After the online sales of domestic electronic cigarettes reached its peak at the beginning of 2019, the growth began to stop and keep stable, and there was no obvious rising trend. Therefore, solving the problem of building sales channels and promoting sales has become the major concern of brand owners.
There are three main reasons for the decline in online sales: first, after the “3.15” party criticized e-cigarettes, e-commerce channels reduce the advertising intensity of e-cigarettes; second, social platforms control all content of e-cigarettes and restrict online marketing channels; third, the mainstream media strengthens the pressure of public opinion that vapes are harmful, and the public’s understanding of e-cigarettes is misled;
The current promotion of electronic cigarette brand in China is a great problem. Limited online promotion channels and slow penetration of brands have led many enterprises to make preparations in advance and shift their focus to the offline channel development.
However, does this mean that the online channel is dead for vapes in China?
The answer is uncertain.
Although the tightening of Internet policy will have a certain impact on online sales and promotion of vape brands, the uncertainty of vape industry and the characteristics of products in line with fast consuming categories may make online marketing gradually turn to the social media new retail mode of O2O or OMO. In addition, some new e-cigarette brands have the capital and online influencer KOL support, and they are very skilled in online marketing adaptability and strategic planning, which will also become one of the reasons for accelerating the integration of online and offline platforms.
What is the social media new retail model of O2O and OMO?
O2O, or Online To Offline, refers to the combination of offline business opportunities and the Internet, making the Internet a front desk for offline transactions. The concept of O2O is very broad. As long as the industry chain can involve both online and offline, it can be called O2O.
In the early days, the main use of O2O was to take the use of the convenience of online promotion, so as to gather the relevant users, and then lead the online traffic to offline. The main areas were focused on online group buying and promotion represented by the early Meituan. Generally speaking, enterprises use the high dissemination of the Internet to publish product information to consumers on the Internet and guide consumers to the offline shop to be served. In this process, there are unidirectional and low adhesion characteristics.
At the later stage of the development of O2O, it has basically possessed the elements that we all know and understand at present. The main feature of this stage is to upgrade to a service-oriented e-commerce model: including commodities (services), orders, payment and other processes, to transfer the previous simple e-commerce module to a more high-frequency and daily life scenario.
Because the traditional service industry has been in a state of low efficiency and insufficient digestion of labor force, there has been a carnival booming growth of O2O model business under the promotion of the new model and the catalysis of capital. so door-to-door massage, door-to-door meal delivery, door-to-door fresh food, door-to-door makeup, Didi and other O2O models began to emerge in endlessly. Due to the maturity of mobile terminal, Wechat payment, data algorithm and other links, as well as the catalysis of capital, their user group grew explosively, the frequency of use and loyalty began to rise, and the integration of O2O and users’daily life began to become an inseparable part of life.
Let’s take a look at the retail model of OMO then, OMO business model is an industry platform business model, referred to “Online Merge Offline“.
Through the effective aggregation of online sharing commerce, mobile e-commerce and offline commerce, enterprises adapts to changes of experience economy development ables the users to simplify the way to obtain physical goods and services, and build an online, mobile and offline three-in-one full-time experience marketing system, so that enterprises and users conduct transactions and consumption through various kinds of carriers and terminals.
Enterprises with such a unified platform-based business model can rationally allocate enterprise resources, formulate corresponding business strategies, and ultimately achieve a win-win situation between brand communication and actual transactions, combining their own product and service characteristics.
Simply put, online is a product line supporting mechanism, offline is another product line supporting mechanism, online channels achieve team fission through the rapid spread of the Internet, offline physical stores do local in-depth marketing through offline product line. At the same time, local offline physical stores are used as business incubation bases to provide business guidance, training and replication to the surrounding entrepreneurs, so as to promote the continuous growth of online channels.
So why put the word “social” before “new retail”? The great reason is that the success of the two retail modes of O2O and OMO is closely related to the practice of social media platform. Perhaps such an explanation is confusing, but if we take the “Wechat business” that has been rising year by year as an example, maybe everyone will understand it immediately.
Wechat business has been developing for seven years since 2012. The greatest advantage of Wechat business is to precipitate users and realize the complete aggregation of team flow fission. Although Wechat’s original intention is to be used as a social tool, marketing is not its main focus, but it also means that Wechat is more accurate than traditional e-commerce to find user groups and interconnected large data, thus greatly improving the scope of business services and orders.
Early Wechat business merchants were simply selling goods in friends circle. They were almost zero guarantee in terms of product quality, category selection, logistics, rights protection and so on. It was full of a large number of counterfeit and defective products. Because of the fission effect of agency distribution mode and viral marketing with low threshold and zero cost, Wechat merchants are springing up in the circle of friends.
