Execution Summary
The snack category of Douyin e-commerce has experienced remarkable growth in the past 4 months, with a 1.5-fold increase in sales and a 4-fold increase in sales volume, despite a 67% decrease in the average selling price.
This change is primarily influenced by two subcategories: “Pastry/Snacks/Bread” and “Walnuts/Nuts/Roasted Snacks.” These two subcategories show significant differences in sales data between January and May.
In January, products with a high unit price of over 100 RMB accounted for 9.3% and 19.7% of total sales in these two categories, respectively. Products with unit prices below 10 RMB accounted for 21.4% and 11.1%. By May, the percentage of products with unit prices over 100 RMB had decreased to 0.5% and 1.7%, while products with unit prices below 10 RMB had increased to 66.8% and 73.0%.
This difference is attributed to a shift in user demand from “gift-giving scenarios” to “leisure scenarios.” By comparing the changes in product names between these scenarios, we have summarized the “long-term user demand” and “seasonal demand related to gift-giving.”
Based on our analysis, we suggest that in the current Douyin e-commerce snack category, competition is fiercer in scenarios similar to May’s “leisure scene,” with lower profit margins (as indicated by the mainstream pricing of 9.9 RMB and an average commission rate of 16.8%). On the other hand, scenarios similar to January’s “gift-giving scene,” while having a shorter time window, have less competition and higher profit margins (mainstream prices above 100 RMB and an average commission rate of less than 2%). This also means that brands or sellers can have more flexible operational space in terms of their supply chain and operations.
In conclusion, we recommend that brands and sellers carefully consider entering the “leisure scene” when entering the snack category, to avoid getting caught in price wars. Instead, they can consider entering the snack category during the “gift-giving scene” window to establish their business on the Douyin platform in a risk-controlled manner.
