Changes in the live streaming ecosystem: New game between super anchors, platforms and merchants

The top structure of live streaming e-commerce is changing, and anchors, merchants, and platforms are jointly responding to growth anxiety and ecological changes.

During this year’s 618 e-commerce promotion, controversies surrounding super anchors other than selling goods frequently became a hot topic.

"I am very resistant to selling things and have never really enjoyed this job... I lack joy and satisfaction." Dong Yuhui's casual remarks when evaluating his work caused an uproar in the public opinion field, causing the share price of Dongfang Zhenxuan to continue to fall after the opening on June 11. The intraday decline once exceeded 11%, setting a new low in the share price in two years.

Super anchors create huge wealth with their ability to sell goods and influence, but anchors are also human beings. Sometimes what they say cannot be taken back. Moreover, Dong’s remarks and choices may shake the business foundation of Oriental Selection.

It is worth mentioning that on June 15, Yuhui Xingxing started a special live broadcast in Pingyao, Shanxi. Dong Yuhui talked with director Jia Zhangke about Shanxi culture. There was laughter and joy during the conversation, and no mention of selling goods was made.

Similar to Dong, before 618, many super anchors chose to reduce the frequency of appearances and gradually fade behind the scenes.

For example, the Kuaishou anchor Simba (Xin Youzhi) said in March this year that he would suspend live streaming and take a two-year break; for another example, the top anchors Xiao Yangge and Da Yangge did not warm up for 618 on their personal Douyin accounts, but promoted it many times in their apprentices' live broadcast rooms and company accounts.

Whether intentionally fading out or highlighting their apprentices, the choices made by super anchors are similar to the changes in platforms and merchants.

From Luo Yonghao (Make Friends), Xiao Yangge (Three Sheep) to Dong Yuhui (Eastern Selection), the "ranking" of super anchors has been updated under the "intentional" promotion of platform traffic; merchants have fallen into the trap of high slot fees and high returns and exchanges of super anchors, and capable merchants have shifted their focus to store broadcasts and self-broadcasts, and a number of new domestic brands with good traffic have emerged from them.

Perhaps, the super-head ecosystem of the live streaming e-commerce industry is undergoing a leopard-like change.

1. Super Head Dilemma

Simba, who wants to fade out of live streaming, is going through a turbulent time.

In a live broadcast on April 20, Simba once again "angrily criticized" Kuaishou as a garbage platform. After his personal account was banned for his radical remarks, he continued to "fire" at the accounts of his apprentices "Dandan" and "Jia Jia" and others.

The reason why Simba once again challenged Kuaishou was very direct. He directly stated in the live broadcast that "Kuaishou condones emotional anchors and affects the platform ecology." The anchor he criticized, "Taiyuan Lao Ge", did not enter the top 20 of Kuaishou's Double Eleven GMV list in 2022, but in 2023, he has risen to fifth place in the same list.

Over the years, Simba has publicly criticized Kuaishou many times, and the "818 Family" he represents has also attracted countless fans because of its "gangster-like" way of selling goods. But behind this public outcry, the Simba Family has a deep growth anxiety.

Before the "818 Family", Kuaishou had successively rectified a large number of family-style anchors, such as Erlu's "Lu Family" and Fangzhang's "Zhangmen", and the Simba family was already the "only seedling"; and this time the rise of emotional anchors such as Taiyuan Lao Ge on Kuaishou is also behind Kuaishou's continued attempts to change the pattern of Simba's "dominant family, daring to command the platform".

In other words, Kuaishou will not let Simba live "too comfortably".

Simba's controversial remarks have caused a lot of controversy. In addition, some media and consumers have discovered that Oriental Selection's live streaming style has quietly changed. The regular phrase "321 link up" has begun to appear in its "Oriental Selection Beautiful Life" live broadcast room, which is very different from Oriental Selection's early style.

In June 2022, when Dong Yuhui "came out of nowhere", his short video of selling steak in English and using his square face to compare a square pot went widely circulated. This differentiated and entertaining style of selling products is actually the cornerstone of Oriental Selection's rise.

