Taobao Live goes back to its rookie ways

On February 20, Taotian Group announced the establishment of a new live streaming e-commerce company, which attracted the attention of many people in the industry. Here, let's take a look at the author's analysis and views on this matter~

No one expected that Taobao’s first major move after the beginning of the year would be to establish a new e-commerce live streaming company.

On February 20, Taotian Group announced the establishment of a new live streaming e-commerce company to provide "nanny-style" fully managed operation services to celebrities, KOLs, and MCN organizations who are interested in broadcasting on Taobao.

The company is run by the Taotian Live Operation Team, and adopts a flexible cooperation model of guaranteed minimum or profit-sharing with the anchors to help them achieve account cold start, full-cycle planning, business docking, official inventory, marketing planning, and even in-depth full-hosting services such as financial management and venue support.

According to Taobao, the main purpose of establishing the company is to provide six-month services to the anchors who have just joined Taobao. After the "newbie training period", the anchors and agencies can adapt to the platform rules and gameplay, and then they can form their own teams or sign contracts with other MCN agencies.

In short, Taobao's MCN agency mainly targets "new players" who are new to Taobao, providing them with refined hosting and operation services to help them get started quickly and adapt to the Taobao ecosystem.

For Taobao, the core of this move is to cultivate more mid-level anchors to fill the impact of the decline of top anchors.

At the same time, for the e-commerce industry that is caught in chaos, this may also indicate that even if live streaming e-commerce still has a natural Matthew effect, top anchors will always exist, and the market also needs this role to help brands break through the circle and clear inventory, but for platforms and merchants, over-reliance on top anchors has gradually become a thing of the past. GMV is no longer the only criterion, and live streaming DAU has become the primary goal.

But behind the prosperity, there are often crises. When the referee becomes a player, the problems it brings are coming one after another: How to ensure the fairness of platform traffic distribution while the Taobao Live MCN organization is operating? Can it balance the platform's ecological environment and form a healthy and fair competition relationship with independent anchors and third-party MCN companies? How to ensure the prosperity of the internal ecology of the platform will become the main problems Taobao will face in the future.

1. Why does Taobao want to be a player?

Looking back at past live broadcasts from today’s perspective, I always feel a sense of the impermanence of life.

In 2016, when Taobao Live first participated in the Double Eleven Shopping Festival, there were only a few merchants interested. Zhang Dayi live-streamed her own Taobao store "My Happy Wardrobe" and attracted more than 410,000 viewers, with a turnover of nearly 20 million in 2 hours, which was already amazing. But just one year later, this achievement has become insignificant. At that time, Wei Ya live-streamed a fur store with zero fans and sold 70 million in sales in five hours.

Jiang Fan, then president of Taobao, praised this in a public speech, saying: "Being able to achieve a live broadcast with millions of viewers and hundreds of millions of transactions is no longer a embellishment, but the mainstream of the future business model."

As expected, from that year on, live streaming e-commerce truly became the mainstream business model. All platforms were flooding in, and the top anchors were like stars, with their rise and fall causing great public outcry. But in the center of this arena, Taobao, once the leader, gradually lost its former leadership.

With the successive demise of Xueli and Wei Ya, the last top anchor, Li Jiaqi, has also gradually lost his original credibility amid various public opinions last year. Taobao is eager for a new top anchor to emerge. But in the past, Taobao's response strategy was to poach people.

In the past two years, many top anchors such as Luo Yonghao, Yu Minhong, and Zhang Lan have landed on Taobao. The battle known as "Taobao's sneak attack on Douyin" on Double Eleven in 2022 was fought vigorously. There was even news on the Internet that Simba, a Kuaishou anchor, was also targeted by Taobao. Last year, the two sides were close to reaching an agreement. Although it did not take shape in the end, it shows Taobao's anxiety and persistence in the top anchors.

