smart home ecological chain system, the ecological scene layout of the products in the ecological chain is complete, and all the products in each link can be integrated. The package is recommended to users and the unit price is increased.
At the same time, it will provide customers with some affordable packages, discounts on multiple products and other preferential activities to guide users to purchase more goods to increase the unit price of customers.
4.3.2 Increase the purchase frequency of users.
1) Payment Success Page
When the user pays successfully, there will be red envelopes and product recommendations on the page. According to the big data, the user’s consumption preferences will be analyzed, and then the product recommendations that meet their consumption preferences will be displayed under the shopping cart. The purpose is to use the red envelopes and recommended products to tap the user’s consumption needs again after the user completes the consumption, prompting the user to buy the product again, thus increasing the user’s purchase frequency.
2) Commodity quality and consumer experience.
In order to increase the frequency of users’ purchase, consumers are most concerned about the quality of goods. Xiaomi Youpin relies on the quality control system to strictly control the quality of goods, high cost performance and personalized aesthetic design, and at the same time follows the principle of "less but better" products, so that consumers can choose good products with their eyes closed on the platform, which improves consumers’ satisfaction with the quality of goods and the use experience.
With the improvement of living standards and the demand for smart life, Xiaomi has a variety of smart home products, and users’ willingness to buy products for many times has also increased, and the habit of repurchasing with the same brand has gradually developed. Once users are satisfied with the previous consumption experience, they will naturally buy back habitually, and then become loyal users of the platform a little bit.
Summary:
From the above analysis, it can be found that Miyoupin has done a lot of optimization work on the platform in order to optimize its income model, constantly attracting new users through rice noodle circle users and large-scale advertising marketing, and improving the conversion rate of users’ orders and the unit price of customers through page design.
According to Xiaomi’s 2019 financial report, the total transaction volume (GMV) and revenue of Xiaomi’s premium e-commerce platform increased rapidly. In 2019, GMV exceeded RMB 10 billion. It can be seen that Xiaomi Youpin has done a good job in these two aspects.
5. Product iterative analysis
In order to analyze the version iteration of Xiaomi Youpin and deeply explore its iterative logic, the author iterates all the core versions of Xiaomi Youpin from V1.0.1 to V4.9.0 as follows:
According to the curve distribution of the cumulative download volume of Xiaomi Youpin on Kuchuan, it can be seen that the user growth curvature continues to increase from V1.7.0 (that is, from August 1, 2017), which belongs to a "J-shaped" curve, and the growth rate slows down in July 2020, which belongs to a mature period, so Xiaomi Youpin is divided into three stages for analysis:
5.1 The first stage: the product cold start stage-improve the basic functions and optimize the user experience.
On March 3, 2017, Xiaomi Youpin was separated from Mijia Mall and became an independent APP. It was separated from March 3, 2017 and went online to version V1.7.0 on August 1, 2017. This stage is the start-up stage of Xiaomi Youpin products. The main goal of this stage is to improve the basic functions and polish the user experience.
At the initial start-up stage, the e-commerce platform needs to complete the basic functions it needs as a shopping platform to meet the shopping needs of users and polish the user experience.
For example, the shopping cart can recommend goods for you, evaluate goods, apply for after-sales service, display selling point information, and the express information page can identify the courier’s phone number and dial it directly. At the same time, in order to facilitate users to log in conveniently and quickly, the platform has launched the one-click registration/login function of mobile phone and WeChat.
At the same time, the platform needs to drain and accumulate new users. In order to attract more new users, a new novice red envelope, a new invitation mechanism, and a Mijia Life Festival function have been added to attract users to register and pull new ones. At present, the platform is in the initial stage of establishment, and the platform is under pressure of funds and inventory, so the estimated delivery time of pre-sale goods is online.
In this way, the platform can flexibly adjust the inventory pressure of goods and improve the capital turnover rate according to the quantity and trend big data of pre-sold goods; With the increase in the number of users and the number of goods sold, it is inevitable that there will be a large number of after-sales demand. The application of after-sales function of Xiaomi’s self-operated goods to solve user problems has greatly improved the user’s shopping security experience.
It can be seen that at this stage, the download volume of Xiaomi products is slowly rising, the platform meets the basic shopping needs of users, and the basic functions are constantly improved, and the user experience is improved by polishing.
5.2 The second stage: rapid growth stage-positioning boutique e-commerce, optimizing functions, attracting new and retaining users.
