DianTao Product Analysis

In February 2019, Alibaba separated the live broadcast module from the Taobao app into an independent app called Taobao Live , in order to deepen its layout in the live broadcast e-commerce sector and compete with rivals such as Douyin, Kuaishou, JD.com, and Mogujie. It strives to achieve rapid transformation in the era of short video explosion and firmly grasp the live broadcast e-commerce market share.

In January 2021, Taobao Live's brand was upgraded to DianTao , continuously highlighting the value of the live e-commerce industry. So why was Diantao (Taobao Live) able to quickly occupy the high ground in the live streaming e-commerce industry in such a short period of time? What is the current development status of the entire live streaming e-commerce industry?

This article will analyze DianTao (Taobao Live) to gain an in-depth understanding of the development status of live e-commerce products and the live e-commerce industry.

This article will analyze from the following 8 aspects:

1. Industry Analysis
2. Competitive product analysis
3. User Value Analysis
4. Business value analysis
5. Product Iteration Analysis
6. Product structure analysis
7. Operational Analysis
8. Future Outlook

1. Industry Analysis

Currently, traditional e-commerce platforms have become mature and there is no room for new market development. It is becoming increasingly difficult to obtain user traffic, and the customer acquisition costs of major platforms are constantly increasing. The traditional e-commerce industry needs to find a new traffic acquisition channel.

With the rapid rise of short video platforms, live streaming platforms have become an important channel for major e-commerce platforms to obtain traffic, and live streaming e-commerce has officially entered a period of rapid development.

The underlying logic of traditional e-commerce is " people looking for goods ". The user's usage scenario is similar to offline shopping. They search for a desired product in advance and then choose to buy it or browse the platform's recommended products to make a selection.

The core features of live streaming e-commerce are quick matching, timely ordering, discounts and authenticity guarantees. Users can obtain detailed information, promotions and quality assurance of their favorite products through a short stay in the live streaming room.

Compared with traditional e-commerce, the conversion path of live streaming e-commerce is shorter , and the real-time and online shopping process is the key factor in ensuring high conversion rate in the live streaming e-commerce industry.

So how did the live streaming e-commerce industry achieve explosive growth? The e-commerce industry is also an industry that is deeply affected by macro factors. Therefore, we will use the PEST model to analyze and explore the underlying logic behind the rapid growth of the live streaming e-commerce industry.

1. Politics

Since the global epidemic hit in 2020, economic development has begun to slow down, trade between countries has been suspended on a large scale, and China's economic development has also experienced a brief stagnation.

However, benefiting from the years of development of the domestic "Internet +" model, online economies such as live streaming e-commerce have become one of the effective tools to stabilize the development of the market economy in the post-epidemic era (or the era of normalized epidemics).

At the same time, 2020 is also the final year of China's battle against poverty. Poverty alleviation measures in various regions have been continuously upgraded, and the live streaming e-commerce model has been widely used in economic poverty alleviation in various places.

During these two major events, the country has also continuously introduced a number of policies to support live e-commerce, making live e-commerce a new engine to drive consumption and revitalize the national economy, such as:

• In February 2020, the Ministry of Commerce issued the "Notice on Further Improving the Matching of Production and Marketing of Agricultural Products during the Epidemic Prevention and Control Period".
• In April 2020, Shanghai Municipal Economic and Information Commission issued the "Shanghai Action Plan to Promote the Development of the Online New Economy (2020-2022)".
• In May 2020, the Qingdao Municipal Bureau of Commerce issued the "Notice on the Qingdao Live E-commerce Development Action Plan (2020-2022)"
• In May 2020, Chongqing Municipal Commission of Commerce issued the “Chongqing Action Plan to Accelerate the Development of Livestreaming Sales”
• In July 2020, Beijing Municipal Bureau of Commerce issued the Action Plan for Promoting New Consumption and Leading a New Quality Lifestyle in Beijing.
• In July 2020, the National Development and Reform Commission and other departments issued the "Opinions on Supporting the Healthy Development of New Business Forms and Models, Activating the Consumer Market and Driving the Expansion of Employment".
• In September 2020, the General Office of the State Council issued the "Opinions on Leading the Accelerated Development of New Consumption with New Business Forms and New Models".

2020 is the first year of explosive growth in live streaming e-commerce, which relies on strong support from national policies. After a period of wild growth, the country has also continuously introduced policies to govern online live streaming, thereby promoting the green, healthy and sustainable development of the live streaming e-commerce industry, such as:

• In February 2021, the Cyberspace Administration of China and seven other departments jointly issued the "Guiding Opinions on Strengthening the Standardized Management of Online Live Broadcasting".
• In March 2021, the China Advertising Association issued the "Online Live Marketing Product Selection Guidelines"
• In May 2021, the Cyberspace Administration of China and seven other departments jointly issued the "Administrative Measures for Online Live Marketing (Trial)"

2. Economy

As my country's economy continues to grow, the per capita disposable income of the people is also increasing. From 2016 to 2020, the annual growth rate of my country's per capita disposable income was 25%. In the first three quarters of 2021, the national per capita disposable income of residents was 26,265 yuan, an increase of 14.8% over the first three quarters of 2019, and an average growth of 7.1% over the two years.

The growth of the national per capita disposable income will directly promote the consumption and shopping ability of the general public and is an important driving force for the live e-commerce industry to increase GMV.

Affected by the epidemic in 2020, the country's economic growth weakened, and industries such as foreign trade, clothing, tourism, and cinemas were severely affected, and economic recovery faced great pressure. However, as the epidemic prevention and control situation gradually stabilized, China's economy entered the fast lane of resuming work and production. From March to May 2020, the total retail sales gradually recovered and was close to the level of the same period last year.

In 2020, the digital economy has become an important booster for economic development in the new era. In the first 11 months of 2020, the national online retail sales of physical goods increased by 15.7% year-on-year, 20.5 percentage points higher than the growth rate of total retail sales of consumer goods. The new online digital economy has become a key target of national support, and the live streaming e-commerce industry has become the first tier to benefit from the policy. The industry's growth rate has continued to rise as the policy has been issued.

At the same time, as national policies lean toward online consumption, online consumption has dominated the market transformation and upgrading. In 2020, the scale of online shopping users reached 710 million, and the scale of mobile online shopping users reached 707 million (data source: iResearch Consulting). Online consumption has become the main form of mass consumption in the post-epidemic era, and the scale of online shopping users has continued to rise.

3. Society

With more than two decades of rapid development of the Internet, as of June 2021, the number of Internet users in my country reached 1.011 billion, an increase of 21.75 million from December 2020, and the Internet penetration rate reached 71.6% (data source: CNNIC's 48th "Statistical Report on the Development of China's Internet").

As of the end of 2020, the scale of online live streaming users in my country reached 617 million, accounting for 62.4% of the total Internet users (data source: iResearch Consulting). Among them, after two years of rapid development, live e-commerce has become the live broadcast category with the largest user base in online live broadcasts, with a user base of 388 million, an increase of 123 million from March 2020, accounting for nearly 40% of the total netizens.

It is worth noting that among live e-commerce users, 66.2% have placed orders, which means that nearly two-thirds of users have made purchases after watching live broadcasts. The live e-commerce industry has great potential.

In recent years, my country's Internet penetration rate has continued to increase, the size of Internet users has further expanded, and consumers have gradually accepted the interactive form of live streaming.

User groups have gradually shifted from purchasing goods from traditional e-commerce to participating in live streaming e-commerce, which offers greater discounts, higher trust, more effortless consumption, and shorter consumption paths. Their acceptance of the live streaming e-commerce model has gradually increased.