Against the backdrop of fierce competition for existing e-commerce shares and low prices, big anchors who have seized the trend of the times and quickly completed a class leap can use their own topicality to muddy the waters of public opinion to the greatest extent, completing the transfer and establishment of the platform's low-price mentality in the chaos.

This is a shortcut. At first, everyone was pleasantly surprised by its efficiency and explosive power, and was actively or passively drawn into its vortex. But it is obvious that shortcuts come at a price. The cannibalization of traffic by top anchors and their strong attitude towards low prices have completely messed up the originally well-organized and hierarchical distribution channels, especially in the current objective environment of a stock market and weak consumption. Whether it is anchors, platforms or brands, they are all caught up in it and cannot remain immune.

After experiencing wild growth and blind optimism, e-commerce live streaming has entered a stable stage. However, Taobao, once a leader, suddenly found that after losing the top anchors, the problem of insufficient traffic has become urgent. On Double 11 last year, Li Jiaqi's live broadcast room, which was caught in a price dispute, had sales of 9.5 billion on the first day, a year-on-year decrease of nearly 40%. The imagination about the top anchors is gradually dissipating. Taobao's crisis is already on the surface.

This means that, despite the pain, adjustments are bound to happen.

In fact, Taobao has been taking action to address this issue. However, before this, Taobao's main actions were mainly to supplement the content level.

At the beginning of last year, Taobao and Tmall announced the five major strategies for this year, namely live broadcasting, private domain, content, local retail and price power, which were internally called the "five major battles". By May, the "five major battles" were condensed into the "three major battles" of user first, ecological prosperity, and technology-driven. But in the final analysis, they all cannot bypass the construction of Taobao's internal ecology.

In this regard, Taobao's solutions can be divided into two categories. The first is the cultivation of pure content talents. The leverage effect of content traffic is becoming more and more obvious. Even Taobao cannot ignore the crisis it brings. The construction of a prosperous ecosystem was Taobao's focus last year. To this end, Taobao Live began to invite some MCN organizations to offer generous traffic support and cash rewards, and tried to cultivate a prosperous content ecosystem and incubate more decentralized advertising spaces.

The second is to encourage merchants to start live streaming. Dai Shan, CEO of Taotian Group, once said: "We will make a historic investment to expand the user scale for merchants." At the "2023 Alibaba Mom Summit" held in September last year, data disclosed that in the past year, more than 27,000 stores on Taobao Live had a turnover of over one million, and nearly 4,000 stores had a turnover of over ten million.

Obviously, in the post-Li Jiaqi era, Taobao has to make adequate preparations to welcome the arrival of a new era of e-commerce live streaming. However, according to a report by Snow Leopard Finance, many practitioners are not optimistic about Taobao's counterattack, or it can be said that Taobao is not clear where the next anchor who can drive the industry will come from. "Supporting Dabo and Dianbo is more like a horse race to see who will eventually come out on top. What the next successful anchor should look like is currently undefined."

2. The relationship between Taobao wet nurses and legitimate and illegitimate children

From this point of view, Taobao's venture into MCN as a referee may be an attempt with both crises and opportunities.

According to Yuan Ge, the head of Taobao Live e-commerce company, the establishment of an MCN organization, with its core hosting model, is equivalent to an incubator for new anchors. Taobao can provide all-round support to new anchors through a professional operation team, and help new anchors quickly establish their own brands and fan groups, thus improving their competitiveness in the live e-commerce industry.

For domestic platforms, the hosting model may be unfamiliar. But among cross-border platforms, "full hosting service" has become a professional service that is practiced and mastered.

Since 2022, Pinduoduo's cross-border e-commerce platform TEMU has been running a "full-hosting service" that has attracted other cross-border platforms to follow up, that is, merchants are responsible for submitting goods and supplying them, and the rest of the operation, logistics, after-sales and other links are all left to the platform. This was once considered a powerful tool to accelerate the development of cross-border e-commerce. Later, this form was applied by AliExpress, TikTok Shop and TEMU, and brought them unexpected platform growth.

