Taobao's first show sold 175 million yuan, and Oriental Selection has "three burrows for cunning rabbits".

This article details the process of Dongfang Zhenxuan entering Taobao, not only analyzing Dongfang Zhenxuan's considerations, but also discussing the trend of multi-platform operations of Douyin's top anchors. It has a good enlightenment effect on understanding the business operation model of e-commerce anchors. 

One month after the news of being "punished" by the TikTok platform came out, Oriental Selection has made new moves.

On the afternoon of July 26, the Douyin live broadcast room @东方甄選 announced that it would suspend operations for three days. Its own product store was also suspended during the same period. The explanation given by 东方甄選 was that "the rules were accidentally triggered and we will actively rectify them."

On August 29, New Oriental founder Yu Minhong and Oriental Selection CEO Sun Xudong (Dongfang Xiaosun) led many Oriental Selection anchors to start a full-day live broadcast on Taobao.

Kas noticed that on the morning of August 29, within one hour of the live broadcast on Taobao, sales of Oriental Selection exceeded 10 million yuan, and the number of online users exceeded 2.1 million; at 6 pm on August 29, Yu Minhong announced in the live broadcast room that sales exceeded 100 million yuan. According to All-Weather Technology, the live broadcast debut, which lasted from 8 am to 24 am, had cumulative sales of 175 million yuan.

As of press time, Oriental Selection has 1.987 million fans on Taobao Live and 30.624 million fans on Douyin. According to Chanmama data, the average daily sales of Oriental Selection's Douyin live broadcast room in the past 30 days has been in the range of 10-25 million.

Today, the discussion about the relationship between Dongfang Zhenxuan and the Douyin platform is raging. Previously, Luo Yonghao and his live broadcast agency Jiaogepengyou entered Taobao, which was considered by the industry as a manifestation of the continued game between Douyin and the top anchors. (Click here to read: "Luo Yonghao" and others enter Taobao in large numbers, is Douyin worried?)

From "Dongfang Selection" to "Dongfang Multiple Selection", how long can this top live streaming influencer remain popular on Douyin? The fact that Douyin's top live streaming agencies have joined Taobao implies what changes in the industry and what are the considerations of interests?

1. The story of Oriental Selection’s entry into Taobao

On July 5, Yu Minhong, together with YOYO and other Oriental Selection anchors and the behind-the-scenes team, launched the first live broadcast on the new version of the Oriental Selection App, mainly recommending Gansu specialty products and Oriental Selection's own products.

Regarding Oriental Selection launching its own live streaming app, Yu Minhong responded in a live broadcast, " Oriental Selection and Douyin are mutually beneficial . Creating its own platform is a normal and enterprising behavior for the company. I hope everyone will not over-interpret it."

However, this kind of "mutual achievement" began to crack after half a month, and this was also the moment when the "gears of fate began to turn" for Oriental Selection.

On the afternoon of July 26, the Douyin live broadcast room @东方甄選's self-operated products announced that it would suspend operations for three days. Its self-operated product store also suspended operations during the same period.

As for why it was shut down by Douyin? Douyin and Dongfang Zhenxuan did not give a clear explanation. According to The Paper, the reason for the ban was that when the anchor was explaining the ingredient list, the QR code of the Dongfang Zhenxuan App was revealed on the packaging, which was considered by Douyin as a traffic diversion.

After being shut down, Sun Xudong quickly responded: "In the past, present and future, we will cooperate with the platform for development. We have always communicated smoothly with the platform. This time we accidentally caused a problem and violated the rules. We will actively rectify it."

At that time, Dongfang Zhenxuan was forced to switch to live streaming on its own app. Sales exceeded 110 million yuan in 4 days, and the Dongfang Zhenxuan app once topped the iOS shopping list. The outstanding performance of the app even led to a drop in the stock price before an increase, which was a blessing in disguise for Dongfang Zhenxuan. (Click here to read: Mr. Yu, how about we bow our heads?)

Seeking multi-platform development has become a common choice for super anchors. So, among so many platforms, why did Dongfang Zhenxuan choose Taobao first?

On the one hand, with traffic reaching its peak, Oriental Selection’s entry into Taobao may usher in a new development cycle.

Alibaba’s latest financial report shows that the average daily active users of Taobao App has increased for five consecutive months, reaching 402 million in June and 887 million monthly active users.

Since 2021, Taobao has always attached great importance to content, and the traffic distribution mechanism has also changed from the main indicator of "transaction" to "double indicators of transaction and content". Oriental Selection, which has content advantages and its own brands, is in line with Taobao to some extent.

