How to seize the opportunity of “Video Account”?

For new merchants and brands looking for breakthroughs, is the video account an opportunity for breakthrough? Let's take a look at the author's analysis and views on video account e-commerce.

How long does it take for a content platform to engage in e-commerce from inception to maturity?

In 2018, Douyin launched Douyin Stores and began to increase its e-commerce layout, but most brands at that time still used it as a marketing platform; in 2020, Douyin's e-commerce live streaming entered a period of explosive growth, "e-commerce" was promoted to a first-level business, big brands increased their investment, and big anchors emerged.

Kuaishou’s pace is almost the same. In 2018, it launched the shopping cart function, and in 2019, it established an e-commerce department. Its GMV exceeded 40 billion, a 415-fold increase. In 2020, due to the catalysis of the epidemic, the revenue of its e-commerce business continued to grow rapidly.

Today, mature platforms have entered the acceleration phase with mature brands. So, can some new merchants still catch up with the dividends of e-commerce live streaming? For brands looking for breakthroughs, where will the next outlet be?

Some platforms that have come from behind have given us a glimpse of a breakthrough point, such as Xiaohongshu, which was mentioned in the previous platform observation series, and Video Account, which is known as the "hope of the entire Tencent".

1. Video accounts, digging up the hidden human and goods market

Tencent really started to develop video account live broadcast at the end of 2020. In October 2020, WeChat video account conducted an internal test of the live broadcast function, and soon the shopping cart function was also launched simultaneously. After more than three years of continuous adjustment and testing, video account has gradually formed its own unique ecology of people, goods, and places.

1. People: Targeting the mature age group under the large base

There is no need to say much about WeChat's user base. According to Tencent's recently released 2023 fourth quarter and full-year financial report, as of the end of 2023, the combined monthly active account numbers of WeChat and WeChat reached 1.343 billion.

Although Video Account grew out of the WeChat program, it is fundamentally different from WeChat. WeChat is a social software, while Video Account is a short video product with e-commerce functions added, so there are some differences in its audience structure.

In the social field, WeChat can be said to have no rivals. The only overlap is its own QQ. However, the situation faced by Video Account is much more complicated. As a rising star, it has to face an all-round encirclement by Douyin and Kuaishou in terms of content, e-commerce, and users. Young people who are chasing new trends have long been accustomed to placing orders while scrolling Douyin. How many opportunities are left for Video Account?

The answer is: mature age group.

According to the [Growth Black Box] 2023 Video Account New Volume Report, it can be seen that users aged 31-45 years old who spend more than 200 yuan account for 30%, which is much higher than other age groups. Among them, users aged 41-45 years old with a single consumption of more than 500 yuan can even reach 10%; in terms of shopping frequency, mature age groups still dominate, and 50% of users aged 36-40 and over 46 years old consume on the video account more than once a month.

The reason is that, on the one hand, although Douyin and Kuaishou have a large user coverage, Internet platforms are all radiating from young people who pursue trends to other age groups, which means that there is still a large part of the mature age group who do not have the habit of consuming on content platforms, and it is still difficult to attract them to download and cultivate consumption habits. WeChat is the main software used by this part of people. It is precisely because of this difference that Video Account has a glimmer of hope in the siege.

On the other hand, young people's social interaction is based on interests, while the older generation's social interaction is based on acquaintances. For them, brand is important, and the reputation of acquaintances is equally important. And it just so happens that video accounts can let you see what your friends and relatives are paying attention to, which also explains why video accounts have high transaction amounts and high frequencies.

Of course, Video Account is also actively attracting young user groups. According to reports, most of the new users of Video Account transactions in 2023 come from young people under the age of 30.

Radiating downward from the mature age group may not be what the video account deliberately does, but it is indeed a breakthrough in the current highly saturated business environment.

2. Goods, domestic products are in fashion, new consumption enters

An interesting phenomenon was discovered by observing the live shopping section of Video Account: domestic brands that were thriving in offline stores more than a decade ago, such as Langsha, Bama Tea, Fuanna Home Textiles... have now "resurrected" on Video Account; Vivi Soy Milk, Wugumofang, White Elephant, Luhua... these foods that were sold through supermarket channels have moved their shelves to Video Account.

E-commerce based on content must follow the logic of "goods find people". Brands need to know where their audience is before they know where to sell their products. As mentioned above, most of the users of video accounts are mature, and they have a better impression of some domestic brands, have more knowledge, and have higher trust, so these old brands will get more attention on video accounts.

As users become younger, new consumer brands have also seen opportunities. At a time when traffic is in a state of internal competition, some new consumer brands such as Perfect Diary, Ubras, and All Cotton Era are also testing the waters.

According to Morketing's observation, although Tencent is supporting brand merchants, white-label and small merchants still occupy a large proportion of video live broadcasts. This is related to the fact that consumers pay more attention to the product itself. In other words, whether it is a big brand, a small or medium-sized brand or a white-label, what is more important on this platform is to emphasize product strength.

3. Field, from the entrance to the live broadcast room, activate the global traffic

If the entrance is compared to a gate, then the video account can be said to be well-connected. It is almost rooted in WeChat and is very integrated.

