Big anchors are losing the low-price machete｜Juchao

Big anchors used to use the "lowest price on the entire network" as a selling point to attract a large number of consumers to the live broadcast room, but this phenomenon is gradually changing. The low-price strategy of e-commerce platforms and the rise of brand self-broadcasting have made the low-price advantage of big anchors no longer obvious. The changes in the market competition environment have had a profound impact on the live broadcasting industry.

If you ask what the big anchors who are popular on the Internet bring to users, in most cases, people’s answer will be “value for money”, or to put it more bluntly: low price.

For a long time, "the lowest price on the entire network" has indeed been the greatest value that the live broadcast room brings to consumers.

Low prices used to be a win-win situation for anchors, merchants and platforms. Li Jiaqi admitted early on that the reason he could get the "lowest price on the entire network" was because merchants wanted to quickly increase sales and gain platform promotion, so they chose to use advertising fees to subsidize prices.

The platform is also happy to see the traffic brought by low prices. Anchors who increase sales and accumulate fans will get greater recommendation weight from the platform: "We can help you sell three months' worth of sales in just one day, or even 15 minutes. The transaction speed is fast and the amount is high, so that the product quickly has the corresponding 'historical weight'. Consumers only need to search for the category name, and this product will be ranked first. Only after having historical weight will there be system recommendations, new traffic will come in, and more customers will be obtained."

But the new situation now is that the market environment that big anchors face with their low-price strategies has changed. E-commerce platforms such as JD.com, Alibaba, Pinduoduo, and Douyin have all regarded "price power" as the first factor at the moment. In this case, price has become the core factor in platform traffic allocation, and traffic leaning towards low prices has become the default rule for each platform.

The "lowest price on the entire network" that the top anchors once boasted of is quietly fading out of the live broadcast rooms.

In 2020, when Luo Yonghao did his first live broadcast to sell goods, he publicly stated on Weibo: "Most of the prices here are the lowest prices on the entire network before June 18th promised to us by manufacturers" and "Brother Xinlong (Luo's self-proclaimed name) will always get the lowest price."

But the reality is that Luo Yonghao has repeatedly made mistakes in terms of price. The China Consumers Association even criticized him by name, saying, "The price of the same product in Luo Yonghao's live broadcast room is much higher than that on e-commerce platforms such as JD.com and Tmall, which does not meet the 'lowest price on the entire network' advertised in the live broadcast room. For example, the voice recorder sold by Luo Yonghao's team for 2,448 yuan in the live broadcast is only 2,398 yuan on other e-commerce platforms. A desk lamp is sold for 279 yuan in Luo Yonghao's live broadcast room, while it is sold for 269 yuan on other platforms."

Coincidentally, during the Double Eleven period in 2022, the topic of "Consumers say that products in Li Jiaqi's live broadcast room are more expensive than official ones" became a hot search. At that time, Mei ONE responded in an uncharacteristic way, "The company has never adopted or pursued the lowest price on the entire network. The core starting point is to serve the users of the live broadcast room well."

The situation is even more obvious for Dongfang Selection, which has never relied on low prices to gain popularity. In a recent live broadcast of the Shanxi trip by "Traveling with Hui", a "whole box of yellow-capped glass Fenjiu" sold by Dong Yuhui was priced at 284.05 yuan, but in JD's self-operated flagship store, the same product was priced at 261.21 yuan, a price difference of more than 20 yuan.

The actual situation during the 618 period this year further proved that when the lowest price on the entire network is no longer a rare thing, the "low-price machete" in the hands of the top anchors is no longer as effective as before.

1. No Longer Scarce

Everything is changing rapidly.

At a time when platforms are offering low prices and brands are focusing on store broadcasts, which has become the norm, the top anchors are facing severe impact.

For example, not long ago, a Roborock P10S PRO sweeping robot was launched in Li Jiaqi's live broadcast room. Consumers paid about 4,200 yuan for the product. However, after purchasing it, many consumers found that the price of the same product in the "Rock Flagship Store" on JD.com after purchasing it was about 3,400 yuan after purchasing it with coupons.

