Three thoughts on live streaming sales in 2023

Most people agree that the live streaming e-commerce market is gradually saying goodbye to its “barbaric growth”. So, overall, after saying goodbye to its “barbaric growth”, what should a healthier live streaming e-commerce ecosystem look like? As a latecomer, can video accounts solve the problems that arise in the subsequent growth path?

In 2022, the end of live streaming e-commerce has not yet arrived, and it is even full of variables.

At the WeChat Open Class Pro held on January 10, the WeChat Video Account team announced its achievements in 2022: the total user usage time exceeded 80% of the total user usage time of Moments, the scale of live broadcast viewing increased by 300%, the viewing time increased by 156%, and the sales of live broadcast products increased by 800%.

In 2022, when the internal and external macro-environment is complex and uncertainty is increasing sharply, it is not easy for Video Account to achieve such results.

In 2022, the live streaming e-commerce market is still undergoing new changes - not just changes in the market structure at the competitive level. From a long-term perspective, live streaming sales are bidding farewell to their wild growth.

We have seen that in the past year, Luo Yonghao and Yu Minhong joined Taobao, Douyin and Kuaishou launched the first-level "mall" entrance on the App homepage, and the platform has further increased content construction, merchant support, ecological improvement, etc.

Putting these changes together, it is not difficult to find that live streaming e-commerce is not a pure zero-sum game. Future competition will depend on the sustainability and health of the platform ecosystem.

Based on the above changes, this article looks ahead to 2023 and selects the following three most concerning issues for discussion:

1. Is the high growth of Video Accounts sustainable?
2. Will the platform's differentiated advantages be eliminated or amplified?
3. What does a healthier live streaming e-commerce platform ecosystem look like?

1. Is the high growth of video accounts a flash in the pan or a gradual trend?

Whether the high growth of video accounts can continue, we can discuss it from two dimensions:

First, whether the richness of content and the proportion of high-quality content within the video account ecosystem can continue to improve; second, whether the combination of content and e-commerce, that is, live streaming with goods, can unleash greater potential.

The content level of the former can be divided into short video content and live broadcast content.

At the WeChat Open Class in 2021, Zhang Xiaolong revealed that in the early days, the Video Account team spent a lot of effort on machine recommendations, but due to the problem of content richness, the results were not good.

“The recommendation team worked very hard, but the first few months were particularly difficult. It seemed that we were stuck in a deadlock. If the content was not good, there would be no views, resulting in no one contributing content. Therefore, the recommendation system could not push out good content, and there was no good content to watch.”

This problem has changed a lot in 2022. According to data disclosed on WeChat Open Class Pro, the number of daily active creators and the average daily video upload volume of video accounts have increased by more than 100% year-on-year, the number of original content on the platform has increased by 350% year-on-year, the number of creators with 10,000 fans or more has increased by 308%, and the number of popular content with more than 100,000 likes has increased by 186%.

There is another set of data worth noting. In 2022, the number of recommended video plays on Video Accounts increased by more than 400% year-on-year. This means that Video Accounts have basically solved the problem of insufficient content richness in the early days.

On the live content side, video accounts are also growing rapidly.

In 2022, the number of high-quality broadcasts on Video Accounts increased by 614%, and the broadcast time increased by 83%; the scale of viewers increased by 300%, and the viewing time increased by 156%.

In other words, more people are broadcasting live on video accounts, and more people prefer to watch live broadcasts through video accounts.

When the scale of both content production and content consumption is increasing at the same time, the live broadcast ecosystem on Video Account will be more likely to form a virtuous circle, because to a certain extent, content creators and content consumers motivate each other invisibly. Of course, this also depends on what the platform itself has done and what it plans to do next. We will analyze this in detail below.

If the richness of content is a necessary condition or foundation for the long-term development of a short video platform, then live streaming with goods determines the possibility of commercialization of the platform.

In 2022, the sales of live streaming on Video Accounts increased by more than 8 times year-on-year. Among them, the sales from Video Account stores accounted for more than 90%, and Video Account live streaming connected more than 1,000 service providers, which contributed more than 30% of the sales.

