Douyin rebalances live streaming by influencers, is the transformation of content e-commerce coming?

As Douyin e-commerce enters a period of balance and adjustment, it faces both challenges and opportunities. After experiencing the craze of live streaming, the platform is now seeking to achieve a new round of growth by strengthening the proportion of shelf e-commerce. The article explores in depth how Douyin adjusts its strategy to cope with the challenge of slowing growth and analyzes the possible direction of future e-commerce development.

Douyin strictly controls live streaming sales by influencers, and it is difficult for top-tier GMV to rise again on the shelves. Douyin's e-commerce has entered a period of balance.

In 2023, Wei Wenwen, president of Douyin e-commerce, proposed a new business concept at the Douyin Ecosystem Conference: "Full-domain integration, flywheel growth". According to her explanation, whether it is good content in short videos and live broadcasts, or good products on the shelves, they are all growth engines that bring traffic to merchants and platforms. If the two are further linked, it is possible to release greater value.

It seems that Douyin is emphasizing balance in e-commerce growth for the first time. At the Douyin e-commerce ecosystem conference, from proposing interest e-commerce in 2021, to focusing on all-domain interest e-commerce in 2022, to the all-domain integrated flywheel growth in 2023, it can be seen that Douyin is gradually strengthening its balance.

But in 2023, Douyin's e-commerce was in a period of rapid growth, with GMV increasing by 80% for the whole year and the total volume exploding, making everything look very good.

Xiao Yangge has become the top star on Douyin. Although Dongfang Zhenxuan is constantly the talk of the town, it can still continuously break the sales record. At the same time, in addition to the content field, the growth of the shelf field has entered an accelerated stage. According to data, the Douyin Mall GMV growth rate in 2023 will be as high as 277%. The comprehensive outbreak and strong data seem to make the company no longer care about the so-called balance. On the other hand, live streaming sales, especially live streaming sales by experts, are still the strongest direction for GMV contribution. Balanced development also means the redistribution of resources.

But the turn is also very urgent. In March 2024, Douyin e-commerce entered a period of slowing growth for the first time. According to a report from LatePost, Douyin e-commerce's sales in the first quarter of 2024 exceeded 700 billion yuan, a year-on-year increase of more than 50%. Among them, the year-on-year growth rate in March fell below 40%. From the perspective of the industry, low-pricing seems to have become the initiator. Some industry insiders said that the low-price strategy can bring more orders and exchange price for volume, but if the price is pressed down first and consumers are not attracted, then the platform sales growth rate will be affected for a period of time.

The explosive growth has entered a slowdown period, and anxiety has followed. In July, some media reported that Douyin is planning to reduce the proportion of live broadcasts by influencers through traffic distribution, and continue to expand the proportion of shelf e-commerce. Although Douyin denied this statement, facing the slowing growth rate and the uneven proportion of content and shelf fields, adjusting the balance has, to some extent, become one of the few ways.

Live streaming by celebrities once laid the foundation for Douyin's e-commerce. The rise of top celebrities such as Xiao Yangge, Dong Yuhui, Zhang Tongxue, the Guangdong couple, and Jia Nailiang has brought Douyin a lot of buzz and potential. At the same time, it has also allowed the e-commerce model based on the content field to gain a firm foothold. However, in the face of increasingly fierce competition and the access to market space, the transformation of content-based e-commerce seems to have become an inevitable direction for Douyin.

01 The content field lacks "new stories"

At the beginning of 2024, a DJ version of "My Hometown in Northeast China" swept the Douyin page of young people. The song was made popular by a 40-year-old girl named Yu Jie from Northeast China. By recording rural life, she gained 18 million fans in a year. Then in May, a young man named Guo Youcai at Heze Railway Station quickly became popular with a song and a retro look. On May 12, his number of fans was less than 200,000, but on May 22, it exceeded 12 million.

Douyin content market, relying on its strong traffic strength, continues to create gods. But judging from the content alone, it seems that there is not much freshness. The stories of ordinary grassroots people's counterattacks have been packaged repeatedly. The Northeast Rain Sister had a template of Zhang Tongxue before, and Guo Youcai also had similar Yu Wenliang and Wen Huijun before.

The homogeneity of content and the similarity of the paths to fame have also shortened the cycle of Douyin's god-making. After becoming popular, Northeast Rain Sister immediately started to bring goods, but in December 2023, she encountered a crisis of trust and her goods were questioned. It was briefly suspended in January 2024, and then the GMV stabilized at around 10 million, which is not high for the top Internet celebrities with more than 20 million fans. And Guo Youcai was quickly hit by events such as sky-high rewards, and the traffic backfired. In terms of monetization ability, Northeast Rain Sister and Guo Youcai have also become dull after experiencing the initial madness.

