Can Video Account bring new ideas to live streaming e-commerce?

In the past year, video accounts have been placed in an important position, shouldering heavy responsibilities and taking continuous actions to continuously improve the e-commerce ecosystem and build the WeChat e-commerce ecosystem. With video accounts being given the "hope of the whole audience", can they bring new ideas to live e-commerce? Let's take a look at the analysis in this article.

Everyone knows that Ma Huateng's words "the hope of the whole audience" have confirmed the strategic position of Video Account in Tencent. Most importantly, Video Account is not only an important carrier for Tencent to connect content, but it is also expected to be close to transactions and complete the e-commerce closed loop.

This is not an easy task, because Ma Huateng also requires that Tencent only play the role of assistant and connector to complete the e-commerce closed loop without personally participating in the e-commerce business.

In the past year, Video Account has shouldered heavy responsibilities and made frequent moves, continuously improving the e-commerce infrastructure and opening up the WeChat ecosystem.

In July 2022, Video Account continued to promote the commercialization progress of Video Account. On the 18th, it announced the access to information flow advertising, and on the 21st, it launched the "Video Account Store". In October, Video Account Store updated its corporate WeChat and connected to WeChat customer service. Customers can directly initiate inquiries on the store product details page or order page.

This year, WeChat also brought service providers into the ecosystem and made them an indispensable part.

At the WeChat Open Class on January 10, 2023, Tao Jia, an open class instructor of the Video Account Live Team, mentioned that in the service provider ecosystem, Video Account live streaming has connected more than 1,000 service providers, and these service providers have contributed more than 30% of sales to Video Account.

Tencent has invested a lot of effort in Video Account. Earlier, Liu Chih-ping also made it clear in a conference call that the continued growth of Video Account is very important to Tencent's overall business. If it can achieve good monetization, it will have a substantial driving force for profits.

Against the backdrop of increasingly difficult Internet growth, all eyes are on the huge traffic pool of video accounts. Brands, anchors, and service providers are all trying to get a piece of the pie or find their own position.

Taking over the traffic from WeChat, Video Account is rapidly accelerating its commercialization progress while also carefully establishing new order and rules.

1. Can you make money by selling goods through live streaming on video accounts?

The live-streaming hosts and brand merchants gathered in the WeChat ecosystem are participating in an audition for potential video account users.

At the current stage, although there have not yet been super-top anchors like Luo Yonghao, Li Jiaqi, Viya, and Simba on video accounts, some brand merchants and anchors have gradually emerged.

Among them are merchants and brands whose total sales through live streaming have reached tens of millions, such as @七朵丝丝, a live streaming merchant from Hangzhou, Zhejiang, and @东山翠宝, a jewelry merchant from Zhaoqing, Guangdong.

According to incomplete data monitored by the video account data platform Xinshi, @七朵丝 had a total sales of 25.8139 million yuan in 171 live broadcasts, while @东山翠宝 had a total sales of 34.8725 million yuan in only 43 live broadcasts.

In addition, Yidian English APP, a brand in the field of knowledge education, achieved total sales of more than 25 million yuan through 824 live broadcasts on Video Account.

In comparison, for brands, the competition for live streaming sales on video accounts is still a blue ocean. Tao Jia said that clothing, food and beauty are the top three consumer categories for live streaming sales on video accounts.

Video accounts are also increasing their investment in live streaming. WeChat invited brands and some big anchors to participate in Double 11 in 2022. Zhu Guagua, who was once known as the "No. 1 e-commerce lady on Douyin", and Crazy Little Yang, the No. 1 internet celebrity on Douyin with more than 100 million fans, both started live streaming on video accounts.

According to Youwang Data, a video account analysis platform, Zhu Guagua, who has only more than 20,000 fans on his video account, had 241,300 viewers on November 1, with an estimated sales of 189,600 yuan. On the other hand, Xiao Yangge, who made his first live broadcast on October 15, had 242,100 viewers in the end.

Neither Xiao Yangge nor Zhu Guagua announced their final results on Double 11. However, jewelry brand Chow Da Seng ranked first in sales in the video store broadcast industry during this period, with the highest number of viewers for a single show reaching 351,000.