In addition, the conversion rate of public domain purchases on the platform increased by more than 100%, and the average order value exceeded 200 yuan.

We can see that the growth rate of video accounts in 2022 is gratifying, but the growth method is not explosive, but gradual and solid. We can also see this from the layout of video accounts in 2022.

For example, the video account has been more smoothly connected with the official account, mini-programs, and enterprise WeChat; for example, the tool capabilities have been continuously optimized and iterated this year; for example, the "Video Account Store" was launched, and the store capabilities are continuously improved.

Judging from the information revealed in this WeChat Open Class Pro, in the coming year, the layout of Video Account will be more powerful on the creator side, on the merchant side, and on the ecosystem.

According to the current growth rhythm of Video Account, we can see that the moment of Video Account’s explosion has not yet arrived, but it is gradually gaining strength.

2. Will the platform’s differentiated advantages be eliminated or amplified?

Looking back at some of the changes that have taken place in the live e-commerce industry in 2022, the market value list believes that there are two points that are particularly worthy of attention:

First, Luo Yonghao and Yu Minhong entered Taobao.

This is not a job-hopping of a big anchor, but the fact that "Make Friends" and "Eastern Selection" - two live broadcast rooms that have already grown in the industry, have added a new business channel for their own development.

In the long run, assuming that this multi-platform operation model proves to be successful, it is likely that more and more influencers and businesses will choose the same path.

This is naturally welcome news for merchants, but it will bring new challenges to the platforms.

Although different platforms have different business logics, from the perspective of merchants, result-oriented comparisons will occur, which will affect energy allocation and business weights.

It is for this reason that the platform needs to establish more differentiated advantages to retain old merchants and attract new ones.

Second, Douyin and Kuaishou launched the first-level “mall” entrance on the App homepage.

After the "mall" entrance is opened, the user's in-domain consumption scenarios and the merchant's business scenarios are more complete and closer to the whole-domain consumption ecology: it includes both the goods looking for people in the content recommendation scenario and the people looking for goods in the user's active scenario.

After this change occurred, some outside comments said that Kuaishou and Douyin are becoming more and more like Taobao, because in addition to the existing interest e-commerce and trust e-commerce, they have uniformly joined the battlefield of shelf e-commerce.

In this way, from the perspective of pure product form and scenario, the differentiation between platforms is actually shrinking. This is a trend.

Therefore, if the platform wants to explore and consolidate differentiation, it needs to go a step further. In essence, there is only one point:

We need to differentiate the experience, including the experience of content producers and consumers, the experience of goods merchants and consumers, and the experience of partners such as service providers within the ecosystem.

The market capitalization list observed that the following two aspects are particularly critical for the platform.

The first level is whether it can help businesses better manage public and private domains.

In a research report published in September this year, iResearch Consulting mentioned that the linkage between public and private domains is necessary and important, and has traffic value, consumption value and operational value.

We see that currently, in terms of public-private domain linkage, the video account has the most obvious differentiated advantage.

Video accounts, which grew up in the social ecosystem of acquaintances, naturally have the shortest link for the action of "sharing". At the same time, after connecting official accounts, Moments, personal WeChat accounts, corporate WeChat, WeChat communities, mini-programs, etc., the circulation channels between the public and private domains are opened to the greatest extent.

This means that when we mention video accounts, its private domain relationships can be established simultaneously through multiple paths such as between users and users, users and anchors, etc.

On this basis, what Video Account has to do is actually relatively simple. It has to help merchants deposit more public domain traffic into the private domain, and then leverage more public domain traffic through private domain traffic.

The second level is how to help more mid-level players and even top-tier players achieve growth under the logic of the "trinity" of content, traffic, and business management.

In 2022, Taobao, Kuaishou, Douyin, and Video Account have all made efforts in this direction, and the trend is becoming more and more obvious.

3. What should a healthier platform ecosystem look like?

Live streaming e-commerce is not a pure zero-sum game. Future competition will depend on the sustainability and health of the platform ecosystem.

On the one hand, it is the continuous improvement of the content-based creator ecosystem; on the other hand, it is the continuous evolution of the platform commercialization ecosystem based on content + e-commerce.