From August 12, 2017 to July 24, 2020, with the version from V1.8.0 to V4.0.0, Mijia Youpin officially changed its name to Youpin, positioning and laying out an independent e-commerce platform for boutique life. This stage is the rapid growth stage of Xiaomi Youpin. At this stage, the scale of users continues to grow with a J-shaped curve. The main goal of this stage is to continuously optimize functions and experiences, retain old users, and attract new users to expand the number of users.
In terms of retaining old users, Xiaomi Youpin continues to optimize basic functions at the product level, including adding new star products, fully reducing shopping cart support, adding leaderboards on the home page, and brand-new classified pages, which further enhances the user experience.
At the same time, the platform has also been improved with some functions to enhance the user’s stickiness. For example, the product evaluation support picture can better let consumers show the photos of the purchased products, and the product evaluation support merchant reply function can better let merchants answer questions to consumers.
This can show the reply content to all consumers, and also answer questions to all consumers to a certain extent, and enhance the stickiness of user experience.
Xiaomi Youpin is positioned as a boutique e-commerce, mainly focusing on home smart technology products. These products have certain usage scenarios. Therefore, the personal center adds the AR ruler tool function, so users can measure the actual consumption scene space at home, and then decide whether the products meet their own needs, improve the user experience, and avoid the possibility of returning goods that do not meet the needs of users.
At this stage, the very important goal is to attract more new users, add new explosive products, new users can enjoy 150 yuan premium gift packages, and launch large-scale promotional activities at this stage, which has attracted a large number of users for Xiaomi’s products. Sharing goods with WeChat friends can be a good way to pull WeChat friends to Xiaomi.
In addition, at this stage, we can see the rapid increase of platform users and the continuous growth of commodity sales, which has also generated a large number of pre-sales and after-sales demands. The functions such as adding online customer service, robot customer service Mi Tu, and digital display on the after-sales process page can better solve the user’s problem needs and enhance the user experience; The increase of users also reveals the problem of third-party payment. Different users have different payment habits, and UnionPay China Unionpay Quick Pass is added to the payment method to improve the diversity of payment.
From the data point of view, at this stage, the download volume of Xiaomi Youpin shows explosive growth, and there is no sign of slowing down, indicating that a series of actions of Xiaomi Youpin at the product level and operation level have achieved very good results at this stage.
5.3 Stage 3: Maturity Stage-Maintain old users and continuously attract new users.
From August 24, 2020 to now, the version has been continuously updated from V4.1.0 to V4.9.0, which is the mature stage of Xiaomi Youpin. At this stage, the scale of users continues to grow, and the growth rate begins to slow down. The main goal of this stage is to continue to optimize functions, maintain old users, and continue to attract new users.
For example, new credit card installment payment is supported to build a multi-channel payment method, and at the same time, there are activities such as 11.11 discount activities and shopping vouchers for the New Year Festival to meet the needs of users for cost-effective shopping. These are the basic functions to improve the shopping of e-commerce platforms and continuously optimize the consumer shopping experience of users.
On the whole, through the iterative analysis of the above versions, it can be seen that the goal of Xiaomi Youpin in each stage is very clear, and the overall planning rhythm of Xiaomi Youpin is very good.
First of all, in the first stage, the focus is on improving the basic functions of the product and optimizing the user experience. The goal of this stage is not to acquire a large number of users, but to improve the basic functions of the platform to meet the basic needs of the platform and users.
In the second stage, the basic functions are basically perfect, the user experience tends to be stable, the functions are continuously optimized, the shopping scenes are continuously enriched, the user experience is improved, and users are attracted through large-scale operation activities;
In the third stage, the product has entered a mature stage. In order to maintain old users and continuously promote new users, we constantly optimize functions and continue related activities to enhance the user experience.
6. Product structure analysis
In the iterative analysis, we analyzed the iterative steps of Xiaomi’s product functions. Next, let’s take a look at what these functions meet the needs of users and how they are distributed throughout the app. This is mainly analyzed through product structure.
The following figure shows the product structure brain diagram of Xiaomi Youpin V4.9.0:
In order to facilitate the analysis, the author will get the following table by reorganizing the product structure of Xiaomi Youpin according to users, scenarios, needs and functions:
Because the main target users of Xiaomi Youpin mobile terminal are consumers, it focuses on meeting the potential needs of consumers.
