Douyin no longer accompanies Xiao Yangge's "madness"

As the dividends of live-streaming e-commerce have peaked, the relationship between Douyin and Xiao Yangge seems to be undergoing a transformation. Under the dual pressure of quality issues and public opinion crisis, will Douyin continue to support this former top anchor?

Last September, at the Douyin e-commerce author summit, Crazy Xiao Yangge won the "Outstanding Individual Award for Successful Careers" from Douyin, and Three Sheep Network also won the "Outstanding Organization Award for Successful Careers". Xiao Yangge, dressed in a black suit, gave a speech on the stage titled "Never Forget Your Original Intention" and expressed his gratitude to Douyin:

Douyin and I met because of dreams, and we walked together because of trust.

Image source: Three Sheep Network WeChat Official Account

Before winning the Outstanding Individual Award in 2023, Xiao Yangge had won several official awards from Douyin. On September 9 this year, at the Douyin E-commerce Author Summit, Xiao Yangge, who had won the Douyin E-commerce Author Award for two consecutive years, was absent.

Yuhui Xingxing won the Douyin Annual Outstanding Author Award. The 20 most influential authors of the year are all familiar faces, such as Qi'er, Jia Nailiang, Mr. Dong, etc., but there is no sign of Brother Yang, who has 112 million fans on Douyin.

Wei Wenwen, President of Douyin E-commerce, emphasized at the meeting that "good content" has become the primary productive force for business growth.

This inevitably makes people wonder: Is the honeymoon period between Douyin and Xiao Yangge over?

Just one week before the Douyin e-commerce summit, Simba, the top anchor of Kuaishou, blasted Brother Xiao Yang, accusing him of problems in quality inspection, after-sales service, and compensation attitude, imitating Xinxuan's business model, and that some products previously sold by Brother Xiao Yang, such as Moutai liquor and pork with preserved vegetables, had quality problems. If Brother Xiao Yang did not deal with it, Simba would use 100 million yuan to compensate Brother Xiao Yang.

Xiao Yangge was caught in a public opinion crisis. A few days later, Xiao Yangge was again involved in the "false advertising" controversy of Meicheng mooncakes, which attracted relevant departments to file a case for investigation, and Xiao Yangge's previous problems of selling counterfeit goods were also dug up.

Image source: Hefei High-tech Release WeChat Official Account

In the face of huge public opinion, Douyin, which has supported Xiao Yangge, may no longer be able to work with Xiao Yangge based on trust.

Xiao Yangge seems to be facing the same problem as Simba's "sugar water bird's nest", but Xiao Yangge is not Simba, and Douyin is not Kuaishou. For Kuaishou, Simba and Xinxuan behind him occupy an important proportion of Kuaishou's e-commerce, but Xiao Yangge's share of Douyin's e-commerce is not that important.

Simba was still at its peak at that time, and Xinxuan accounted for about 30% of Kuaishou's e-commerce GMV. For the current Xiao Yangge, "China Entrepreneur" once reported that Sanzhiyang's GMV (gross merchandise volume) would reach 16 billion yuan in 2023.

This proportion is not as important to the trillion-dollar e-commerce Douyin as it was to Kuaishou.

Currently, Douyin is adjusting its relationship with big anchors, accelerating its support for mid-level anchors and supporting store anchors. If it were to start over again, the relationship between Xiao Yangge and the platform might also undergo major changes.

01

For a long time, Xiao Yangge and Douyin can be said to have achieved each other. Xiao Yangge went from a rural student to the founder of a company with a production value of tens of billions, and it is also the development history of Douyin from a rising star to a company that can compete with established e-commerce companies.

In 2018, Xiao Yangge, who switched from Kuaishou to Douyin, caught the opportunity of Douyin's attack on the sinking market.

At that time, Douyin was positioned in first- and second-tier cities, and these users accounted for 45% of Douyin. On the contrary, Douyin had no presence in the lower-tier markets. When Yue Jianxiong, vice president of iQiyi, met Zhang Yiming in 2017, Zhang Yiming told Yue Jianxiong, "Although Douyin only has 20 million users, they are all in first- and second-tier cities, and the speed of development from high-end to low-end will be faster."

