Research On Performance Evaluation Of Profit Model Of E-commerce Platform

The Internet’s growth has seen an increase in the utilization of smart phones,leading to a better quality of life,a transformation of consumption,the development of mobile payments,and the impact of national policies.Unfortunately,offline shopping has been unable to satisfy the needs of people,who are looking for more convenient and efficient consumption,free from time and place constraints.Therefore,retail e-commerce enterprises have ushered in a broad market.The e-commerce industry’s rapid development,its gradual integration into our national economy,and its promotion of the nation’s economic growth cannot be overlooked;moreover,its profit model is of great importance.In comparison to traditional enterprises,the e-commerce industry necessitates a great deal of marketing and other activities in the early stages to enhance its visibility.At the same time,attractive activities need to be designed to attract and retain users.Many e-commerce enterprises are basically unprofitable or even in the state of loss in the first few years after their establishment,so a good profit model for e-commerce enterprises is of great significance for long-term sustainable operation.The research object of this paper is the profit model of PDD,a dark horse enterprise in the e-commerce industry.An analysis of the return object,return point,return source,return leverage and return barrier of PDD is conducted,with the theory of five elements of the profit model and the Long tail theory being elaborated upon.This paper’s analysis reveals that PDD’s profit objectives are primarily comprised of sinking users and small and medium-sized merchants,and these profit objectives are spread out,which is beneficial in decreasing the risk of businesses.With commission and advertising revenue as the source of profit,the way to obtain income is relatively simple;Relying on cost-effective products of various categories,convenient shopping process,diversified preferential activities and interesting game-like shopping experience as profit points,it has attracted a large number of users to place orders on the platform.Group shopping,technology and brand awareness as profit leverage to enhance the profit effect,constantly promote the profit model optimization,to create value for the enterprise;Taking large user scale,social e-commerce model and accurate push technology as profit barrier is conducive to expanding market share and adding new profit objects,profit sources and profit points.This paper employs the concept of value creation to construct a thorough performance assessment system of the e-commerce sector,which is composed of financial,non-financial,and special indicators of the e-commerce industry,to thoroughly analyze and assess the PDD profit model.By employing the traditional financial index analysis technique,one can contrast the company’s debt-paying,operating,profitability,and development capabilities from 2017 to 2021 with those in the same sector.To further analyze PDD’s profit model,one can utilize non-financial indices and the special indicators of e-commerce industry traffic,taking into account four facets: user acquisition,retention,transformation,and realization.The financial analysis of value creation of PDD profit model shows that PDD has good realization ability and large development space.The model of profit has issues of inadequate operational capacity and meager profitability,and its capacity to generate value must be augmented.In terms of non-financial indicators of value creation,PDD quickly occupied the market of middle and low income users at the early stage of its establishment,with a high market share.In terms of value creation traffic indicators,PDD profit model shows that the platform has certain competitiveness for user acquisition and user stickiness,but there is still a lot of room for improvement in traffic transformation and traffic realization.In this paper,the profit model of PDD is evaluated through comprehensive performance evaluation system,and the weak links of PDD are proposed from the perspective of five elements,including grasping existing customers,exploring new users,strengthening commodity quality supervision,improving logistics system,expanding income sources and strengthening profit barrier.This case study of the e-commerce platform’s profit model can be enriched by this study,while also deepening theoretical research and practical application of the model.This study,in contrast,provides special indicators of the e-commerce industry for assessment and appraisal,thus enabling a thorough and accurate comprehension of the pros and cons of the PDD profit model,as well as pinpointing areas that require improvement and taking prompt action.The study of PDD e-commerce enterprises’ potential to generate greater value is of great importance;moreover,this issue can serve as a benchmark for other businesses to create a profit model that meets their development needs,which is beneficial in fostering the growth and exploration of Chinese e-commerce industry profit models.