Tencent increases investment in local life, with video accounts taking the lead

Entering the local life, WeChat Video Account creates an ecological amusement park for mature businesses. It is worth looking forward to what kind of waves the video account will make with the WeChat ecosystem. Let's take a look at the analysis in this article.

The commercialization route of Video Account is becoming clearer.

On May 28, WeChat released an internal announcement stating that the WeChat Video Account live e-commerce team will be incorporated into the WeChat Open Platform (mini programs, official accounts, etc.) team, and the original WeChat Video Account live e-commerce team will be transferred to the person in charge of the WeChat Open Platform.

Further integrating Video Account into WeChat Open Platform business from the organizational structure side indicates that WeChat is gradually releasing the ecological synergy value of Video Account, Mini Programs and Official Accounts.

In addition to advertising and live e-commerce, the current commercialization measures of Video Accounts also include local life. After clarifying the importance of ecology to Video Accounts, it can be found that Video Accounts are not going to follow the example of Douyin and Meituan, but to take an "ecological path". "Ecological synergy" will also become the best footnote for the commercialization of Video Accounts.

On the one hand, the value of ecological synergy is the strongest moat that Video Account has built with the support of WeChat. Amplifying the ecological advantage will be the best weapon for Video Account to break through. On the other hand, local life has been in fierce competition for many years, and competitors have already used their own unique strategies. Blindly following the "head-to-head" competition will not be effective for Video Account in the short term.

When Video Account bets on the ecosystem, another main line also becomes apparent, that is, the local life business of Video Account provides a "playground" for mature merchants that have accumulated an early user base and mature private domain operation capabilities.

This can also be seen from the current entry rules of the local life of the video account. After nearly a year of exploration, as of now, the video account has only opened two first-level categories, catering and hotel travel. Among them, the catering category must be a chain store. The hotel, scenic spot, passenger transport and other hotel travel categories have set conditions such as "the hotel's brand must belong to the high or medium brand power level of the platform" and "only open to 4A and above scenic spots".

By magnifying its ecological advantages with its left hand and cooperating with mature merchants with its right hand, Video Account has already demonstrated its local life business.

1. Maximize strengths and smoothly transition from public domain to private domain

As a latecomer, “how to unleash ecological advantages” is the primary challenge facing Video Account.

The thinking of video accounts on this issue can be seen from the ordering pages of chain restaurant brands. Take Luckin Coffee as an example. Its video account main page has basic content sections such as video information flow and live broadcast playback, as well as an entrance to jump to order. In addition, you can also jump directly to the official account, mini program and add corporate WeChat.

Image source: Luckin Coffee Video Account

It can be seen that when users place an order, they not only bring incremental business to the brand, but when users enter the corporate WeChat page or official account page through the video account homepage, they also enter the brand's membership system, which simplifies the process for the brand to accumulate member data assets and "smoothly" realizes the process from incremental business to user retention.

In the end, the brand formed a seamless collaboration between official accounts, mini-programs and video accounts, and together with WeChat built an efficient, interactive and deeply integrated local life service ecosystem.

At the same time, backed by mature infrastructure such as WeChat Pay, Video Account will streamline the "browsing + purchasing" path, and realize the complete process of "product planting → order purchase → payment → verification and fulfillment → merchant diversion → repurchase" within WeChat. All actions do not require jumping to other APPs, forming a complete closed loop from content display to product transactions, providing consumers with a "seamless" experience. The improvement of the operating experience is conducive to the increase in user usage frequency, which in turn drives the growth of transactions of merchants.

At this point, Video Account has opened up a closed loop for a smooth transition from the public domain to the private domain.

Brands have found a new solution to divert traffic from the public content field to the private membership system, which can both "cast a wide net" and "dig deep and work hard". At the same time, brands have also found more voice in local life platforms, no longer relying solely on the platform's traffic inclination, and doing a good job of repeat purchases from old customers can also drive business growth.

It is worth noting that the above actions only stay on the video account page, which is not enough to fully outline the ecological value of WeChat. The core is that the entrance to the video account does not only exist separately on the "Discover" page.

According to "Retail Business Finance", WeChat recently launched a new function. When users browse the latest updates in Moments, an entrance to "enter Video Account" will appear. Previously, when users clicked on the video account content in Moments, they could directly enter the video account information flow after the playback ended. Not only that, WeChat has also added a video account content information flow interface to the official account homepage.

Image source: Screenshot from Moments

WeChat is gradually increasing the exposure frequency of video accounts and continuously integrating them into the Moments system. The latter is currently the most valuable content and social field, and is also WeChat's longest advantage in terms of social and content.

It can be seen that WeChat is extending its own strengths, connecting all open platforms, and directing traffic to each other, while releasing ecological value in the commercialization of video accounts.

2. The “Ecological Card” of Misaligned Competition

Backed by WeChat, Video Account did not choose to follow a path that has been proven successful by its predecessors, but instead played the "ecological card" to bypass the core battlefield. What are the considerations behind this?

