“Li Jiaqi and others” are overcoming all obstacles to grab offline business?

The top anchors are exploring offline businesses in order to find a second growth curve, but it is not easy to do well. The article analyzes the reasons why they choose offline, including building personal IP, incubating brands, and enhancing consumer recognition, but also points out the challenges they face. Recommended for Internet friends to read.

"I'm so excited, I actually saw Li Jiaqi singing and dancing on TV." In the talent show "Brothers Who Make Waves 4" which started in August, in addition to a number of celebrities, there was also Li Jiaqi singing "Sunny Homebody". Many netizens joked that this was crossing the dimensional wall.

While Li Jiaqi is "overcoming difficulties", many netizens have also found that the frequency and time of his appearance in the live broadcast room have gradually decreased since last year, and he has been replaced by his assistant Zhu Wangwang. It is worth mentioning that Zhu Wangwang's recent performance in the variety show "My Daughter 2024" has also received multiple hot searches in succession.

But Li Jiaqi is not the only one who is "not doing his job". Wei Ya, who left the live broadcast room the earliest, is busy making investments and filming short dramas; Xiao Yangge and Simba, who are gradually fading out, have also opened their own chain supermarkets; the new anchor Dong Yuhui has just started to learn how to be a boss...

The once-powerful top anchors, who could easily earn over 100 million yuan in GMV from a single live broadcast, have now faded out of the live broadcast room and started offline businesses. Is it that live streaming e-commerce is no longer profitable, or is it that the end of traffic is ultimately "offline"?

1. Super-head anchors, addicted to "opening a store"

Since the end of last year, many top anchors have begun to fade out of the live broadcast room. In March this year, Xiao Yangge talked about his live broadcast plan for 2024, saying that this year he would do more entertainment live broadcasts and reduce live broadcasts with goods. In May, Simba mentioned that "there will be fewer and fewer live broadcasts in the future, which will make Xinxuan get used to the absence of Simba, and let fans get used to Simba's departure."

Li Jiaqi's actions were earlier. As early as 2022, three months after Li Jiaqi's live broadcast room was suspended, Mei ONE began to increase its efforts to train assistants. Since last year, Li Jiaqi has deliberately reduced the frequency and duration of live broadcasts. Li Jiaqi, known as a "model worker", even took a long vacation of more than ten days in April this year.

The "fading out" of the top anchors is not instantaneous, but the traffic around them is indeed visibly decreasing. This year's "618" is also known as the "618 that can't be broadcast". The decline in GMV in the live broadcast room has become a common phenomenon. Data shows that the GMV of the beauty category in Li Jiaqi's live broadcast room on the first day of pre-sale fell by as much as 46% year-on-year.

Last year's "Double 11", the GMV of Li Jiaqi's first live broadcast in the live broadcast room was 9.5 billion yuan, but in 2022, this figure was 21.5 billion yuan, and in 2021 it was 10.6 billion yuan, with a significant decline in sales.

The live broadcast rooms of top anchors are no longer lively. Due to the weak overall economic environment, consumers are holding on to their wallets, and shopping is naturally not as enjoyable as before.

On the other hand, live streaming e-commerce has entered the second half, and the bonus period of strong growth has passed. Both traffic and consumer sentiment are beginning to enter a bottleneck period. Even if super anchors work hard to promote it, it is difficult to make a splash.

Moreover, because top anchors often appear in front of the screen, their every word and action attracts more attention. For example, Li Jiaqi’s "eyebrow pencil incident" and Simba’s "scolding the platform" incident. Behind the anchors' "wealth-making myth", their existence has become more sensitive. At this time, choosing to hide in the hustle and bustle may not be a more rational choice.

From the perspective of merchants, the star halo of top anchors is also fading. As more and more players enter the live e-commerce market, the traffic pool has not seen any significant increase, and the marginal benefit of traffic is decreasing.

Some merchants said in an interview with the media that the cost-effectiveness of the live broadcast rooms of top anchors is not high. Although big anchors can increase sales, 80% of them will lose money. This is also related to the phenomenon that top anchors are accustomed to asking brands for the "lowest price". At a time when "price reduction" has become the mainstream, the profits of brands are already very thin. If they cede profits to top anchors, they can only get a situation of "spending money to make a fuss".

Therefore, in the context where brands are unwilling to spend money and live streaming has no growth, platforms have begun to focus on supporting mid-level anchors, merchants have also begun to explore brand live streaming, and top anchors have to consider "taking over".