From another perspective, the shortening of the "bonus" cycle of new top-tier stars means the proliferation of homogeneous content. The flourishing attitude of Xiao Yangge, Dong Yuhui, Liu Genghong, Zhang Tongxue, Wang Xinling and others in the early years is long gone. From various perspectives, the emerging traffic celebrities are more like differentiated imitations of previous Internet celebrities.

On the other hand, traditional traffic influencers seem to have lost their former popularity on Douyin.

Entering 2024, Xiao Yangge, who sells goods with a "Buddhist" attitude, is still controversial. From suspected fake Moutai to refurbished iPhones, Xiao Yangge, who is constantly on negative hot searches, is facing a decline in reputation and credit, and a drop in GMV. And after experiencing the de-Dong Yuhuiization, Oriental Selection continues to be criticized by more consumers, from shouting sales, to Yu Minhong's complaints, to the host's multiple serious verbal errors, the declining number of fans, and the GMV value, have made Oriental Selection miserable in the secondary market, and its stock price has been sliding from a high level. People like Jiao Ge Pengyou and Jia Nailiang, who spend money to buy traffic, seem to be the few who are still growing, but

The top traditional content creators are feeling the pinch. From a broader perspective, in addition to the collective homogeneity brought about by the low-price trend, it seems more about consumers’ fatigue with the lack of innovative content.

The rapid iteration of new Internet celebrities and the difficulty faced by the top players have caused the content field of Douyin to seem to have reached a bottleneck. From a broader perspective, the benefits of content creation seem to be becoming less cost-effective.

According to data released by Douyin in September 2023, Douyin adds 5.15 million new e-commerce authors every year, and 8.84 million authors earn income through live broadcasts, short videos, showcases, pictures and texts. Among them, the number of authors with a cumulative GMV of over 100,000 yuan exceeds 600,000. Some media have calculated that if the creators are charged 20-30% commission, the income from a GMV of 100,000 is 20,000-30,000 yuan, averaging about 2,000 yuan per month. Such authors are already a minority in Douyin, accounting for only 6.8% of the 8.84 million.

The lack of new stories in the content field, to some extent, also means that e-commerce based on content traffic seems to be on the eve of change.

02 Expert live broadcast of brake and gear shifting

The shrinking innovation in the content field and the decline in traffic have directly led to commercial difficulties.

This year's 618 is undoubtedly the moment when Douyin anchors collectively stepped down from the altar. According to Chanmama data, Douyin's top anchor Xiao Yangge only ranked 17th on the list of 618 influencers this year. According to Feigua data, in the first broadcast of 618, the Guangdong couple of Douyin had a transaction volume of 450 million last year and 61.14 million this year, a year-on-year decrease of 86.4%; Qi'er had a transaction volume of 111 million last year and 12.923 million this year, a decrease of 88.46%; Pan Yurun had a transaction volume of 29.529 million last year and 6.748 million this year, a decrease of 77%.

In fact, such a decline has already occurred among some of the top influencers in 2023. On the eve of 618 in 2023, the top influencers of Douyin, the "Guangdong Couple", held a marathon live broadcast to challenge the GMV of 1 billion in a single game, with 8 iPhones given away in a draw in one minute and almost no cost investment. The topic once became a hot search, but in terms of the effect, only 456 million was achieved on that day, less than half of the expected result.

At that time, some industry insiders said that the efficiency of live streaming sales had reached a bottleneck period, and it might not be able to continue to unilaterally erode the territory of traditional shelf e-commerce. The growth momentum of live streaming sales itself might also be exhausted.

Another obvious sign is the losses of the top MCN companies. According to media reports, since May, Jia Nailiang has been leading the sales of goods on Douyin, firmly holding the position of Douyin's new "number one seller", but the MCN company behind him, Yaowang Technology (002291), has been losing money year after year, with a huge loss of 1.05 billion yuan last year. Its closing price on the most recent trading day has fallen by more than 80% from its recent high. In 2024, according to the listing announcement, in the first quarter, the company's revenue was about 1.581 billion yuan, and its net profit attributable to the parent company was about -94.2386 million yuan.

Similar situations also appear in the top MCNs. Dongfang Zhenxuan released its interim performance announcement for fiscal year 2024 (June 1, 2023 to November 30, 2023). During the reporting period, the company's total revenue was 2.795 billion yuan, and its net profit was 249 million yuan, a year-on-year decline of 57.4%. In 2023, the GMV of Jiaogepengyou was as high as 12 billion yuan, but the profit was only 180 million yuan.

From a broader perspective, the huge GMV of top influencers is supported by various subsidies. Take Jia Nailiang as an example. According to media reports, almost every product in Jia Nailiang’s 618 live broadcast has huge subsidies, especially big-name products. A consumer posted an order on a social platform saying: “How much subsidy did Douyin give Jia Nailiang? I bought Lancome at a 600 yuan discount, and a 1,000 yuan product from Guerlain at a 220 yuan discount.”