To some extent, the key highlights of Taotian Group's establishment of an MCN agency for e-commerce live streaming are in line with its core.

On the one hand, Taobao Group's content systematization and standardized infrastructure can help new anchors and agencies reduce initial operating costs and investment risks, and use the advantages of the Taobao platform to provide celebrities and Internet celebrities with product selection, supply chain and operation services that they are not good at, allowing agencies to release more energy and open up new growth space. In other words, Taobao will act as a "nanny" to provide all-round traffic and logistics services for new anchors who sign MCN agencies.

At the same time, after the six-month support period, anchors can withdraw at any time. In the past, the private domain attributes of Taobao Live made it difficult for mid-level anchors to achieve higher growth through public domain traffic, and they could only rely on endurance. Many anchors left Taobao and joined Douyin, tending to operate on multiple platforms, which is undoubtedly the reason. However, this also further helped super anchors such as Li Jiaqi become representatives of low prices on the site, forming a vicious cycle within Taobao.

For new anchors, this move undoubtedly means that they may be able to gain certainty in traffic and profits in a short period of time.

Of course, the most important point is that past experience has shown that in the e-commerce live streaming industry, this approach is certain and replicable.

However, behind this seemingly colorful billboard is a brand new platform ecology that Taobao needs to face.

Although Taobao has made a commitment to this, the project will not compete with other organizations. "We also welcome organizations to put new anchors to be signed into the hosting model, and the platform will help bear the early incubation risks. The entire project is not aimed at profit, but will invest in support with the goal of prospering the ecosystem."

However, it is undeniable that live streaming is essentially a recommendation logic and non-purposeful shopping. Traffic plays an immediate role in the transaction effect of the live streaming room. It is necessary to obtain a burst of traffic in a short period of time to attract a large number of users to the live streaming room. This instant burst of traffic can either rely on the traffic brought by the top anchors or rely on the traffic recommendation mechanism of the public domain. Obviously, Taobao’s entry into the MCN agency is aimed at the latter.

In this case, Taobao's MCN agencies will inevitably compete with third-party MCN agencies, independent anchors, etc. It can even be said that in the future, the balance of "legitimate and illegitimate relationships" will become the most concerned hidden danger of Taobao's model.

Especially when the giant Taotian Group begins to transform radically at all costs and cultivate new reserve teams, it will inevitably put pressure on young players such as Douyin, Kuaishou, and Xiaohongshu who are trying to overtake by using content e-commerce.

In fact, from the perspective of today's e-commerce landscape, as the growth rate of GMV of various platforms slows down, platforms have begun to seek growth in another model based on their inherent advantages. Taobao once aggressively sought a content-based platform, while Douyin e-commerce was also aggressively promoting shelf-based platforms. Both sides are competing for each other's territory and have gradually completed the transformation on the e-commerce-content axis.

As Cheng Daofang, general manager of Taobao Live Division, said, live streaming e-commerce has entered the middle and later stages and is returning to the essence of "e-commerce". This means that when the core of e-commerce is goods, price power, and service, and the professional attributes of merchants become increasingly important, in the future, establishing one's own MCN organization, cultivating high-quality anchors to promote platform development, and keeping high-quality anchors on the platform more stably may be a new trend in the post-e-commerce live streaming era.

Of course, in the short term, it is difficult to see the effects of these support plans, especially on the anchor side. From nothing to something, from small to big, from wild growth to the formation of a healthy industry ecology, all this requires the magic of time.

But no matter what, they all point to a new era of live streaming e-commerce - after the lack of momentum for wild growth, the live streaming e-commerce industry has become a traditional industry. If all roles in the industry want to have new stories, they will inevitably embark on the path of exploring refined operations.

Author: Pomegranate; Editor: Yuejian

WeChat public account: New Entropy