Can video e-commerce get out of the black box?

In 2023, video accounts are constantly making efforts, such as optimizing the distribution mechanism, and user groups of more age groups have also surfaced. So, how to interpret the year of the landing of video account e-commerce? You might as well follow the author to take a look, which may give you some inspiration.

The video account, known as Tencent's "hope of the whole audience", began to release commercial energy in 2023.

At this time last year, video account e-commerce was still in a thick fog. At that time, there were still many basic tools waiting to be completed, the vague customer portrait needed to be clearer, and user tags also needed time to settle. In addition to the powerful private domain capabilities, most merchants were like monks, scratching their heads.

A year later, this black box has gradually become visible. This year is a year for Video Account to accumulate strength and also a year for it to exert its strength.

Video accounts are no longer just for middle-aged and elderly people, but also for women over 30. Video accounts have a low product return rate and a customer unit price of more than 200 yuan, both of which are leading the industry. Video accounts are adjusting their public-private linkage operation mechanism and continuously optimizing their distribution mechanism. E-commerce players in the industry have sensed subtle signals of change.

Tencent President Martin Lau still released positive news in the first quarter 2023 earnings call, "E-commerce live streaming and video accounts hold huge opportunities." The relevant revenue data of the video account has appeared in three consecutive quarterly reports this year.

The data shared by Li Hao, founder of Mars Culture & Kas Academy, is that last year the annual GMV of video account e-commerce was around 130 billion yuan, and he expects it to reach 400 billion yuan this year.

The fog of commercialization of video accounts may not have completely dissipated, but this year, at least the tip of the iceberg has been revealed and continues to challenge people's imagination.

1. Video account e-commerce, launched this year

A typical change in Video Account in 2023 is the optimization of the distribution mechanism.

The continuous improvement in distribution efficiency is also an important reason for the continued growth of video account content and e-commerce: from the previous social distribution to social + algorithm distribution.

According to Zhang Xiaolong's ideal expectation, the ratio of social and algorithm distribution should be 3:10. However, at present, Video Account is not enough to reach the scale of Douyin in terms of content upload volume and label volume, so the proportion of algorithm distribution has not reached the ideal proportion. Enriching labels and content has also been the core work of Video Account in the past year.

In mid-July 2022, WeChat announced a new move: the launch of the "Video Account Store". Li Hao regards this move as a key node in the e-commerce of Video Account, and it can also be understood that from this time on, Video Account has really started to engage in e-commerce.

The reason is simple. Video Store is establishing a product with unified standards. Third-party SaaS such as Weimeng and Youzan are eliminated, and even its own "WeChat Store" is replaced. Only in this way can all user order data be accumulated in one product, and algorithm distribution can be optimized.

In 2023, another obvious change in video account e-commerce is that the linkage mechanism between public and private domains is being strengthened.

The earliest merchants to enter the video account can start as long as they have a private domain, and the private domain can be operated, accumulated and converted with good results. In other words, the entry threshold of the video account is relatively low. However, the existence of countless private domains is not conducive to label accumulation and algorithm distribution. Therefore, the video account encourages merchants to guide private domains to the public domain, and at the same time gives merchants a certain proportion of the public domain.

Public domain streaming is also closely related to video account advertising revenue. In the financial report released by Tencent in Q3 this year, it was mentioned that WeChat's pan-internal circulation advertising revenue increased by more than 30% year-on-year and contributed more than half of WeChat's advertising revenue, including that brought by video accounts.

In 2023, the merchant ecosystem of Video Account is constantly expanding. Data from the Jiuqian middle platform expert minutes show that last year, Video Account added 250,000 new merchants, mainly in the fields of clothing and home furnishings, fresh food, beauty and personal care. However, there is no obvious lead in each category at present, and Video Account has not shown any obvious movement to tilt traffic to a certain track.

However, the user profile of video account e-commerce has changed significantly this year.