Looking at the entire chain, it can be seen that live streaming by influencers seems to be the beginning of a negative feedback loop. Platform subsidies, MCN profit declines, and merchants' profits begin to be eroded after low prices. In the entire system, influencers seem to be the only winners. After recognizing this fact, it is not difficult to explain why influencers entered a collective "silent" state during this year's 618. Under the negative feedback loop, the overall model will undoubtedly be affected.

From another perspective, the volume of live broadcasts by celebrities is also approaching its limit. According to Douyin's internal calculations, the GMV ceiling of its live broadcast e-commerce business is about 2 trillion to 3 trillion yuan. According to Wandian.com, Douyin's e-commerce transaction volume in 2022 was about 1.6 trillion yuan, and it has reached 2.6 trillion yuan in 2023. The live broadcast e-commerce business is rapidly approaching the ceiling. At the same time, this also means that it is more difficult for anchors to achieve growth, and the cost of selling goods for merchants is also rising rapidly.

The collective slowdown of live broadcasts by celebrities and the approaching limit of the industry ceiling have given the platform a reason to brake and shift gears. A person close to Douyin said that now the platform needs short videos that can "save traffic", store broadcasts that "consume advertisements" and malls that "stabilize consumption", rather than the stereotyped live broadcasts of celebrities that "consume traffic". According to a report by 36Kr, in Douyin's plan, future content and live broadcasts will be mainly used to promote seeding and transactions, while malls will be used for repeat purchases. Douyin e-commerce will rely on advertising exposure and live broadcasts and short videos to obtain traffic, stabilize user minds through Douyin Mall, and form a full-domain e-commerce scenario.

The tide of live streaming by experts has begun to recede, so what efforts does Douyin need to make in order to achieve transformation?

03 Switching to defense, Douyin still needs to make up for the shortcomings

Whether it is JD.com's procurement and sales or Pinduoduo's low prices, the fundamental support for the new round of price wars among e-commerce giants lies in the improvement of supply chain infrastructure and efficient operations. After the content market entered a bottleneck period, making up for the shortcomings seems to be the key to Douyin's continued growth.

But from this perspective, although Douyin has powerful traffic, how to accumulate the traffic and make the traffic not only accumulate in the direction of influencers bringing goods are questions that Douyin needs to answer.

At the 2023 Douyin e-commerce ecosystem conference, Wei Wenwen said on the spot that Douyin e-commerce is a complete ecosystem. She does not want the content field and the shelf field to be separated, and hopes that the two fields can be connected and operated. For this reason, Douyin has also made many optimizations. According to reports, in terms of traffic strategy, Douyin e-commerce allows new and popular products in the content field to have a higher distribution weight in the shelf field, and also allows merchants with better shelf operations to get more traffic in the content scene.

In terms of products, users can smoothly switch between content pages and shelf pages, allowing for more immersive browsing and consumption. In order to accelerate the development of the shelf market, Douyin e-commerce launched a product card commission-free project in March this year. Its purpose is to enable merchants to continue to achieve exposure in multiple scenarios through product cards when they are not broadcasting. In order to attract more merchants, Douyin e-commerce began to implement a new policy of "0 yuan entry" in February this year.

It can be seen that on the supply side, Douyin has invested more resources and is determined to rebalance the e-commerce ecosystem. But from the perspective of consumers, another meaning of the shelf market is to strengthen the mindset of purposeful consumption. Then, what consumers need may be a stronger platform-based personality. Compared with Pinduoduo's low prices, JD.com's mid-to-high-end products, and Alibaba's diversity, Douyin's interest e-commerce seems to be a gray area.

If Douyin wants to continue to grow in a more precise direction, it may still need to make comprehensive innovations based on its own advantages. At present, Douyin is more imitating Pinduoduo, and a series of product designs are very similar to Pinduoduo's ideas, but the results do not seem clear.

According to reports, some Douyin merchants said that commodity card sales, live streaming sales, and short video sales are the three main directions of Douyin transactions. Since 2024, although commodity card sales have increased, live streaming sales and short videos have been directly suppressed. At the same time, the launch of the price comparison system has also forced shelf merchants to enter the low-price involution range. How to break the deadlock, it seems that Douyin has no clear path.

In summary, the e-commerce sector, as Douyin's most important source of income, has entered a slowdown period after experiencing rapid growth. At the same time, a balance adjustment is taking place within the e-commerce sector. The decline in the popularity of live broadcasts by experts and the development of shelf markets have outlined the development direction of Douyin in the future. However, in order to face competition and re-enter the high-speed growth period, Douyin seems to need greater innovation.

Author: Sakuragi; Editor: Jiuli

Source public account: Xinentropy (ID: baoliaohui), insight into business variables and exploration of the essence of business.