The underlying logic of Kuaishou live streaming sales from Simba’s sales

In the Double Eleven battle that ended not long ago, the competition between Taobao anchors Li Jiaqi and Wei Ya in bringing goods became a topic of national concern, while at the Kuaishou e-commerce shopping festival, Simba became the benchmark of 2019.

In Kuaishou’s first sales king competition on November 6, 2018, Wawa, Xiaoliang and Sanda Ge were still the focus of sales. But in 2019, with sales of 400 million on Double Eleven, Simba successfully took the top spot in Kuaishou anchor sales, and the title of Kuaishou's sales king officially changed hands.

Simba of Kuaishou, Niurou Ge of Douyin, Li Jiaqi and Viya of Taobao are all annotations of the live streaming ecology on their respective platforms.

From the battle of thousands of live broadcasts in the past to today's situation, the live broadcast industry has entered a new era.

According to public data, the number of anchors joining Taobao Live in 2018 increased by 180% compared to the previous year, and there were more than 100 anchors with monthly income exceeding one million. Kuaishou platform has set its revenue target for 2019 at 30 billion yuan, with live streaming and advertising being the main sources of income.

Kuaishou’s ability to sell goods through live streaming has always been evident to industry insiders. After Double Eleven, Kas Data and Taobao Alliance jointly released the "Double Eleven Off-site Expert Agency TOP List". Among the TOP50 expert sales list from multiple platforms compiled by Taobao Alliance, nearly 40% came from the Kuaishou platform, among which Simba even won the first place in the Double Eleven Tmall off-site popularity list.

So why has Simba become the new generation of “sales king”?

What underlying logic is reflected behind Kuaishou’s powerful live streaming sales capability?

What kind of development space does Kuaishou’s live streaming e-commerce face in the future?

This article will focus on "Kuaishou Live" and discuss these issues in detail.

1. Content ecology, community atmosphere, and old friend economy lay the foundation for bringing goods

Many people have discovered this phenomenon: many Kuaishou anchors successfully sell goods while chatting and shouting into the microphone in the live broadcast room. Tracing the reasons behind this phenomenon, it is closely related to Kuaishou’s unique content ecology, community atmosphere, and old iron economy, which are also the basis of Kuaishou’s live streaming sales.

On Kuaishou, we can see guys at jade factories testing the texture of jade, factory owners selling wholesale clothes at stalls, farmers planting crops, raising fish, and collecting honey in the fields... Overall, the content on Kuaishou is real, vivid, and all-encompassing, and authentic, original content is more likely to build trust among fans.

In addition to the content itself, compared to Douyin, short video creators are more concerned about whether the content is recommended by the platform. The biggest feature of Kuaishou is the "old iron" economy. The anchors tacitly implement the "old iron" system from top to bottom, and creators care more about whether they can get along with fans through various interactive means. The more friendly and accessible the host makes fans feel, the higher the fans' stickiness and loyalty to the host will be.

A prominent manifestation of the Laotie economy is Kuaishou's unique interactive ranking mechanism. After fans frantically give gifts to the anchor and win the first place on the gift list, the anchor will call on the fan area to pay attention to this person in order to thank the fans who topped the list. The fan who topped the list can use the anchor's popularity to sell goods. It can be said that Kuaishou’s interactive ranking mechanism allows fans and anchors to form a mutually beneficial relationship, which in turn promotes the community attributes of Kuaishou’s old iron community.

When Simba first entered Kuaishou, he made full use of the instant ranking mechanism.

At the beginning, he started to send gifts crazily in the live broadcast rooms of several top anchors, gained a "large wave" of presence, and set a record of increasing his followers by 7.95 million in three months.

After accumulating a huge number of fans, Simba did not rush to sell goods. Instead, through close interaction with fans, he established the image of "farmer's son", "simple businessman", "role model for young people", etc., and built himself into a "positive and inspirational" persona.

