Live e-commerce enters deep waters, and "Little Yang Brothers" flee the live studio

This article deeply analyzes the current situation and future trends of the live streaming e-commerce industry, explores the reasons why top anchors have reduced the frequency of live streaming sales and its impact on the industry, and guides your reading. I hope it will help you understand the deeper dynamics of live streaming e-commerce.

“Xinxuan is not as profitable as everyone thinks!”

A week after the 38th Festival promotion, Kuaishou's top anchor Simba suddenly announced that he would withdraw from the live broadcast room. Prior to this, he completed the first live broadcast of the Year of the Dragon. According to third-party data, nearly 200 products were put on the shelves during this live broadcast, with cumulative sales exceeding 540 million yuan.

According to Simba's public expenditure, Xinxuan has to pay more than 1.1 billion yuan in wages to 4,860 employees, more than 200 million yuan in rent, utilities, and more than 2 billion yuan in profits for the platform each year. With these expenses stacked up, Simba felt that "basically it was all for nothing" after a year . After thinking about it, he decided to spend two years studying artificial intelligence.

Coincidentally, the Douyin anchor @疯狂小杨哥, who has over 100 million fans, also mentioned that he would continue to reduce live streaming with goods, and do more entertainment live streaming and other work, such as electronic music festivals, music festivals, film and television projects, and even offline stores selected by Xiao Yang. Before that, Xiao Yangge was also on Weibo's hot search list for being dropped from the "Douyin Live Streaming Top 20 Monthly Ranking of Live Streaming", and his explanation was that "the number of live streaming with goods has decreased."

For super anchors, "stop broadcasting" or "broadcasting less" is not uncommon. Simba and Li Jiaqi have disappeared for several months. Luo Yonghao retired as early as June 2022 and turned to starting a business, basically only broadcasting live once a week.

Two years ago, Kas also analyzed the phenomenon of super anchors reducing the frequency of live broadcasts and the "mass withdrawal" of first-line anchors, and tried to explain the reasons. The highlight of the recent "retirement" news is that the anchor himself said that he would "reduce live broadcasts", which is equivalent to an "official announcement".

Why are the big anchors who have achieved life and career advancement through live streaming "retiring" one after another? Is it out of helplessness or strategic shift? As the live streaming e-commerce industry enters the deep waters, how can the leading companies seize the opportunities of the next era?

1. Escaping from the deep water, "Little Yang Brothers" explore new paths

Simba's "retirement" had been planned for a long time.

After the "sugar water bird's nest" incident at the end of 2020, Simba was banned from the platform for a short period of time and did not resume broadcasting until March of the following year. It was also from this year that Xinxuan accelerated its "de-Simbaization".

In 2023, Simba will almost only broadcast during important promotional events such as 618, Double 11, and New Year’s Festival.

In a live broadcast in March of this year, when talking about future plans, Simba said that there is nothing in the live streaming e-commerce track that can excite him anymore, so he wants to suspend live streaming and spend two years studying artificial intelligence. If he still wants to do live streaming e-commerce in the future, he will choose a new track and start over.

Xinxuan Group is a leading company in the live streaming e-commerce industry. According to public data, its total GMV will exceed 50 billion in 2023, and its total GMV in the five years from 2018 to 2023 will exceed 200 billion.

Simba was able to "leave" the live broadcast room with peace of mind because he supported reliable new anchors to take over the traffic and take on important responsibilities.

Simba started training apprentices very early, and frequently broadcast live with his apprentices (Zhao Mengche, Dandan, Shi Da Piaoliang, etc.) to attract traffic for them. Among them, the female disciple @蛋蛋 has accumulated 95 million fans, making her the second most popular IP on the Kuaishou platform, second only to Simba.

How did she manage to sell over 6 billion worth of goods in 3 months?

Screenshots of Zhao Mengche, Dandan, and Shi Da Piaoliang's Kuaishou homepages

In the same month, Xiao Yangge, who was regarded by some media as the "second Simba", also announced in a live broadcast that he would stop broadcasting for 2-3 weeks in order to "concentrate on filming movies and TV shows."

Xiao Yangge also revealed that this year, the company will reduce the number of live broadcasts to sell goods, and will focus more on its own brands and company affairs. At the same time, it will continue to organize electronic music festivals and music festivals. Previously, the Three Sheep Group announced that it would hold the "DXYG-VAC" electronic music festival in Hefei in May, and 17,000 tickets were sold out in 30 seconds.

According to statistics, Xiao Yangge's live broadcast frequency this year is about once a week. In February this year, he only broadcast live on February 2, February 3, and February 29. There was only one live broadcast with goods, and the rest were entertainment live broadcasts. During the 38th Festival promotion, Xiao Yangge conducted a beauty and clothing live broadcast on March 2, with nearly 40 million viewers and an estimated GMV of between 50 million and 75 million.

