Sina Technology Ho Chang

If you want to select the top ten keywords of the Chinese Internet in 2020, live streaming will definitely be on the list.

Despite being questioned about “old wine in new bottles” and “TV shopping in the Internet era,” data myths have kept Via and Li Jiaqi at the top of the card-delivery anchor pyramid, while still making more and more onlookers eager to try it out. Among these are celebrities, influencers, and former e-commerce practitioners and entrepreneurs from all walks of life. They have walked to that tower one after another and played new roles facing the camera.

The anchor is the last step in reaching users. Behind every display and recommendation by the anchor, the merchant's expectations for sales and revenue are carried, and it also represents the platform's desire for traffic and traffic monetization. The Taobao live broadcast featured Via and Li Jiaqi going hand in hand. Kuaishou and the celebrity family represented by Simba and the Two Donkeys had mutual success. Douyin signed Luo Yonghao as a topic maker.Jingdong, Suning and the latter two separately reached strategic cooperation to make up for each other's shortcomings. Under the live broadcast of the goods feast, compared to rivals that have stepped up their layout,PinduoduoIt always seemed to be half a beat slower, and had little presence. There wasn't even a single leading anchor like Li Jiaqi or Via.

Pinduoduo officially launched Duoduo Live in January of this year. It focuses on in-store live streaming, which is equivalent to a marketing tool for merchants. So far, there is no centralized portal for live streaming on the Pinduoduo App. The positioning of live streaming may be one of the reasons why Pinduoduo has trouble making leading anchors, but Zhang Shuai, founder of the Internet celebrity cat, believes that the problem with Pinduoduo is that the price is too low and there is no room for leading anchors to grow.

For Pinduoduo, cheapness is a killer weapon. As long as it is always ahead of the live broadcast room in this direction, the size of the live broadcast and the presence or absence of a leading anchor seem less important. However, when traditional e-commerce embraces content and short videos hold hands with e-commerce, the leading anchor becomes the platform's business card, with different effects of increasing user stickiness and strengthening brand awareness — this is a double-edged sword for Taobao live streaming, but it may become the added value of Pinduoduo, especially at a time when giants are entering the market and multiple parties are scrambling.

The ferocious live broadcast room: Pinduoduo beyond the hustle and bustle

The live broadcast brought goods, and it was very popular.

According to big data monitoring by the Ministry of Commerce, in the first quarter of 2020, there were more than 4 million live e-commerce broadcasts nationwide, which is equivalent to more than 30 e-commerce live broadcasts running simultaneously every minute.

AlibabaThe “618 Taobao Live Streaming Innovation Report” released revealed that during the 618 consumer promotion season, the number of Taobao live streaming broadcasts increased 123% year on year, and the number of businesses participating in the live broadcast increased by 160% year on year.

Li Yun, a Taobao merchant who sells in the tableware category, is one of them. For cost reasons, she chose a live streaming agency — there are not a few businesses that use live streaming agency to test the waters of live streaming, and demand has further spawned new markets. Li Yun told Sina Technology that one of her friends recently left the short video industry and switched to live streaming agency management. “Now I can earn 100,000 a day with a net profit of 100,000.” Li Yun said that another colleague left his job in the e-commerce field to start a business. Currently, he has set up dozens of live broadcast rooms and is still recruiting anchors. “The threshold for live streaming agency operations is particularly low now. Smaller companies add up to less than 10 people, and e-commerce transformation is rampant.”

In addition to former e-commerce practitioners, entrepreneurs also scrambled to enter the live broadcast room: Luo Yonghao, Liang Jianzhang, Dong Mingzhu, Guo Guangchang, Ding Lei... Zhang Shuai mentioned that Luo Yonghao's live streaming has greatly stimulated many “mainstream” entrepreneurs, so much so that now they all accept and welcome the live broadcast. No one will clearly reject it, depending on their learning ability and speed of evolution.

The live broadcast room is so ferocious; of course, the platform is also plotting.

In 2016, the 13-year-old Taobao determined three future development directions: communalization, content, and local lifestyle. Under this strategy, Taobao Live is launched as an e-commerce content-based product, supporting Alibaba Group CEO Zhang Yong's expectation to “make content part of consumption.”

Rookie companies became famous, and Douyin and Kuaishou experienced explosive growth in 2018, and commercialization was quickly put on the agenda. At the time, they and Taobao each had their own needs. The former had a lot of traffic to explore and monetize, while the latter struggled with traffic to cultivate content and social networking. The two sides hit it off. The two sides hit it off. Short video e-commerce shopping guides, and links were just business.

However, the honeymoon period entered the countdown in 2019. Whether Douyin launched the “Selected Goods Alliance” or Kuaishou's support for direct factory supply and native e-commerce talent brands, it all points to a gradual tightening of “goods” and traffic. At this point, Pinduoduo had just begun the live broadcast of the closed beta.

