The local life war is re-emerging, and video accounts are rushing into the market

Local life always feels like something is missing without Tencent, right?

On April 23, Video Account officially announced that merchants in the local life industry can apply to enter the Video Account store of the "local life" business type. Last year, merchants gradually received invitations to the internal test of the local life business of Video Account, and now, Video Account is finally fully launched.

Currently, the local life business of Video Account is still in the stage of soliciting investment, and the window rules are also in the stage of soliciting opinions. However, according to the information that has been released, the main categories involved in Video Account are catering and hotel travel. Among them, catering merchants must be chain stores, and single stores are not allowed to apply.

Although the specific appearance of Video Account Local Life is not available at present, the main framework of Video Account Local Life can be seen from the previous internal testing content. Local Life will appear as a component of Video Account. Merchants can promote through short videos and sell coupons in the live broadcast room. The coupons can be used for business scenarios such as in-store verification/self-pickup or door-to-door delivery in the same city.

Why has Video Account been so obsessed with local life in the past two years?

On the one hand, in order to increase corporate revenue, video accounts have extremely high monetization capabilities and are worth further exploration. Tencent's 2023 semi-annual report shows that benefiting from the growth in user usage time of video accounts, mini programs and Moments, it has brought in more than 3 billion yuan in advertising revenue.

On the other hand, the local life business is a blue ocean, and there is still a "cake" to be eaten. According to data from iiMedia Research, the scale of local life services will exceed 2.5 trillion yuan in 2025. Driven by these two reasons, video accounts have become "the hope of the whole village."

In fact, the battle for local life is getting more and more intense. Big brother Meituan, new player Douyin, and old iron Kuaishou have all been planning for many years. What is the confidence of Video Account to choose to join the game at this moment? How is it different from the old players?

First of all, the biggest confidence of Video Account is WeChat behind it. Tencent's financial report shows that the combined monthly active accounts of WeChat and WeChat are 1.343 billion. The huge user base has brought huge traffic to Video Account. WeChat Open Class data shows that the GMV of Video Account in 2023 will increase by 3 times compared with 2022, and the supply quantity and order quantity will increase by 3 times and more than 244% respectively.

Secondly, the monetization ability of video accounts is stronger. As Tencent pays more and more attention to video accounts, its growth potential is also being released. The average customer unit price of video account live streaming exceeds 200 yuan, and the customer unit price of autumn and winter clothing and beauty products during the promotion period exceeds 300 yuan. Shijie has reported that the customer unit price of Douyin e-commerce in 2022 is about 60 to 80 yuan, while the customer unit price of Taobao e-commerce is around 100 yuan.

Finally, the traffic sources of video accounts are completely different from those of short video apps such as Douyin and Kuaishou. Video accounts rely more on private domain recommendations rather than algorithm recommendations, and their traffic sources are forwarding and likes. Douyin and Kuaishou are completely opposite. In other words, once a merchant cannot retain users in a short period of time, the algorithm will not recommend it, and it will be difficult to continue to make transactions. At the same time, it also puts forward higher requirements on the merchant's video editing and marketing capabilities.

From the current perspective, the video account is friendly to newly settled merchants and influencers. As long as someone in their private domain sees it and is willing to like it, the traffic will continue to split.

However, Video Account is not without flaws.

First, the active users of video accounts are mainly middle-aged and elderly users. Although their spending power is guaranteed, compared with young people, they are not very receptive to new consumer brands, do not like to eat takeout, and are not particularly familiar with online shopping. This may affect the sales and write-off data of dining vouchers.

Second, the service capabilities of Video Account may not be as good as other platforms. Southern Weekend reported that at the beginning of 2023, the entire Douyin ecosystem had as many as 20,000 employees, but Video Account had only a few hundred people. This means that the same merchants cannot enjoy the same services on different platforms. Some merchants have said that compared with other platforms, the response efficiency and docking efficiency of Video Account are lower.

If it wants to break through the siege, Video Account must solve these two problems. Now, almost all platforms are betting on local life and firmly binding local life with content. In March this year, Meituan Short Video added a theater channel, which means that it wants to use this channel to increase the length of time users stay. Not to mention Douyin and Kuaishou, they started with content.

As a latecomer, Video Account faces considerable challenges, but its unique streaming method leads to higher user retention time and video quality, which also means that it has certain advantages in content, which may become a "sharp knife" for it to break through. The war in local life is far from over.