According to incomplete statistics from Morketing, there are more than ten entrances to live streaming in the private domain, including the first-level entrance in the "Discover" page, live streaming, nearby, search, watch, video account recommendations, and advertising; the private domain entrances include video accounts that you follow, likes from friends, public accounts, mini-programs, communities, corporate WeChat, and sharing by friends.

The obvious benefit of having more entrances is that there are more opportunities to reach consumers, but more importantly, it breaks down the barriers between private and public domains and creates a deeper connection with WeChat.

After entering through the first-level "gate", the dual-column information flow mechanism gives consumers room for choice. The video live shopping page is subdivided into clothing, food, beauty, digital appliances and other sections.

When it comes to the live broadcast scene, the biggest feeling of Morketing is that it is not very "fancy", there is no sales pitch, it does not manipulate people's mentality, it mostly talks about products, and it can be seen that many of them are small businesses live streaming in physical stores.

Some people say that the current Video Account is like Douyin in 2020, and is in the early stages of an explosion. This is not without reason. Looking back at last year's data, the GMV of Video Account transactions was about 300 billion yuan, a year-on-year increase of 3 times, and the number of orders increased by 244% year-on-year.

2. Forced to flee or actively choose? Why has the video account become so popular?

According to Morketing’s observation, many brands have already made preparations and have allocated a lot of budget to invest in video accounts; small and medium-sized businesses that have come to their senses have switched to other platforms to continue to make money; some mid-level influencers are also preparing to compete for the top positions in video accounts...

So, why are these businesses flocking to Video Accounts?

On the one hand, this is because Tencent continues to increase its investment in video accounts.

Last year, in May, Tencent launched the Video Account Brand Incentive Plan, issuing traffic coupons to encourage brands to join the Video Account; in July, it launched the Video Account Live Broadcasting Talent Cold Start Incentive Plan, providing traffic incentives for new anchors and talents who joined the Video Account; in September, it launched three support policies: "Cold Start Support Policy, Growth Support Policy, and Benchmark Case Support Policy", which rated brands, talents, and merchants based on monthly GMV, and issued traffic coupons based on the ratings. The policy announcement shows that Tencent's official traffic incentives for merchants can be as high as 200,000 points.

On the other hand, some characteristics of the video account itself are relatively scarce in the current business environment.

First, the public and private domains are linked. Although Tencent is now more focused on opening up public domain live broadcasts and acquiring customers in a faster way, Morketing believes that it is still the private domain that really distinguishes Video Account from other platforms.

Wang Siying, senior director of the beauty and apparel industry center at Tencent Advertising, mentioned at the Tencent Advertising Innovation and Sharing Conference last week: "Video account live broadcast is a unique business system based on a wide range of social networks, and it achieves continuous growth in transactions through the linkage between public and private domains."

Official account fans, mini-program members, corporate WeChat, community users, etc. are all important private domain assets for businesses. They can leverage public domain traffic through sticky users and expand new audiences. At the same time, public domain traffic will also precipitate private domain assets, forming a virtuous circle.

When we are all discussing consumer-centricity, the first thing we need to do is to get closer to consumers, understand consumer portraits and behavioral habits more intuitively and accurately through private domains, and then feed back to the brand.

Secondly, traffic dividend. The traffic of mainstream e-commerce platforms is tight, and many small and medium-sized businesses find that their profits are pitiful, so they are forced to change their positions. The stage where video accounts are at is the stage of attracting a large number of businesses, so the traffic policy is relatively friendly. As mentioned above, an incentive is launched almost every two months, and a plan lasts for two months.

Finally, decentralization. As the platform becomes more and more mature, Matthew's law will become more and more obvious, but as of now, there is no absolute top streamer on Video Account. The relationship between brands, platforms and influencers is interdependent and mutually restrictive. Last year, we ate one melon after another between big anchors and brands, proving that the gameplay of top anchors has declined, and brands need a platform that is more friendly to merchants' self-broadcasting.

3. Why are many brands reluctant to take action?

Seeing this, you may think that all brands should go all out, but the current situation is that many brands are still reluctant to take action.

It can be said that success is due to timing, and failure is also due to timing. Because it is not mature enough, brands will think it is the next growth point, but also because it is not mature enough, brands may not take the risk to expand. How to choose between the two depends on the market situation on the one hand, and the attitude of the platform on the other.

Cai Hong, Chief Marketing Officer of Kraft Heinz China, once expressed to Morketing, "We will actively embrace its commercialization with an open attitude, but at present it may still be mainly based on media platforms, because the video account itself does not have a clear ecological positioning. In the end, it still depends on whether it is more commercial or branded."

Some specific practical reasons also make it difficult for brands to layout their video accounts, such as categories, traffic, and self-built costs...

The luggage brand Horizon No. 8 has previously tried video broadcasting, but the effect was not very good.

After analyzing the reasons, they believe that "the overall live streaming volume of video accounts is still small, whether it is natural traffic or paid traffic, the traffic of video account live streaming is still not large. In addition, the audience profile, best-selling categories, and customer unit price of video account live streaming are not in line with the current positioning of our brand. In addition, the cost of setting up a brand's own live broadcast room is quite high. Whether from the perspective of product promotion or sales, the investment-output ratio can be foreseen to be very low, so there is no plan to deploy it for the time being."

