Simba fights three sheep, tearing open the "underpants" of the live e-commerce supply chain

What kind of business logic and industry trends are hidden behind the fierce fight between Simba and Sanzhiyang, the top anchors of the two major platforms of Douyin and Kuaishou, in the battle for traffic and supply chain? This article will analyze this dispute in depth, explore the market dynamics behind it, and its potential impact on the future e-commerce landscape.

The two major platforms, Douyin and Kuaishou, are fighting each other, from traffic to supply chain.

Just as Three Sheep opened a branch in Hong Kong to promote "celebrity sales" and prepare to reap the rewards, Kuaishou internet celebrity Simba started a fight with Three Sheep.

The conflict was caused by both parties promoting hairy crabs in the live broadcast room. Simba said in the live broadcast that Big Brother Yang and Little Brother Yang said that their products had no quality inspection, no after-sales service, and no responsibility attitude, so what qualifications did they have to compete, and said that "which business model of the Three Sheep was not imitated from me".

Facing Simba's relentless pursuit, Lu Wenqing, the founder and director of Three Sheep, responded in a live broadcast that Simba had no bottom line in order to gain traffic. Zeng Zhiwei, who cooperated with Three Sheep, also quickly concealed the relevant information.

In fact, since the beginning of this year, Xiao Yangge has reduced his live streaming sales. After entering the entertainment industry, the traffic of major platforms has been divided by more and more people who have entered the live streaming sales. The quarrel between the top brothers of the two major platforms seems accidental, but it is inevitable. People speculate that Simba may have moved to open up a second sales battlefield after he quarreled with three sheep on Douyin.

It is still difficult to say who is right and who is wrong, but the competition among the anchors has spread to the supply chain. The "one or the other" strategy that was once "killed" seems to be making a comeback?

01 Simba’s battle with the three sheep was no accident

As the main dish on the table during the Mid-Autumn Festival, hairy crabs have appeared in the live broadcast rooms of many anchors. Mrs. Crab hairy crabs are also a hot-selling brand. According to third-party data platforms, Mrs. Crab’s monthly sales on Douyin exceeded 200 million yuan in August. Especially in late August, its single-day sales reached 25 million yuan on many days, and even on August 22, the single-day sales were close to 100 million yuan.

The cause of this incident was that Simba promoted Mrs. Crab hairy crabs in a live broadcast. The same brand of hairy crabs had been sold in Brother Xiao Yang's live broadcast room before. Simba said that after they were sold out, fans asked him to add stock, but the link to add stock was gone because he was reported by Brother Xiao Yang. The reason for the report was that Simba sold them too cheaply.

Simba responded to consumers by saying that because he had cooperated with Mrs. Crab earlier, the price was cheaper. He believed that the Three Sheep live broadcast room had no after-sales service, no quality inspection, and no responsibility attitude, and said that the Three Sheep imitated Xinxuan's business model.

In response to this, accounts related to Three Sheep responded by publishing works, pointing out that the sales strategy was formulated by Brother Yang, implying that Simba's reporting behavior lacked strength.

Simba said angrily in the live broadcast room: "I sold hairy crabs and all the anchors reported me for selling too cheaply. What qualifications do you have to compete?" Obviously, he felt that his price advantage was treated unfairly. The relevant account of Three Sheep also responded quickly, saying: "The second order of 0 yuan is the mechanism of Big Brother Yang. If you have the ability, you can also cut it. If you don't have the ability, is it interesting to just report it?" The two sides launched a fierce war of words.

Simba mentioned Lu Wenqing and said, "You were just sentenced in Dongguan. You were sentenced to three years in prison with four years suspended or three years suspended with one year suspended. What was the specific reason? It seems to be related to e-commerce. You must have cheated. You are a partner of Three Sheep, right? You are serving your sentence outside prison, right?"

In the live broadcast room, Lu Wenqing called on people not to bully Brother Yang and Brother Yang, and stressed that respect should be maintained in the live broadcast industry, and that people should focus on the development of their respective businesses and should not pursue traffic without bottom line.

On September 3, in the latest live broadcast, Simba responded to the questions raised by Three Sheep founder and director Lu Wenqing in the previous live broadcast.