With the influence of the short video model over the years, user habits have gradually formed, the average daily time users spend watching short videos and live broadcasts has continued to increase, the proportion of live e-commerce users in the overall Internet users has increased significantly, and more and more people are able to accept the consumption method of shopping in live broadcast rooms.

4. Technology

The continuous implementation of IT technology and emerging technologies (5G, cloud computing, blockchain, AI, etc.) has brought many changes and improvements to the live e-commerce industry.

• In 2010, the first generation of Xiaomi mobile phone was officially released, which reshaped the domestic low-end mobile phone industry environment, allowing the general public to use cost-effective high-tech mobile phones, and also laid the foundation for the rapid development of mobile Internet.
• In June 2019, 5G licenses were issued, and the three major operators began to vigorously deploy 5G base stations. Based on the large bandwidth, low latency, and wide connection characteristics of 5G technology, they provide high-speed and reliable solutions for mobile live broadcast, outdoor live broadcast, indoor live broadcast and other different scenarios for the majority of live broadcast users.
• The dual upgrade of hardware and algorithms. The hardware upgrade brings an improvement in software running speed. At the same time, the innovation of various beauty algorithms, image algorithms, and face recognition technologies brings benefits to the optimization of live broadcast scenes.
• The continuous innovation and application of technologies such as VR/AR/MR have changed the way of live broadcasting in the live broadcast industry. The online shopping experience has been greatly improved with the help of virtual reality technology.

5. Conclusion

By integrating the advantages of politics, economy, society and technology, the live streaming e-commerce industry has shown explosive growth, further promoting the country's pace of building a "new online digital economy."

So, what will be the development trend of the live streaming e-commerce industry in the next few years? Is there enough room for market development?

According to a report by iResearch Consulting, the scale of China's live e-commerce market reached 1.2 trillion yuan in 2020, with an annual growth rate of 197.0%. The average annual compound growth rate is expected to be 58.3% in the next three years. In 2023, the scale of live e-commerce will exceed 4.9 trillion yuan.

According to the "Taobao Live 2021 Annual Report", as of December 31, 2020, the GMV brought by Taobao Live in the 12 months exceeded RMB 400 billion, with an annual transaction growth rate of more than 100%;

According to the "2020 Kuaishou Annual Content Report" released by Kuaishou Big Data Research Institute, as of August 30, 2020, Kuaishou's e-commerce GMV reached 204.1 billion yuan, with an average repurchase rate of more than 65%;

According to LatePost, Douyin e-commerce's GMV in 2020 exceeded 500 billion yuan.

The GMV of the three major mainstream live-streaming e-commerce platforms is astonishing. Combined with the transaction volume of other scattered live-streaming e-commerce products, including Xiaohongshu, JD.com, Mogujie and other products, the live-streaming e-commerce industry has a very large market potential, and has become a new growth outlet for the e-commerce industry.

Live streaming e-commerce has become an important marketing channel for the e-commerce industry. In the future, the user scale, number of ordering users, order frequency and average order value of live streaming e-commerce will continue to increase. It is expected that the number of ordering users will continue to expand until it reaches saturation, and the increase in order frequency will gradually reach saturation, and the average order value will increase.

Therefore, we can see that there is still a lot of room for development in the live streaming e-commerce market. The live streaming e-commerce industry is in a period of rapid development. It is a trillion-level market with considerable growth rate in the future.

2. Competitive Product Analysis

In the era of the rapid rise of live streaming e-commerce, a large number of industry players have emerged, including traditional e-commerce platforms that have transformed into live streaming e-commerce platforms, as well as short video platforms that focus on live streaming e-commerce modules, such as Taobao Live (Diantao), Douyin, Kuaishou, JD.com, Pinduoduo, Mogujie and other large platforms.

According to the data collated by the Prospective Industry Research Institute, Taobao Live (Diantao) is a first-tier player, incubated by Taobao, with obvious advantages in the live e-commerce module, and currently ranks first in annual GMV data;

As short video platforms, Douyin and Kuaishou have large-scale user traffic and impressive GMV data. As important players in the live e-commerce industry, they belong to the second tier.

Platforms such as JD.com, Pinduoduo, and Suning.com are all traditional e-commerce platforms that have transformed themselves and developed live streaming e-commerce modules, while Xiaohongshu has also gradually transformed from content e-commerce to a "content + live streaming" e-commerce model. Compared with the top players, these platforms have a lower market share and belong to the third echelon.

Since the GMV data of the top players in the first and second echelons are very impressive, we chose the Douyin platform with the largest user base from the second echelon as a direct competitor. We used the growth paths and business models of Diantao and Douyin platforms as entry points to conduct an in-depth analysis and understand the differences between the two.

1. DianTao

• In 2016, Taobao officially launched the live streaming e-commerce module and integrated it into the Taobao APP, marking Taobao's official entry into the live streaming e-commerce industry.
• In May 2016, anchor Wei Ya officially joined Taobao Live and achieved an astonishing sales volume of 100 million yuan in the next four months.
• In February 2017, Taobao Live and Tmall Live announced their merger, connecting the two businesses. It was also at this time that anchor Li Jiaqi gradually emerged.
• In October 2017, anchor Wei Ya helped a fur shop with zero fans to generate sales of 70 million during a live broadcast, setting a new record for live broadcast sales.
• During the Double 11 period in 2017, Taobao’s official Double 11 team of 600 anchors broadcast a total of 8,032 shows for a total of 36,000 hours. The average person among China’s 1.38 billion people watched the live broadcast 10 times, and the estimated number of people entering stores through live broadcasts reached 78.53 million times.
• In February 2019, Taobao officially separated the live streaming section into an independent APP and named it Taobao Live.
• In January 2021, Taobao's live streaming brand was upgraded to Diantao, forming a live streaming e-commerce model of "live streaming + content + short video".

DianTao's business model is mainly based on live streaming, where the anchor sells goods and users place orders to achieve conversions; it is supplemented by a model of content + short videos to share good things, further improving the user order conversion rate.

The business canvas is used here to conduct an in-depth analysis of DianTao.

Through business canvas analysis, we know that DianTao APP forms a closed loop of online shopping by introducing merchants (brands), anchors (MCN) and consumers.

• Merchant (product) source: Merchants are mainly leading brands, production factories and product bases. Through close cooperation with merchants, we provide goods sources for DianTao APP;
• Source of anchors: DianTao APP will sign contracts with top anchors with large traffic, reach cooperation agreements with large MCN organizations, and cultivate anchors who are good at selling goods on their own. Major brands will also sign contracts with anchors on their own and start live broadcasts on DianTao.
• Consumer source: The top consumers are Taobao mobile phone users. When Taobao users enter a brand mall on the Taobao APP, they can directly enter the live broadcast room to watch. The second group is the fan consumers brought by the anchors with large traffic. This group goes straight to the popular anchors and is a very important user group in the live e-commerce segment. This group has a very high trust in the anchors, and their order conversion rate is significantly higher than that of other users.
• Logistics service: When placing an order on the DianTao APP, the logistics of the goods is controlled by the brand. DianTao is not responsible for the specific logistics, but there will be corresponding rules and restrictions on the delivery time for merchants. Except during promotional periods, events, special circumstances (such as epidemics, natural disasters, etc.) or agreement between the two parties, the seller must ship the goods within 72 hours after the user places an order and pays. If the seller fails to ship the goods within the specified time, the buyer can file a complaint with the platform (DianTao or Taobao). If the complaint is successful, the seller will be punished and the buyer will be compensated.
• After-sales service: Consumers can choose freight insurance service when purchasing goods on DianTao, which provides high-quality services for subsequent returns and exchanges. At the same time, if the corresponding conditions are met, consumers can enjoy extremely fast refunds and seven-day no-reason return services. If consumers and merchants have disagreements on after-sales issues (returns, exchanges, and a series of other issues), consumers can file a complaint with the platform, and the store clerk will come in to handle the consumer's after-sales service issues.