When consumers use Xiaomi, there will be three scenarios:
- Before buying: the main goal of consumers is to know the products they are interested in (product details, product evaluation, etc.) and the latest activities.
- In the process of purchase: the main goals of consumers are to confirm the delivery address, whether there are discounts and choose the payment method.
- After purchase: the main goal of consumers is to check whether the purchased goods have been delivered, check the logistics process, and whether it is convenient to return or exchange goods when the goods are not suitable and sell them in time.
6.1 Scenario 1: What are the needs of consumers before purchasing and what functions do Xiaomi have to meet this demand?
There are two main target users of Xiaomi’s products before purchase: those who definitely buy the target products and those who don’t.
For users with clear purchase goals: the target products they want to search are very clear. What these users need is to find the target products quickly. They can find the required products through the search box at the top of the home page or come to the classification page through detailed navigation and classification. In addition, the product details page, evaluation and asking everyone module help users to know more about the target products they want to buy.
When users want to know more about product quality and get more detailed product information, in addition to the module of checking product details, evaluating and asking everyone, there is a module of taste evaluation circle, which contains the use experience and evaluation of products by researchers of various products, so that users can have a comprehensive understanding of products.
For users who don’t have a clear purchase goal: they don’t have a clear purchase goal and want to browse around casually. Xiaomi Youpin provides a "guess what you like" module, and sets a one-click direct function from home page to guess what you like, so that users can quickly find this module to browse, which is convenient for users to choose products of interest without a purchase goal.
At the same time, the platform provides a carousel of activities, spikes, limited time snapping and the entrance to the event venue, etc., and puts them in the most conspicuous home page position, so that users can intuitively see the latest activities.
In addition, Xiaomi Youpin has set up a "Taste" page in the bottom navigation bar, in which there are the experience and recommendations of researchers on various products, users can learn about product information on this page, and at the same time improve the conversion rate of users.
With the development of 5G Internet technology, online live broadcast has developed rapidly, and the platform has also launched the "live broadcast with goods" module, which better shows the usage mode and scene of goods and brings users a quality shopping experience.
6.2 Scenario 2: What are the needs of consumers during purchase and what functions Xiaomi Youpin uses to meet this demand?
When a user selects a favorite product and decides to buy it, the user can click "Buy" directly from the details page or enter the settlement page from the shopping cart. At this time, the user’s focus turns to coupons, adding/replacing/confirming the delivery address, selecting the payment method, checking the payment amount and so on.
At the same time, in the "shopping cart", the product focus is marked red to collect orders, get coupons and red envelopes, which helps users get the maximum preferential strength and enhance their shopping pleasure.
In addition, some users will ask for an invoice. For these users, an invoice type module is also provided on the payment page.
6.3 Scenario 3: What are the needs of consumers after purchase and what functions Xiaomi Youpin uses to meet this demand?
After placing a successful order, the user’s main goal is to check whether the purchased goods have been delivered, check the progress of logistics, and whether it is convenient to return and sell them in time when the goods are not suitable.
According to the needs of users in this scenario, the platform provides the modules to be delivered and received, transaction logistics function, refund/after-sales module, after-sales service and online customer service module.
After receiving the product, users can evaluate the product and recommend it to everyone. Xiaomi Youpin provides an "evaluation" module, which allows users to evaluate the product quickly. On the other hand, if users want to evaluate this product in depth, they can publish their detailed use experience through the taste page.
After receiving the goods, if users are not satisfied and need to return them, they can inquire and apply for after-sales in the refund/after-sales and official customer service modules.
From the above analysis, we can find that the functional design of Xiaomi Youpin can well meet the needs of users in three scenarios before, during and after purchase, and the page design is indirect and beautiful, and Xiaomi Youpin has some innovative and personalized functions.
For example, one-click direct guessing that you like intelligent recommendation function, taste evaluation function, asking everyone, etc., reflects that Xiaomi Youpin, as a boutique e-commerce, attaches great importance to user experience, and its distribution is reasonable, concise and clear, and it can be said that it is an excellent product in functional design.
7. Operation path analysis
Regardless of product operation, they all have the same goal: increasing users and gaining profits. So how does Xiaomi Youpin operate this product and grow rapidly in a short time? Since the establishment of Xiaomi Youpin, according to AARRR model, the author sorts out the main operation activities as follows.