For example, Simba's disciples such as Zhao Mengche, Dandan, and Shi Da Piaoliang have already become independent in the live broadcast field; Brother Yang has also successfully made many of his disciples famous, including Huang from Hongludian, Laoban Qi, and Zui Ge.

The master-apprentice system and assistant broadcasting model are prevalent in the anchor industry. The so-called "taking over" means that the top anchors will gradually transfer more traffic to their apprentices, while they continue to exert influence in other fields to create traffic and topics for their apprentices. This can be seen from the fact that Li Jiaqi has appeared many times in variety shows in which Zhu Wangwang participated.

Therefore, the top live streamers who have faded out of the live broadcast room are actually not idle. They just changed the way to "maintain popularity", and crossing over to offline seems to have become everyone's common choice.

In April this year, Li Jiaqi's IP "Naiwa Family" and Bear Claw Coffee opened their first joint coffee shop "NEVER MIND CAFE", a silent coffee shop dedicated to providing employment opportunities for more people with disabilities.

Xiao Yangge and Simba both chose to open supermarkets. In September last year, Xiao Yangge's "Xiao Yang Zhenxuan" brand opened its first offline supermarket in Anhui; Simba also opened a supermarket in Guangzhou as early as 2022, and stated that the goal is to open 1,000 chain supermarkets across the country.

Mao Qiqi, a popular anchor on Kuaishou with over 30 million fans, created the "Dailaixi" beauty brand and opened its first flagship store in Shanghai; Mr. Mideng, a popular UP host on Bilibili, also opened an offline home experience store "Mizhu" in Hangzhou.

2. Exploring offline, each with their own plans

At present, although the top anchors have their own plans after moving offline, overall they still cannot do without the original live e-commerce dividends.

First, it is to build a personal IP. For a group of top anchors, they have already attracted enough traffic and attention, so building an IP is a natural step.

For example, Li Jiaqi's "Naiwa Family" IP originated from a Bichon Frise named "NEVER" raised by Li Jiaqi. It not only became popular through Li Jiaqi's live broadcast room, but also extended to IP variety shows such as "Naiwa Family's School Diary". The launch of NEVER MIND CAFE seems to be within everyone's expectations.

In addition to creating IP, some anchors also incubate their own brands. For example, Li Ziqi once incubated "Li Ziqi"; Mao Qiqi created "Dailaixi"; and Xiao Yangge brought "Xiao Yang Selection".

Secondly, incubate personal brands and move online supply chains offline. For example, after creating "Xiao Yang Selection" and "Xinxuan Group", Xiao Yangge and Simba are not only busy opening supermarkets, but have also mentioned many times that they "want to build their own supply chain".

In 2022, Brother Xiao Yang established Hefei Xiao Yang Zhenxuan Supply Chain Management Co., Ltd., while building its own brand "Xiao Yang Zhenxuan" and building its own supply chain; Simba's team focused on cooperating with local suppliers, brands, etc., and finding lower-cost supply chains globally through supply chain traceability.

Regardless of the model, it can be said that the reason why the supply chain of the top anchors can be established quickly is inseparable from the huge sales scale brought by the live broadcast room. Without the support of sales and the celebrity effect of the anchors, they may not be able to gain an advantage in supply chain negotiations.

Finally, it is to enhance consumer recognition and use offline stores to promote personal brands/live broadcast rooms. For example, Li Jiaqi's "Naiwa Family" has previously launched joint products with beauty brands such as Perfect Diary, Anji Xinyu, and Huazhixiao. The eyeshadow palette launched in cooperation with Perfect Diary sold 175,000 palettes in Li Jiaqi's live broadcast room, with sales exceeding 10 million.

As the No. 1 influencer in the home furnishing industry, @Mr迷蹬, a UP host on Bilibili, rented a warehouse in Hangzhou last year as an experience store. In an interview, he said his model is more like "IKEA", allowing users to experience products through offline stores, and does not focus on instant transactions and delivery, ultimately paving the way for online transactions.

At this time, offline stores become a "voice amplifier", allowing netizens to communicate closely with anchors and brands, directing private domain traffic and ultimately feeding back to the brands.

As top anchors move from online to offline, they naturally have the advantages of popularity, traffic attention, and voice channels. They can also reach consumers more naturally, making it easier to build their own brands.

When their personal brands mature, they will definitely not be satisfied with simple live streaming and selling goods. They will use their personal brands to open stores, empower, and even go deep into the back end of the supply chain to build their own e-commerce system. But the problem is that big anchors all want to be bosses, but being a boss is not that easy.

3. Dividend transfer is easier said than done

The top anchors opening offline stores is actually similar to celebrities opening restaurants. Both are cross-border operations and rely on the celebrity halo, but both look easy but are difficult to do.