Simba said frankly that he had never blackmailed anyone. In response to Lu Wenqing's questioning that he was taking advantage of the traffic, Simba said: "As far as I can remember, my live broadcast popularity has been higher than yours over the years."

Simba continued to fire back and forth, pointing the finger at Three Sheep for avoiding suspension of broadcasts after product problems arose, and his attitude of not responding or dealing with the issue was really disappointing. These included Meicai Kourou and Maotai Liquor, saying that they had no after-sales service after problems arose and that he was irresponsible to consumers.

In response to Simba’s accusations about after-sales service, Lu Wenqing also responded through a live broadcast in the early morning, saying that he would respond to everything with actions, and that Three Sheep is developing its own braised pork with preserved vegetables.

As the verbal battle escalated, Xiao Yangge responded, "After the media exposure, the relevant departments conducted a careful, meticulous and cautious investigation and synchronized the results of the investigation to us. Up to now, our company has not received any punishment from any relevant department for this incident." Lu Wenqing responded that after the incident and before the results of the investigation came out, Three Sheep actively responded and made a refund, including but not limited to refunding one and compensating three. In fact, Three Sheep attaches great importance to the demands of each customer, has established an after-sales team of more than 300 people, and ensures a customer service quantity response mechanism to try to meet customer demands.

Simba was more radical. He said: "We have decided to give Three Sheep a week. If Three Sheep still does not treat consumers well after a week, we will start to compensate for some of the products of Three Sheep consumers, as well as after-sales service. Tomorrow I will arrange to pay 100 million in cash to Xinxuan's assistant until the compensation of 100 million is completed."

Many netizens believe that Simba's move is a form of hype. However, Xiao Yangge's live streaming of goods does have a lot of problems in the past, from lymphatic trough meat and preserved vegetable braised pork to fake Maotai, hair dryers without any warranty and paper kitchen knives, which have been exposed many times by CCTV's "3.15" Gala and evaluation columns, but Three Sheep Network has not responded or compensated so far.

However, Simba has also been accused of selling fakes, and many consumers still remember the bird's nest incident a few years ago. This time, Xiao Yangge is facing such an incident, and his reputation will also be partially destroyed. The war of words may escalate, and the "volume" behind the war of words seems to be more worthy of attention.

02 The "choose one of two" policy of the top V supply chain has failed

In the past, anchors attracted traffic, but now that the platform traffic is being divided up by players who continue to join, it is difficult for big anchors to continue their single-game miracles. Both anchors and platforms are well aware that the industry cannot be dominated by one company alone, and bringing goods is no longer just a competition between anchors. Therefore, they can only squeeze brands and the supply chain.

The complaint of Three Sheep against Simba for the lowest price is actually similar to the complaint of JD.com against Li Jiaqi for the lowest price not long ago. On the surface, it is a traffic competition between big platforms and big anchors to attract attention. Behind it is a reflection of the "rolling" supply chain and the "choose one of two" of the previous platform.

The controversy over the "choose one of two" policy in e-commerce first emerged around 2010. At that time, Dangdang, JD.com, Suning and other companies had experienced disputes over the "choose one of two". Later, there were "choose one of two" cases between WeChat and Alipay, and between JD.com and Alibaba.

Exclusive cooperation agreements can achieve the effect of having something that others do not, giving the platform a sense of security. However, it is very disadvantageous to consumers. Because merchants are forced to "choose one of two", they cannot sell on other platforms. In this way, consumers' product selection range is significantly narrowed, and they cannot make the best choice among multiple platforms according to their needs and preferences.

Moreover, in order to make up for the lost market share and sales channels due to the “choose one of two” policy, merchants may raise the prices of goods on the platform, but consumers will eventually pay for it. Ultimately, consumers’ shopping experience deteriorates.

Judging from specific events, before the hairy crab incidents of Three Sheep and Simba, in 2022, people related to Philips Air Conditioning reported to the media the "choose one of two" dilemma encountered during the company's development. The other choice corresponding to Philips was Gree, the leader in the air-conditioning industry.

