Brother Xiao Yang, lost 3 million fans! The super anchor is retreating

As the live streaming e-commerce industry is about to reach a turning point, super anchor Xiao Yangge has encountered a crisis of trust due to false advertising, and the number of his fans has dropped sharply. The industry is facing challenges of standardization and quality improvement in the future.

The top live-streaming anchor “Crazy Little Brother Yang” is experiencing his biggest crisis since his explosion in popularity.

On the eve of the Mid-Autumn Festival, Xiao Yang claimed in his livestream that the mooncakes he was selling were high-end brands from Hong Kong, but they were revealed to be made in Guangdong. This false advertising caused public outrage. Prior to this, Xiao Yang and his company Three Sheep Network had been exposed for selling pork belly with preserved vegetables, fake Maotai, fake beef rolls, etc., and netizens' dissatisfaction was gradually accumulating.

Recently, a recording of Lu Wenqing, the founder and director of Three Sheep Group, was circulated, turning this controversy over the quality of goods into a matter of public concern.

A crisis of confidence has occurred.

Along with the condemnation of netizens, China National Radio also criticized: "The 'three sheep' who have angered the public must pay the price for violating laws and regulations." On September 19, the Hefei Market Supervision Bureau set up a joint investigation team with the local commerce bureau, public security bureau and other departments to investigate the three sheep.

Interestingly, on the same day, Zhang Dayi, the first generation of Internet celebrity, officially announced the closure of her online store "My Happy Wardrobe" which had been open for ten years. This store became the first women's clothing store on Taobao to have sales of over 100 million yuan on November 11, 2016.

Zhang Dayi posted a statement claiming that closing the store was to adapt to the market and find the next target, and that she had experienced a major public opinion cleansing and would spend more time with her daughter.

First-generation internet celebrities like Zhang Dayi and popular anchors like Xiao Yangge have either actively or passively begun to stay away from the live e-commerce industry. What signal does this reflect? Has the live e-commerce industry reached a turning point?

01 Brother Xiao Yang, lost 3 million fans in 20 days

Brother Yang, who is deeply involved in the fake goods scandal, has entered a Mercury retrograde period, and has been plagued by one setback after another.

First, Simba and Brother Xiao Yang had a fight over hairy crabs, then it was revealed that the "disappeared" Three Sheep female anchor Momo was sent to prison by Brother Xiao Yang, and then a recording of Three Sheep executive Lu Wenqing circulated on the Internet, and the shocking words in the recording made Three Sheep bear even greater public pressure.

A series of negative events caused Xiao Yangge to lose all the fans and goodwill he had worked so hard to accumulate. According to Chanmama data, the total number of fans on the Douyin account of "Crazy Xiao Yangge" dropped from 120 million on September 1 to 117 million on September 17, with more than 230,000 fans lost on September 16 alone.

Data changes of fans of "Crazy Xiao Yangge" live broadcast monitored by third-party platforms

It lost 3 million followers in 20 days, and is still losing 200,000 to 300,000 followers every day.

On September 19, several accounts under the Three Sheep Company resumed broadcasting after two days of suspension, but the live broadcast rooms were almost full of netizens’ condemnation: “I will never dare to buy your products again”, “You still dare to broadcast at this time, you are simply committing a crime against the wind”, and the short video comment area of ​​the Douyin account of “Crazy Xiao Yangge” was also full of accusations…

Tianyancha judicial case information also shows that recently, Hefei Three Sheep Network Technology Co., Ltd., Anhui Donghui Food Technology Co., Ltd. and others have added a court opening notice. The plaintiff is Wang Moumou, and the case is a product liability dispute. The case will be heard on November 5 at the Shanghai Pudong New Area People's Court.

It seems that the three sheep will never be able to return to their former glory days.

Looking back, we have to say that in just ten years, Brother Yang has taken a counter-trend path from a grassroots to a wealthy man.

In 2014, Xiao Yangge was just an ordinary college student in Hefei. In 2016, Xiao Yangge was still confusedly squeezed into the subway. In 2018, Douyin became popular, and the gears of Xiao Yangge's fate began to turn. He became famous with a series of short videos such as "Desperate Weekend" and "Internet Addicted Father and Son". In 2020, the number of fans of the Douyin account of "Crazy Xiao Yangge" exceeded 40 million. In 2021, Xiao Yangge and Xiao Yangge jointly established the Three Sheep Network with Lu Wenqing, and made a fortune in live e-commerce.

According to "China Entrepreneur", Sanzhiyang's GMV reached 16 billion yuan in 2023, 1.5 times that of the previous year, and the number of employees reached about 1,500.

Based on short video live streaming, Three Sheep has expanded its business, with its business scope expanding from short video IP to slicing, live training, short dramas, supply chain, etc.

At the same time, Xiao Yangge's personal wealth has also risen rapidly. According to the 2023 online anchor net income statistics, Xiao Yangge ranked first with an income of 3.2123 billion, and Simba ranked second with 3.0533 billion. The combined income of the two is higher than the combined income of the other eight anchors in the top ten.