The emergence of Brother Xiao Yang just filled the gap of Douyin in the sinking market and met Douyin's demand for content at that time.

Xiao Yangge, who appeared on Douyin, has a similar style to Simba and quickly gained fans in the sinking market. In one year, Xiao Yangge has accumulated 10 million fans on Douyin, and the number of fans exceeded 40 million in 2020.

As Xiao Yangge said, "Bage (Simba) told me a lot about how to use the Internet, and I just try to play according to Bage (Simba)'s way." Xiao Yangge's fans are mainly young people from third- to fifth-tier cities. According to Daduoduo data, users from third-tier cities account for 25%, and Generation Z and small town youth account for 44%.

Douyin's penetration into lower-tier cities has achieved significant results. According to QuestMobile statistics, in March 2020, Douyin had 37.62 million new users, of which 70.5% were from third-, fourth- and fifth-tier cities.

By 2022, the Douyin sinking market data insight report released by ByteDance shows that the proportion of users in the sinking market is higher than that of users in high-tier cities, and they are also the main source of content supply, accounting for 61%; they are also the main content consumption power, accounting for 55% of content viewing.

Such a fan portrait also provides a user base for Xiao Yangge's subsequent transformation into live streaming sales, which involves users who pursue cost-effectiveness and are highly sensitive to prices.

In 2022, Brother Xiao Yang became the first amateur anchor on Douyin to have over 100 million fans, and set a record of selling goods worth over 100 million yuan in one hour, becoming the top anchor on Douyin.

Of course, the reason why Xiao Yangge can become a top anchor is inseparable from Douyin's traffic support. According to "Shijie", a senior person in the live broadcast industry said that Xiao Yangge's popularity has a lot to do with Douyin's strong support for white-label and traffic inclination. Behind this is the result of Douyin's efforts in e-commerce.

In 2020, ByteDance established a first-level e-commerce department. In September 2021, Xiao Yangge switched to live streaming.

In the second half of 2022, Douyin e-commerce shifted its focus to small and medium-sized businesses, established a business development department, mainly serving small and medium-sized businesses, and launched a series of support policies. Xiao Yangge's live broadcast room and his own brand "Xiao Yang Zhenxuan" also received more traffic.

At the Douyin e-commerce author summit in September 2022, Xiao Yangge, who had just transformed into live streaming for a year, won the Douyin e-commerce Outstanding Individual Award for the first time. In 2023, as soon as Xiao Yangge's own brand "Xiao Yang Zhenxuan" went online, sales exceeded 10 million orders in half a year.

In May of the same year, at the Douyin E-commerce Ecosystem Conference, Xiao Yangge once again won the "Influential Author of the Year" award, and Three Sheep Network also won the title of "Influential MCN Agency of the Year". Other top anchors who went on stage to receive the awards included Dongfang Zhenxuan, Make Friends and Qi'er.

Image source: Three Sheep Network WeChat Official Account

In the era of short videos, Douyin has made Xiao Yang Ge successful. As Xiao Yang Ge thanked Douyin, "It is very open and inclusive, and it provides everyone with an equal opportunity to show themselves." Xiao Yang Ge also brought a lot of users to Douyin. At its peak, Xiao Yang Ge's Douyin fans exceeded 120 million.

During the era of live streaming, Xiao Yangge became a top anchor with the support of Douyin. Douyin also needs super anchors like Xiao Yangge to compete with old e-commerce companies that have anchors such as Li Jiaqi and Simba.

02

During the 618 period last year, Xiao Yangge and Simba had a live broadcast together.

Brother Yang calls Simba "Buga" and says frankly that Simba is his idol and role model, "Buga (Simba) will always be my role model."

Simba said, "One day you have caused great harm to our platform, and when it is necessary for me to fight... then I will fight." His words revealed that "you and I should keep our distance from each other", and finally the live broadcast ended in a harmonious and friendly atmosphere.

