With monthly sales of 500 million and a return rate of over 90%, their business has become the top streamer on Douyin

Jewelry merchants occupy five of the top ten spots on Douyin's monthly sales list, and jewelry business is booming on Douyin. This article details the current status, reasons for the boom, and development prospects of jewelry business, and I hope it will be helpful to you.

The "get-rich-quick myth" of the jewelry live broadcast room continues.

The most popular anchors on Douyin have turned into a group of middle-aged men covered in jewels and precious stones.

The Douyin anchor sales list released by Xin Dou Data shows that the top three anchors in terms of sales in July are all from the jewelry and cultural relics field, namely: Xinjiang Hetian Jade Lao Zheng, Xiaobei Jewelry Selection, and Yunshang Jewelry. The monthly transaction volume (GMV) of the top two anchors exceeded 500 million yuan.

Oriental Selection, which has dominated the charts for a long time, was suspended from Douyin for five days due to its high-profile switch to its own app and violation of the rules. Its sales performance in July ranked only fourth.

However, the sudden rise of jewelry merchants is not accidental. In February this year, Xinjiang Hetian Jade Lao Zheng had already sneaked into the TOP10, and then successfully ranked among the top three in March and April. In May, he even surpassed a number of top anchors to top the list.

The reason why the July list attracted attention is that jewelry merchants collectively "dominated the list", occupying a total of five seats in the top ten and taking the TOP3 positions.

Jewelry merchants occupy five of the top ten spots on Douyin's monthly sales list

However, these "jewelry tycoons" with good gold-digging ability are far behind the big Vs in terms of the number of fans. The first one is Xinjiang Hetian Jade Lao Zheng, who currently has only 1.01 million fans on Douyin, while Dongfang Zhenxuan has 30.59 million fans, a 30-fold difference in popularity between the two.

An even more dramatic scene occurred on July 17, when #TikTok Jewelers Return Rate 90%# directly topped the Weibo trending search list. A jewelry merchant posted relevant backend data, claiming that "the 618 TikTok jewelry industry was ruined."

On one hand, there is a good situation with high growth and high performance, but on the other hand, there is a surprisingly high return rate. How did jewelry merchants gain popularity on Douyin? What role did the platform play in it? And why jewelry?

1. Douyin targets jewelry

In the 700 billion-dollar jewelry and jade market, the proportion of online transactions has been increasing year by year.

According to statistics from the China Jewelry, Jadeite Jewelry Association, the total online jewelry sales in 2022 were approximately 235 billion yuan, a year-on-year increase of 27%, accounting for more than one-third of the total sales.

Because jewelry is mostly sold as non-standard products and is marked up by agents, the terminal selling price is often very high. In the past, the purchasing channels available to consumers were also relatively limited, concentrated in department stores, jewelry stores, etc.

The rise of the jewelry industry on Douyin is a two-way effort between the platform and merchants.

Interesting content can stimulate the demand for "wandering" and guide impulse purchases through live broadcasts. This direct-to-user DTC model also allows many source-based merchants to have price advantages and reach a wider consumer market.

Bu Er Jewelry, a new jewelry brand, once said, "There are many middlemen in the jewelry market, and the quality of goods is mixed. Newbies who don't understand jewelry are most afraid of not being able to buy good goods. Therefore, live streaming is an opportunity for fans to reduce middlemen and select good goods from the source."

Douyin also has its own considerations for targeting the jewelry industry.

The second half of e-commerce live streaming has entered an era of decentralization. Since Douyin’s daily active users exceeded 600 million, its growth rate has slowed down. In order to maximize the commercial value of these existing stocks, it is necessary to create a more diversified live streaming ecosystem. The GMV that super-head anchors can contribute is always limited. The platform hopes to see a situation where a hundred schools of thought contend, with more mid-level and long-tail anchors driving the growth of the market.

From the retirement of Luo Yonghao from Make Friends and the establishment of Dongfang Zhenxuan, we can see that these big anchors and big IPs have their own celebrity aura and brand effect, but are also full of uncertainty. In contrast, jewelry merchants have risen by leveraging the power of the platform, and are more dependent on official support in terms of resources and traffic, and are more closely tied to Douyin.

As for why jewelry is the first choice, it may be related to the urgent need for Douyin to create a strong category for its own platform. Taobao Tmall's clothing, JD's digital 3C, and Pinduoduo's agricultural products have all formed certain vertical industry competition barriers and distinct user minds, thereby driving consumption power to radiate to other categories.

Jewelry, jade, and gold jewelry, like beauty products and food, have their own content highlights and display value, and belong to the category of high unit price. Even if they are not essential products, they can still achieve impressive GMV data with the help of traffic.