Unlike Li Jiaqi’s “Buy it, buy it”, Simba’s regular sales pitch is “Buy it if I need you, and don’t buy it if you don’t need it.” Having established an emotional bond with his fans, Simba is not shy about increasing his following through methods such as red envelopes and lucky draws in live broadcast rooms. He has also shown his true side to his fans, such as arguing with haters and crying. He even had a head-on dispute with a brand owner over the price of a bottle of wine... While always showing his true nature, he is also gradually strengthening his friendship with his fans.

On top of this, Kuaishou anchors make the ultimate use of traffic. From Simba’s three major ways of selling products, we may be able to feel this “extreme”.

1. Simba will sell goods with his apprentices or contracted anchors during live broadcasts and guide fans to follow his apprentices' accounts. For example, this year Simba’s new female disciple gained nearly 800,000 followers in just two hours. This gameplay of using a large account to lead small accounts can also be of great use during major e-commerce promotions: numerous small accounts and large accounts form a synergistic growth effect by bringing in goods and traffic to each other.
2. Simba uses his contracted anchors to broadcast live continuously, "timing in" special time periods, and uses the live broadcast rooms of anchors with advantages in product selection to attract traffic and sell goods. By timing in special time periods, he can use one person for one purpose, which has driven geometric growth in sales.
3. Utilize the through train attributes to improve the natural search ranking of a single product and obtain more on-site traffic; attract a large amount of off-site traffic into your own Taobao store through live streaming. This is a typical way of using off-site traffic to drive on-site traffic.

In addition to these actions, Simba also used the influence of celebrities to become popular. For example, during this year's 618 e-commerce festival, Aaron Kwok brought his own shampoo brand AKFS+ into Simba's live broadcast room and sold 165,000 bottles in 5 seconds.

To sum up Simba's popularity, he accumulated fans by giving sky-high rewards in seconds, established his personal image by interacting closely with fans, cooperated with celebrities across industries to convert traffic, controlled traffic points during special periods of e-commerce festivals, and used big accounts to lead small accounts.

We can see that Simba’s sales model is fundamentally different from that of Li Jiaqi. The latter has established professional influence in a certain field and tends to drive consumers to impulsive shopping. Simba, on the other hand, has established a genuine, passionate, friendly personality and a corresponding shopping guide style for himself through the Kuaishou Laotie community, and he has made the most of the platform rules and traffic methods.

2. "Transform" the supply chain to create the ultimate cost-effectiveness

On Kuaishou, anchors advocate the ultimate cost-effectiveness and direct sales of products. The reason is simple. Kuaishou mainly covers the sinking market users in third- and fourth-tier cities. Unlike persuading consumers in first- and second-tier cities to pay, to persuade users in lower-tier markets to buy products, it is necessary to tell users why your products are more worth buying and why your products have more advantages.

As an industry insider said: On Kuaishou, you can’t talk about brand, but rather cost-effectiveness and practicality.

So the question is, how does Kuaishou achieve the ultimate cost-effectiveness?

First of all, this may be closely related to the anchor attributes of Kuaishou.

Judging from the attributes of Kuaishou’s entire anchors, there are a large number of anchors from factories, places of origin, and industrial chains, and their live broadcast content is also closely linked to their attributes. For example, many Kuaishou anchors will broadcast live their own orchards, stalls, stores and factories, emphasizing that the products come from "their own factories." This way of selling that directly displays the source and origin of the products can give users an intuitive understanding of the products, thereby increasing their favorability and loyalty to the products.

In addition, Kuaishou has also laid out industrial belts to help anchors establish live broadcast bases at the source, actively cooperating with the anchors' demand for bringing goods from the source. The core of live streaming e-commerce in industrial belts is to operate around category selection and quality control, rich industrial chain resources, third-party services and other links, forming a "good goods from the source" model.