This is especially true for Douyin, Kuaishou, and Video Account. The three are first content/social platforms, and then e-commerce platforms. For the platforms, a sense of balance is particularly important:

• The balance between user experience and platform commercialization - they need to explore commercial realization within a comfortable space acceptable to users, whether it is live streaming or advertising;
• The balance between creators’ input and rewards: creators cannot just pay for their ideals, but should be motivated to continue to create;
• The balance between the commercialization of the platform and the commercialization of its partners - the platform needs to make money, and so do its partners;
• Balance between small and medium-sized businesses and brand businesses - providing sufficient opportunities for operators of different sizes, different development stages, and different backgrounds.

We might as well take the video account, which is still in the early stages of commercialization, as a research sample to see how it is done.

First, we will increase support for creators of short video/live streaming content.

On the one hand, there is the upgrade of creative service tools. For example, in the creator center, creators can view their own exclusive growth tasks. In the "Violation Query" module, creators can understand the recent status and problems of their account.

On the other hand, the Video Account team revealed that in 2022, the "Polaris Project" has provided billions of traffic to support and incubate tens of thousands of outstanding creators.

For authors with “0 fans”, “100 fans” and then “10,000 fans”, Video Account has targeted monetization tools to help them monetize their works through live broadcast rewards, live broadcast sales, product sharing, mutual selection of advertisements and other capabilities.

Second, in terms of video account e-commerce, we will continue to focus on users, merchants, and service providers.

At the user level, we will continue to build a unified and orderly platform to ensure the purchasing experience of C-end users.

At the WeChat Open Class Pro, instructor Tao Jia said that the gradually unified purchasing process for C-end users of Video Account is based on the platform's unified product details page and product showcase page. This not only carries the platform's official guarantee for the entire purchasing process, but also effectively ensures the consistency of the user's consumption experience, which is conducive to cultivating a stable consumer mentality among users.

At the merchant level, we will continue to optimize capabilities and open up safe and controllable B-side merchant management tools.

In 2022, Video Account connected user identities of mini programs, official accounts, Video Account stores and other channels, unified the user identity system, and facilitated unified management by merchants. It also opened up various interfaces and tools, allowing merchants to connect existing ERP, SCRP and other efficiency tools.

In addition, Video Account has also opened a service provider application market, allowing merchants to purchase small store services provided by service providers according to their own needs.

At the service provider level, Tao Jia introduced that over the past year, Video Account has gradually built a set of investment training guidance, account incubation, and recruitment and operation systems for agency service providers.

We see that the ecological construction of Video Account in 2022, on the one hand, is continuing to consolidate the infrastructure, and on the other hand, it is also striving to create capabilities that make multiple roles within the ecosystem, such as users, creators, merchants, and service providers, relatively comfortable.

Video Account will continue to implement this idea in 2023. In the open class, the Video Account team revealed that Video Account will continue to increase its support for merchants and service providers.

For example, a brand merchant incentive plan will be released in the near future, providing brand merchants who have settled in the video account store with various rights and interests including traffic cold start, brand logo, exclusive services, etc. At the same time, the private domain traffic incentive plan will be further upgraded.

For example, we will increase support for industrial belt service providers, brand operation service providers, and alliance investment promotion team leaders.

IV. Conclusion

Some time ago, in a slightly radical internal speech, Ma Huateng affirmed the progress of the video account, "The most eye-catching business of WXG (WeChat Business Group) is the video account."

Looking back at the development history of Video Account, since its launch in 2020, it has basically solved the problems of survival and growth, but the next challenges may be the most severe, and it needs to continue to prove its commercialization capabilities.

Strictly speaking, the progress of the video account cannot be said to be fast, and it is even a bit slow, whether compared with Taobao, Douyin or Kuaishou.

However, before the final pattern of live streaming e-commerce is established, long-term growth is more important than speed.

As we mentioned, future competition will depend on the sustainability and health of the platform ecosystem, whether it can continue to capture the "living water" of merchants, and whether it can make all roles in the ecosystem comfortable and win-win.

Author: Zhu Zhang; Editor: Jia Xin

Source: Market Capitalization List (ID: shizhibang2021), Capital and Business Research