At the 3.15 Gala broadcast by CCTV this year, the preserved pork with preserved vegetables, which was once promoted by Crazy Brother Yang and his anchors, was exposed. The Three Sheep Group stated that it would make advance compensation to consumers, but the fermentation of related public opinion storms has a significant impact on its reputation.

Recently, a consumer announced that he would sue Three Sheep Network and the manufacturer of Meicaikourou, demanding a refund of ten times the amount, as well as compensation of 1 yuan for mental damage. The case has now been accepted by the relevant departments.

As a top anchor, Brother Yang enjoys the traffic dividend and the support of fans, but also bears more pressure from public opinion. He must always seek change to offset his own sense of crisis.

Brother Yang once said that he is not only doing live broadcasts for himself, but is also being pushed forward by the team behind him. The Three Sheep Group currently has hundreds of full-time employees and more than 10,000 part-time editors online.

In a live broadcast in 2023, Xiao Yangge's remarks also attracted the attention of netizens - "Don't make a fortune. What's the point of making such a big fortune? I tell you that making a small fortune is the happiest. Don't make a big fortune! If you make a big fortune, you have to think about how to make this wealth last. Making a small fortune is enough for yourself. Be content with what you have."

2. Matrix, going overseas, variety shows: where are the leading companies going?

If the first half of live streaming e-commerce is about running a successful business model and building the personal IP of big anchors, then the second half is about retaining consumers for a long time through advantages in supply chain and services.
Since 2022, leading companies have gradually moved away from the business model of relying solely on one anchor to bring goods, and no longer rely solely on the traffic of a single platform, but have "walked on multiple legs". At present, the business layout of leading companies in the industry outside the main live broadcast room, Kas believes that there are roughly four directions:
The first is to no longer rely on personal or celebrity IP to increase volume, but to promote the store broadcast model, cultivate multi-platform and matrix live broadcast rooms, and even establish live broadcast rooms for institutional accounts to build the group's brand value.

For example, since 2022, Meiwan has successively opened new live broadcast rooms on Taobao, @全部女孩, @全部女孩的衣墙, supported new anchors, and opened social media accounts such as Xiaohongshu for the anchors.

Except for Meiwan and Xinxuan, most leading companies choose to carry out regular live broadcasts on multiple platforms.

Starting from Kuaishou in 2019, Yaowang has successively incubated first-line anchors such as Yu Dagongzi and Xuebao, and signed stars such as Wang Zulan, Jia Nailiang, and Zhang Baizhi to deploy Douyin live broadcast, and established institutional accounts on multiple platforms in the name of "Yaowang XX Station" in the second half of 2022. It has now achieved a complete layout of new traffic platforms such as Douyin, Kuaishou, Taobao, Bilibili, and Xiaohongshu.

Jiaogepengyou has expanded horizontally from Douyin to platforms such as Taobao and JD.com. In April 2020, Luo Yonghao started broadcasting on Douyin, and Jiaogepengyou gradually laid out a multi-category matrix account live broadcast room. On the eve of Double Eleven in 2022, Jiaogepengyou entered Taobao, and in May 2023, it entered JD.com, and in October, it opened a vertical live broadcast room for wine and beverages on Taobao. By the end of 2023, Jiaogepengyou had built 30 matrix live broadcast rooms. Its financial report shows that in 2023, the company relied on the "Friends Cloud" platform to realize the dataization and intelligence of live e-commerce, and its net profit increased by 6 times.

Similar to Making Friends, Oriental Selection has already created live broadcast rooms for all product categories.

In June 2022, when Dongfang Zhenxuan became popular on Douyin, it had already established a matrix account, including books, personal care and beauty, cultural and creative, maternal and child care, etc. In January 2024, a new account independent of Dongfang Zhenxuan was launched, and it did not directly use Dong Yuhui's personal name, but was called @与辉同行, and adopted the model of old leading new, giving new anchors many opportunities to perform.

@与辉同行TikTok live broadcast screenshot

The second is to create a self-operated e-commerce platform with a positioning similar to Sam’s Club.

Only four months after its establishment, Oriental Selection launched its own products, and in less than half a year, it launched its own APP. In July 2023, Oriental Selection's own APP also launched the live broadcast business.

Dongfang Zhenxuan wants to create an online version of "Sam's Club". Sun Dongxu, the former CEO of Dongfang Zhenxuan, once explained in a live broadcast that Dongfang Zhenxuan APP has three positionings: first, it is a platform for selecting good products; second, it continuously provides differentiated services to users through an independent APP. In the future, Dongfang Zhenxuan will establish a membership service system to provide premium products to paying members; third, it is a cultural platform to provide users with good content with substance, so that reading thousands of books can help you travel thousands of miles.

Yu Minhong revealed that as of January this year, the number of registered users of the Oriental Selection APP has reached 3.6 million, with basically no cost. At the same time, the number of paid members of the APP has reached nearly 200,000, and the average monthly consumption of paid members is about 800 yuan.