2. TikTok

• In September 2016, Douyin was officially launched and developed rapidly in the next two years, becoming a leading player in the short video industry.
• In December 2018, Douyin followed in the footsteps of Kuaishou and also started the live streaming e-commerce model. Since then, the two major short video platforms have transformed into the live streaming e-commerce model.
• In 2020, Douyin e-commerce's full-year GMV exceeded 500 billion yuan, more than three times that of 2019.

Douyin's business model is based on the acquisition of short video traffic, which is used to carry out live streaming sales. By increasing the number of users and the effect of top anchors, it drives up the user's order conversion rate, which is similar to Diantao's live streaming business model.

The business canvas is used here to conduct an in-depth analysis of Douyin’s live e-commerce.

Through business canvas analysis, we know that Douyin live e-commerce is similar to Diantao APP, and will also introduce merchants (brands), anchors (MCN) and consumers to form an online shopping closed loop.

Unlike the DianTao APP, there are a large number of small and medium-sized anchors selling goods on the Douyin live e-commerce platform, and the types of anchors and presentation forms are more diverse.

At the same time, benefiting from Douyin's traffic engine mechanism, small and medium-sized anchors can also achieve high shopping conversion rates through traffic introduction.

• Sources of merchants (goods): Merchants are mainly leading brands, production factories and product bases, and also include external links of traditional e-commerce, such as Taobao and JD.com. The sources of merchants and goods are wider than those of the DianTao APP. At the same time, except for the Douyin stores operated by Douyin itself, the Douyin platform does not need to manage the sources of merchants and goods.
• Source of anchors: The Douyin platform will also sign contracts with top anchors with large traffic, reach cooperation agreements with large MCN organizations, and cultivate anchors who are good at selling products on their own. Major brands will also sign contracts with anchors on their own and start live broadcasts on Douyin. At the same time, big stars in the entertainment industry will also start live broadcasts on Douyin from time to time to act as anchors to sell products. Unlike the DianTao APP, thanks to the Douyin traffic engine, almost 70% of Douyin users can easily become live streaming anchors, as long as they meet the platform's store opening conditions. The sources of Tik Tok anchors are more extensive.
• Consumer sources: Douyin consumers include fan groups of top high-traffic anchors (Internet celebrities), fan groups of celebrities, and ordinary Douyin users. Thanks to the traffic distribution mechanism of the Douyin platform, consumers from major live broadcast rooms can gather from all corners of Douyin, forming a large consumer group.
• Logistics service: After consumers place an order in the Douyin Mall, the merchant and brand will choose the logistics for delivery, which is similar to Diantao. In terms of delivery time, the Douyin platform also has strict restrictions and requirements for merchants, among which the delivery time for the spot delivery mode is 48 hours. When a merchant exceeds the time limit, he will be punished. The Douyin platform has set up three delivery modes: spot delivery mode, full payment pre-sale mode, and tiered delivery mode. The delivery time will be adjusted accordingly according to the sales mode of goods in different modes. On this basis, a complaint and customer service system is set up to protect the rights and interests of consumers.
• After-sales service: The Douyin platform has a strict after-sales service assessment system for merchants, including rules for canceling cash on delivery orders, canceling online payment orders, online payment return procedures, cash on delivery return procedures, etc., which can fully protect the rights and interests of consumers.

3. Conclusion

From the above analysis, Diantao APP relies on the brand support of Taobao and Tmall and the traffic support of top internet celebrities, and is able to achieve high conversion rates and high GMV. At the same time, it forms a business closed loop with merchants, anchors and consumers as the core. This is the core reason why Diantao APP has achieved huge business volume.

Compared with Diantao APP, Douyin started e-commerce live streaming later (Douyin started in 2019, Taobao started in 2016), but thanks to the surge in the number of users of the short video platform and the traffic distribution characteristics of short videos, it directly drove the rapid growth of Douyin's live streaming e-commerce GMV. Relying on the advantages of Douyin's traffic engine, top internet celebrity anchors, celebrity anchors, and a series of small and medium-sized anchors can all get a share of the big pool of Douyin traffic.

At the same time, the Douyin live streaming e-commerce platform does not need to consider the bargaining power of brands like the Diantao APP. Except for opening Douyin stores, the rest of the brand signing, negotiation and other work are left to the MCN agency and the anchor to handle.

For the Douyin platform, mastering the traffic distribution mechanism means mastering the core points of GMV growth in live e-commerce.

Judging from subsequent business changes, Diantao APP has gradually pushed its business model towards the form of "live broadcast + content + short video", increasing the number of direct users of Diantao APP and extending the product retention time of Diantao users, further promoting shopping conversion rate.

For the Douyin platform, by controlling the quality of MCN institutions, the traffic distribution of top anchors, and the platform's e-commerce operation team's control over the product quality of each contracted brand, the stable development of the Douyin live broadcast e-commerce platform business can be achieved.

3. User Value Analysis

In the live streaming e-commerce industry, there are generally four participants: consumers, MCN agencies and anchors, merchants (brands), and platforms.

In the entire live streaming e-commerce industry chain, the upstream is mainly brands, factories or industrial bases, the midstream is anchors, MCN organizations and live streaming platforms, and the downstream is consumers, forming a closed loop of the live streaming e-commerce industry.

1. Consumers

The underlying logic of traditional e-commerce is "people looking for goods", which moves consumers' offline shopping scenarios online and enables the entire process of product selection, ordering, and delivery to be online.

For consumers, the advantages of traditional e-commerce are that they can obtain more product information, have higher browsing efficiency, and reduce the difficulty of product search. In summary, the entire chain of user information acquisition, analysis, and decision-making is more intelligent.

In addition, the improvement of electronic payment methods has reduced the difficulty of payment in users' shopping scenarios. Due to the digital nature of electronic payment currency, the probability of consumers' impulse purchases has been further increased.

However, with the advent of the big data era, users have entered an environment of information explosion. In such an environment, although users can obtain more information, the information barriers are higher, and the cost for users to find useful and valuable information in massive information is higher .

Corresponding to the e-commerce scenario, it is becoming increasingly difficult for consumers to choose products that meet their expectations from a massive amount of products . Various factors including product price, product appearance, and product quality make it more difficult for users to make purchasing decisions.

For example, when consumers want to buy a certain type of product, they will consider multiple factors at the same time, such as the price, brand effect, product efficacy, etc. Consumers will be very entangled, and will compare prices from three stores, constantly hesitating between different brands.

At the same time, due to the continuous competition among traditional e-commerce companies in the current market, the intensity and strategies of discounts will also vary. For example, the choice between full-discount activities for different products and multiple-buy discounts for the same product, etc. Therefore, users will also struggle and choose between different e-commerce platforms, further increasing the difficulty of shopping.

Secondly, consumers’ lack of trust in unfamiliar merchants is also an important reason why consumers find it difficult to make decisions. When consumers are shopping, in order to judge the quality of the unfamiliar merchants’ products, consumers will spend more time to verify.

For example, checking product reviews, asking people who have used the product, asking people around you, or directly searching on Baidu will further extend the decision-making process. The fundamental reason is that consumers do not trust unfamiliar merchants enough.

In contrast, users have a shorter decision-making process and higher trust in products from big brands and manufacturers.