When the style of cultural talk shows moves towards a more radical and direct "321 link" model, on the one hand, it is because Oriental Selection still has management problems. Yu Minhong himself publicly stated: "Oriental Selection is a mess"; but on the other hand, for deeper reasons, Oriental Selection also has growth anxiety.

Data shows that from January to May this year, the cumulative number of visitors to the Oriental Selection live broadcast room has dropped from 380 million to 156 million. In terms of sales, Oriental Selection's sales in January were 557 million yuan, but dropped sharply to 228 million yuan in February; compared with Dong Yuhui's personal studio "Walking with Hui", sales in January were 920 million yuan in 22 days of live broadcast, and sales exceeded 400 million yuan in February after only 16 days of live broadcast.

The super-head effect has obvious divisions.

Although Dong Yuhui may not want to sell goods, his live broadcasts are still very popular, and the Douyin platform also hopes that Dong Yuhui can help the platform's GMV (gross merchandise volume) grow. In March this year, Dong revealed in a live broadcast that Douyin had an afternoon meeting with his team, and especially hoped that the company could develop faster.

The real contradiction lies in that super anchors may really want to hide behind the scenes. They hope to train their apprentices and assistants to become top anchors as soon as possible. This is not only to diversify risks and develop in a diversified manner, but also because live streaming with goods that is tied to individuals or even one person will ultimately have great development limitations.

However, the platform's desire for growth and the pressure from external competition will inevitably be transmitted to the internal ecology of the anchor. The Internet is inherently forgetful, and traffic and attention are fleeting. The live streaming industry is becoming more and more competitive. When the growth curve is no longer sexy, super anchors as "representative figures" must personally take the stage and face up to growth anxiety.

Even someone as strong as Dong Yuhui won’t always be at the top. In April this year, his ranking on Douyin’s monthly sales ranking dropped from first to ninth.

The collision between growth anxiety and diversification is always there. The personal temperament, ability and talent of super anchors lay the foundation for their fan base, which also creates possibilities for subsequent growth. However, the more personalized the anchor's characteristics are, the more difficult it is to replicate. Most live broadcast companies are trying to modularize the anchor's capabilities and put products and services first. This is why there is a dispute between Dongfang Zhenxuan's "Internet celebrity model" and "product route".

In the future, most super anchors will still strike a balance between "diversified development" and "fighting growth anxiety". They will devote their energy to supply chain and brand building, and they will also need to stand in front of the stage again when traffic declines.

As the landscape of super anchors changes, the ecosystem of merchants and platforms is also changing.

2. Pressure on the Merchant Side

During last year's Double Eleven, the Economic Observer reported that a wine marketing brand "Liang Daxia Wine" chose to withdraw completely from the live broadcast channel. The reason was simple, because the live broadcast room often fell below Liang Daxia's bottom price and disrupted its pricing system.

"The sales guide price I give for a bottle of wine is 99 yuan, but the platform has to subsidize it, and the anchor uses commission to subsidize it, so the price is reduced to 69 yuan, or even lower." Fu Zhigang, founder of Liang Daxia Wine Industry, said frankly that as a brand, there is no good way to maintain the price system. "Without sufficient profit margins, who would be willing to innovate?"

In the industry, when top anchors cooperate with brands, they often sign a base price contract to ensure that the cooperation price given by the brand to the anchor must be the most competitive compared with other platforms and live broadcast rooms. Otherwise, they will have to pay a high penalty. A "Mei ONE Live Broadcast Promotion Service Contract" exposed by Sina Technology last year showed that if the brand breaches the contract, it will need to refund the consumer five times the price difference and pay Mei ONE a penalty of 2 million yuan.

Super anchors have an absolute advantage in traffic exposure, and the platform is the creator of the overall e-commerce ecosystem. It can even make profits from traffic conversion transactions, such as the traffic investment costs paid by merchants; while merchants who provide products and undertake part of the services become the party with the lowest voice and profit margin.

Some analysts pointed out that the voice of super anchors, which has been formed by the traffic effect, has actually replaced traditional brand middlemen and agents and become the new "decisive people", but the entire industrial chain has not become more vital because of the existence of super anchors.