The answer to the question needs to be found both internally and externally. Internally, the video account is still very cautious in its trial run. Perhaps it does not want to go too far and damage its own ecological advantages too much, and trade speed for scale.

At this stage, Video Account has not yet opened the POI function, nor has it expanded the size of the local life team too much, and has chosen to introduce third-party service providers to fill the gap. But this also means that Video Account cannot currently provide too much precise traffic inclination for local life, and will not temporarily change the traffic distribution mechanism of the entire ecosystem. The preference for chain brand stores is precisely because chain brands do not need too much precise traffic push, which allows the original traffic ecological environment to be preserved.

From an external perspective, Meituan and Douyin have already occupied two forms in the public domain traffic field. Meituan is a tool platform that can be used and left, while Douyin is a content platform for public domain traffic.

From a positioning perspective, Meituan meets users' diversified consumption needs through efficient service integration and data-driven personalized recommendations, while providing merchants with traffic exposure and transaction conversion, building a bridge connecting users and merchants. With the moat of its strong supply chain management and logistics and distribution capabilities, it provides users with a full-range consumption experience from online to offline.

Meituan receives traffic from users' active searches. Once users develop a tool mentality, Meituan will continue to move towards content, attracting users to spend more time using the app.

Douyin uses interest-based content to drive users’ consumption decisions, opening up a new marketing path for merchants. Through content marketing, merchants can satisfy users’ entertainment emotional value while stimulating consumption demand, turning “spectators into customers”. Douyin takes on traffic that users passively accept, using content to stimulate consumption.

Compared with the strengths of Meituan and Douyin, and the user mindset that has been cultivated, Video Account did not have an obvious competitive advantage when it first entered the market, but it naturally had user stickiness brought by its social attributes and the user resources that merchants have accumulated by building accounts.

It can neither be a "tool" nor a "toy". It has clearly defined its competitors' positioning and its own plans. Video Account does not intend to copy or imitate the paths of Douyin and Meituan in exploring local life. Instead, it wants to follow its own product thinking, lightweight operations, balancing the public and private domains, decentralizing traffic, and ultimately transforming Video Account from an ordinary connection tool into an ecological infrastructure.

3. Video Accounts and the Future of Local Life

It is not difficult to see that Video Account's attempts in local life are cautious and steady. It is precisely because there is still a lot of room for exploration in the field of local life services that Video Account has taken small steps and slowed down.

The existing "in-store" strategy is not the optimal solution for video accounts. At present, video accounts choose to connect to third-party service providers, which is more cost-effective but also faces the risk of some bad service providers taking advantage of loopholes.

At the beginning of this year, Tencent notified five illegal service providers and expelled them, and will never cooperate with them again. Another way to directly connect with merchants also requires Video Account to provide a lot of resources and service infrastructure, such as negotiating with merchants and helping them settle in.

"In-store delivery" still requires long-term accumulation, but the local life service business with more room for imagination is "home delivery". Without sufficient transportation capacity and terminal delivery capabilities, it is difficult to launch the "home delivery" business of local life services.

Meituan has a complete delivery system as a moat, Alibaba can use Ele.me for instant delivery, and if WeChat wants to get involved in "home delivery", it will undoubtedly need to build a logistics delivery system with high timeliness and low cost. At present, Video Account can cooperate with mature third-party delivery platforms, such as using the instant delivery interface provided by the WeChat platform to cooperate with SF Express, Dada, and Flash Express.

Image source: WeChat official document

For longer-term considerations, WeChat may still need to build its own logistics team to ensure service quality and response speed. Undoubtedly, building a widely covered distribution network is not an overnight job. Although Video Account dares to enter the local life market, whether it can be successfully "delivered to home" depends on how determined WeChat is.

Furthermore, the change in user mentality is also a gap that stands in the way of WeChat’s home delivery business.

Users already have an existing impression of Video Account as a content platform, as well as a solidified positioning of WeChat as “functional social interaction among acquaintances.” To transform from a social tool and content platform to an e-commerce platform that provides instant delivery services, Video Account needs to help overcome users’ inherent perceptions of the platform’s functional positioning and reshape user habits and expectations.

To break this mental stereotype, Video Account needs to reshape its brand positioning and convey a clear message to users that Video Account can not only provide entertainment and social content, but also provide convenient local life services, including home delivery services.

At the same time, Video Account needs to optimize user experience and find differentiated advantages, overcome user usage inertia and the market's acceptance cycle for new services, gradually expand product awareness, and shape itself into a multi-functional life service platform.

There is no doubt that there is huge room for business imagination for WeChat Video Account's local life. WeChat Video Account has traffic and resources, and local life has market and competition. It is worth looking forward to what kind of waves this catfish WeChat Video Account will stir up with its "ecosystem". It is also worthy of vigilance from old local life players such as Meituan and Douyin.