According to a report by iResearch Consulting, consumers' demand for products has gradually changed from pursuing cost-effectiveness to pursuing product quality, brand, reputation and whether it can meet personalized needs.

Consumers hope to buy products of better quality, but they need to collect detailed information before shopping and try to buy products with well-known brands.

Overall, the essence of consumers' lack of trust in unfamiliar merchants is that consumers are unable to obtain effective information about the merchants . For less well-known products, consumers have fewer channels to obtain information and the cost of obtaining information is high, which makes it more difficult to choose to buy from a large number of products and makes it more difficult for consumers to make decisions that meet their expectations.

In summary, in the traditional e-commerce environment, consumers have high information acquisition costs during the shopping process, lack of trust in products, complex decision-making behaviors, long decision-making processes, and high decision-making costs.

2. MCN organizations and anchors

Compared with traditional e-commerce, the introduction of anchors and MCN agencies is innovative. For these participants, the demands are closer to the live broadcast industry.

First of all, the anchor hopes to conduct live broadcasts on a stable live broadcast platform , that is, the anchor needs a platform that can provide a large number of live broadcast viewers and operate stably all year round.

If a platform goes bankrupt after providing live broadcasting services to an anchor for a period of time, the fan base that the anchor has worked so hard to build up will also decline due to the platform migration. This is extremely disadvantageous for the anchor, because the fan base is the anchor's core resource.

Secondly, a live broadcast venue that is simple, easy to use and has diverse scenarios is needed . The live broadcast venue is an important scenario for anchors to connect with consumers. The availability and ease of use of the live broadcast venue are important factors that directly determine the user purchase conversion rate. It would be an extremely bad experience if consumers cannot easily view the product information introduced by the anchor in the live broadcast room, or cannot find the order entrance, cannot place an order or pay, etc.

According to a report by iMedia Consulting, using technology to improve the user experience of live broadcast rooms, expand the forms of interaction between anchors and consumers, and enrich live broadcast content can reduce costs, enhance user stickiness, and expand business models.

It can be seen that a live broadcast platform with high-quality user experience can enable the anchor to better showcase himself and the products, and allow the anchor to better explain the products, thereby increasing the user purchase conversion rate and enhancing user stickiness.

Secondly, it is necessary to provide channels for traffic exposure for anchors and MCN agencies . Traffic exposure is an important means to improve the shopping conversion rate of the live broadcast room. The higher the exposure of the live broadcast room (for example, the live broadcast room is recommended on the homepage of the web page or APP), the number of viewers will increase, and the possibility of improving the shopping conversion rate of the live broadcast room will be higher.

Not only that, the increase in exposure rate can also increase the number of fans of the anchor, and the number of fans is also an important indicator for the anchor to carry out long-term live streaming with goods.

Finally, the anchor industry needs to rely on a large number of operational tools, including content production tools, short video production functions, etc. , to achieve diversified layout of live broadcast room scenes, optimize product display, enrich live broadcast formats and content, and achieve traffic conversion in live broadcast rooms through content distribution and short video distribution.

3. Merchants (Brands)

In the traditional e-commerce environment, large companies and well-known brands can quickly attract a large number of fans on the platform based on their past brand effects.

But for small and medium-sized businesses, the cost of attracting traffic and acquiring new users is very high . For well-known brands, in addition to old fans and old customers, the cost of attracting and maintaining new users is also very high, and a large number of promotional activities are required.

For all brands, it is very difficult to retain users . The platform can attract new users, but old users are constantly lost. The lack of targeted marketing methods makes it difficult to monetize fans.

For major brands, they need to open up multiple channels to distribute their products. Through the distribution link, the profits of upstream merchants are directly diluted, and the profits that the brands ultimately obtain are very low.

For brands, in addition to considering attracting new users, maintaining old users, and developing channel dealers, traditional e-commerce platforms are less active, brands lack efficient marketing interaction methods, and consumers are showing weakness in current e-commerce marketing methods. For example, Taobao's Double Eleven event no longer mentions its transaction volume, and users' interest in important events such as Double Eleven has begun to decline.

4. Platform

Through the above analysis, the main problems faced by consumers in traditional e-commerce environments include:

• It is difficult for consumers to choose products that meet their expectations from a huge number of products (1)
• Consumers have high information acquisition costs during shopping, lack of trust in products, complex decision-making behaviors, long decision-making processes, and high decision-making costs (2)

For anchors and MCN agencies, the main problems include:

• Need a stable live streaming platform (3)
• Need a live broadcast venue that is simple, easy to use and has diverse scenarios (4)
• Requires traffic exposure channels (5)
• Requires a lot of operational tools (6)

For brands, the main problems include:

• The brand’s customer acquisition cost is high (7)
• Difficulty in retaining brand users (8)
• The profit margin of products distributed by distributors is low (9)
• Traditional e-commerce platforms have low activity levels and lack efficient marketing interaction methods. (10)

So, how does DianTao, as a platform, meet their needs and attract them to use the platform?

(1) Live broadcast platform construction

In April 2016, Taobao and Tmall launched the e-commerce live streaming function and embedded the live streaming module in the Taobao app. Based on Taobao's user base and annual GMV data, anchors and brand owners can achieve stable and long-term live streaming sales on Taobao without having to worry about issues such as platform activity and operating conditions (anchor demand point 3) . With the continuous iteration of product versions, Taobao Live module has continuously added various operation tools and diversified scene layout gadgets (anchor demand point 6) , including fission coupon settings, live broadcast explanation short video information on product display pages and other operation tools. At the same time, it also adds a variety of live broadcast special effects for anchors, including beautification, props and other functions (anchor demand point 4) .

(2) Introducing high-traffic anchors and MCN organizations to build Taobao live broadcast rules

The core advantage of live streaming e-commerce is to shorten the user decision-making process, changing the model from " people looking for goods " to " goods looking for people ".

The introduction of a large number of anchors and MCN agencies is to build the core advantages of live streaming e-commerce. Anchors and MCN agencies become traffic centers, output product information, and influence consumers’ minds through traffic-centric trust mechanisms (i.e. endorsements by internet celebrity anchors and celebrity status).

For consumers, in the live broadcast scenario, products are strictly selected by the anchor or MCN organization and pushed to consumers. Consumers can have a comprehensive understanding of the products based on the anchor's explanation. At the same time, due to the timeliness of the live broadcast, consumers only need a few minutes to decide whether to buy the product.

This also relies on the trust between consumers and anchors. Anchors use their own reputation to endorse brands, reduce the cost of obtaining information during the shopping process, and reduce the difficulty of consumers’ shopping decisions (Consumer Demand Point 2) .

At the same time, anchors and MCN agencies will do detailed product selection in advance, or choose high-quality and suitable products from a large number of products to explain and promote, which further reduces the difficulty for consumers to search for product information (Consumer Demand Point 1) .

Under the anchor-led sales model, it is possible to bypass channel dealers and cooperate directly with brands (merchants), thus realizing the C2M model, reducing the price difference generated by the intermediate links of sales, and thus increasing the profits of the brand.

At the same time, the anchor can also share this part of the profit with consumers, thus creating a more favorable situation (brand demand point 10) , forming a stronger customer attraction ability for the anchor, thereby further improving the brand's ability to attract new customers and reducing customer acquisition costs (brand demand point 8) .

In order to better protect the live broadcast system and brand trust, Taobao has issued the "Implementation Rules on Anchors Restricting the Promotion of Products on the Taobao Live Broadcast Platform" and the "Taobao Live Broadcast Platform Management Rules."

