Douyin’s new e-commerce function also says “no” to low-price competition!

The "price-breaking risk" warning interception function recently launched by Douyin e-commerce is not only a protection for merchants, but also a big step for e-commerce platforms to move towards a healthy competitive environment. This move not only helps merchants avoid economic losses caused by incorrect price setting, but also encourages more reasonable pricing strategies and gradually escapes the vicious cycle of price wars. Let's take a deeper look at this new function and the significance behind it.

Yesterday (August 6), Douyin E-commerce announced that it had added a "price-breaking risk" early warning interception function to the merchant backend, aiming to protect merchants from economic losses caused by unexpected low-price sales.

In the fiercely competitive e-commerce industry, price wars have always been the main means for merchants and platforms to compete for market share. The launch of this feature on Douyin may mean that the platform is trying to get rid of the model of over-reliance on low-price competition and instead seek a healthier and more sustainable business environment.

01 Warning will be issued for commodities with risk of being priced too low

An announcement issued by Douyin E-Commerce stated that during the registration process for platform activities, there may be overlapping store discounts or incorrect prices reported for activities, resulting in the actual selling price of the goods being lower than the merchant's expectations, causing economic losses to the merchant.

In order to avoid asset losses for our business friends, a new early warning and interception function for products with price-breaking risks has been added to the activity interface.

At the same time, this function will conduct risk verification during the product registration platform activity, issue warnings for products with a risk of being priced too low (such as the final price is 10% lower than the original price or 20% lower than the activity verification price), and require confirmation from the merchant before continuing the process.

For example, during the registration process for a big sale, when filling in the registration price, if the price range of the risky product is hit, a price risk warning will appear and the lowest price of the SKU will be displayed (as shown below).

At this time, the merchant needs to carefully confirm whether the price meets the merchant's expectations. If the price does not meet the merchant's expectations, you can click the [Modify Promotional Price] button to modify the product promotion price; if it meets the merchant's expectations, you can click the [Always Create] button to establish the product price.

At present, the "price-breaking risk" early warning and interception function has been automatically launched for big promotion products, value-for-money products, and flash sale products. Merchants do not need to configure it themselves, and the platform will also be gradually opened to all promotional products in the future.

Previously, when participating in platform activities, merchants may make mistakes in operation or fail to understand the rules, resulting in actual selling prices of goods far lower than expected, thus causing financial losses. The introduction of the new function will effectively avoid such situations and protect the interests of merchants.

02 Get rid of the quagmire of low-price competition

It is not difficult to see that through the early warning and interception function, the platform is not only helping merchants avoid unnecessary losses caused by setting prices too low, but also encouraging merchants to set reasonable price ranges, avoid disorderly price wars, and help merchants maintain profits.

At the same time, the launch of new functions will also help improve the overall image of the platform. Excessive low-price competition often leaves consumers with the impression that the platform's products are of low quality. Through the early warning and interception function, the platform can gradually guide merchants and consumers to a more rational consumption model. Douyin e-commerce's move can also be seen as a positive attempt to climb out of the low-price quagmire.

It is worth noting that the previous price war among major e-commerce platforms has resulted in meager profits for merchants, and many merchants have been complaining. However, the wind direction has suddenly changed recently, and many leading e-commerce platforms have announced adjustments to their business strategies in an effort to escape the quagmire of low-price competition.

For example, Taobao has weakened its "refund only" automatic support policy, while strengthening the weight of GMV and store comprehensive experience score, guiding merchants to pay more attention to product quality and after-sales service, rather than relying solely on low prices to attract consumers. Douyin e-commerce has also loosened its "price comparison system" and is adjusting its price comparison system.

Overall, these strategic adjustments by e-commerce platforms are a positive signal. These adjustments will not only help improve user experience, but also create a fairer and healthier competitive environment for merchants. In the future, as these adjustments are implemented in depth, e-commerce platforms are expected to achieve a win-win situation for all parties.