7.1 Acquisition
Xiaomi Youpin has just been established for a few years, and it needs some operational activities to pull new products. In order to pull new products, Xiaomi Youpin mainly adopts the following methods:
7.1.1 Mode 1: celebrity endorsement
- On May 9, 2019, Jay Chou endorsed the SpearHead VR esports headset;
- On June 5, 2019, Kevin Yan endorsed the razor;
- On July 19, 2019, Eddie Peng Yuyan endorsed the car refrigerator;
- On July 22nd, 2019, Yang Yang endorsed the four-piece bedding set of Mi Tu.
7.1.2 Method 2: Products are embedded in movies, popular variety shows with titles, movies and TV advertisements.
- On July 27, 2018, the film "The Richest Man in Xihong City" jointly produced by Xiaomi Pictures was implanted with advertisements, and products such as Mijia electric toothbrush and Xiaomi bedside lamp were implanted into the film;
- On October 5, 2018, Xiaomi Youpin and inFace jointly sponsored the new film "Finding You" produced by Huayi Brothers Film Co., Ltd.;
- In December 2019, Xiaomi had the idea of using "old bottled new medicine" and remake the classic advertisement "New Cover and Middle Cover".
7.1.3 Mode 3: Cross-border cooperation
- In May 2018, Xiaomi Youpin reached a strategic cooperation with Country Garden Bijia;
- In September 2018, Xiaomi Youpin strategically cooperated with the standardized home improvement brand Love Space;
- On November 6, 2018, Xiaomi Youpin officially settled in JD.COM, which strongly helped JD.COM Double Eleven Global Good Things Festival;
- On November 21, 2018, Xiaomi Youpin joined the "three-screen joint exhibition" model, landed with a third-party brand, and spoke for the China brand across the continent;
- In January 2019, Xiaomi Youpin and Meituan’s hazelnut B&B jointly created a warm and intelligent family "Xiaomi Youpin Home";
- In April 2019, Xiaomi Youpin Pudong Development Bank Youpin Heart Card was officially released;
- In September 2019, Xiaomi Youpin officially settled in the pocket mall of Guangfa Bank;
- In November 2019, Xiaomi Youpin and Maotai Group reached a consensus on new retail;
- In December 2019, Xiaomi Youpin Platform and Indiegogo, a well-known overseas crowdfunding platform, announced a strategic cooperation;
- On October 5, 2020, Chivas Regal settled in Xiaomi Youpin, which was an upgrade of scientific and technological innovation to promote comfort.
7.1.4 Mode 4: Helping public welfare activities
- In October 2017, Xiaomi Youpin joined hands with Han Hong Charity Foundation and Haiquan Fund to raise 2 million donations for the elderly in Tibetan areas.
- In February 2020, 40 caring merchants of Xiaomi Youpin Linkage Platform provided 62 kinds of living materials to 5 hospitals in Wuhan.
- On April 3, 2020, Xiaomi Youpin launched "Helping Hubei Food Specials" to help Hubei specialty sales. At the same time, Xiaomi Youpin will launch support policies for enterprises in Hubei, and cooperative enterprises and intentional cooperative enterprises in Hubei will enjoy a 50% discount on commission within six months.
7.2 Activation
After Laxin obtains the user to download and register the app, it needs some operations to activate the user to open the app and participate in it, thus enhancing the user’s activity. Xiaomi Youpin’s methods to enhance the user’s activity are mainly in the form of some operational activities:
- Xiao mi you pin zhong Chou
- Pinpin spike
- Shangxin selected
- Everyday welfare, etc.
7.3 Improve Retention
After promoting user activity, it is necessary to improve the retention rate of users, attract and retain users or even save lost users through operational activities, so as to continuously create value for the platform. In order to improve the retention rate of users, Xiaomi Youpin mainly does the following things: Xiaomi Youpin signs in daily, earning 150 for 15 consecutive days and 300 for 30 consecutive days.
7.4 Share communication (Revenue)
In order to guide users to spread spontaneously, Xiaomi Youpin has mainly done the following things:
- Newcomer invitation mechanism, old users invite friends to download Mijia Youpin App, and new users can get coupons after activation;
- Share goods with WeChat friends and associate them with applet cards;
- Explosive products are grouped together, and 5 people are grouped together, enjoying ultra-low discount.