From the perspective of the population, the core users of the jewelry industry are older, while the proportion of middle-aged and elderly people on Douyin has increased significantly. QuestMobile data shows that in 2021, middle-aged and elderly users over 41 years old accounted for 36.3% of Douyin's population portrait, and those over 51 years old accounted for 18.4%.

This year's popular "Xiu Cai" and "Yi Xiao Qing Cheng" easily captured the hearts of more than 10 million middle-aged and elderly "Douyin users" with just lip-syncing singing videos. Long stay time, strong spending power, and short decision-making path are the core characteristics of this group of users, and it is they who support Douyin's jewelry business.

Focusing on the July sales rankings again, Oriental Selection, which has over 30 million fans, ranks fourth, Crazy Brother Yang, who has over 100 million fans, ranks ninth, and Make Friends, who has over 21 million fans, ranks thirteenth. The winner, Xinjiang Hetian Jade Lao Zheng, has fewer fans than the big Vs, but has managed to generate monthly sales of 500 million.

“Being popular doesn’t mean you can get accurate traffic.”

A merchant from an industrial belt who got started with live streaming with natural traffic told "Tianxia E-Commerce" that this year, Douyin's live streaming has reduced the weight of popularity value and placed more emphasis on real-time transactions. This means that merchants with fewer fans and average popularity, if they can facilitate intensive transactions, are very likely to be monitored by the platform and receive accurate free streaming.

This is a change in the platform's traffic mechanism, which has brought new possibilities for the business explosion of more small and medium-sized businesses. What's more, the jewelry industry is the focus of support from the platform.

In 2022, Douyin e-commerce officially launched the "Treasure Plan" and the industry member "Treasure Player" at the Jewelry Trendy Luxury Industry Conference to promote the development of the jewelry trendy luxury industry. Official data shows that as of June 2022, the business volume of Douyin e-commerce jewelry trendy luxury industry has reached 100 billion yuan, and the GMV of jewelry trendy luxury high-end products has increased by more than 54% in the past year.

2. High-quality goods, lighting and character design

The heavy support from the platform has created conditions for the jewelry industry to break out of its circle. From the perspective of the merchants themselves, they have gradually explored a mature methodology for live streaming sales.

Mr. Zheng, a Xinjiang Hetian jade trader, positioned himself on the homepage of his account as follows: "We make jade jewelry affordable so that more people can understand and like jade and be able to afford it."

A 9.9 yuan gold jade water drop pendant, a 15 yuan water grass agate bracelet, and a 34.9 yuan Hetian jade peace buckle pendant. When you enter Lao Zheng’s store or live broadcast room, you can find that low-priced products are very popular. They play the role of stimulating interest and attracting traffic.

But if we look further at Lao Zheng's goods, we can see that the price range of the goods is very wide, with the highest price of a single item exceeding 30,000 yuan. What really makes Lao Zheng the number one on the list of goods sold are those "high-end goods" with a unit price of thousands or even over 10,000 yuan.

On the evening of August 9, "Tianxia Online Business" opened Lao Zheng's live broadcast room. A Hetian jade bracelet priced at 4,980 yuan was taken off the shelves after nearly 900 people placed orders, with sales of nearly 4.6 million yuan. Heat Wave data shows that the product with the highest sales in Lao Zheng's live broadcast room in the past 30 days is a Hetian jade jasper powder green round bracelet priced at 32,000 yuan, with 491 units sold and sales reaching 9.11 million yuan.

There are two key points to achieving high conversion rates for these high-priced, low-frequency jewelry and jade. The first is to build a trustworthy personality for the anchor, and the second is to do a good job of presenting the products in the live broadcast room and increase the conversion rate by taking advantage of the source price.

A jewelry merchant said, "The essence of live streaming sales is trust and interaction between people." Because the market is opaque and there is information gap in the industry, it is crucial to create a reliable personality for the anchor.

Xiaobei, the owner of Xiaobei Jewelry, claims to have "been working in the jewelry industry for more than 10 years and is the president of the Jewelry Association." Lao Zheng is a down-to-earth jade expert in the eyes of fans. He explains jade knowledge in easy-to-understand colloquial language. They build trust with users through high-frequency broadcasts and establish themselves as product endorsements.

At the same time, most jewelry merchants pay attention to the decoration, lighting, and atmosphere of the live broadcast room to present the luster and quality of jewelry and jade. Lao Zheng's live broadcast style is simple, with most of the pictures showing close-ups of products, and he occasionally uses a flashlight to illuminate them. In addition to explaining the core selling points, he emphasizes the high cost-effectiveness to pamper fans, "I'll give you 39.9 for high-quality products, and there's no need to order more," calling on users to "get on board" quickly.