During this period, Wechat merchants almost made consumers hate Wechat merchants’ advertising activities, but it is also this fast-growing social medial retailing that enables enterprises that want to get more traffic and sales to introduce the mode of O2O and OMO into Wechat merchants, and to achieve the comprehensive interchange of brand channels, decentralized traffic aggregation and user precipitation.
On the one hand, due to the early environmental impact, Wechat business practitioners need more brands with high prestige to enter the market, while consumers need products with mouth-to-mouth credibility; on the other hand, brands need to spread quickly to achieve user fission, interact directly with consumers, so as to establish brand awareness in the market. Therefore, in the context of both buyers and sellers’demand, a “new social retail” in O2O or OMO model gets favored by consumers gradually.
At present, there is no OMO’s social retail model in the electronic cigarette industry. After all, you should not have heard of such services like “sharing electronic cigarettes” or “electronic smoke cloud data” appearing on the market. But when it comes to social media new retail outlets of the type of O2O, online channels of some enterprises have begun to shift in this direction according to the surveys.
First of all, YOOZ, an electronic cigarette brand created by Uncle Cai Yuedong, was taken as an example. After its previous achievements in Taobao, Jingdong and Xiaohongshu, YOOZ is planning to make efforts in the private domain to solve the pain points faced by traditional Wechat merchants with brand-new categories and innovative models, to use traffic fission to play new retail.
YOOZ’s team includes several top Wechat business executives to improve the disadvantages of the Wechat business agent team system. For example, there are only two levels of agency sales. Flattened agency team can help YOOZ really approach the market and help agents get more product revenue. In addition, unlike traditional retailers, the quality, logistics and rights protection of electronic cigarette products are handed over to YOOZ.
When consumers use YOOZ products, they find that the product price and performance are good. They can apply to become agents through the unified entrance of Wechat built by Yooz. Agents can share products and link to social media such as friends circle, China twitter, QQ space, and realize fissile prodcut distribution based on acquaintance recommendation.
Remember the “YOOZ e-cigarette online 24 hours to get 5 million sales” incident at the beginning of this year? This is Cai Yuedong, who is well versed in Internet marketing, who demonstrates the social media new retail is best with a strong team of Internet foundations.
Look at another brand case of realizing new retail fission. It is also a popular electronic cigarette brand, FLOW, which was launched almost at the same time as YOOZ.
FLOW’s recently adopted FLOW Partner Scheme, similar to YOOZ, is a new retail model that uses social media as a channel for sales agents to achieve user fission. However, it is worth noting that FLOW’s method of becoming a distributor is simpler than YOOZ’s. It only needs to register through an entry link set up by the official Wechat account to become the brand general partner after being audited.
After becoming a partner, you can enter the Partner’s Center through the official Wechat account to check your shop situation, and share links to other consumers to earn commissions. If you become a general partner, you can get a 10% Commission on any order, and if you become a partner’s friend and successfully promote it to his friend, you can also get an additional 2% second-level invitation award.
In addition, as the amount of accumulated orders continues to rise, your partner rank will also rise. When you exceed 5000 yuan, you will be promoted to an intermediate partner with a corresponding increase of 15% and 3% in commission. When you accumulate more than 10000 yuan, you will become a senior partner with the highest commission ratio of 20% and 5%.
Does FLOW seem to have a similar partnership plan? In fact, Airscream Bubble, an emerging e-cigarette brand, launched its Distributor Program earlier this year, along the same path. The brand has raised a lot of topics at Shenzhen Electronic Cigarette Exhibition with the “99 yuan pod vape starter kit”. Later, Bubble set up the “Bubble Ambassador” distribution officer program on Wechat, which became the first echelon for domestic e-cigarette brands to step into social media new retailing.
In the case of electronic cigarette companies, social media new retail seems to be a trend of many opportunities, although many market analysts say that the trend of bubbles has always existed because of the closeness of WeChat platform and the fact that third parties can not see the true marketing effect, and what commission system is and the two level reward. However, it is worth noting that electronic cigarette products, different from traditional consumer goods, are a “addictive” consumer market. And the marketing model of Wechat businesss + O2O has great potential to accelerate the “stickiness” and “penetration” of electronic cigarette brands to consumers remaining nontransparent.
Generally speaking, the transition to social media new retail, a large-scale, high-precision sales channel, just meets the convenience of e-cigarette users’ demand for products. Through the direct purchase of Wechat micro APP, fixed-point transportation, at least one layer of wholesalers is removed, which not only greatly improves the convenience of consumers, reduces the problem of middlemen, but also reduces the cost of brand promotion and expands the margin space of profits. Therefore, online channel transformation is the general trend of the future.
However, the transformation of online channels can bring considerable fission results, but at the same time, it also tests the ability of enterprises to expand offline, capital, resources, product quality and other issues. After all, once the online channel grows, it will inevitably become the opposite and competitor of the offline channel. If the market cannot be perfectly integrated and well controlled, it will easily lead to the revolt of the agents and the collapse of the hard-built offline sales channel.