Brands eventually become the ones who follow the anchors to "squeeze low prices", and the industry lacks real value innovation.

The contradiction facing merchants in the live streaming ecosystem is that they know that cooperating with super anchors is a "pitfall" that will result in huge losses. However, for new brands and factory-type merchants that need to clear stock quickly, they are in urgent need of channels that can ship in large quantities and help enhance their brand value. Super anchors who have traffic advantages are the best shipping channels.

Following the underlying logic of "traffic is king", some businesses are finding breakthroughs from contradictions and actively carrying out self-broadcasting.

On the Douyin platform, the sales of self-broadcasting of many brands such as Hansu, Proya, and Marubi have accounted for more than half. Taking Hansu as an example, its self-broadcasting on Douyin accounted for 72.12% in August 2023 and 56% in September.

The e-commerce operator of a Shanghai designer women's clothing brand told Dige.com that currently the store mainly relies on self-broadcasting, and Dabo (live broadcast by experts) is similar to the brand's distributor, but has no pricing power and cannot control the supply of goods, so the brand will not provide many cost-effective products to the experts, and these products are kept for their own sale.

More brands are still exploring new brand positioning in the process of self-broadcasting, such as the "Coco Tree Coconut Juice" live broadcast room, which became popular on the Internet for its unique aesthetic, and the live broadcast room of the domestic brand "Fenghua", which took on the huge traffic from Li Jiaqi's "Hua Xizi incident" and launched a 79-yuan hair care set.

Of course, there is no need to be too optimistic about store self-broadcasting. Behind the very few successful cases mentioned above, most of them are beauty and clothing brands with a good brand foundation and are more in line with the main consumer groups of live streaming, or the brand's e-commerce operation team is professional enough, and there is also the influence of occasional hot spot traffic such as "wild consumption of domestic products".

The path to success is not easy to replicate, and more traditional businesses are still struggling with complex operating rules and traffic costs, such as in the fresh agricultural products sector where products are highly non-standardized and logistics fulfillment requirements are almost stringent.

Recently, the author of Dige.com visited Henan Wanbang International Agricultural Products Wholesale Market, one of the top three primary wholesale markets for agricultural products in the country. Some of the leading merchants in the fruit category have product procurement all over the world and have become important agricultural product supply chain companies. However, they are still slow to develop in the e-commerce field, and even invested tens of millions of yuan but ended up with nothing.

For traditional first-tier wholesalers, they are absolutely professional in terms of goods and hope to establish brand effects through new online channels. However, due to factors such as insufficient e-commerce experience and unreasonable platform traffic structure, they often have difficulty entering the field of live streaming.

Many Wanbang merchants interviewed by the author are more or less calling for the emergence of a benign and healthy ecology in today's market that makes consumers happy, meets the demands of the platform, and is conducive to the long-term development of market participants.

Things are changing.

3. The platform aims at ecological construction

With the rise of super anchors, they have maintained a complex "symbiotic and competitive" relationship with the platforms.

For the platform, super anchors have increased the GMV and traffic value of the platform, but because super anchors have amazing ability to grab traffic and their scale is large enough to influence the platform, the latter often maintains a subtle "sense of ambiguity" with the anchors in order to balance the traffic ecology and promote the diversification of content and models.

As mentioned earlier, Kuaishou does not want Simba to live "too comfortably", nor does it want to copy another Simba who dares to challenge the platform. The optimal solution to balance the super-head traffic is to support a more diverse anchor ecology and create a balanced traffic structure.

As early as 2021, Zhang Yipeng, head of Kuaishou's e-commerce marketing center, said that the platform is willing to give some very precious traffic to the middle and lower levels, hoping that the Kuaishou platform can become an e-commerce community with a rich ecology. Moreover, there is no cap on Kuaishou's investment in supporting small and medium-sized anchors.

Optimizing the traffic structure has also achieved certain results. Data shows that in the first quarter of this year, the GMV scale of mid-level influencers on Kuaishou increased by 40% year-on-year.