The "Taobao Live Platform Management Rules" have more stringent requirements for anchors, including that the store credit rating must be above 1 diamond, there must be no violations of selling counterfeit goods in the current calendar year, no serious violations of publishing prohibited information or counterfeit material ingredients within the current calendar year will result in a deduction of 6 points or more, the seller must have a certain number of Weitao fans, customer operation capabilities and anchor quality, etc.

The introduction of these management rules can further guarantee the overall quality of anchors and MCN organizations, ensure that consumers’ trust in anchors is enhanced, and further enhance the brand effect (consumer demand point 2) .

(3) Provide diversified content sharing methods

In addition to building live broadcast scenarios, DianTao also provides two content sharing methods: short videos and content sharing.

Take advantage of the content distribution advantages of information flow products to improve the efficiency of distributing product information on the platform.

This method is to embed the function of content e-commerce in the live broadcast e-commerce platform and replicate the concept of "planting grass". Merchants, anchors or ordinary consumers can attract users by making interesting and practical short videos (product introductions) or short reviews (product comments) and further convert potential users into buyers.

The core logic is to bring products to users based on their interests, thereby increasing user activity and purchase conversion rate (brand demand point 10) .

After continuous user fission, the reputation of high-quality products can also be quickly established through traffic. The dual mode of "content + live broadcast" ensures that users can spend more time on the platform and achieve brand user sedimentation (brand demand point 8) .

(4) Building a traffic distribution mechanism

Taobao has established a complete distribution mechanism specifically for traffic allocation in the live streaming traffic pool, including tag competition, level climbing and activity ranking (brand demand point 5) .

Tag competition is to label live broadcasts and then match corresponding traffic based on attributes.

Climbing the levels means continuously improving the anchor's live broadcast level. The higher you climb, the greater the live broadcast rights and interests, and the greater the chance of being seen by officials and fans. Naturally, traffic will also tilt towards high-level anchors or stores.

The activity ranking is based on the completion of various activities, theme live broadcasts and monthly qualifying competitions held by Taobao. The anchors who complete official activities and official tasks better are ranked higher, so that they can be allocated more traffic, which is also "distribution according to work."

According to the strategic transformation of Taobao Live, it will pay more attention to content construction and allocate more traffic to good content. Diantao will judge the content from five dimensions, including content conversion ability, content acquisition ability, content guidance ability, content attractiveness and content visibility. It can be said that there is a complete assessment mechanism for the traffic distribution of anchors.

Therefore, the DianTao platform provides a complete traffic distribution mechanism and channels for major anchors, MCN agencies and brands, which can provide traffic exposure and thus achieve further shopping conversions.

4. Commercial Value Analysis

Diantao's core business is to increase consumers' shopping conversion rate through live streaming. It can be judged that Diantao's revenue indicators can be improved based on the GMV indicators commonly used in traditional e-commerce. The GMV of live streaming e-commerce = average UV*UV conversion rate*average order value*number of live broadcasts.

The average UV can be regarded as the number of viewers in the live broadcast room. The UV conversion rate is the order rate of viewers in the live broadcast room. By disassembling the three dimensions of UV, UV conversion rate, and customer unit price, we analyze how the Diantao APP improves the key indicator data in each dimension.

Since the Diantao platform can provide 7*24-hour live broadcasts, the live broadcast sessions are generally controlled by anchors, MCN institutions and merchants. In order to gain more opportunities in the live e-commerce market, anchors, MCN institutions and merchants generally choose to work shifts and continuously broadcast live broadcasts. Therefore, this article does not conduct specific analysis on the strategies and plans of live broadcast sessions.

1. Increase the number of viewers in the live broadcast room and short video (average UV, traffic)

To achieve the improvement of live e-commerce GMV, we must first increase the overall number of users on the platform, the number of viewers in the live broadcast room, and the number of viewers on the platform's short videos. So how did Diantao improve these indicators?

(1) Improve the overall number of users on the platform (platform daily active users)

From the perspective of improving the live broadcast GMV of the entire platform, Diantao APP and major MCN institutions work together to promote marketing and increase advertising investment, so as to achieve the platform's new recruitment and promotion of vitality.

Since the Matthew effect of anchors in live e-commerce is very obvious, the traffic of top anchors is very different from that of shoulder and waist anchors.

According to a research report by iResearch Consulting, the average number of viewers on top anchors with a number of fans exceeding 5 million is as high as 2.4887 million, far higher than the 185,500 of the mid-range anchors.

Take Diantao as an example. The top 20% of institutions account for 80% of the GMV of the institutional market, and the top 20% of institutions account for 75% of the traffic of the institutional market.

According to the Matthew effect, the stronger the stronger the weaker the weaker the weaker the more traffic it is.

Therefore, in order to increase the number of users and platform visibility, the platform and MCN need to expand marketing on a large scale and increase advertising investment.

Diantao (Taobao Live) and major MCN institutions have invested a lot of money in advertising promotion, such as:

• On September 27, 2021, the variety show "OFFER of All Girls" invited Li Jiaqi to interview, realizing traffic warm-up in Double Eleven
• On November 5, 2021, Diantao and Xiaoguo Culture launched a self-made live variety show "Double 11 Dot Tao worry-free conference", which uses the widespread dissemination of "talk show conference" among young people to increase the number of young users.

(2) Increase the number of viewers and video viewers in major live broadcast rooms

In order to increase the GMV of a single store, merchants, MCN organizations and platforms will try their best to increase the audience.

For Diantao APP, it mainly provides platform-based event planning plans and coupon distribution. For example, the Tmall New Year Festival and Diantao joint activities (Diantao New Year Festival) at the beginning of 2022, which can achieve the improvement of daily active users through the daily sign-in Cangyuanbao activity. At the same time, it provides rewards for the three main user behaviors of live broadcast, entry into the live broadcast room, and entering the product details page, thereby improving the conversion rate of each node on the user behavior path.

At the same time, Diantao has built a ruby ​​New Year’s goods list to provide users with official comprehensive sales selection of high-quality New Year’s goods, and provides product rankings, corresponding product entrances, and product introduction video entrances to attract users to watch short videos, and at the same time, it can also increase the number of viewers in the live broadcast room of the product (brand).

(3) Diantao APP homepage design

When users enter the Diantao APP, they will first display the "Homepage" page. In this page, there are three modules: follow, live broadcast (default display), and video.

(4) Live broadcast module

First of all, there is the live broadcast page. Diantao will display the live broadcast room that users have "watched recently" on the homepage and mark it in the live broadcast room icon to help users quickly find their favorite live broadcast room, thereby guiding users to enter the live broadcast room again.

Secondly, the popular live broadcast room is placed at the top of the live broadcast module to guide users into the live broadcast room.

Finally, tags will be added to different live broadcast rooms and tag classification will be implemented on the top, so that users can find the live broadcast room sections they need faster, thereby making choices and increasing average UV per game.

2. Pay attention to the module

In the following module, the anchors and merchants who are broadcast on the user's follower list will be displayed. Here, Diantao divides attention into two types:

• Diantao Follow (the merchants that users follow in the Diantao APP are classified as the "All Follows" tag in the following list)
• Taobao Follow (the merchants that users follow in the Taobao APP are directly migrated and classified in the "Taobao Follow" tag and the "All Follow" tag).

By default, the live broadcast room that is being broadcasted by users who are all concerned about is displayed, so that users can reach their favorite live broadcast room faster and increase the UV of the live broadcast room.

At the same time, in the following module, there will be a "Preview Product List" module at the top. In this module, the merchant's live broadcast time, the products, product basic information of the live broadcast of the session, and the appointment live broadcast function. This allows users to know the pre-sale product information of the live broadcast room more clearly, thereby improving the UV of the live broadcast room of the target user.