However, running a self-operated e-commerce platform is destined to be a path that requires more time and has higher labor costs, which will increase the pressure on profitability. It remains to be seen how far the Oriental Selection APP can go.

The latest financial report shows that as of November 30, 2023, the total number of people in the self-operated products and live e-commerce teams of Oriental Selection reached 1,587, of which the supply chain and product teams reached 643. A series of actions from supply chain to personnel expansion have caused Oriental Selection's revenue costs to grow rapidly, while gross profit margins have shrunk rapidly. From June 1 to November 30, 2023, the gross profit margin of its self-operated products and live e-commerce divisions was 32.9%, compared with 42.5% in the same period last year.

The third is to go overseas, jump from domestic to international platforms, and seek greater market growth.

Overseas, Jiaogepengyou was the first to set up its business, while Xinxuan and Sanzhiyang seem to be more efficient.

In May 2023, Xinxuan Group officially landed overseas with Thailand as the starting point. During the live broadcast, Simba's team put local Thai specialties such as fruits, skin care products, and latex pillows on the shelves. Third-party data showed that the total sales exceeded 830 million yuan.

Xinxuan's overseas expansion is to look for low-cost supply chains overseas and cooperate with local suppliers and brands, while Sanzhiyang has chosen a new mass consumer market.

Live streaming organizations such as Three Sheep have chosen Tiktok as their primary overseas platform. As a product of ByteDance, TikTok has become one of the most visited social platforms in the world. By the end of 2023, TikTok has more than 1.677 billion users, of which 1.1 billion are monthly active users.

In terms of market selection, both Xiao Yangge and Simba chose Southeast Asia as their first stop. In January 2024, Three Sheep Network cooperated with Singapore local expert @shop with sasax to complete its first live broadcast to sell its own brand Xiao Yang's Selection and partner brands, setting a new record for TikTok's e-commerce sector in Singapore, but did not disclose specific figures.

The reason for targeting Southeast Asia is not difficult to understand. The user scale in this region is large enough and the acceptance of the live streaming sales model is relatively high.

In 2021, Tiktok began to test the e-commerce waters in Indonesia, and then started its business in Southeast Asian countries such as Thailand and Malaysia.

According to data released by Yipit Data, TikTok's global e-commerce GMV in 2023 will be approximately US$13.6 billion, of which Southeast Asia will contribute more than 90%. The GMV of Indonesia, Thailand, Vietnam, the Philippines, and Malaysia accounted for 28%, 22%, 17%, 12%, and 11%, respectively.

However, facing the uncontrollable global market, live streaming on TikTok also faces many challenges.

According to FastMoss Research Institute, 80% of e-commerce sales on TikTok are generated by influencers, and only 20% are generated by live streaming and shopping malls. Especially when leaving the Southeast Asian market and entering the US market, the acceptance of live streaming will be even lower. In addition, live streaming organizations also face localization challenges such as cross-border efficiency management.

The fourth is to create content to explore and expand the influence of IP and find business growth points beyond live streaming.

Among the leading companies in the live streaming e-commerce industry, one of Meiwan's advantages is content creation. In the past four years, it has also been trying to produce variety shows around Li Jiaqi's IP and the live streaming industry, and has achieved some results, such as "All Girls' Offers", "All Girls' Hosts", "Naiwa Family's School Diary", etc., all of which have a Douban score of no less than 7.5; this year, the hosts' year-end performance reports were turned into micro-variety shows, which remain popular, with an average of more than 10,000 likes per episode on the Xiaohongshu platform.

Image source: Douban

In 2023, Yaowang Technology and Haixi Media jointly produced the variety show "Let's Farm", which shows the farm operation process from farming, harvesting to selling, and has a good reputation among the public. This year, Yaowang announced that it will invest more in variety shows and short dramas. At present, Yaowang still has 20 programs to be launched, such as "Please Start Now" and "Top Chef", and has completed more than 20 short dramas in the field of short dramas, and is doing more content development to reserve IP.

The fifth is to expand from To C to To B business and become a technical service provider for enterprises.

Humility starts early and lasts longer on this path.

In 2019, Qianxun independently developed the first industry SaaS service platform, Lingke. In 2023, Qianxun released a new AI intelligent version of the Lingke system to help influencers' live broadcast rooms and brands increase sales and strengthen business compliance.

In August of the same year, Qianxun launched AI digital human live broadcast service, trying to solve pain points for enterprises such as the difficulty in replicating excellent anchors and the high cost of live broadcast operations.

After the wave of live broadcast e-commerce industry receded, the big anchors who became entrepreneurs stood in a higher and more dangerous position, and the test they faced changed accordingly. It is a general trend for the top anchors to fade out of the live broadcast room, while more new anchors are queuing up to "take the position". Will there be a dark horse in 2024? Kas still keeps looking forward to it.

Author: Lou Xingchui

Source: WeChat public account "CaasData (ID: caasdata6)"