Of course, brands generally face new opportunities with a positive attitude.

The instant freeze-dried fruit tea brand Otter Ton Ton said: "Otter Ton Ton's video account live broadcast started relatively late and is still in the testing stage. We are stepping up our learning and strive to start broadcasting effectively as soon as possible."

Contact lens brand Youtong told Morketing: "In fact, we have always paid attention to video accounts. It is also a part of the private domain. However, our category is not yet allowed to do the yellow car, mainly because of the category issue."

The luggage brand Horizon No. 8 believes: "When our brand's private domain develops to a certain extent, we will consider deploying video live broadcasts and forming a closed loop with private domain operations."

4. Brand layout methodology

We divide WeChat's omni-channel marketing into four steps: Talent Combination, Private-Public Transmisson, Brand Treasure Accumulation, and Long-Tail Marketing. This way, we can more clearly solve the practical problems encountered by brands in deploying video accounts.

1. We need excellent creators, and we need excellent creators with more logic

If you want to create good content for your video account, it is not feasible to just rely on some strong stimulation to attract attention. We must understand that the content ecology of WeChat has been reshuffled during the official account era. To continue to develop on the platform, you need real materials. Therefore, users will have greater expectations for high-quality content on this platform. The video account cannot be separated from high-quality content. Whether it is Dabo or Dianbo, there must be excellent creators.

Of course, in the AIGC era, excellent creators must not only have the ability to create high-quality content, but also the ability to clearly express their demands.

Under Tencent Advertising's new advertising model, brands can automatically generate high-quality content through AIGC tools such as Miaosi. On the one hand, this frees creators from the need to do a lot of useless and ineffective work, but it also challenges creators' logical abilities.

Yang Jingyi, head of user interaction at Pernod Ricard (China), once said at the 8th AI Awards that solving problems with AI must first start with asking the right questions, that is, being an excellent prompt engineer.

2. Understand the underlying logic and connect the private and public domains

By leveraging the precision of private domain traffic and the breadth of public domain traffic, the communication effect can be maximized. Brands can leverage the user resources accumulated on WeChat official accounts, mini programs, and corporate WeChat communities to leverage public domain communication.

Because these users usually have a certain degree of awareness and trust in the company or creator, and are more willing to share. According to the AIPL model [awareness, interest, purchase and loyalty], the fourth behavior, loyalty, is the real way to establish a long-term relationship with the brand, which requires a private membership system, task mechanism, and fan operation.

At this stage, brands need to accurately target their audiences, optimize content, increase retention through interactive mechanisms, use social platforms to break through the circle and obtain more natural traffic, thereby reaching non-circle users.

It is worth noting that the commercialization of video accounts is based on circles, that is, advertisements are not placed entirely according to physical age, but according to the circles they belong to. One product can gather people of different ages and genders. Brands should conduct private domain operations and public domain communication based on this underlying logic.

When private domain communication and public domain communication overlap, a synergistic effect can be generated, which can make the communication effect grow exponentially. In this process, brands need to pay close attention to changes in communication effects and adjust strategies in a timely manner to adapt to market changes.

3. Pay attention to the accumulation of invisible brand assets

In the WeChat ecosystem, brands cannot treat video accounts as a tool that only increases GMV or ROI. Its greater value lies in those implicit brand assets - for example, user awareness, likes, customer acquisition leads, brand trust, willingness to repurchase, etc.

Voice and word of mouth reflect the breadth of a brand’s dissemination and influence in the WeChat ecosystem; user awareness and liking are the key to a brand establishing an emotional connection with users in the WeChat ecosystem; brand trust is an important foundation for a brand to achieve user growth and conversion in the WeChat ecosystem; and repurchase intention is an important means for a brand to achieve precise marketing and sustainable growth in the WeChat ecosystem.

These implicit brand assets are very important for long-term operations.

Tencent Advertising recently launched a marketing science system - Ruyi, one of the core capabilities of which is full-cycle brand asset management. It uses 5R as the core crowd asset model, consolidates users who interact with the brand into the brand's crowd assets, and creates sustainable and efficient management methods and products around crowd assets.

4. Activate the WeChat ecosystem to form a long-term marketing closed loop

Many advertisers already have mini-programs, public accounts, and fan groups on the WeChat platform, which provides brands with unique conditions for building a long-term marketing closed loop within the WeChat ecosystem. By connecting the small stores on the video account with the corporate WeChat groups, brands can further activate their resources within the WeChat ecosystem and achieve more efficient marketing and conversion.

This closed loop not only includes direct sales conversion, but also covers multiple links such as user interaction, information collection, and brand promotion. Within this closed loop, brands can continuously optimize marketing strategies and enhance user experience.

In general, video accounts are continuously releasing dividends. However, how to enter the market, how to layout, and how to break through the market require brands to plan more carefully and the platform to provide more strategic support.

Author: Tiana

Source: WeChat public account: Morketing (ID: Morketing)