Li Jiaqi's explanation for this was that "the price was abnormally low due to system reasons and the small quantity of goods", which was equivalent to "flash sale". He believed that comparing the prices of the two was "not so fair" and stressed that "price comparison should still be compared with the Tmall store."

But this explanation is obviously difficult to convince consumers, and similar things are not uncommon: the price of TCL 98T8H in the live broadcast room during the 618 period was 11,399 yuan, while during the same period of JD.com's event, this product was reduced to 10,999 yuan; the price of the Beurer N5mini shoulder and neck massager in the live broadcast room was 389 yuan, and the price on JD.com was 339 yuan.

Image source: Xiaohongshu

Image source: Xiaohongshu

Similar things have happened to other big anchors. The AMIRO Miguang brand beauty instrument that Douyin anchor Jia Nailiang once promoted was estimated to cost 4,599 yuan in the live broadcast room, but the daily price in offline Sam's Club is only 2,999 yuan. Due to the huge price difference, consumers complained and Jia Nailiang himself was suspected of "cutting leeks". The Jinfang softener and other products sold in Xiao Yangge's live broadcast room are also more expensive than the same products on other e-commerce platforms.

The "lowest price on the entire network" that big anchors once loved to emphasize has become increasingly difficult to achieve. This is the actual situation in the live streaming e-commerce field.

When low prices are no longer available, can big anchors still "narrow traffic to make the brand"? The answer is difficult. Low prices and the various advantages that come with them are crucial to top anchors. The massive number of consumers attracted by low prices is closely related to their dominant position in the supply chain, but all of this is changing rapidly now.

2. Low-price flow

The right to define low price is not exclusive to the anchor.

All major e-commerce platforms have now put a lot of effort into low prices.

From the history of the development of the retail industry, low prices are the fate of all retail formats, and e-commerce platforms are born with low-price genes. It’s just that Taobao and JD.com rose in the era of physical stores by relying on low prices and took advantage of price advantages; Pinduoduo and live streaming e-commerce also rose in the era of traditional e-commerce by relying on low prices and once again took advantage.

Nowadays, e-commerce platforms have realized the core role of low prices, and price wars have intensified. Various promotional activities have almost never stopped. In this case, it is difficult for the low prices in live broadcast rooms to maintain their unique advantages.

The main source of low prices in live broadcast rooms is still from the concessions made by merchants and subsidies from platforms. In other words, the bargaining power of top anchors is ultimately based on the value recognition and business cooperation of partners. However, this recognition and cooperation comes from the scale of consumers brought about by low prices.

Therefore, for the live streaming e-commerce industry, the more critical issue is the monopoly of the top anchors on absolutely low prices, rather than product selection and content capabilities. Without this "only one" price control, consumers' attention and purchasing decisions will naturally be distracted by other e-commerce platforms.

The big platforms joined the low-price war, further distracting consumers' attention and purchasing decisions, and also began to have more conflicts with the big anchors.

On Double 11 last year, JD.com accused Li Jiaqi of signing a minimum price agreement with the brand. That is, once it was discovered that a brand's products were priced lower in other channels, the brand's products would be removed from the live broadcast room and the brand would be required to compensate the anchor.

During this year's 618 period, controversy also arose about the difference between the low prices of big anchors and platform prices, which also shows that the low-price foundation of the top anchors is being challenged by the platforms.

In essence, livestreamers are a special sales channel, which is essentially the same as e-commerce platforms. When e-commerce platforms do not regard livestreamers as competitors, there is room for both sides to coexist peacefully. But when big platforms and big brands start to fight for pricing power, the biggest bargaining chip in the livestreamers' hands is actually their popularity.

The embarrassing thing is that a lot of the popularity of the big anchors is brought by absolutely low prices.