A year later, the two started a war of words on the Internet. The reason for the quarrel was that Simba sold hairy crabs at a low price in the live broadcast room, which attracted reports from Xiao Yangge and his fans, resulting in Simba being unable to continue selling.

The reason behind this dispute is that as the dividends of live e-commerce have peaked, the competition between these two big anchors with extremely similar styles in terms of traffic, users, brands, prices and other aspects is becoming increasingly fierce.

Alphabet List once analyzed and pointed out in the article "Xiao Yangge Falls into Simba's Trap" that as the two people's sales territory continues to expand, the target audiences between Xiao Yangge and Simba will inevitably overlap, and the two sides may not be able to avoid a war.

Xiao Yangge and Simba are similar to each other to a great extent. Xiao Yangge can even be called the "Simba of Douyin". Both of them have down-to-earth styles. They have established a family-based live streaming sales network by recruiting apprentices, and have attracted many fans in the sinking market. Similarly, live streaming rooms are often the focus of "anti-counterfeiting".

In the end, Xiao Yangge and Simba stepped into the same river of "being investigated for false advertising". On September 17, the Hefei High-tech Zone Market Supervision and Administration Bureau issued a situation report stating that it had filed a case against Three Sheep Network Technology Co., Ltd. for suspected "misleading consumers" and other behaviors during live broadcasts, and would handle it in accordance with the law based on the investigation results.

When Simba was confronted by Wang Hai's anti-counterfeiting "sugar water bird's nest" that year, he first issued a lawyer's statement to deny it, and then admitted that there was indeed exaggerated propaganda and was willing to refund three times the amount, totaling 61.983 million yuan.

After the Guangzhou market supervision department released the investigation results, the big anchor involved was banned for an additional 60 days by Kuaishou on top of the original 14-day ban. Simba was also banned for 60 days by Kuaishou for inappropriate remarks in the live broadcast room.

It is difficult to predict the fate of Xiao Yangge. According to the detailed rules on false advertising of Douyin e-commerce cited by Huaerjie Reference, the behavior of merchants containing false information in the information release, deceiving and misleading consumers, "...using text, pictures, oral broadcasts, props, etc., to express or imply false information that is inconsistent with the actual content of the product..."

Among the handling measures, products with general violations will be removed from the shelves, products with particularly serious violations will be banned, and the payment for illegal products will be frozen for 90 days.

Situations where the circumstances are particularly serious include those that generate major public opinion and regulatory risks. Douyin has not yet given a clear response as to whether Brother Yang and the Three Sheep Group are "particularly serious cases."

As for Douyin's attitude towards Xiao Yangge, the only statement was made by a staff member of the Douyin Mall consumer customer service hotline: the platform has intervened and will jointly investigate with the market supervision department, and will not condone him just because he is a live broadcaster.

According to Simba's path, compensation and being banned may be the best ending for Xiao Yangge. But after returning, will Xiao Yangge still be as successful as Simba in Kuaishou?

Simba has returned, and Xinxuan, the company behind him, is still an important MCN agency of Kuaishou. According to reports, in 2021, after being banned for two months, Xinxuan accounted for about 8% of Kuaishou's e-commerce. Simba eventually could not escape the fate of Kuaishou's reduction of its vassal status. By 2023, the Xinxuan family accounted for 5% of Kuaishou's e-commerce.

For Xiao Yangge, the situation he faces is no longer the same as it was many years ago. On the one hand, Douyin is supporting more big anchors, such as Dong Yuhui; on the other hand, Douyin is supporting store broadcasts and shelf e-commerce.

Wei Wenwen said that in the past year, Douyin's e-commerce GMV increased by 46% year-on-year, and the GMV in shelf scenes increased by 86% year-on-year.

03

The situation faced by Brother Yang is more complicated than that of Simba back then. The reason behind this is naturally that Douyin’s attitude towards big anchors has changed.

Douyin first introduced and supported Luo Yonghao in 2020 in order to open up the live streaming e-commerce situation with big anchors, attract some big anchors and more powerful merchants to settle in, cultivate consumers' shopping mentality on Douyin, and realize a virtuous cycle of the big anchor ecology.