Philips and Gree have had a long-standing grudge. As a new team composed of former Gree executives, Philips often "sings the opposite tune" with Gree. In 2022, there was news in the market that Gree required relevant dealers to "prohibit the sale of both Gree and Philips air conditioners", and asked dealers to "choose one of the two" at the sales end. In addition to the sales end, Philips Air Conditioning revealed that Gree also required upstream air conditioner parts suppliers to "choose one of the two" between Gree and Philips air conditioners. For example, a major electronic expansion valve supplier in the air conditioning industry was told that Gree required it to "choose one of the two", otherwise it would lose Gree orders.

In addition to the Philips and Gree incident, the recent controversial Dongfang Zhenxuan and Hui Tongxing also had similar incidents. Before Hui Tongxing became independent, they shared the anchor resources with Dongfang Zhenxuan. With the independence of Hui Tongxing, its internal structure urgently needs to be established, and some anchors and behind-the-scenes members of Dongfang Zhenxuan may face the situation of "choosing one of the two".

According to relevant media reports, a former employee of Oriental Selection once revealed that the team members behind the scenes need to face a "choose one of two" situation. Some colleagues who have a good relationship with the resident anchors of Yuhui Tongxing chose to resign from Oriental Selection and join Yuhui Tongxing.

In short, the "choose one of two" incident is always a matter of public opinion. But from the perspective of consumers, the "choose one of two" behavior is an unfair competition method in the e-commerce industry, which has a negative impact on the rights and interests of merchants, consumers and the healthy development of the industry. Platforms, anchors, and merchants all need to find a more balanced development model.

03 Platform "deep digging" for low-price supply

Now, the three sheep and Simba have finished cursing, but the trust in live e-commerce has also been weakened. Interestingly, Taobao will soon allow WeChat payment. At least on the surface, the choice between two options in e-commerce is gradually disappearing.

Despite this, the theme of e-commerce has not changed. With the release of financial reports by platforms such as Alibaba and JD.com, the high-growth stage of e-commerce has ended. In the slow-growth era, major e-commerce platforms have come up with their own unique strategies.

As the main battlefield of the three sheep, Douyin is approaching its ceiling. It emphasizes that it will no longer put "price power" first, and will focus on pursuing GMV (transaction volume) growth in the second half of the year.

Douyin's merchant operation department is divided into two groups, A and B. The former is mainly responsible for brand merchant operations, and the latter mainly serves white-label merchants. Previously, Group A mainly focused on GMV and Group B mainly focused on order volume, but after this adjustment, Group B no longer emphasizes order volume, but turns to GMV.

According to 36Kr, Douyin plans to reduce the proportion of live broadcasts by influencers to expand shelf e-commerce. Although Douyin has denied the news, it is certain that shelf space is becoming more and more important to Douyin e-commerce as live broadcast e-commerce gradually approaches its ceiling.

Taobao has also changed its direction. It has made it clear that since last year, its search weight allocation system based on "five-star price power" has been weakened and changed back to allocation based on GMV. In terms of business indicators, this year Taobao's assessment focus has shifted to GMV and AAC (average amount of consumption), and no longer pursues high DAC (order volume) brought by low prices. 1688, which previously served the B-end market mainly with wholesale transaction services, has also been promoted to the core strategic transformation level.

JD.com will stick to its low-price strategy until the end of 2022, and it will intensively carry out the "Low-Price Mindset Special Action": launching 10 billion subsidies, opening up the ecosystem, organizational changes, promoting equal traffic rights, free shipping at 9.9 yuan, double compensation for overpriced purchases, and other activities.

Pinduoduo, the "king player" of low prices, recently lowered the store deposits for merchants, covering 70 categories, with the intention of attracting more merchants.

It can be seen that major manufacturers are anxious about traffic, GMV, and the number of merchants. Douyin focuses on shelf e-commerce and has no advantageous categories; Taotian’s tactics have changed repeatedly and it is difficult to implement; JD.com pursues low prices and loses some "high-end" mindsets.

On the other hand, in addition to calling for low prices and introducing merchants, the platforms now focus more on digging into each other's supply chains, because merchants with high-quality supply chains and sources of goods can survive longer.

On the contrary, for many merchants and anchors, no matter how the platform policies change, they should delve deeply into their supply chain, content, and operations in order to survive the "survival of the fittest".

Just a few verbal battles and hype have caused more disgust among consumers. If you spend all your energy on "acting", you might as well become an entertainment anchor. After all, there are countless small and medium-sized anchors who want to enter the field of bringing goods.

Author | Miwa