7.5 Raise income (Refer)
As for the method of increasing income, we have introduced it in detail in the part of business value analysis, so I won’t repeat it here.
Step 8 summarize
Through the overall analysis of the boutique e-commerce market and Xiaomi’s products, we can draw the following conclusions:
- Driven by factors such as policy, economy, social culture and technology, in recent years, the quality e-commerce industry has stood on the fast track, developed rapidly, and the market has been expanding, and will continue to maintain a certain high growth rate in the next few years.
- In the quality e-commerce industry, Xiaomi Youpin has obvious advantages in enterprise revenue and user scale. In 2019, Xiaomi Youpin broke through RMB 10 billion, belonging to the first echelon; And compared with direct competing products, Xiaomi has an advantage by relying on the strong and loyal rice noodle circle of Xiaomi brand, which makes it rise rapidly in just three years after its establishment, quickly opening up the gap with its competitors and occupying a place in the e-commerce industry. Moreover, Xiaomi has products and strictly controls SKUs, making it easier to control goods and create explosions.
- In the boutique e-commerce industry market, there are mainly three participants: consumers, merchants and platforms. If the platform wants to achieve rapid development, it must meet the needs of consumers and merchants, and at the same time "please" children, so as to continuously generate user value.
- The quality e-commerce business of Xiaomi Youpin’s core business. In order to maintain the positive growth of revenue, first of all, Xiaomi Youpin constantly obtains new users through various methods such as Xiaomi rice noodle circle, advertising and activity promotion; Secondly, a lot of optimization and improvement have been made to the platform to optimize the shopping experience. Through the page design, the conversion rate of users’ orders (showing cost-effectiveness, creating popular reputation, creating commodity scarcity, comparing taste evaluation, etc.) and the unit price of customers (free freight, full reduction of coupons, and recommended goods) have been improved.
- On the whole, the development of Xiaomi Youpin has been divided into three stages since its establishment, and the overall planning rhythm is very good. First of all, in the first stage, the focus is on improving the basic functions of products, meeting the basic needs of platforms and users, and optimizing the user experience. In the second stage, the basic functions are basically perfect, the user experience tends to be stable, the functions are continuously optimized, the shopping scenes are continuously enriched, the user experience is improved, and users are attracted through large-scale operation activities. In the third stage, when the number of users reaches a certain scale, it will enter a mature stage. In order to maintain old users and continuously promote new users, we will continue to optimize functions and continue related operational activities to enhance the user experience.
- The target users of Xiaomi Youpin mobile terminal are consumers, so all functional designs are centered on meeting the needs of consumers. When consumers use Xiaomi’s products, there will be three scenarios: before purchase, during purchase and after purchase. By combing the structure and function of Xiaomi Youpin, we can find that it can meet the shopping needs and experience of users. A good user experience is the vitality of a product.
- Operation is very important for the development of a product. The rapid growth of Xiaomi Youpin can not be separated from operation activities. It can be seen that Xiaomi Youpin has done a lot of work in innovation, promotion, retention and self-dissemination, and the effect is good at present.
Above, the author systematically analyzes the reasons behind the rise of Xiaomi Youpin from seven parts: industry, competing products, user value, commercial value, product iteration, product structure and operation. It can be seen that no product can succeed casually, and it must be the comprehensive effect of internal and external reasons such as "the right time, the right place and the right people".
9. Future Outlook/Optimization Suggestions
Through the above analysis, we understand the reasons for the rapid rise of Xiaomi Youpin. Where will it go in the future? Next, the author will use SWOT model to systematically analyze the future development of Xiaomi Youpin.
From the above analysis, we can see that if Xiaomi has good products, it will continue to develop.
- First of all, we must continue to optimize the user experience, such as after-sales problems and bad reviews, which is an important support for obtaining long-term users and retaining consumers;
- As a platform based on intelligent hardware products, Xiaomi Youpin relies on Xiaomi, ecological chain and the powerful ecological chain system of third-party enterprises to build an intelligent industrial chain of smart homes, preempt the layout of competitors, acquire users and improve user stickiness;
- With the development of 5G technology and the rapid rise of content e-commerce, live broadcast has developed rapidly. Xiaomi has products to enhance the user experience of its live broadcast and gain traffic.
This article was originally published by @ Fu Xiansen Product Wang. Everyone is a product manager. Reprinting is prohibited without permission.
The title map comes from Unsplash and is based on CC0 protocol.