Some anchors also focus on scenes and interactive experiences. For example, they broadcast shopping in a jewelry market and bargain with upstream suppliers on the spot. The porcelain merchant "Bu Yi Ceramics" also moved the live broadcast to the kiln of Shuangfeng Chai Kiln, allowing users to immerse themselves in the intangible cultural heritage inheritance skills.

3. A false prosperity with a return rate as high as 90%?

Due to the high entry threshold, it is difficult for ordinary consumers to identify the authenticity and quality of jewelry and jade products.

Taking jade as an example, there is a saying that "laymen look at the color, experts look at the quality". The "quality" of jade is divided into more than ten types, including glass type, high ice type, glutinous ice type, etc. Factors such as color, bracelet shape, defects, and circumference all affect the price, which is difficult for non-professionals to distinguish.

At last year's "3.15 Evening Party", the chaos in jewelry and jade was singled out. It was reported that an anchor claiming to be from a "jewelry factory" visited the Myanmar jade market, but the so-called visit was actually self-directed and the scene was actually set up in an office building.

To ensure the quality of jewelry, Douyin e-commerce has established quality inspection and warehousing integrated operation centers (QIC) in many places. These quality inspection centers are often located in local jewelry wholesale market bases. After the goods are sold online, they will be sent directly to these quality inspection centers. After being identified as qualified, certificates will be issued and then shipped to consumers. Many merchants will also indicate on their homepages that "natural jewelry quality inspection and delivery will take about 3 days, please be patient."

However, under such quality inspection and supervision procedures, the return rate in the jewelry industry is still shocking.

The jewelry merchant that triggered the trending search #TikTokJewelerReturnRate90％# posted a screenshot of its transaction volume, showing that its transaction volume was 1.43 million and its refunds were 1.15 million, which exceeded 81.15% of its peers in the same industry.

However, some people in the industry said that if you buy so-called natural jewelry and jade online, the return rate will be very high, and this situation is not limited to Douyin. Jewelry appraiser Zhang Dongfang also pointed out that "it is normal for jewelry merchants to have a return rate of more than 80%. Most returns are because the goods are not the same as the ones described. They are delivered in the same way as they were delivered."

This is closely related to the non-standard nature of jewelry and jade. Merchants often adopt "diversified delivery", and the quality is difficult to guarantee. A user who has purchased crystal beads on live broadcasts said, "The things I received from diversified delivery have nothing to do with what I saw in the live broadcast room, and the same is true for both expensive and cheap goods."

The beautiful filters in the live broadcast room are also one of the "culprits". A user who claimed to be "de-enchanted" by jade said that he bought a bracelet in a live broadcast room and found a big difference after receiving it. Under the special light source in the live broadcast room, the beads were obviously greener and more transparent, which could easily make people "intoxicated".

"It may not be the product that captures consumers' emotions, but the content. Impulsive orders do not really stimulate real consumer demand. When the filter no longer exists and the emotions have passed, they will naturally return the products and get refunds."

What makes many merchants dissatisfied is the platform’s traffic distribution mechanism.

As mentioned above, Douyin's distribution mechanism has a set of strict assessment standards for merchants' live broadcast rooms, especially focusing on transaction data. Some jewelry merchants believe that the high return rate is related to the platform releasing a lot of "pan-traffic" to the live broadcast room. These are not the traffic of the target population. If you don't work hard to convert them, the live broadcast room traffic will fail. Actively promoting conversion will lead to a high return rate.

A Weibo user who calls himself "Cultural Art Douyin Merchant" also pointed out that "the most bizarre thing about Douyin is the vertical push notifications. After users take a photo, similar products are immediately pushed to them. If they see a cheaper product, they will just return it regardless of the quality."

This controversial business has found an opportunity for explosion with the support of platform resources, but is also limited by its product category characteristics and traffic mechanism.

Douyin e-commerce is also thinking about countermeasures. This month, it launched a "first check, then send" labeling service for jewelry and jade products. Products authenticated by QIC will be labeled and the entire transaction chain will be disclosed to the user.

For the platform, it is necessary to make iterative evolutions in regulatory processes, distribution methods, consumer rights protection and service systems, and balance the interests of merchants, platforms and consumers. Only then will the seemingly prosperous jewelry business have the possibility of being healthier and longer-lasting.

Author: Zhu Zhicong

Source: Tianxiawangshang