(1) Yuanbao Center Design

After users enter the Diantao APP, they can see the entrance to "Yuanbao Center" on any page, which is located on the right sidebar of the screen by default.

The "Yuanbao Center" module is a money-making activity provided by Diantao to consumers. Users earn ingots by completing various tasks, thereby realizing cash withdrawal or redemption of red envelopes. They can also use ingots to shop at low prices in the "Yuanbao Mall".

The Yuanbao Center provides daily activities such as daily check-in, friends to receive together, and invitations and gifts.

First of all, the daily check-in and get ingots activity can improve user stickiness and increase platform daily activity.

Secondly, the function of collecting with friends can achieve the promotion of "Ta get 1 piece, you get 1 piece" by giving good things to friends (only for newcomers).

All the good items in this module are sold in the form of 0.01 yuan and are marked with the original market price, so as to guide consumers to forward shopping through the amount gap and achieve user fission.

Finally, the invitation gift event allows users to invite friends, thereby obtaining ingots (which can be converted into cash and red envelopes), and can also increase the number of users on the platform through continuous invitations.

After attracting traffic from daily activities such as gifts, daily sign-in, etc., through tasks to earn ingots, we can achieve the improvement of the platform's daily active users and the UVs in the video and live broadcast rooms.

These tasks include shooting videos, shopping and returning to ingots, watching videos, watching live broadcasts, playing games, etc. The settings of these activity tasks are all to increase the number and activity of users, and further promote UVs in the video and live broadcast rooms.

3. Improve UV conversion rate

In order to increase the purchase conversion rate of viewers in the live broadcast room, in addition to relying on the anchor’s professional sales ability and the effects of Internet celebrities and big brands, Diantao APP will also increase conversion rate from the functions and page layout, and provide more platform-type coupons.

(1) Diantao APP live broadcast room page design

First, using the commonly used psychologically guided shopping plan of "limited time discount", Diantao APP designed the live broadcast room page as "As soon as the user enters the live broadcast room, a limited-time flash sale event information pops up at the bottom", displaying product information, inventory (using the principle of product scarcity to stimulate users to place orders), event participation conditions (increasing the number of fans and user retention), preferential prices and original prices, and event time countdown information.

Secondly, in the baby pocket list (product details page), the product information is displayed in detail. In order to improve user conversion rate, Diantao APP adopts the following four strategies to design product details pages:

1. After selecting products from your baby's pocket, users jump directly to the product selection window from the bottom (it does not cover the full screen, the page is the same as the Taobao details page, which is easy for users to accept). Users can purchase and place orders directly. The order operation is the same as Taobao APP. Users do not need to learn how to operate, and the learning cost is low.
2. Offer limited time events. Consistent with the information of the limited-time flash sale event pop-up on the homepage, compared with the pop-up on the homepage, there are more products participating in such activities. Users can view which products participate in such activities at one time, and at the same time, the countdown is limited to stimulate users to purchase.
3. Discounted price tips. Provide a direct comparison of the original price of the product and the price after the coupon, so that users can have a more intuitive and clear understanding of the discount intensity, thereby promoting users to click on the product details page.
4. Member-only activities. Provide merchant members with logos for member-exclusive activities (member-exclusive), and the price of member-exclusive activities will be lower, which will promote users to pay attention to the conversion rate of live broadcast rooms (merchants) and product details pages.

Finally, in order to increase the conversion rate of orders, the detailed information of the order will be displayed in detail on the "Confirm Order" page, including product details (store name, product name, specifications, quantity, price), delivery method, freight insurance, store discounts, platform event discounts and other detailed information. At the same time, in order to have a better payment experience, two payment methods will be provided on the order details page.

In the payment page, when the user clicks to submit an order, a payment page will pop up from the bottom. This page integrates the Alipay payment function, and you can select "Alipay Account" and the corresponding bank card bound to the account.

The transaction amount is also marked with large black bold fonts to remind and confirm consumers' shopping amounts and further protect users' consumer rights.

(2) Video module design

In the video module, anchors and ordinary users will display related products or explain the products. At the bottom of the video, there will be a brief information about introducing the products and the value of planting grass (determined based on the number of users who plant grass), and two buttons for insensitivity and planting grass are provided, which allows users to share their purchasing desires and enhance users' sense of shopping participation.

At the same time, when the user clicks on the product information, the basic product information will pop up from the bottom, displaying price, number of purchases and a quick "Buy Now" button to shorten the conversion path of users' shopping. "Author Recommendation" will also be marked in the upper left corner of the product icon to strengthen consumers' trust in the product and speed up users' shopping decisions.

When users want to know the details of this product, they can also click "Go Details" to view the product details, which can further promote the conversion rate from the product introduction page to the product details page.

Secondly, when the user clicks on the screen to pause the video, click Tao will recognize the item information on the screen, thereby popping up the same recommendation for the relevant items, that is, the "See the same model" function. When the user clicks the View the same model button, he can enter the image recognition recommendation page, thereby guiding the user to place an order to purchase the same video, and also display how many people have purchased the product. This function has a very important user experience improvement in the fields of short videos and long videos. Using consumers' herd mentality, it can further improve the user's shopping conversion rate.

4. Increase customer order price

In order to increase the average customer price of products in the live broadcast room, Diantao APP provides a variety of coupon strategy solutions, including full discount promotions (stage full discount, every full discount), package promotions, gift promotions, full discount promotions, multiple purchase discounts and other solutions. The specific plan is as follows:

• Full discount promotion: Increase the unit price of the product and give users discounts when a certain amount is met.
• Package promotion: Increase the unit price of products, and allow users to purchase product packages to enjoy preferential prices.
• Gift promotion: Increase the unit price of products and induce users to place orders by accompanying samples and gifts.
• Full-time promotion: Increase the unit price of the product, and when the user purchases more than a certain amount, give away a certain product.
• Buy more discount: Increase the unit price of products. When users purchase multiple single products, they can provide x-discount discounts, for example, 3 items can be purchased at 75% off.

5. Conclusion

Through the above analysis, Diantao has made many optimizations in order to continuously attract new products and increase the GMV of live e-commerce. Judging from the actual GMV value, the effect is good, and Diantao has always occupied the first echelon of the live e-commerce industry.

5. Product Iteration Analysis

In order to deeply analyze the version iteration path of Diantao APP and explore the product iteration logic, this article organizes all the core versions of Diantao APP from V1.0.0 to V2.36.18 as follows:

According to the curve distribution of the cumulative download volume of the Diantao APP (Android side), it can be seen that the user growth curvature of V1.6.1 (starting from March 6, 2020) continues to increase, which is a "J-shaped" curve. Therefore, the Diantao APP is divided into two stages and analyzed:

1. Phase 1: Platform Initiative

Before March 6, 2020, the versions of V1.0.0 to V1.5.2 are the cold start stage of Taobao live broadcast platform. The main goal of this stage is to migrate the live broadcast module embedded in Taobao APP to an independent APP, and continuously verify the user needs of the "live broadcast + content" model, improve user experience, and demonstrate the core logic of the live e-commerce platform.

The main core iterative content of this stage is to optimize consumers' behavioral paths for using Taobao Live (Diantao) APP.

Since the core logic of Taobao Live GMV growth is to introduce leading internet celebrity anchors and large MCN institutions to absorb traffic.

Therefore, at this stage, the first step is to move the "Follow Anchor" module to the homepage. Users can see the anchors they follow and like as soon as they enter the APP, thereby optimizing the consumer experience, allowing users to enter the live broadcast room they follow more conveniently, and shortening the time for users to reach their favorite anchors.