The after-sales and guarantee issues of live streaming have not been completely resolved. Southern Metropolis Daily once reported that a consumer believed that she had bought fake SK-II's "magic water" in the anchor's live broadcast room, but she needed to produce a legally binding appraisal report when providing evidence and pay more than 10,000 yuan for it. "It is too difficult for ordinary consumers and the cost of defending rights is too high."

Data from the People's Daily "People's Complaints" platform also show that since 2023, among the issues with higher rates of complaints about "live streaming sales", difficulties in returns and refunds accounted for 50%, and after-sales service that did not meet promises accounted for 61.7%.

As platforms and merchant brands take the initiative to start arming themselves with low prices and adding more complete after-sales capabilities, the advantages of big anchors are becoming less and less. An obvious trend is that store broadcasts are now shining brightly.

In the future, it will be increasingly difficult for consumers to see super anchors who can shout out the "lowest price on the entire network". It will become the norm to watch platforms and brands broadcasting for limited-time low prices, and watch JD.com's buyers and sellers give discounts for ordinary low prices.

3. Return to business

A question that all e-commerce practitioners think about.

The top anchors still have a strong sense of crisis, which can be seen from the fact that they have begun to build their own brands.

Since we are essentially channels, if we cannot get the lowest price from brand merchants, we need to build our own brand to squeeze profits from the supply chain and thereby maintain our uniqueness in front of users.

Kuaishou's top anchor Simba is at the forefront of the industry. As early as 2022, the GMV of its Xinxuan Group had reached 50 billion, and some of its own brands have begun to enter offline channels such as convenience stores and supermarkets.

Although Simba has been banned by Kuaishou, this frequent ban and unban cycle seems to no longer affect users' shopping in Simba's live broadcast room. During this 618 period, Simba's self-owned brand Jianfeng Foodie launched a number of popular products, selling more than 1.11 million products in a single live broadcast, with sales exceeding 75 million yuan.

Xiao Yangge's sales data during the 618 shopping festival this year declined sharply, but his company Three Sheep Network has already expanded overseas in a low-key manner. Its own-brand products such as "Xiao Yang's Selection" face towels, tissues, garbage bags, wet wipes, nuts, bread, etc. have also begun to enter warehouses in Singapore, Malaysia and other places along with Tiktok e-commerce.

It will not be smooth sailing for top anchors to build their own brands. After all, the underlying logic of operating a live broadcast room and operating a brand is very different. Not to mention the most serious problems of food safety and counterfeit goods, just the issue of how to set prices to balance sales and gross profit is enough to give these anchors who started with low prices a headache when building their own brands.

Obtaining enough profit to survive is the underlying logic of all e-commerce practitioners. The anchors and the companies behind them must also abide by this rule. However, big anchors usually have a strong channel mentality that is difficult to adjust, that is, they have never lost money or even made a small profit.

In the past, big anchors and their companies earned money from commissions. The commission rate was as high as 40% for domestic products and 20% for imported products, and even 80% for some beauty categories. In addition to this, big anchors also had a slot fee as a guaranteed income that would not be refunded even if sales failed. It can be said that they had habitual high gross profits.

But when the industry identity of the big anchors changed from a sales channel that earned commissions to a manufacturer that earned processing fees - while also continuing the low-price strategy to attract consumer attention, the whole situation changed drastically.

On the one hand, as a brand owner, they must have product advantages and production capacity advantages to have the confidence to make low-priced hot-selling products and make money at the same time. On the other hand, if the profit from small profits but quick turnover is not as much as that from previous sales, the willingness and investment of the big anchors in operating their own brands will naturally decrease.

So the final result is that the prices of the products of the big anchors’ self-built brands are not high, but they are usually not low either. Only in this way can they leave enough profit margin for themselves.

After all, like many small and medium-sized businesses, after building their own brands, anchors are also afraid of the risk of losing money to gain publicity. This is actually a dilemma faced by the entire industry.

However, small and medium-sized businesses and their consumers are already familiar with this, while big anchors and their consumers are still in the process of getting familiar with this new environment.