Of course, Xiao Yangge's ambitions go far beyond this. Many industry insiders believe that the ultimate goal of Sanzhiyang is to go public. On the one hand, from the perspective of GMV, Sanzhiyang's size is close to listed companies such as Dongfang Zhenxuan, Yaowang Technology and Jiaogepengyou; on the other hand, Sanzhiyang has also established an investment and securities department and frequently contacts capital.

Not long ago, the Hong Kong branch of Three Sheep opened for business. A number of Hong Kong stars including Eric Tsang, Kenny Bee, and Benny Chan appeared at the opening ceremony. Many people also believed that Three Sheep might go public in Hong Kong.

Now, the hope of Sanzhiyang going public is quite slim. However, the taste of going public is not necessarily wonderful, as Zhang Dayi has experienced.

In 2019, Ruhan was listed on the Nasdaq in the United States, and Zhang Dayi became the first Chinese Internet celebrity to ring the bell on the Nasdaq. However, Ruhan was delisted in 2021, and its stock price shrank by more than 70% in two years. The financial report during the listing period showed that it had not been profitable.

The core reason why investors are not buying it is that they do not see the possibility of Ruohan mass-producing internet celebrities and are too dependent on top internet celebrities, which leads to great uncertainty in the company's business.

Nowadays, super live-streaming hosts are glamorous, but their popularity is indeed short.

Viya, who evaded taxes, has disappeared, Li Jiaqi, who mocked working people, has become much more low-key, Simba’s relationship with the platform has become increasingly tense, his live broadcast time has dropped significantly, and Luo Yonghao has also faded out of the “Make Friends” live broadcast room.

There is no doubt that super anchors are undergoing a major retreat.

There is a popular saying on the Internet that we should consider both personal struggle and the course of history. Judging from the changes taking place in the entire industry, the "honeymoon period" between the platform and the super anchors may have ended.

02 The growth rate of shelf e-commerce GMV exceeds that of live streaming

As super anchors fall one after another, the growth rate of live e-commerce has gradually slowed down after a rapid growth.

According to iResearch data, the transaction volume of China's live e-commerce market in the second quarter of 2024 was 1.0604 trillion yuan, a year-on-year increase of 12.6%, but the growth rate has slowed down significantly compared with previous years, and it has undoubtedly reached a turning point.

As the overall growth rate of the industry slows down, competition among platforms is becoming increasingly fierce. Douyin, Kuaishou, and Taobao are the main players in live streaming e-commerce, but Pinduoduo, JD.com, Video Account, and Xiaohongshu have also entered the live streaming e-commerce market. With too many people and too little porridge, it is more difficult for platforms to tap into incremental growth.

Therefore, we can see that although Douyin e-commerce has the largest market share, its performance has slowed down at the beginning and has shown a clear turning point. According to the latest data, Douyin e-commerce's GMV increased by 46% year-on-year in the past year, but it has also declined significantly compared with 320% and 80% in the previous two years.

In an industry with more intense competition, platforms need to re-examine their relationship with super anchors from three aspects: users, merchants, and ecology. This is the key for platforms to break through growth difficulties and tap into more incremental growth. Specifically:

1. Improve user experience

While the overall growth rate of Douyin e-commerce has declined, the GMV of the shelf scene has increased by 86% year-on-year, making a significant contribution to the overall growth rate. This reflects an important signal: some users are losing enthusiasm for live e-commerce and are returning to shelf e-commerce.

In fact, it is not difficult to understand, because for some users, the experience of live e-commerce is indeed poor. Data shows that the market size of live e-commerce has increased by 10.5 times in the past five years, while the increase in complaints and reports is as high as 47.1 times, which is significantly higher than that of shelf e-commerce. The core reasons are false propaganda, rampant counterfeit goods, and poor quality control.

Among the anchors who engage in false advertising, super anchors are particularly prominent. According to the statistics of the proportion of public opinion on consumer rights protection in live streaming last year, Xiao Yangge accounted for 31.3% and Simba accounted for 4.64%, ranking second and fifth respectively. The main issues for rights protection were false advertising, product quality and uncivilized live streaming.

If super anchors continue to bring bad experiences to users, it will be more difficult for the platform to generate incremental growth.

2. Reduce merchant costs

Live e-commerce is usually divided into live streaming by experts and live streaming by stores. To put it simply, store live streaming means that the merchants themselves broadcast the content without relying on experts.

Since last year, the trend of increasing store share has been very obvious. Data shows that in 2023, the store live broadcast market size accounted for 51.8%, surpassing the 48.2% of live broadcast by experts for the first time, and the share of live broadcast by experts is still on a downward trend.

Taobao, JD.com, Pinduoduo, Douyin, Kuaishou, Xiaohongshu and other platforms are increasing their efforts in the layout of store broadcasting. For example, in April this year, the number of merchants on Xiaohongshu e-commerce broadcasting increased by 5 times year-on-year, the number of merchants with monthly sales of over one million increased by 7.4 times year-on-year, and the number of users who purchased store broadcasting increased by 12 times year-on-year. This means that store broadcasting has become a new growth pole for Xiaohongshu.