The so-called good products from the source allow the anchor to skip the middle links and directly connect with high-quality factories and places of origin, thereby enhancing the industrial value and trust value of merchants in terms of traffic and money. Kuaishou will also support them by endorsing the credibility of its own platform.

For example, Kuaishou launched the "Kuaishou See Treasures" aggregation page for the jewelry and jade industry belt. Merchants on this page can obtain official certification and platform endorsement for product labeling. In addition, Kuaishou also launched the "Reliable Goods" plan to introduce high-quality merchant resources and supply chains... With official endorsement, merchants will be able to greatly improve conversion rates and repurchase rates. For example, in last year’s “116 Sales King” event, according to data officially released by Kuaishou, the repurchase rate of fans of Kuaishou anchor Wawa reached 75%, which is quite amazing.

In addition, Kuaishou has also opened up external e-commerce channels. Currently, Pinduoduo and JD.com have appeared in the shopping carts of Kuaishou stores. Together with the previously connected Taobao and Tmall, Kuaishou has basically achieved full integration with mainstream e-commerce trading platforms, utilizing the mature brands, supply chains, standardized merchants and consumer protection systems of external e-commerce companies. Through the host’s live broadcast room, products are connected to the factory supply on one end, and to old fans and users on the other end, so as to achieve a high degree of match between product selection and users.

Driven by this model, more and more Kuaishou anchors choose to build their own brands and warehouses, and ship their own products under their own labels, bringing the most cost-effective source products directly to Kuaishou's loyal users.

Analysis of the sales of "doll" products Source: Kas Business Edition

According to statistics, Simba once set a record of short selling a Thai latex factory in 10 minutes and achieving total sales of 180 million in 6 hours. The reason why Simba is able to sell goods is not only due to his own reasons, but more because of his complete utilization of the platform's business model and rules. For example, when he sells honey, he goes to the bee farm in person; when he sells Thai latex pillows, he goes to the Thai factory in person. Sometimes he would directly show the production process of the product, and even the process of bargaining and lowering the price through live broadcast, which further gained the trust of fans.

In terms of external e-commerce channels, Simba has "Simba 818" on Kuaishou and a store called "Xin Youzhi" on Tmall. Through live streaming, he has completely connected Kuaishou and Taobao.

It is not difficult to see that Kuaishou’s creation of an “industrial belt” is intended to form a new e-commerce ecosystem.

First, further improve the personal image of merchants, allowing them to rely on the resources of the "industrial belt" to sell goods through live broadcasts on the Kuaishou e-commerce platform. At the same time, it has changed the various roles and division of labor in the industrial chain, and enhanced the platform's voice and trust value in the e-commerce industrial chain.

Secondly, many domestic manufacturing companies and factories that have production capabilities but lack brand awareness are exactly suited to the Kuaishou anchor or manufacturer’s self-broadcasting model, which allows them to directly present factory goods to users in a cost-effective manner.

Finally, the model created by Kuaishou has also opened up new traffic channels and gameplay rules for many small and medium-sized e-commerce players.

3. Kuaishou’s killer feature for live streaming sales: trust relationships and private domain traffic

On Kuaishou, you can sell more than just cheap and cost-effective products. It can sell pots, pans, and utensils worth tens of dollars, as well as cars, excavators, and other products worth tens of thousands or even hundreds of thousands of dollars. In short, "everything can be brought."

For example, the first live broadcast of the account "Sany Heavy Industry" on Kuaishou was an engineer explaining the powerful functions and promotional mechanisms of the road roller on site, and the number of online fans was only a few hundred. But during the one-hour live broadcast, deposits for 31 road rollers were received, and all of them were successfully converted into transactions later.

Why does Kuaishou have such sales results?

Different from the public domain traffic distribution mechanism of platforms such as Douyin, Kuaishou is a decentralized distribution mechanism implemented by the community of universal access + Gini coefficient. The specific content of ordinary individuals can obtain corresponding target user traffic. Video recommendations are more dispersed and sinking, and it is easier to accumulate private domain traffic. The value of private domain traffic lies in promoting the accuracy and trust of target fans, and trust relationships can promote efficient conversions.