Taobao Live is also making similar changes. Starting in 2023, Taobao Live has increased its investment in live content, introducing more entertainment anchors and related content. In February this year, Taobao Live also launched a full hosting service, providing celebrities, KOLs, and MCN organizations who are interested in starting a live broadcast on Taobao with "nanny-style" operation services from account cold start, official product support to marketing planning, further enhancing the diversity of content.

Using diversified support policies to enhance the competitiveness of mid-level anchors is one of the solutions for the platform to ensure the healthy growth of the traffic ecology. This also allows latecomers to feel that there are still opportunities on the platform, so that all market participants can continuously join the new business format.

Of course, optimizing the platform ecology requires more than just balancing the traffic structure.

In March this year, Douyin launched an independent APP called "Douyin Mall Edition", through which users can complete a complete e-commerce platform shopping experience including searching for products, comparing prices, placing orders, checking logistics, and after-sales services.

In fact, since the proposal of "global interest e-commerce" in 2022, Douyin has been trying to establish a two-legged model of "live streaming + shelf scenes". After all, when consumers place orders in the live broadcast room due to instant consumption impulses, merchants also need shelf scenes to accumulate fans and loyal users. The launch of the mall version of the APP has taken this strategy a step further.

Data shows that from May 1, 2022 to April 30, 2023, Douyin's shelf scene GMV increased by 140% year-on-year, surpassing the 80% year-on-year growth rate of the overall e-commerce GMV.

Douyin’s emphasis on shelf scenes is also a way for it, as a new e-commerce company, to “make up for the lost time” of traditional models. This is the only way for Douyin to complete its e-commerce ecosystem.

At present, live streaming has become an important part of the e-commerce industry that cannot be ignored. In 2023, Kuaishou's e-commerce GMV exceeded 1 trillion yuan for the first time, reaching 1.18 trillion yuan, and Douyin's e-commerce GMV target for 2024 is set at 4 trillion yuan. They have already stepped out of the "grassroots" of the past. Now the platform not only needs super anchors to maintain growth, but also needs a good ecological development, introducing new players with new possibilities, and making the platform's product structure, traffic distribution and diversified content more standardized and perfect.

Dao Fang, head of Alibaba's live broadcast business unit, also mentioned that the platform welcomes super-head anchors, but the vitality of the ecosystem is equally important. "If a super-head anchor accounts for too large a proportion, it will cause business risks. This is what we need to consider, so there must be a healthy ecosystem with ups and downs."

The current situation is that the platform hopes to optimize the business ecology and support the growth of more professional merchants with good products, rather than blindly "traffic is king"; merchants need traffic and exposure, but they also need a reasonable profit distribution mechanism in order to provide consumers with good products with excellent quality and reasonable prices.

Compared to a few towering trees (super anchors), the platform needs a forest (ecological model).

But it is undeniable that the towering trees have created a huge demonstration effect for the platform to a certain extent, and the platform will still need to rely on these super anchors for some time to come.

Going further, compared to the traffic effect of super anchors, the platform hopes to build an ecosystem together with top anchors, promote the in-depth development of "old players", bring more good products and services to the platform, and truly create actual consumer value.

In April 2022, Oriental Selection officially launched its first self-operated product. As of November 30, 2023, there will be more than 264 self-operated products, and it will also start live broadcasts of traceability of its own factories. This model of deepening the supply chain and building a fresh food channel brand is obviously highly consistent with the goal of platform ecological construction.

Now, the platform also welcomes more ecological merchants to join.

On July 1 this year, the "Regulations on the Implementation of the Consumer Protection Law of the People's Republic of China" will be officially implemented. It will elevate the relevant content in the normative document "Measures for the Management of Online Live Streaming Marketing (Trial)" to legal obligations, clarify that "everyone has the responsibility" for the platform, live broadcast room and anchor, and clarify that operators of live broadcast marketing platforms should establish and improve consumer rights protection systems and consumer dispute resolution mechanisms.

From grassroots to standardized, from disorder to order, in the future, only merchants who pay attention to the ecology and make solid products and services can truly "play well" in live streaming sales.

Author: Han Zhipeng

Source public account: IT Friends