Why has the proportion of store broadcasts increased significantly? The core reason is that the various costs of super anchors, such as the pit fees, are very high, and many merchants cannot afford it. In addition, the effect of super anchors in bringing goods is also declining. Merchants simply start broadcasting themselves to try to reduce costs and increase efficiency.

Previously, there were reports that some anchors and institutions faked orders and data to create a false sales boom in order to push up the "pit fees". This not only "pits" merchants, but also hinders the development of the platform. For the platform, it is necessary to reduce the operating costs of merchants to attract more merchants, so as to ensure a rich supply of goods and then attract more consumers.

3. Promote ecological growth

From the perspective of the growth of the entire platform ecosystem, over-reliance on super anchors is also an obstacle.

In 2019, more than 1 million anchors joined Taobao Live. The total sales volume of Taobao Live on Double 11 in 2020 was 72.9 billion yuan, of which Viya and Li Jiaqi brought in a total of 22.1 billion yuan, accounting for more than 30%.

The top anchors have very high bargaining power and resources, and other small and medium anchors can only compete for the few remaining cakes. This has led to serious internal competition among small and medium anchors, and the platform is in internal consumption, unable to obtain more new growth from outside the platform.

Therefore, we can see that platforms such as Douyin and Taobao are increasing their support for small and medium-sized anchors. Only when the top, middle and tail anchors can get development opportunities and benefit equally, the ecology of the entire platform can be healthy and sustainable.

Super anchors are the first to sense changes in the direction of platforms and industries. In the first half of this year, Xiao Yangge revealed that he would reduce the frequency of live broadcasts with goods, and if there are special events, he would consider handing them over to his apprentices. Simba said bluntly, "There will be fewer and fewer live broadcasts in the future. I plan to use ten live broadcasts to make Xinxuan get used to the absence of Simba."

Some people may feel anxious: "As super anchors leave one after another, is the anchor industry going to decline completely?" That's not the case. It's just that in the future the industry will develop more and more towards standardization and quality.

03 Looking into the future: Where will the anchors go?

The country still recognizes the profession of "internet anchor" and does not condemn it outright.

In July this year, the National Bureau of Statistics officially added "online anchor" as a new national occupation, which means that the professional identity of online anchors has been established for the first time in the "national occupation classification". However, the premise is to strengthen supervision and correction of live e-commerce and online anchors.

Compared with shelf e-commerce, live streaming e-commerce has deficiencies in supply chain, product selection, quality inspection and after-sales service. Not long after Crazy Brother Yang's mooncake promotion failed, Dong Yuhui's Yuhui Xingxing live streaming room was also exposed to be selling mooncakes with suspected problems.

Later, Huixingxing responded to the suspected quality problems of mooncakes, saying that they had indeed sold them and would provide feedback for verification. This shows that in the live e-commerce industry, whether it is entertainment anchors or knowledge anchors, supply chain and quality control problems are common.

However, many e-commerce platforms and online anchors have not taken effective measures to respond to consumer complaints about counterfeit goods and product quality. Even if the platforms and anchors have complaint systems, they take a long time and are not handled effectively.

So we can see that on September 20, the State Administration for Market Regulation held a signing event for the "Self-Discipline Convention for E-Commerce Platform Operators to Improve the Level of Intellectual Property Protection", and 81 platforms including Taobao, Pinduoduo, Douyin, Tencent, Xiaohongshu, and JD.com signed the convention.

The Convention requires the platform to establish a convenient and smooth channel for answering rights protection questions, promptly review complaint evidence, and publish it uniformly on the rights protection page.

In addition, the state is also strengthening supervision of the entire process of live streaming sales through the establishment of full-chain legal responsibilities, including product selection, live streaming content, after-sales service and other links, to curb the chaos of online anchors bringing goods. Only by strengthening supervision and promoting standardized development can live streaming e-commerce and online anchors have a long-term future.

As for where the ceiling for internet anchors will be in the future, it is still unknown.

In a long article recently published, Zhang Dayi expressed this sentiment: "So far, I have not seen any Taobao-affiliated company successfully switch platforms, because the meager gross profit margin of the clothing category cannot support various operating costs, and switching platforms will result in losses." "Influencer e-commerce is wonderful, but it is suitable for small and beautiful, small and exquisite, otherwise it will just be an assembly line product."

Many small and medium-sized anchors envy Zhang Dayi and Ruhan for their successful listing, but even if they are listed, they will eventually be delisted. Some small and medium-sized anchors envy Xiao Yangge and Sanzhiyang for being at the top, but now they have also fallen from the top. This has sounded the alarm for many young people who entered the live e-commerce industry with dreams. Standardization and quality are the direction of the future.

You still need to keep a calm mind, take the goods seriously, and stop dreaming about getting rich overnight.

Author | Zhu Ming Editor | Ji Ran This article is written by the author of Operation Party [Value Planet], WeChat public account: [Value Planet], original/authorized to be published in Operation Party, and any reproduction without permission is prohibited.

The title image is from Unsplash, based on the CC0 protocol.