According to the data from the "Research on the E-commerce Marketing Value of Kuaishou Platform" released by Miaozhen System, 32% of Kuaishou users will buy products because they trust the host's recommendation.

On top of this, the KOC marketing model, which is derived from the authenticity of original content and the trust value of private domain traffic, helps boost the anchor's sales effect.

For example, the characteristic of Sany Heavy Industry’s live broadcast is that front-line employees participate in content creation. Due to their lack of experience in performing in front of cameras, their live broadcasts are more real and simple, which is actually a KOC marketing model.

The so-called KOC refers to consumers who have in-depth experience of the product. The content they share is mostly their own personal experience. The marketing process focuses more on interaction with fans. Although the content is rough, it is real enough, and the trust value and interaction value it brings are very high, which can achieve extremely high conversion (private domain traffic) through platform exposure (public domain traffic).

KOC-based live streaming has created many sales cases.

For example, the Kuaishou user "Wawa" has an average transaction volume of 1 million yuan per hour during live broadcasts; in the Ulagai Grassland in Inner Mongolia, an account with 180,000 followers can sell 40,000 kilograms of beef jerky a year; and in Renshou, Sichuan, an account with 100,000 followers can sell 300,000 kilograms of tangerines a year. Tibetan girl Gelong Zhuomu once used Kuaishou to help the entire village sell more than 300,000 yuan of Cordyceps in one month. Among the "Yiwu Internet celebrities", Yan Bo sold 350,000 wholesale wool sweaters in one month...

4. The future of Kuaishou live streaming: strengthening mid-tier and lower-tier operations, stimulating the value of female users, and capturing first- and second-tier users through quality delivery

Overall, Kuaishou focuses on using people to bring content, and the "old iron" type of fan relationships have high stickiness, and the continuous operation of private domain traffic and the marketing chain of bringing goods are more stable.

According to relevant data: Among the Kuaishou live-streaming hosts with outstanding performance in September, there were 3 hosts with fan base ranging from 5 to 10 million, contributing 11.52% of the overall revenue of the list; the number of hosts with fan base ranging from 1 to 5 million was the largest, with a total of 9 hosts, contributing 30.95% of the overall revenue of the list.

Relatively speaking, Kuaishou pays more attention to mid- and low-end operations. For example, Kuaishou launched the "Double 10 Plan", which on the one hand is to further motivate creators, and on the other hand is to strengthen local services. By providing a variety of functions and commercial tools, it helps small and medium-sized businesses at the mid- and bottom-end that have difficulty in monetizing to quickly accumulate fans and realize conversion and monetization.

Kuaishou is smart.

From an ecological perspective, only when mid-level anchors grow stronger can the platform become more prosperous. Compared with one Simba, Kuaishou hopes to incubate tens of millions of "small and medium-sized" Simbas on the platform in the future.

From the user's perspective, Taobao Live users are mainly women aged 25 to 35. According to QuestMobile user portrait data, the proportion of women among the basic users of Douyin App is also relatively high, while male users are the main purchasing force in Kuaishou Live, accounting for 53.3%. Therefore, from another perspective, it is also worth thinking about how Kuaishou will stimulate the user value of women in the future.

Image source: QuestMobile

In addition, although Kuaishou Live has an advantage in fan social stickiness, the test of live streaming e-commerce is still the repurchase rate and product quality delivery. Once problems arise with products that lack quality assurance, it may cause a brand crisis and a trust crisis at any time.

Kuaishou e-commerce has conquered the world with its cost-effectiveness and successfully leveraged the sinking market, but how to capture first- and second-tier users with further quality delivery is also a shortcoming that needs to be considered and optimized.

Author: Kas Data

Source: caasdata, public account (ID: caasdata6)