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Oct. 16 (NBD) – News and information distribution platform Toutiao quietly launched a new e-commerce app called Zhidian last month.
Products on the app center on consumer goods, such as clothing, food & beverage, kitchen utensils and car accessories.
NBD notices that the new app features an interface with endless flow of news feed, just like a miniature version of Toutiao, distinguishing itself from other e-commerce apps. Toutiao, a company best known for its news recommendation algorithm, attempts to combine reading with shopping in one app.
The news feed can help improve user stickiness and lengthen usage time, thus stimulate shopping behaviors, an industry insider said. Moreover, connecting user data on reading and shopping will enhance the accuracy of algorithm-based recommendations, enabling the platform to provide "tailored" products.
Zhidian is currently offering generous discounts. It claims the factory-to-home model will cut out middleman. Cao Lei, director of the E-commerce Research Center, told NBD that the new app targets the mid- and low-end market, exactly where Toutiao's reader groups are situated, as most of items on the app are cost-effective products.
The business strategy is immediately reminiscent of discount platform Pinduoduo, which sank to China's vast lower-tier market and grew exponentially over the past three years. But when reached by NBD, Toutiao declined to comment.
Toutiao has long desired to cash in on its enormous amount of user traffic. According to consultancy firm Analysys, the platform's average DAU (daily active users) was 156 million, and average app usage time per day was 99.2 minutes in August this year.
As early as 2016, Toutiao started cooperation with JD.com to guide its readers to the online retail giant. In 2017, the news platform launched a shopping service within its app, but the service was not well received. These attempts, however, can hardly be described as successful.
The introduction of Zhidian marks Toutiao's new efforts in the e-commerce sector. Backed by the information platform's torrential user traffic and brand appeal, Zhidian will get some opportunities in the booming e-commerce market, Cao Lei said to NBD.
There is space for survival, but it would face difficulties in growing big and strong, he added. After all, Pinduoduo has already built a powerful presence. For Zhidian, it is vital to cultivate user habits and integrate and optimize supply chain, Cao suggested.
Email: limenglin@nbd.com.cn
Editor:
Li Menglin
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