In 2020, cooperation evolved into confrontation. Douyin used Luo Yonghao's live broadcast as a dividing point to promote e-commerce business after April 1. Zhang Shuai pointed out, “Today's headlines used to have many advertisers. They have mobilized local LA (local accounts, meaning major local customers) to communicate with various brands and invite brands to join Douyin's Blue V, which has made significant progress this year.”

At the same time, Kuaishou announced a brand protection mechanism. After reaching a strategic cooperation with JD, Kuaishou stores can directly purchase JD's own products without redirection; the annual cooperation framework between Douyin and Taobao has expired, and the confirmed marriage partner is Suning Tesco — a new honeymoon has begun.

If you stop singing, I'm on the stage, so it's hilarious. Taobao's GMV in 2019 exceeded 200 billion yuan. Douyin and Kuaishou have also repeatedly brought out of the industry with live streaming, yet Pinduoduo is not in the center of the live streaming stage. A person close to Pinduoduo told Sina Technology that the starting point for Pinduoduo to launch live streaming is related to the needs of merchants and industry trends, but in fact, live streaming is not suitable for all businesses and business scenarios. Until now, Pinduoduo has always positioned live streaming as a marketing tool for merchants. From the past, present, to the future, the attitude of Pinduoduo will not change.

The shortage of leading anchors: don't you want to or can't?

Pinduoduo officially joined the live streaming service at the beginning of this year. Half a year since its launch, Duoduo Live has been shown on the Pinduoduo App homepage, store homepage, search display, product details, and recommendation lists. However, there is no unified entrance — this kind of treatment is still exclusive to merchants. Although there is no threshold, users can only watch live broadcasts by clicking on the link shared by the anchor, and cannot be searched.

Did Pinduoduo treat the live broadcast as a chicken rib?

“Pinduoduo still pays a lot of attention to live streaming.” According to Jiang Zhuo, an employee of Pinduoduo, the company has invested quite a bit in the live streaming business, regardless of whether it is human resources or machine resources. “The live streaming team's demand and scheduling priorities will be higher. There is also strong team support in terms of development. Excellent colleagues drawn from various development teams. The product owner is a super powerful product powerhouse. There are both store live broadcasts and official live broadcasts. Overall, there is still plenty of momentum in all areas.”

China Merchants Securities analyzed in the “Three Kingdoms of Live E-commerce, from “Cats and Dogs” to “Cats Shake Fast” — New Retail Research's Live E-commerce Series” that Pinduoduo's live streaming model is different from Taobao's live streaming “people looking for goods,” and focuses more on “goods looking for people.” The research report speculates that Pinduoduo's live streaming layout will train anchors according to the product classification model. The premise for brands to enter Pinduoduo Live is that there is only one brand store on this platform, that is, starting from the supply chain to find new additions for the live broadcast.

This has limited the incubation of leading Pinduoduo anchors to a certain extent, but it may be in line with Pinduoduo's intentions. An e-commerce industry analyst told Sina Technology that Pinduoduo's live streaming ecosystem is dominated by in-store live streaming, with the aim of increasing conversion rates. “Being able to do a good job in marketing efficiency is an amazing thing. Pinduoduo's 10 billion subsidized products don't need to rely on live streaming at all to bring goods. What's more, the gross margin of the product is so low that they don't want to find leading anchors.”

According to Zhang Shuai, the left side of the leading anchor and the live streaming service provider behind it is traffic, and on the right is the supply chain. Because a large number of suppliers don't understand and can't do live broadcasts, there is a market for service providers, yet Pinduoduo's business format is very unfriendly to service providers. “Because Pinduoduo actually cut prices too low.” He gave an example of a sunscreen spray: “The psychological price of a sunscreen spray is about 30 yuan to 80 yuan, and the lowest is probably 19.9 yuan. As a result, after communicating with Pinduoduo's merchants, we discovered that they actually sell it for 2.3 yuan.”

Zhang Shuai originally thought the sunscreen spray package at this price would be plastic; he didn't expect it to be a tin can. “The cost of a tin can is estimated to be at least 1 yuan. The other party said this one sold well. The problem is that the three-hour live broadcast and 10,000 copies sold only sold for 23,000 yuan. If the merchant costs 1.4 yuan, the anchor can only get a few thousand yuan after deducting it; that's because he wants to drink the northwest wind.”

Instead, Pinduoduo's price advantage in front of users has become an obstacle to the growth of leading anchors. In other words, the reason Pinduoduo doesn't have Li Jiaqi is that its products are so cheap; it's so cheap that either Li Jiaqi starved to death, or Pinduoduo died because of it. “So Pinduoduo is now vigorously developing live streaming in stores. Otherwise, there would be too many roles.” Zhang Shuai said.