Moreover, since Wei Ya stopped broadcasting, Taobao Live has always lacked a top anchor to compete with Li Jiaqi, so it has always been a monopoly. Attracting top anchors from other platforms will also help Taobao enrich its own content ecology and talent supply.

On August 24, when the official announcement of the launch of Oriental Selection on Taobao was made, Taobao also gave a positive response - welcoming Oriental Selection and accompanying the picture "A bigger world, a better selection". Oriental Selection's entry into Taobao is another leading live streaming organization to enter Taobao from Douyin, following Jiao Ge Pengyou, Yaowang, and TVB.

On the other hand, the suspension of Douyin has accelerated the multi-platform layout of Oriental Selection. Since the end of July, Oriental Selection has mainly done three things: first, maintaining a stable relationship with Douyin; second, stepping up efforts to develop an independent app; and third, vigorously expanding multi-platform cooperation.

Data shows that Oriental Selection had a great start on Taobao. At 9 a.m. on August 29, within just one hour of the launch of the program on Taobao, sales of Oriental Selection exceeded 10 million yuan, and the number of online users exceeded 2.1 million. The total sales for the whole day reached 175 million yuan, which is an outstanding achievement for a non-platform promotion period.

In terms of popularity, as of 7 p.m. on August 29, the total number of viewers of the Oriental Selection Taobao live broadcast room reached 26 million, which exceeded the number of viewers of Li Jiaqi’s live broadcast the day before.

From the perspective of product selection, the product structure of Oriental Selection’s first Taobao display is very complete, covering multiple categories such as beauty and skin care, food and beverages, 3C digital products, household daily necessities, etc. Among them, the vast majority of beauty products come from international brands (such as Lancome, Estee Lauder, Clarins, La Mer, etc.), while in the food and beverage and household categories, a large number of Oriental Selection’s own products have been introduced.

It is worth noting that because coupons can be returned when purchasing goods, Taobao users are further motivated to place orders, thereby effectively driving up GMV; the 12% discount on all Oriental Selection's own products is also a discount point that encourages old users to place orders.

Judging from the pre-heating, platform publicity and recommended positions on the day of the live broadcast, the live broadcast debut of Dongfang Zhenxuan was a grand and relatively successful marketing activity. Judging from the performance of the anchors, Dongfang Zhenxuan's advantages such as "cultural output" and "content characteristics" are still applicable to Taobao. Kas noticed that not only in the live broadcast room, but also on social platforms such as WeChat and Xiaohongshu, there were many consumers who liked the performance of the anchors on that day.

However, anchor Yoyo also mentioned in the live broadcast that Oriental Selection will not start the daily broadcast mode on Taobao. Kas believes that on the one hand, this means that the sales focus of Oriental Selection is still on Douyin, and on the other hand, it reveals that Oriental Selection still intends to invest more energy in its own APP.

2. The Limited Game of “TikTok’s No. 1”

Since it became popular in June 2022, Dongfang Zhenxuan has been advancing by leaps and bounds and has become a rising star in the live e-commerce industry. At the same time, it has always faced the potential crisis of unstable status as the "number one". The reason behind this is simple - Douyin does not have a constant top stream.

Tik Tok is a content platform with algorithm distribution as its underlying logic. Users’ interests will constantly change, and popular trends will also change accordingly. Therefore, whether it is content experts or e-commerce anchors, they will face a "generational change" crisis.

Guosen Securities' in-depth report analysis in June pointed out that Douyin's traffic distribution is more "algorithm-oriented and user-light". All live broadcasts must obey the principle of algorithm priority, and the specific traffic distribution mechanism follows the "horse racing mechanism" + the rule of timed zeroing of scores.

Douyin will provide a certain amount of basic traffic for each live broadcast room, and then adjust the ranking based on the short-term performance of the live broadcast room, and increase the traffic of the top 10-20% of the live broadcast rooms to enter the next-level traffic pool with a higher ceiling.

Reference indicators for short-term performance include interaction heat and sales heat. The interaction heat index refers to the 40-second residence rate of the live broadcast room, the 3-minute interaction rate, the proportion of users who reward, etc. The sales heat index includes order conversion rate, 1-minute order volume, average GPM (i.e. the average conversion rate of traffic to sales), etc.

When a round of "horse racing" is completed, the platform algorithm will generally reset the popularity points and sales points in hours, put all live broadcast rooms at the starting line, and compete again.