Xinmei Daybreak searched on WeChat and found out that Zhou Dasheng has three video accounts, @周大生在线, @周大生旗舰店, and @周大生官方旗舰店, for live streaming and selling products.

Xinshi monitored that in a live broadcast in the past 30 days, @周大生 flagship store had a total sales of 261,300 yuan, with an average of 64,400 viewers per broadcast, while @周大生 official flagship store had a total sales of 659,900 yuan in a live broadcast, with an average of 129,000 viewers per broadcast.

From the cold start to now, it took only two months for @周大生 flagship store to go online. In yesterday's WeChat open class, Zhou Dasheng's deputy general manager of e-commerce revealed that Zhou Dasheng's highest sales in a single live broadcast on the video account reached more than 5 million.

Some popular anchors with smaller voices and limited influence have also found a place to survive on video accounts.

The fashion account owner @颜君美術 has accumulated 13 live broadcasts and achieved sales of 288,200 yuan. The food anchor @大朗水口炒粉姐 and the lifestyle blogger @庄乡大小姐, both of whom sell fried noodles and local specialties from their hometowns on live broadcasts on their video accounts. After each live broadcast, they also achieved sales of nearly 10,000 yuan.

According to official data from WeChat, the overall scale of live streaming sales on video accounts maintained rapid growth in 2022, with sales increasing more than 8 times year-on-year, the platform's public domain purchase conversion rate increased by more than 100%, and the average customer price exceeded 200 yuan. In addition, the GMV of the platform from video account stores has exceeded 90%.

2. Four changes of video accounts

The automatically playing videos we see when we click on the video account come from the "Recommendations" column at the top. In this column, you only need to swipe up on the entertainment videos to smoothly swipe to the live streaming room recommended by the algorithm.

The transition from content to e-commerce is the result of multiple iterations of the traffic recommendation mechanism. The three columns at the top, "Follow, Friends, and Recommendations", are the three traffic distribution hubs of the video account.

At the WeChat Open Class in 2021, Zhang Xiaolong mentioned that the optimal mechanism for these three traffic hubs is 1:2:10. However, at that time, this mechanism had not yet reached optimization. The amount of videos generated by watching friends’ likes was more than twice that of machine recommendations.

Rooted in the WeChat ecosystem of acquaintance relationships, the proportion of machine recommendations on video accounts continues to expand, and the traffic distribution mechanism has been reorganized into "social + algorithm". Zhang Xiaolong also made it clear that as the richness of content expands in the future, the proportion of machine recommendations will be even greater.

Changing the traffic operation mechanism is the threshold that Video Account must cross in order to complete the e-commerce closed loop. After that, Video Account made many changes related to the infrastructure of live e-commerce.

At first, Video Account adhered to the product concept of WeChat and did not pay attention to "operation". The Video Account team believed that the system and rules were much more efficient than operations, but later, this idea changed.

At the WeChat Open Class in January 2022, the Video Account team talked a lot about operational actions and also proposed a special operational plan for live streaming e-commerce.

For merchants, when Video Account launched a new live-streaming merchant incentive plan in early 2022, opening the private domain valve and heading towards public domain traffic, it meant that the opportunity to sell goods through live streaming on Video Account had arrived.

Video accounts encourage anchors to "bring in their own private domain traffic" first. For every private domain user introduced into the live broadcast room, the platform will incentivize at least one public domain user to the merchant.

In order to make the flow of public and private traffic smoother, WeChat has also launched live broadcast red envelopes, sharing, and reservation functions to help businesses reach users, attribute performance, and increase viewing conversion rates. This is based on the unique operating mechanism of video live broadcast sales in the WeChat ecosystem, which is difficult to achieve with Kuaishou, Douyin, and Taobao live broadcast sales.

Regarding sales outlets, video accounts have gradually been unified.

In the past, merchants could supply goods on various SaaS platforms, and even Tencent itself was supplying goods. Now the platform has ended this chaotic state. Individual small shops have been closed, and self-operation can only be done through video account stores, and distribution is done through the Preferred Alliance. For non-brand merchants, Video Account has tightened the use rights of its third-party mini-programs.

At present, users can easily complete the entire shopping process in the live broadcast room of the video account.