In the past two years, many celebrity restaurants have closed down, such as Chen He's Xianhezhuang Braised Hotpot, Han Han's "Nice to Meet You", Xue Zhiqian's Shang Shang Qian Hotpot, etc. Celebrities are not good at running restaurants, mainly because they do not know how to operate and cannot guarantee the quality of food, and the star traffic halo fades year by year, and consumers are unwilling to pay only for the brand.

The above are also the challenges for top anchors to open stores. On the one hand, the IP of top anchors is similar to the halo of stars. In essence, they are the power of fan economy. It is the "attention" of fans that enables anchors to convert online "traffic" into offline "retention", which lays the foundation for opening offline stores.

But this is actually a double-edged sword, because offline stores are closely related to the popularity and reputation of the anchor, and will also bring more uncertainty.

For example, as Li Jiaqi gradually faded out of the live broadcast room, his NEVER MIND CAFÉ did not create a stir online after its opening, and it was incomparable with the previous popularity of the "Naiwa Family"; Internet celebrity Wang Hongquanxing once opened a luxury offline store "Quanxinghui" in Beijing, but as his account was banned, he is no longer a shareholder of the company.

On the other hand, physical businesses have also faced severe challenges in recent years. According to incomplete statistics, more than 6,000 stores in China announced store closures in the first half of the year, including well-known brands such as Walmart, Yonghui Supermarket, Luckin Coffee, and Mixue Ice City.

Among them, the catering industry, where celebrities love to gather, had a closure rate of 22.6% last year, a slight increase from the closure rate of about 20% two years ago. The reason behind this is the continuous increase in labor costs and raw material costs, as well as the operational challenges brought about by the increasing number of competitors.

Finally, there are obvious barriers between online live streaming and opening offline physical stores, and there is a lot of uncertainty for top anchors to operate physical stores.

The first generation of online celebrity Hema Fresh has long revealed the difficulty of operating offline stores. Founded in 2016, Hema has tried no less than 10 new formats, including Hema Station with a forward warehouse model, Hema Mini with a small store model, and Hema Vegetable Market close to the community, but it has always been burning money.

It was not until the beginning of this year that Hema announced for the first time that it had achieved profits in the off-season for four consecutive months. The newly appointed Hema CEO Yan Xiaolei changed the radical discounting strategy of the previous CEO Hou Yi and embraced the middle class again, which brought Hema back to the edge of profitability. However, it is still hard to say whether it can continue to make profits.

Even Alibaba Group, which has huge traffic, has not been successful in its cross-border exploration of the fresh food industry. Even if the top anchors have their own supply chains, they will probably have to pay a lot of trial and error costs if they want to build a chain brand.

At present, whether it is Simba's emphasis on 1,000 chain supermarkets or Oriental Selection's proposal to turn 800 offline teaching points into membership stores, large-scale replication has not yet begun. Instead, the group behind Xiao Yangge and Simba is accelerating the pace of supply chain going overseas and selling their own brands to the world through TIKTOK.

In this light, the top anchors opening hundreds or thousands of stores across industries may not be just a lot of noise with little results, as the end of the traffic will eventually return to the online world.

In fact, the e-commerce industry is not as sluggish as imagined. According to the "2023 China Live E-commerce Industry Research Report", China's live e-commerce transaction volume in 2023 will be 4.9 trillion yuan, a growth rate of 35.2%; during the "618" period this year, the sales of live e-commerce platforms such as Douyin and Kuaishou reached 206.8 billion yuan, an increase of 12%.

Against the backdrop of a weak economy and slowing benefits from live streaming, it is difficult for top anchors to continuously increase their user conversion rates without new traffic. The reason behind this is that the logic of the live streaming industry has undergone fundamental changes. Users need new content to stimulate transactions, such as the flow of short dramas and short videos; the guidance of private domain traffic by brand store broadcasts, etc. The top anchors are beginning to be "demystified."

Therefore, for top anchors, exploring opening stores will be a "safer" way to explore the second growth curve. Regardless of success or failure, it can create momentum and attract traffic for their own brands to a certain extent.

In this case, the top anchors naturally don’t mind leveraging small costs to make big business, but if they really want to expand and improve their offline business, it may not be an easy task. Although they want to be bosses, not all live broadcasters have the ability to be good bosses.

Author: Kaikai This article is written by the author of Operation School [Bohu Finance], WeChat public account: [Bohu Finance], original/authorized to be published in Operation School, and any reproduction without permission is prohibited.

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