Figure/ Guosen Securities Research Report

Soochow Securities also pointed out that Douyin's consumers are more concerned about the content and the anchors themselves, and the platform's algorithm mechanism is more conducive to suppressing the emergence of top anchors; while Taobao's consumers pay more attention to the strength of discounts, and super top anchors have extremely high bargaining power and are more likely to get high concessions from brands.

For a super live streaming room like Oriental Selection, which has accumulated 30 million fans on Douyin and has been the monthly sales champion for many consecutive months, it also has to abide by Douyin's rules of the game and faces the risk of traffic peaking.

3. Douyin’s top MCNs are queuing up to join Taobao

Since Douyin traffic is distributed based on algorithms, traffic is dispersed, private traffic has not been established, the horse racing mechanism that can be cleared at any time, and the ever-increasing traffic prices have made the top anchors feel insecure. After considering many aspects, the top anchors may choose to jointly deploy on multiple platforms.

In fact, Yu Minhong has long been aware of the risks of cooperating with platforms, and once said: "The lively business model based on external platforms is very fragile." Therefore, Dongfang Zhenxuan has been planning its development prospects beyond Douyin.

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 this year, Oriental Selection’s own app also launched a live broadcast business.

According to public data, the GMV of Oriental Selection showed a downward trend in the first half of this year, and finally ushered in strong growth in May this year. The GMV of matrix accounts reached 944 million, a month-on-month increase of 30.45%.

On August 25, Dongfang Zhenxuan announced its full-year results for the 2023 fiscal year from June 1 last year to May 31 this year. The financial report shows that in the 2023 fiscal year, the total transaction volume of Dongfang Zhenxuan's live e-commerce business reached RMB 10 billion, most of which came from Douyin . In the 2023 fiscal year, the total number of paid orders for third-party products and self-operated products on Douyin was 136.3 million.

Source: Oriental Selection 2023 Annual Report

From the perspective of revenue structure, self-operated products have gradually become a major driving force for Oriental Selection’s revenue growth.

In fiscal year 2023, the total revenue of Oriental Selection's self-operated products and live e-commerce division was RMB 3.9 billion, of which the total revenue of self-operated products exceeded RMB 2.6 billion, and the GMV of self-operated products accounted for about 67%. Affected by the higher sales of self-operated products, Oriental Selection's gross profit margin increased from 37.8% in fiscal year 2022 to 38.2% in fiscal year 2023.

As for the future direction, Oriental Selection wants to create an online version of "Sam's Club".

Sun Dongxu once explained in a live broadcast that the Oriental Selection APP has three positionings. The first is to be a platform for selecting good things; the second is to continuously provide differentiated services to users through an independent APP. In the future, Oriental Selection will establish a membership service system to provide paying members with great value products; the third is to be a cultural platform, providing users with good content with substance, so that they can read thousands of books and travel thousands of miles.

The game between Oriental Selection and Douyin is not an isolated case.

Making friends with the first generation of Douyin's number one anchor, who chose to "leave Douyin and join Taobao" during the Double 11 period in 2022, is also the result of the game between the platform and the top anchors.

According to third-party data, in the third quarter of 2022, the sales of the "Make Friends" Douyin live broadcast room began to decline, reaching 317 million yuan, 298 million yuan, and 100 million to 250 million yuan from July to September, respectively.

After entering Taobao Live, the GMV of Luo Yonghao's first Taobao Live show reached 210 million yuan on October 24, 2022. During the 618 period in 2023, Jiao Ge Pengyou entered JD.com again, and the GMV of its first live show also exceeded 150 million.

Through a cross-platform, multi-channel, and multi-account matrix layout, Jiaogepengyou reduces the risk of relying on a single platform.

In October last year, Kas also wrote an article mentioning this point of view: the departure of Jiao Ge Pengyou from Douyin and entry into Taobao will inevitably lead to a new situation, that is, the history of top anchors being monopolized by platforms will be rewritten, and it will also become a trend for anchors to jump back and forth on multiple platforms to achieve comprehensive growth.

Judging from the industry dynamics over the past six months, the facts are indeed consistent with our expectations. More anchors have adopted a matrix layout across platforms, channels, and accounts to resolve the risks that are bound to arise from relying solely on a single platform.

Long-term and stable growth is the common pursuit of the top live broadcasting organizations. In order to achieve this goal, the top MCNs have many other problems to solve besides migration.

Author: Lou Xingchui

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