Zhang Qin, a user who placed an order and purchased a product at @周大生official flagship store, told us that the process of purchasing a necklace in the video account live broadcast room was very smooth. After clicking the purchase link posted in the live broadcast room, she could submit the order. The logistics speed was also very fast. It arrived in three days through SF Express. If she had any questions, she could find the customer service through the merchant’s corporate account for consultation.

However, Zhang Qin mentioned that because it was her first time shopping in the video account live broadcast room, she could not find the order location for a while after submitting the order. "After paying with WeChat, I exited the video account and returned to the chat page. Later, I wanted to check the order details. After searching for a while, I realized that I had to return to the video account and find 'me' to see the order."

3. Raised threshold

As video account e-commerce moves towards precise traffic and certain transactions, it may be difficult for new entrants to find their own rhythm and position in a short period of time.

Li Yan, a food merchant, plans to live stream her products on a video account. On the third day of her live stream, she still hasn’t accumulated enough fans, and every step is difficult. On the one hand, her short videos are limited in traffic due to poor quality, and on the other hand, she only has 20 viewers after an hour of live streaming, “only one or two people come in after more than ten minutes.”

Li Yan did not receive any violation notification from the platform, but she was worried that if she continued, her account would be ruined. After receiving advice from her peers, she decided to try changing the method of posting lucky bags to extend the user's stay time and strive to obtain public domain traffic support. "I will stick with this account for two more days, and if it doesn't work, I will change it."

Merchants have not yet figured out a clear way to sell goods through live streaming on video accounts, and they are facing the reality that the threshold has been raised.

After June 18 this year, the conditions for obtaining public domain traffic in the video account live broadcast room have been restricted. In the past, the private domain led the public domain with a 1:1 reward mechanism, but now the official has added conditions, such as the sales volume and number of orders of the number of people entering the live broadcast room.

This is to avoid the generation of false order data. In order to encourage merchants with private domain strength, Video Account will also expand the public domain reward ratio of 1:1 to 1:5.

Some video account service providers said that public domain traffic has also begun to roll inward and has entered the stage of paid traffic. Merchants without a private domain foundation will see the gap widened if they do not pay to purchase traffic. Unless some accounts have strong content attributes and naturally have the function of attracting traffic.

Jian Feng, CEO of Zero One Digital Technology, a WeChat private domain agency service provider, mentioned in an interview, "At the end of last year, the government gave us hundreds of thousands or millions of traffic support every month, but we didn't use it because the traffic was too general. But now people will not do that. They will actively and proactively apply for traffic support because it is becoming more and more accurate."

Tao Jia also mentioned in his speech, "Through continuous optimization of recommendation efficiency, the platform's public domain purchase conversion rate has increased by more than 100% this year."

But before that, video accounts must also pay attention to balancing the ratio of influencers and brands’ own broadcasts. This is a detour that Taobao Live has taken before.

When public domain content is not accurately recommended to users, private domain experts are needed to help the platform improve user tags. "Just like Tik Tok and Kuaishou, in the early stage, experts are needed to label the content and attract brands to pay for it," said Jianfeng from Zero One Digital.

This is also the reason why WeChat relies on service providers.

At present, Zero One Digital Technology has signed contracts with more than a dozen well-known brands such as Anner, Belle, and Wu Gu Mo Fang, and has gradually achieved profitability. In addition, Zero One is also actively exploring training guidance and account incubation businesses to drive more merchants to join the video account.

Despite this, the live streaming e-commerce links of Video Account have only reached 30%-40%, and there is still a lot of room for improvement: first, Video Account has not yet opened up the distribution and push links; second, due to the commercialization process, Video Account currently only has basic e-commerce functions and cannot achieve diversified gameplay.

This is a difficult problem that all content platforms must handle carefully, that is, to master the balance between content and e-commerce. This is especially true for national-level applications such as WeChat. However, Liu Chih-ping sent a signal to the public a long time ago that the monetization model of Video Account is similar to that of products on the market, but Video Account will pay more attention to the balance between user experience and monetization.

(At the request of the interviewees, Zhang Qin and Li Yan are pseudonyms in this article)

Author: Li Huan

Source public account: Xinmei daybreak (ID: new-daybreak), understand people and discover changes.