Why does the live broadcast room have to have the lowest price?

This year's relatively dull Double 11 caused the biggest waves many days after it ended. The dispute revolves around the "price difference" of L'Oreal's facial masks. In early November, some consumers discovered that the price of purchasing ampoule masks in L'Oreal's brand live broadcast room was more favorable after adding discounts than the prices offered in Li Jiaqi and Wei Ya's live broadcast rooms when the Double 11 pre-sale started. At the time, L'Oreal had publicly stated that the pre-sale activities of these two top anchors would be "the biggest efforts of the year."

Many buyers who stayed up late to watch the live broadcast and snap up the products believed that they had been cheated and began to complain. The matter continued to ferment. On November 17, the two major anchors rarely released announcements with similar content at the same time, accusing L'Oreal and suspending cooperation with it. The matter was completely "exploded". In the following days, consumers complained a lot, ranging from anger at L'Oreal to criticism of the live streaming e-commerce model, which sparked a lot of discussion.

After Li Jiaqi and Wei Ya successively issued statements to suspend their cooperation with L'Oreal, L'Oreal officials also made two responses. In the first response, L'Oreal made an official response to the "Double Eleven Promotion Mechanism of Ampoule Masks" and the "Statement by Viya and Li Jiaqi" and apologized to consumers; in the second response, L'Oreal proposed a solution to the incident, saying that it would use two different no-threshold coupons for compensation. But many consumers are not buying it.

On the morning of November 20, consumers' dissatisfaction with L'Oreal's solution caused the related topic to once again top the Weibo hot search list. CCTV Finance publicly commented on this topic, saying that if consumers are unacceptable to the solution proposed by the merchant, they can continue to complain through the Consumer Association and other relevant institutions, or sue the merchant for suspected illegal activities.

1. The failure of the “lowest price on the entire network”

This controversy has been raging until now, and it is actually not complicated to sort out its causes and process.

On October 20, the Double Eleven pre-sale officially started. Many top anchors, including Li Jiaqi and Wei Ya, were promoting a L'Oreal ampoule mask in the live broadcast room. The official slogan on the social media platform was "the biggest effort of the year", and 50 masks could be purchased for 429 yuan. That night, this product sold more than 600,000 and 200,000 pieces in the live broadcast rooms of Li Jiaqi and Wei Ya respectively, with a total transaction volume of more than 350 million yuan.

However, some consumers discovered in early November that in L'Oreal's brand live broadcast room, the same number of the same ampoule masks could be purchased for 257 yuan, with a price difference of up to 170 yuan. A large number of consumers who purchased goods in the live broadcast room hoped to apply for price protection by refunding the price difference, but found that the product link had been removed from the shelves by the official. Some consumers even posted chat records with L'Oreal customer service, in which the other party claimed that "Li Jiaqi is also an employee, and the discount he said does not count."

After several failed attempts to protect their rights, consumers collectively filed complaints on major platforms. There were nearly 40,000 cases of "L'Oreal's false advertising" on the Black Cat Complaint APP alone. While consumers complained to the brands, they also demanded explanations in Li Jiaqi and Viya’s live broadcast rooms and fan communities. After several days of fermentation, topics related to the price difference incident topped the hot search lists on major platforms on November 17.

On the evening of November 17, Li Jiaqi and Wei Ya released public statements almost at the same time, both of them saying that the reason for the price difference was that the L'Oreal brand continued to release a large number of "200 yuan off for purchases over 999 yuan" coupons from November 1 to 3, which could be combined with product discounts and cross-store discounts on the platform. As a result, consumers who used the coupons got a transaction price lower than that in Li Jiaqi and Wei Ya's live broadcast rooms.

The two top anchors also stated that the brand's behavior was unfair to the consumers who waited in the live broadcast room to shop on October 20, and that they would suspend cooperation with L'Oreal until the matter was properly handled. If the losses suffered by consumers cannot be recovered by the brand, Li Jiaqi and Wei Ya's live broadcast rooms will come forward to compensate them.

The price difference incident was constantly magnified on the Internet. In the early morning of November 18, L'Oreal issued its first official response. As a brand, it once again explained the reason for the price difference, responded to the statements of Li Jiaqi and Wei Ya, and apologized to all consumers whose rights were damaged. Subsequently, L'Oréal gave a second official response on the evening of November 18, providing a solution from the brand side, saying that it would compensate with two different no-threshold coupons. But the solution proposed by L'Oreal was not recognized by most consumers.

On the morning of November 20, many consumers boycotted and protested against L'Oreal's solution, and the related topic once again topped the Weibo hot search list. "Coupons? Do I still have to buy from you? Refund the price difference quickly!" "The usual practice for price guarantee is to refund the price difference, not coupons. Many people have already bought enough and don't need to buy more for the time being, or don't want to buy this brand. Use products to retain people, use integrity to retain people, don't use routines to retain people." "Why use coupons to stimulate the next purchase to compensate for the damage that has already been done to consumers? Do you really think consumers are leeks?"

It can be seen from the overwhelming comments that consumers’ ultimate demand is for the brand to refund the price difference, rather than a coupon that can only be used after another purchase. But there is another voice in public opinion: Can all consumers who bought this product in the live broadcast room of the top anchor get a refund for the price difference?

