Jake’s Take: Douyin’s Shift from Discounts to Quality & Experience

Douyin moving away from discounting?

I think there’s been this misconception that consumers are only motivated by low prices in the current environment, when in fact different demographics of consumers have different priorities—and those priorities shift depending on the product category + platform.

Don’t get me wrong, price is important. But product quality and shopping experience also influence conversions and user stickiness.

Douyin’s low-price strategy has consisted of giving traffic to merchants with low prices, labelling product listings with price categorizations, as well as providing price adjustment suggestions to merchants. And now we’re seeing a shift in strategy away from this emphasis on low prices.

I think Douyin executives have recognized that there is a potential conflict between aggressively promoting low prices and maintaining a positive user experience. Douyin is fundamentally an entertainment platform, but creators offering low prices alongside bad content might be rewarded with traffic, worsening the user experience. Douyin’s magic is connecting products to potential buyers through its robust interest graph algorithm, but that’s hampered if users aren’t enjoying the content in the first place.

Moreover, the price comparison mechanism doesn’t always account for product quality, so you’re getting lower quality products pushed to consumers, which might also lower conversions or push users to make purchases of certain goods elsewhere.

To be clear: I don’t think either of these problems has become rampant on Douyin and we’re still seeing impressive GMV on the platform, it’s more of a pro-active shift.

The other problem with the low-price push in the market is that it squeezes merchants, who might then allocate their inventory or ad spend to other platforms where they can find the best margins. So Douyin is likely trying to make the platform more attractive for merchants, which is ultimately good for revenue.