To this end, Douyin signed an exclusive contract with Luo Yonghao. In addition to the signing fee, Douyin provided Luo Yonghao with tremendous resource support, such as splash screen advertising and live broadcast push to all users on the site.

Later, Douyin supported Dongfang Zhenxuan, and Luo Yonghao, who had retired from the Internet, became the new No. 1 in selling goods, supporting the reputation of Douyin e-commerce. Dongfang Zhenxuan, which stood out from the knowledge-based selling, greatly enriched the anchor ecology and content ecology of Douyin. At this time, Douyin's content ecology construction and user purchasing mentality were becoming more mature.

Oriental Selection has also been recognized by the official Douyin for many consecutive times, such as having just won the annual influential organization award at the Douyin E-commerce Author Festival.

Dong Yuhui is currently the anchor that Douyin is increasing its support for. Douyin’s role cannot be ignored in shaping Dong Yuhui’s cultural IP.

For example, in March this year, Dong Yuhui revealed that the Douyin team had an afternoon meeting with him and put forward many development ideas and expectations to him, especially hoping for faster development;

In addition, Douyin also supports Dong Yuhui in creating a series of interview programs "Sports Athletes Talk". The Alphabet List once analyzed that the emergence of Dong Yuhui's IP just made up for the regret of ByteDance missing out on Li Ziqi.

At the Douyin e-commerce author summit not long ago, Yuhui Tongxing won the "Outstanding Author of the Year Award" and was the only organization to receive this award.

It can be seen that Douyin’s requirements for big anchors are changing. It is no longer just about pursuing GMV, but also about pursuing high-quality content to achieve a virtuous cycle of anchor ecology and content.

The relationship between Douyin and big anchors has also undergone subtle changes as the platform supports mid-level influencers, store broadcasts, and develops shelf e-commerce.

The "2024 Douyin E-Commerce Expert Growth Report" recently released by Douyin E-Commerce shows that in the first half of 2024, there will be only more than 3,000 top influencers, while there will be more than 560,000 small and medium-sized anchors and 170,000 mid-level influencers.

The number of small and medium-sized anchors and mid-level influencers is increasing, and they are gradually becoming the backbone of Douyin's e-commerce ecosystem.

Store broadcasting and shelf e-commerce are also rising rapidly. Wei Wenwen revealed that in the past year, Douyin e-commerce GMV increased by 46% year-on-year, Douyin e-commerce shelf scene GMV increased by 86% year-on-year, and new merchants increased by 83% year-on-year.

In the past, in the era of big anchors, the business model of big anchors, platforms and merchants was: big anchors collected commissions and slot fees from brands and merchants, and used their own traffic to bring goods;

When merchants sell goods, the platform takes a commission. Now the platform supports store broadcasting and shelf e-commerce, and the business model has changed, eliminating the third-party anchors who earn commissions, giving small and medium-sized brands more development opportunities.

For the platform, it not only benefits users and brands, but also makes more profits for itself. Store broadcasting has become a battleground for e-commerce platforms. This year, Douyin launched the "CEO's Explosion" series of IPs, and domestic brand owners flocked to the live broadcast room to sell goods, which is also a way to indirectly support store broadcasting.

In the past, Douyin needed Luo Yonghao to open up the market, needed Xiao Yangge to enter the lower-tier markets, and needed Dongfang Zhenxuan to support its reputation. Now, Douyin no longer needs big anchors. Therefore, it is still unknown whether Xiao Yangge, who is in crisis, can continue to work with Douyin based on trust.

References:

"Douyin e-commerce cannot do without Brother Yang" Power Plant

"Xiao Yang has long since given up on this job"

"Douyin and Kuaishou compete with each other and go deep into each other's territory" Poison Eyes

"Do you believe that Douyin will not "indulge" Xiao Yang? "Huaer Street Reference

"Douyin sells goods worth 10 billion yuan, revealing the crazy Xiao Yangge and the company behind him" China Entrepreneur Magazine

"Crazy Little Brother Yang is on the hot search: Five years of popularity, half of the history of Douyin e-commerce development" Blue Whale Finance