Consumers who bought the mask in the live broadcast room and spent a total of 999 yuan at L'Oreal should naturally get a full refund of the price difference. But for consumers who only bought the mask and whose total consumption was less than 999 yuan, if they also received the same refund compensation, would that create another kind of unfairness for consumers who placed orders to get a discount?

As a brand, L'Oréal first promoted through official channels that the prices in the anchor's live broadcast room on October 20 were the highest of the year, but then issued a large number of high-value coupons in early November. The resulting price difference in products undoubtedly led to suspected false advertising. However, why can’t high-value coupons be distributed at the beginning of the Double 11 event? Why do brands use time differences to launch activities of different intensities? After all, this is a battle for traffic between brands and top anchors under the banner of "lowest price".

2. Super anchors vs. brands

In fact, with the extension of the overall cycle of "Double 11" and the complication of discount rules, this national shopping carnival has been invisibly divided into two stages. The first phase was led by top anchors and began to warm up in mid-October. In between their daily sales, anchors such as Li Jiaqi and Wei Ya would use "spoilers" to introduce to consumers the hot-selling products that would be launched during Double 11. "Hot-selling products" not only refer to the brand's popularity, but also mean amazing discounts.

To this end, Li Jiaqi also reproduced the entire process of his business negotiations with major brands through the variety show "Offer to All Girls". In the show, amid the tense arguments between the two sides, Li Jiaqi always stood from the perspective of the consumers. Relying on the traffic advantage of his live broadcast room, his professionalism in bringing goods, and the sales miracles he repeatedly created, he made one international brand after another lose the battle and retreated, and obtained seemingly impossible discounts.

Several consumers who have watched the variety show said that they were indeed touched and were looking forward to the pre-sale live broadcast on October 20. "Li Jiaqi has repeatedly emphasized in the early warm-up live broadcasts that the event on October 20 will definitely be the biggest this year. Missing this day is equivalent to missing Double Eleven."

The reason for this statement is that the number of popular products participating in the event is limited. October 20 is the first day of the pre-sale period to pay the deposit. Although the Double Eleven event cycle is very long, some products with small inventory will be sold out in the early morning of the 20th. It is still unknown whether they will be able to return to the shelves later. Therefore, this day was called the "peak showdown" between Li Jiaqi and Wei Ya. The two super anchors started broadcasting at 4 pm that day and continued until the late night. Each of them sold more than 400 products, and the cumulative viewing volume reached 249 million and 239 million respectively.

It can be said that the period from the payment of the deposit on October 20 to the payment of the balance in the early morning of November 1 is the time when the top anchors, including Li Jiaqi and Wei Ya, have the largest and most concentrated traffic for sales. The reason why various brands are willing to give large discounts on products is that they also hope to achieve short-term large-scale sales of products by relying on the huge traffic of the top anchors. Since November 1, the Double 11 event has entered the second phase dominated by brands.

During this stage, although the top anchors are still continuing to sell goods, most of the inherent consumer groups in their live broadcast rooms have completed their Double Eleven purchases, and the consumption potential of new users in the short term is limited. According to statistics, the cumulative number of views of Li Jiaqi's live broadcast room in the first phase of Double 11 reached about 673 million, while the cumulative number of views in the second phase was 405 million.

In the second stage, on the one hand, brands began to conduct more independent store broadcasts, and on the other hand, combined with the full-discount activities of e-commerce platforms to launch promotional activities in their own stores. It can be said that this stage is the best time for brands to accumulate private domain traffic, which is also the reason why L'Oreal will issue a large number of high-value coupons in early November.

The problem arises in two stages, the traffic game between top anchors and brands. Both the anchors and the brands attempt to control the "lowest price on the entire network" in their own hands, but they inevitably have to cooperate with each other, which makes it difficult for both parties to reach an agreement on the disclosure and synchronization of discount information.

From the brand's perspective, only by lowering the prices of activities in the first phase and offering the "lowest price on the entire network" in their own activities can they better cultivate user loyalty and gradually accumulate more brand traffic. For well-known brands with a certain audience base, although they can achieve short-term sales impact through the live broadcast rooms of Li Jiaqi and Wei Ya, they themselves have no shortage of exposure and have the ability to operate their own stores for a long time. They also have certain offline sales channels as a guarantee. In the long run, the benefits of giving super anchors the "lowest price on the entire network" are not obvious.

For small and medium-sized brands in the start-up stage, although the live broadcast rooms of Li Jiaqi and Wei Ya can bring them a certain amount of voice and sales, they also set higher standards for hard power such as product strength, quality, and supply chain. If any link is missed and the consumer's shopping experience is damaged, it will do more harm than good to the growing brand. From the perspective of super anchors, "the lowest price on the entire network" is also the foundation of their livelihood. Tens of millions of consumers stay up late to watch the live broadcast room, to put it bluntly, because they can buy genuine products at the lowest price.