Previously, video account e-commerce users were more likely to be aged 45+, while users under 25 accounted for a smaller proportion. These native video account users show completely different characteristics from users of other e-commerce platforms: low shopping hesitation, low price comparison awareness, strong overall spending power, low return rate, and high loyalty. Now, algorithm distribution has enabled young users around 30 to start entering video account e-commerce.

LatePost quoted an observation from a WeChat person to support this point: One of the important special tasks of Video Account in 2022 is to promote the younger users.

Tencent President Martin Lau clearly stated at Tencent's third quarter 2023 earnings conference that there is still a large proportion of high-income WeChat users who are not accustomed to online shopping, and converting them into e-commerce and live streaming e-commerce consumers will also help improve the business.

2. Changes in the trend of public-private linkage

The dual distribution mechanism of social + algorithm determines that what makes Video Account e-commerce different from other e-commerce is the existence of a private domain ecosystem.

In the past, players with their own private domain capabilities could complete the cold start of commercialization at a low cost. But today, for the sake of distribution mechanism optimization and commercialization, the platform encourages the linkage between public and private domains. This has become the traffic model and operation basis of video account e-commerce.

So we can see two obvious actions of WeChat:

First, in August this year, Video Account issued a new rule that "corporate WeChat accounts cannot be added to live broadcast rooms, homepages, and top links of short videos." The weight of private domains in the commercialization of Video Accounts was reduced. This means that the way in which merchants used live broadcast rooms and short videos to guide users to add corporate WeChat, gather a group of private domain users, and then convert and monetize them has failed.

Second, merchants are encouraged to direct private domains to the public domain. Moreover, when merchants’ private domains enter the live broadcast room, they will bring in public domain traffic. Li Hao shared that, without other variables, 1,000 private domains entering the live broadcast room will bring in 200-300 public domain traffic. The proportion of traffic from the public domain to merchants is determined based on comprehensive data such as user stay time, product click-through rate, conversion rate, and number of speeches.

A data provided by Kas Consulting is that in the live broadcast rooms of video accounts with better content, the ratio of private and public domain traffic can reach 2:8 or even 1:9.

This has led to some businesses being able to increase their volume purely by relying on the public domain without any accumulation in the private domain.

Zero One Digital CEO Jian Feng once publicly stated that among the merchants they serve, 60% of the brands rely on pure public domain accounts. Data from Oriental Securities Research Report also shows that the current public domain traffic of Video Accounts accounts for 67%. At the end of 2021, the proportion of private domains in Video Account live streaming sales exceeded 50%.

However, company-domain linkage has obvious contradictions and weaknesses.

Jianfeng mentioned that in the process of serving brands, it is often the case that some brands have accumulated young people in the private domain, but the people pushed by the public domain of the video account are mostly middle-aged and elderly people who like other products. In other words, the public and private domain linkage brings two groups of people, and the live broadcast room is easy to become a hodgepodge.

In this case, the linkage between the public and private domains puts forward higher requirements for the flexibility of the live broadcast room operation. According to the comparison of the number of users coming in from the private domain and the public domain of the live broadcast room, the action of cutting the money and adjusting the corresponding live broadcast words can be performed immediately.

In addition, the public and private domains are generally managed by different teams, and it is difficult to link the public and private domains in the existing organizational structure of the brand. For different products of different industry brands, their corresponding private domain users are scattered across various ports in the WeChat ecosystem. In such a complex environment, the difficulty of linking the public and private domains is also very different.

Video accounts are also struggling with the mechanism of linkage between public and private domains.

Li Hao analyzed that the ideal situation is that merchants introduce the public domain through private domain, and the two work together to support and help merchants "build a growth flywheel", but the reality is that almost all of the brands that rank at the top are brands with strong micro-business and private domain capabilities such as Luckin Coffee.

Therefore, Video Account has made some changes in terms of algorithm rules - cutting and stripping the user transaction data brought in by merchants from the private domain. However, Video Account may not have fully thought through whether it is a full or partial cut.

3. Is investment the final outcome?

Unlike Douyin's strong operation orientation, Video Account is product-oriented. The difference in ecological genes determines the difference between Video Account and other platforms.