Secondly, the live broadcast time-shift function is launched. The live time-shift function can realize live video recording and display it as the "watch explanation" function on the mobile terminal, which is one of the most important functions in the live e-commerce bank.

When a user misses a certain product explanation of the anchor, he can use this function to realize the live content review, so that the user can grasp every minute and every second of the favorite anchor, and can also understand the detailed explanation information of each product and the anchor explanation more clearly, thereby improving the user experience.

Again, it is the introduction of the popular product module. By displaying good products and popular product information in this module, users can more easily obtain high-quality product information, thereby promoting users' viewing and extending their stay on the platform.

The introduction of popular product modules is also the beginning of Taobao Live APP to develop into the "content + live broadcast" platform construction model, introducing a two-way conversion model of content + live broadcast traffic to promote user precipitation.

Finally, various activity functions are launched, starting from "sharing and discounts", and gradually testing various activities, and also conducting demonstration and experiments on user growth of subsequent live broadcast platforms.

2. Phase 2: Optimize functional modules and explore the platform incremental space

From March 6, 2020 to the present, the version from V1.6.1 to V2.36.18 is the rapid growth stage of Diantao APP. It can be seen that the probability of user growth in this stage continues to rise. At this stage, using the live broadcast platform GMV as the Polar Star indicator, and using various means to increase the number of platform users, the number of large Internet celebrity anchors, and improve user stickiness are the core goals of this stage.

At this stage, the first step is to continuously improve the user experience of the live broadcast room.

First of all, adding the same-city channel to the earlier versions can allow users to discover the same-city anchor, thereby increasing the distance between users and anchors.

Secondly, optimize the short video module and add the "want" function. Users can obtain the products introduced in the short video through one click, optimize the user's shopping path, and thus improve the conversion rate.

Furthermore, the real-time, weekly and monthly hot product list is added to the "Discover" module to further optimize the platform's user experience in the "content" direction, so that consumers can have a clearer understanding of the current hottest hot products, thereby using the "herd effect" to promote users' shopping and increase shopping conversion rate.

The second step is to explore various activities on the platform. Starting from version V1.6.1, Taobao Live Platform has begun to launch various live shopping festival activities, guiding users to consume through various promotional activities.

Judging from the daily download volume of Diantao IOS terminal of Qimai Data (February 13, 2019 to January 12, 2022), the peak download period of Diantao APP is exactly the corresponding major activities of the platform in various festivals, such as Double Eleven, Double Twelve, 618 Festival, 38 Queen's Day, New Year's Festival, etc.

By introducing various holiday versions, Diantao APP will also mark the icons to form a sharp contrast with the ordinary version, so as to tell users that the platform will have major discount activities during this period, thereby promoting consumers to use the APP to watch live broadcasts and further guiding consumers to shop.

And always keep the " Yuanbao Center " function on any screen in the APP. Through various gameplays of the activities, users can pay more easily attention to the live broadcast room products and short video content, promote the platform's daily active users and shopping conversion rate, thereby improving the overall GMV of the platform.

From the data point of view, in the second stage, the number of users of Diantao APP showed explosive growth and continued to rise, which shows that at this stage, the product design and operation of Diantao APP was very effective, and the development of various activities can effectively promote the platform's user growth.

3. Conclusion

Overall, the overall development pace of Diantao APP is relatively good. It gradually started to independently start from the first stage. It is not in a hurry to carry out various festival activities, but instead polished the core functions of the live e-commerce platform, namely the live broadcast room function design and product shopping module.

Starting from the second stage, in addition to continuing to polish the live broadcast function, festival activities have begun to be gradually introduced, and various promotional activities can be achieved to attract new products, retain and transform them. This is the overall iteration path of Diantao APP at present.

6. Product structure analysis

The main users of Diantao APP are consumers, so the functions and structural design of Diantao APP will revolve around consumers.

So after continuous function iteration, the product functions developed by Diantao APP meet what users’ needs and how are distributed throughout the APP? Next, we will analyze from the perspective of product structure. The product structure diagram of Diantao APP V2.38.18 version is shown in the following figure:

This article re-sorted Diantao's product structure according to users, scenarios, needs and functions to obtain the following table:

Since the core users of Diantao APP are consumers, Diantao APP needs to meet the simple needs of consumers. Generally speaking, when consumers use Diantao, there are two scenarios:

1. Before shopping, click Tao to watch live broadcasts, videos, and content, and select products to purchase;
2. After shopping, use the Diantao APP to track product logistics and after-sales services to share shopping experience.

1. Scenario 1: How does the platform meet consumer needs before shopping?

The Diantao platform first needs to meet the user's first behavioral needs, that is, to find live broadcasts and enter to watch.

According to the effect of top anchors, consumers open the Diantao APP to see their favorite anchors or big brands live broadcasts. Therefore, when users open the APP, they first display the "live broadcast", "follow" and "video" modules on the homepage. By default, enter the "live broadcast" module, so that users can reach the live broadcast room faster. The live broadcast room will also be arranged according to parameters such as popularity value and live broadcast room weight, reducing the path for consumers to reach the live broadcast room.

In order to enable users to enter the live broadcast room of their favorite anchors or merchants faster, the homepage of Diantao APP provides a "Follow" module, so that consumers can easily enter the live broadcast room of their followers to meet users' most fundamental needs for finding their favorite live broadcast room.

At the same time, a "Preview Product List Module" is provided in the "Follow Module", which solves the problem that consumers do not know what will sell a certain live broadcast session, making the purpose of consumers watching the live broadcast clearer and making shopping decisions faster (select the products they like based on the list in advance, and when the anchor feels it is appropriate, you can place an order to buy it).

Secondly, when consumers want to find different types of products when shopping needs are unclear, Diantao APP provides a "short video" module to present it on the homepage.

Consumers watch short videos, and by watching and listening to the anchors in the video explain product information, they can choose whether to plant the same product in the video. By implanting product information in the video, triggering the same product with one click, shortening the user's shopping path (no need to go back to the search bar on the homepage for search, and it doesn't matter to think about search terms for similar products, reducing the user's thinking time, that is, reducing the cost of purchasing decisions for users).

Furthermore, it is also in response to consumers' unclear shopping needs. When consumers want to know what popular products or Internet celebrity products are currently available, the "Vanguard Module" and "Block Module" are provided in the navigation bar at the bottom of the Diantao APP.

The "Baoshi Module" provides consumers with submodules such as list product recommendations, Diantao Selection, and product recommendation lists in various categories, so that consumers can find their favorite products in different lists.

The "block module" enables consumers to share their shopping experience and user experience (show orders) to realize product recommendations, allowing more consumers to comment (seek product information to assist consumers in making decisions) and plant grass.

The products, short videos, live broadcasts and liked content that consumers like will be stored in the "User preferences module". When a user wants to buy past grass or favorite products at a certain moment, it can be quickly reached and thus achieve conversion.

2. Scenario 2: How does the platform meet consumer needs after shopping?

After the consumer places an order, the Diantao APP needs to provide consumers with product delivery status information, logistics information, refunds and after-sales services. These services are integrated in the "My Order Module". Consumers do not need to open multiple Taobao APPs, but only need to view order details in the Diantao APP. When there is an after-sales service requirement, they can also directly seek help in the Diantao APP.

At the same time, through the "photograph" and "show orders" modules, users can release their desire to share, thereby realizing product information sharing, allowing users on other platforms to see more product reviews and user experiences, and obtain more product information. Other consumers can choose whether to plant products through other people's purchasing experience, reducing the difficulty of consumers' decision-making.

3. Conclusion

To sum up, the functional design of Diantao APP can basically meet the needs of consumers in the two scenarios before and after shopping. The high-frequency needs of different consumers can be reasonably distributed in the product structure and highlight the key points. It is an excellent live e-commerce product.