However, with the rapid development of the live streaming e-commerce industry, self-broadcasting by merchants has begun to rise across the board. According to relevant statistics, during last year's Double Eleven period, more than 60% of Taobao Live's transaction revenue came from merchants' self-broadcasting. According to iResearch Consulting data, in 2020, the transaction volume of merchants’ self-broadcasting accounted for 32.1% of the overall live streaming e-commerce industry, and is expected to reach nearly 50% in 2023.

In any case, as long as super anchors still hold the advantage of traffic, the cooperation model between brands and super anchors will not stop. The two parties, whose fundamental interests are not consistent, can only use time differences and vague activity rules to please consumers in their home turf.

3. Why must the live broadcast room have the lowest price?

After discussing the entire process of the L'Oreal incident and the disputes behind it, there is actually another question that is more worthy of discussion: Who should have the "lowest price"? In the past few years, people seem to have taken one thing for granted: the live broadcast room must have the lowest price. This is not unrelated to the evolution of the entire live e-commerce industry.

Since 2017, with the explosive growth of the short video industry, live streaming e-commerce has also become popular. Li Jiaqi became popular on the Internet with his lipstick trial videos such as "OMG, buy it!" and "Girls, go ahead!". During the same period, Wei Ya also made her mark in Taobao live streaming with her outstanding sales ability. With the traffic support from the e-commerce platform and the two's own operations, the live broadcast rooms of Li Jiaqi and Wei Ya became famous during the Double 11 in 2018, and they embarked on the road to becoming super anchors.

It is undeniable that as a new channel for selling goods, live streaming has indeed brought new consumer experience to e-commerce companies that have always been in the era of pictures and texts. Including lipsticks, skin care products, and technological digital products, the real-time display and evaluation by the anchor helped many people with purchasing intentions to make consumption decisions.

However, the Matthew effect was very obvious in the early days of the live streaming e-commerce industry. Top anchors represented by Li Jiaqi and Viya have almost contracted most of the industry's traffic and resources. On the one hand, this has allowed the two to grow into super anchors at a rapid speed and in turn driven the rise and prosperity of the entire industry. On the other hand, it has also given Li Jiaqi and Viya greater bargaining power. Sometimes this advantage even destroys the price balance between the anchors and brands. However, it is precisely this price advantage that has allowed the two super anchors to attract countless fans and gather greater traffic.

Over time, Li Jiaqi, Wei Ya and their fans have reached a "tacit understanding" that products that can be shown in the live broadcast room must have the lowest price or the most welfare gifts on the entire network.

This tacit understanding has intensified since live streaming e-commerce became popular across the country, especially since the epidemic, when many celebrities in the entertainment industry began to sell goods through live streaming. In addition to relying on the popularity accumulated from previous works to monetize traffic, the most common card played by celebrity anchors is "the lowest price on the entire network." There are many radical people who have declared in the live broadcast room that even if they have to pay for subsidies, they will still provide fans with the lowest price in history.

Putting aside the issue of product quality that has been criticized by the outside world for celebrity endorsements, the logic behind the entire live-streaming e-commerce industry's competition for the "lowest price on the entire network" actually ignores a premise: what about consumers who don't like to watch live broadcasts? Do they have the right to enjoy the lowest price on the entire Internet?

"I really don't like watching live broadcasts. It's noisy and time-consuming. Can't people who don't consume in the live broadcast room get the lowest price?" "In order to buy a certain product, I have to wait for the live broadcast all night and then fight for it. It takes too much time and energy." "If it were a normal day, it would be fine. People who watch the live broadcast get benefits by spending their time, but Double 11 is the national shopping festival, and consumers should enjoy equal discount prices." On major social media platforms, complaints about this year's Double 11 live e-commerce can be seen everywhere.

Some netizens even revealed that the Double Eleven discounts planned offline by Hangzhou Yintai this year were stopped and cancelled because they were greater than the live broadcast rooms of the top anchors, and all pre-sold orders by the salesgirls were also refunded. Under the influence of super anchors, it seems natural for live broadcast rooms to get the lowest prices in the industry.

But a fact that is being overlooked is that the existence of Internet e-commerce was originally intended to provide the public with a more convenient and affordable shopping method, and to create a more transparent and fair sales channel for brands. However, when the "lowest price" of many of the most popular products in this shopping festival with the participation of the whole nation becomes the exclusive right of the live broadcast room, it may harm the freedom of consumers in the way they shop, and Internet e-commerce will become less convenient and fast to some extent.

For live streaming e-commerce, which has only been around for five years, low prices have certainly been a catalyst in its development. But if we go back to the initial popularity of Li Jiaqi and Viya, we will find that consumers' love for live streaming e-commerce stems from their appreciation of high-quality content. Whether it is Li Jiaqi's unique lipstick swatches or Viya's comprehensive product introductions, they all add fun and interactivity to e-commerce shopping. This is also the reason why some consumers are willing to watch live streaming sales frequently even if they have no shopping needs.

The L'Oreal incident is a concentrated outbreak of many problems. While L'Oreal itself is looking for more sincere ways to repair its relationship with consumers and its brand image, it is time for live streaming e-commerce to think clearly about what role it wants to play and what role it can play.

Author: Shen Danyang

Source: Pinwan