Li Hao once mentioned in the founder growth course that major changes in Douyin are often hidden in the adjustment of operating rules, while major changes in Video Account are often hidden in product adjustments. The basic prerequisite for doing well in Video Account is to follow the products of Video Account, because every adjustment may hide opportunities for bonuses.

This is not difficult to understand in theory, but when it comes to actual operations, businesses have not found a mature and replicable methodology, and have no path to follow.

Some serious merchants said that they had hoped to develop private domains through video accounts, but after a long time of live streaming, they did not achieve significant sales results, so they had to give up. Some merchants could not get enough traffic. After four consecutive days of live streaming, only 30 people entered the live streaming room, and "only entered the room two minutes before the broadcast, and no one entered the room for two hours afterwards." Some merchants did not worry about traffic, but lost people as soon as they brought goods, and did not know how to realize it.

Successful merchants understand the situation of these merchants. A merchant engaged in porcelain trade told us that compared with Douyin and Taobao, video accounts bring him the highest sales. An account with not very strong performance can bring 300,000 goods a day, and more than 20 accounts combined can sometimes send out goods worth tens of millions of yuan a day.

But he also emphasized that "it's not that video accounts are difficult to run, it's that most people can't do it." Before starting in April this year, he also went through a long and dark start-up period. In the live broadcast room with 400 people online, after giving out two benefits and then raising the price of the original product, "all the people ran away."

Now, he claims that he has mastered the mentality and gameplay mechanisms of different groups of people on the platform, and everything has become smooth. By using the flow-investing gameplay to make transactions, his account's customer unit price starts at 200 yuan. Moreover, he does not need to post short videos to warm up at ordinary times, "all he does is play with live broadcast traffic."

By adopting a bold traffic-investing strategy, some brands have now become popular on video accounts.

A typical example is the down jacket brand YaYa, which has dozens of stores in a matrix-style strategy. YaYa uses a traffic strategy that focuses on the public domain and supplements the private domain, as well as three official tools to distribute traffic. In a single live broadcast on the video account, YaYa has achieved a sales performance of over 5 million yuan.

There is also the international beauty brand YSL Saint Laurent. After launching native information flow advertising on the video account, the advertising ROI has increased by more than 60% compared to before.

In other words, unlike the private domain strategy, in the public domain era of video accounts, there is a new option of spending money to buy growth - paid traffic, which can quickly help merchants expand traffic, improve business efficiency, and help video accounts generate more advertising revenue.

In the financial report released by Tencent in Q3 this year, it was mentioned that the advertising revenue of WeChat's pan-internal circulation increased by more than 30% year-on-year, and contributed more than half of WeChat's advertising revenue, including that brought by the video account. It is worth noting that in Q2 this year, the advertising revenue of the video account exceeded 3 billion yuan.

In fact, the reason why paid streaming can help businesses get through the awkward period of cold start is because the efficiency of the algorithm distribution behind it has been improved. Li Hao analyzed that this is because the number of tags is large enough and the accuracy is getting finer and finer. For a long time, Video Account has been solving the problem of tag accuracy.

But the platform's dividends are short-lived, and are essentially caused by an imbalance in supply and demand. Just like Douyin, the more efficient the platform's traffic algorithm and the more convenient the delivery tools, the higher the certainty of the business operations will be, but at the same time, the corresponding dividends will be less and the cost will be greater.

Runyu, a knowledge blogger with tens of millions of GMV, a sales anchor, and a billion-level service provider, clearly mentioned in an interview with Xinbang that although some people complain that ADQ and WeChat beans are inaccurate and difficult to use, certainty itself means the disappearance of dividends.

Although many businesses now still only regard video accounts as a traffic supplement platform, some businesses have quickly realized that the important thing at the moment is to seize the time window when video accounts have not yet been perfected, enter the market quickly, and look for opportunities to leverage traffic dividends.

Author: Li Huan, Editor: Zhai Wenting

Source: New-Daybreak (ID: new-daybreak)