7. Operational Path Analysis

This section will analyze the Diantao APP from the perspective of product operation. So how did Taobao operate the Diantao product so as to achieve explosive growth in the number of users in a short period of time? This article will sort out the main operating activities of Diantao APP according to the AARRR model as follows.

1. Acquisition

Taobao Live has opened the "Tao Live" project and made bold attempts in variety shows + e-commerce live broadcast. As a part of Taobao's focus on PGC (professional content production), Taobao Live has won many consumers through cooperation with major TV stations, professional production institutions, etc. in the past year.

For example:

• In December 2016, Taobao Live and Hunan TV's "The More You Are Trying" program jointly produced the "Shop Treasure" program and began to officially participate in the creation of PGC columns.
• In August 2018, Taobao and Mango Interactive Entertainment reached a cooperation plan, released the Super IP Rutao cooperation plan, and derived ace programs such as "Chinese Restaurant" into Taobao live programs to sell goods, further upgrading the Taiwan-network integration model
• During Double 11, Taobao Live opened up the Future Life Home of "I Am the Future", one of the Chinese Restaurants, one of the "Chinese Restaurants", global treasure hunts, and "The Legend of Journey", which helped the industry gain more than tens of millions of new users through content, and nearly one million users converted into purchases through content planting.
• On September 27, 2021, the variety show "OFFER of All Girls" invited Li Jiaqi to interview, realizing traffic warm-up in Double Eleven
• On November 5, 2021, Diantao and Xiaoguo Culture launched a self-made live variety show "Double 11 Dot Tao worry-free conference", which uses the widespread dissemination of "talk show conference" among young people to increase the number of young users.

Taobao Live not only uses PGC to expand its user base, but also has done a lot of effort in mass media, including advertising for the 2022 New Year’s Goods Festival, which has put out the slogan of “watch live broadcasts and receive red envelopes”, and has driven the increase in user base through offline marketing activities.

In addition to promotional and marketing activities, the "Yuanbao Center" module inside the Diantao APP has built-in "Invite with Gifts" and "Friends Together" activities, which enable users to pull new users to receive rewards.

2. Improve activity (Activation)

After users download and register an APP, they need to let users use the APP frequently, that is, improve the daily active and monthly active APP. In order to improve daily active and monthly active Diantao APP, it mainly improves through different types of event planning:

• Do tasks to earn ingots, including shooting videos, shopping and returning ingots, watching live broadcasts, watching videos, and eliminating red envelopes, etc.

3. Improve retention

After promoting user activity, it is also necessary to improve the user retention rate of the APP in order to continuously create value for the platform. In order to improve the retention rate, Diantao APP mainly accomplished the following things:

• Daily check-in activities
• Yuanbao system, cash out and redemption of red envelopes through Yuanbao, and provides Yuanbao Mall, where users can make low-price (deductible) shopping in Yuanbao Mall

4. Increase income (Revenue)

Regarding the methods to increase the revenue of e-commerce platforms, we have introduced in detail in the commercial value analysis section, and will not be repeated here.

5. Share and disseminate (Referral)

In order to guide users to spread spontaneously, Diantao mainly does the following:

• Planning a "Share and Discount" event
• Create Taobao live PGC to "bring the rhythm, interact and function" for the industry

8. Future Prospects/Optimization Suggestions

This section starts from the SWOT model and conducts systematic analysis of the Diantao APP. It is hoped that through analysis, it can provide some optimization suggestions for the future development of Diantao.

1. Advantages

1. As a member of the Taobao APP, Diantao can rely on Taobao's deep cultivation in the e-commerce field for many years, have a mature e-commerce system, accumulate a large number of merchants and users, and have a high start.
2. There are many large Internet celebrity anchors and MCN institutions in Diantao APP, such as "Li Jiaqi", "Snowy Li_Cherie", "Heika-z", etc., which have a huge fan base. Relying on the current live e-commerce environment, these big anchors can achieve rapid growth and monetization of users. Big anchors are the main force in improving the platform's GMV. Among the 12 anchors with sales of more than 1 billion yuan during Double Eleven in 2021, 10 are from Taobao Live.
3. Users have high recognition of Taobao platforms. Relying on the advantages of Tmall flagship stores, users can guarantee the conversion rate of orders.

2. Disadvantages

• The APP usage experience still needs to be optimized. Since there are currently two APPs Taobao (embedded live broadcast module) and Diantao, the functions of Taobao live broadcast module are getting fewer and fewer, and the optimization of live broadcast function is completed at Diantao. However, the user's rush to buy in Diantao live broadcast room is far less than that in Taobao APP, and there are also problems such as user feedback in the live broadcast room sorting; the live broadcast back function also has great flaws, and users cannot pull the progress bar; the activity gameplay is not mature in the APP, and the actual situation of user feedback is very difficult to use. In summary, the overall user experience of the APP is poor and still needs improvement.
• The live e-commerce industry shows a clear "Matthew effect". The top anchors occupy most of the traffic, small anchors cannot obtain effective traffic, and the platform's ecosystem in the field of live broadcast cultivation cannot be effectively established, and it still needs to rely on external MCN institutions.
• Diantao's short video module is not rich enough. Judging from the likes and comments data of short videos, there are still big problems with user activity and retention.

3. Opportunities

1. The live e-commerce industry is still in a period of rapid development, and there is still a lot of room for development compared to traditional e-commerce.
2. Expand to the "live broadcast + content" model, while continuously building live broadcast barriers (cultivating large anchors), enrich short video content, and increase traffic conversion channels.
3. Affected by the "Viya Tax Evasion Incident in 2021", the top anchor echelon may usher in important structural changes, and there is still a lot of room for development in the construction of top anchors.

4. Threats

1. Douyin and Kuaishou rely on a mature content ecosystem and are developing rapidly in the live e-commerce sector, and the competition is very cruel. According to the GMV data of Taobao, Douyin and Kuaishou in 2020, although Taobao live streaming is leading, the gap is constantly narrowing.
2. Affected by the "Viya Tax Evasion Incident in 2021", the tax evasion behavior of the top anchors has become an important factor affecting the development of the platform. Just judging by "Viya"'s live broadcast during the 2021 Double Eleven period, the personal or institutional behavior of the top anchors is an important threat to affect the development of the platform.

5. Suggestions

Through the above analysis, if Diantao APP wants to maintain a high-speed growth trend and annual high GMV revenue, it may take the following measures:

• Maintain your own advantages in the traditional e-commerce field, continuously accumulate high-quality merchants and products, improve product quality and service quality under the platform, and maximize the advantages of Taobao matrix products.
• According to the Matthew effect, we have continuously introduced large high-traffic internet celebrity anchors and MCN institutions, and always maintained the construction of a huge traffic pool on the platform, attract more user traffic, and form industry barriers.
• Strengthen the construction of the "live broadcast + content" model. Compared with competitor products such as Douyin, Kuaishou and Xiaohongshu, Diantao APP still has a lot of room for development in the short video module. The two-way transformation model of content + live broadcast is the core growth engine of Diantao in the future.
• We still need to continuously optimize product functions. In the product iteration section, we have analyzed the iteration path of Diantao. In the second stage, the operational activities are mainly updated. Judging from the comments of the IOS endpoint Tao APP, most users are very dissatisfied with the functions of the Diantao APP live broadcast room. Therefore, the Diantao team needs to speed up the iteration of APP, continuously optimize the functions of the live broadcast room and short video module, and improve the user experience.

Author: Yunyunyun

Source: Yunyunyun