The new stage of giants: conjecture of the pattern behind the scuffle

“If you don't do a live broadcast or watch a live broadcast in 2020, it's basically a waste of time.” Wu Xiaobo put it bluntly during his live broadcast debut.

According to the 45th “Statistical Report on China's Internet Development” released by the China Internet Information Center, as of March, the number of Internet users in China reached 904 million, of which the number of mobile Internet users reached 887 million, accounting for 99.3%. In terms of live streaming, the number of webcast users in China reached 560 million, accounting for 62.0% of the total number of netizens. Among them, the number of e-commerce live streaming users was 265 million, accounting for 29.3% of the total number of netizens, and the development was rapid.

The rapid spread of mobile Internet is one of the factors in the rise of live streaming delivery. Under the influence of the epidemic, live streaming delivery is not only an advanced production method, but also a lifesaver for the offline industry. “The pandemic has led to poor offline business, objectively increasing demand for online sales. Many of the bosses we are communicating with now have accepted the live streaming method. There are 10 sales staff offline, and there must be 10, or even 20 online.” Zhang Shuai said.

The popularity of live streaming has also brought new questions: is this a short-term dividend or a long-term direction? How will the landscape of various platforms change as a result?

Li Yun believes that it is difficult for live streaming to impact traditional e-commerce in a short period of time; at most, it has evolved into an additional sales channel for traditional e-commerce. Kocher, who works in e-commerce business at an Internet company, agreed with this: “Traditional e-commerce plus live streaming is a feature highlight, and content platforms that use live streaming to bring goods are a means of monetization. Live streaming may be more suitable for non-standard products, products with poor brand awareness, or as a supplementary sales scenario for new functional products. If I buy a standard product and still have to watch a half-hour live broadcast, that would be fatal.”

What is even more critical is the value of live streaming. Most users have no purchase expectations when they spend in the live broadcast room. This is impulsive consumption, and the efficiency of traffic conversion is questionable. However, Zhang Shuai shared a set of data: “On Douyin, the conversion rate from entering our product page to placing an order can be as high as 50%. As long as these 100 people click in, 50 people will buy. We also work on Taobao. We also work on Taobao. The conversion rate of Taobao is generally 7%-9%.”

Zhang Shuai stressed that compared to traditional shelf e-commerce, the operating efficiency of live streaming must have been improved. Taking beauty products as an example, the price increase rate generally starts at 5 times. The production cost of a lipstick that sells for 100 yuan may be less than 20 yuan. The sales hierarchy is: a first-level agent may have a 3.5% discount to a 40% discount, a second-level agent may be 40% off, a third-level agent may offer 20% off, and finally it will reach the consumer. When manufacturers use live streaming to bring goods and build an online sales system, they have an anchor, or live streaming salesperson, which is equivalent to clearing all of the first, second, and third level agents. “In fact, the commissions for anchors are not high. The commissions for Via and Li Jiaqi are 300,000, 400,000, or 500,000 at most. According to the traditional system, they can be treated as first-level agents. This is no different from the profit margin required by first-level agents, but compared to the previous level of divestment, wouldn't it be better to just let manufacturers face consumers?”

As the buzz continues year after year, the platform will naturally make its own plans. Douyin won't let go of the money it should make, but it also needs to pre-set live streaming to interfere with the retention of its content users; Kuaishou doesn't rely on advertising money printers like Douyin; live streaming is clearly another way out; JD and Suning's advantage is in the supply chain, where no one is me is a victory; and Taobao Live plans to invest 50 billion dollars in resource packages this year to “build the most valuable live streaming platform in China,” and the growth of small to medium anchors has been raised as a priority.

“In the past two years, Taobao Live has only trained Via and Li Jiaqi, who make up half of the country. Other than that, there are no highlights.” Zhang Shuai was impressed that traffic was scarce and strong enemies surrounded. 2020 was probably the hardest year for Alibaba. “There is a blue ocean market like Douyin Kuaishou that is twice the size of Taobao. Why don't merchants and brands go? Everyone is profiting.”

As for Pinduoduo, there is one weapon that can compete with live streaming — low price. Every live broadcast room can be seen as a small promotional campaign. The main selling point is the high cost performance ratio. The content output of the leading anchor and the mentality of the fans are certainly effective. The low price on the entire network is the topic that users are most concerned about. In other words, as long as Pinduoduo adheres to the low price policy and user base is not shaken by live streaming, then even if Pinduoduo always moves in slow motion on live streaming and never has a leading anchor, nothing matters, but only if it can hold on.

(In this article, Li Yun, Jiang Zhuo, and Kocher are pseudonyms.)