In-depth reveal of brand self-broadcasting methodology

Douyin, a short video content co-creation platform that has swept the country and even the world in just a few years; e-commerce, a channel and lifestyle that migrates shopping behaviors online; self-broadcasting, a form of live streaming in which companies abandon big-name anchors and turn to live streaming to sell goods themselves after live streaming becomes popular.

What effect will occur when these three concepts are combined?

First of all, we need to figure out what is the difference between Douyin e-commerce and other traditional e-commerce.

In April this year, Douyin E-commerce held the "First Douyin E-commerce Ecosystem Conference" since its establishment in June 2020. From the speech delivered by Kang Zeyu, President of Douyin E-commerce, "interest e-commerce" emerged, replacing the outside world's positioning of it as "content e-commerce" or "live streaming e-commerce."

Based on interest-based e-commerce, live streaming with goods has gradually begun to transform. On the basis of ensuring content quality, the booming live streaming has begun to transform from its original high dependence on big-name anchors and well-known KOLs to a combination of brand self-broadcasting , expert cooperation, and Top KOLs.

As consumer goods become increasingly diverse, brands are increasingly unable to grasp consumers’ ever-changing tastes and preferences. Therefore, the marketing methods and approaches are different now than in the past. We analyze the basic plate of Douyin e-commerce and dismantle the underlying logic of Douyin e-commerce brand self-broadcasting to answer questions for brands and try to outline a growth path under the Douyin e-commerce system.

1. Breakthrough point in traffic competition

After our in-depth research and service for nearly a hundred consumer brands, we found that there seems to be a pattern behind it - consumers' attention is positively correlated with purchasing decisions.

In fact, it is not difficult to understand that if a brand wants to generate long-term sales, it must continue to be seen by consumers. As time goes by, brands' demand for exposure has greatly increased: in our communication with P&G's core team, we found that 10 years ago, a product would generate a purchase if it came into contact with consumers seven times, but today it takes 30 times.

So, if brands want to reach consumers, they must first look at where consumers spend their time.

Data source: "2021 Douyin E-commerce Merchant Management Methodology White Paper"

From 2017 to 2019, the annual growth rate of Douyin's daily active users (DAU) was about 2%. Although the overall DAU growth rate slowed down, the time consumers spent using mobile apps increased significantly. The average monthly usage time of short video/live streaming software users was 20.7 hours, an increase of about 9% compared to 2019. It is obvious that users prefer to watch short videos and live streaming.

According to the 618 data released by Douyin officially in 2021, the cumulative number of people watching live broadcasts reached 37.2 billion in nearly a month. Caitong Securities estimates that the number of people watching live streaming sales on Douyin exceeds 30 billion in a single month.

When Douyin was first launched, its main function for brands was to “plant grass” with short videos. It was not until the shopping cart was launched in 2018 that the e-commerce function of external link jump was realized. Subsequently, the live broadcast function was launched, and then the "Douyin Shop" was launched in 2019, and then the first-level e-commerce department was established in June 2020. This undoubtedly reflects a signal: e-commerce is a strategic business of ByteDance, and putting "exposure" and "purchase" in the same scenario is the ultimate answer.

In April this year, Douyin's e-commerce business model had a clear definition of "interest e-commerce".

The biggest difference between Douyin e-commerce and other traditional e-commerce is that the former is based on content logic, while the latter is based on shelf logic.

The shelf-style e-commerce platform focuses on super-large-scale product supply. Through channel operation and product marketing, it reaches consumers with clear consumption purposes, takes "search" as the main consumption path, and presents the main feature of "people looking for goods".

Douyin e-commerce takes visual product content as its core, focuses on product content operation and interest content recommendation, takes stimulating interest as its starting point, and presents the core feature of "goods find people".

When a platform helps brands achieve “goods finding people”, consumers’ consumption habits are also transformed, from passively solving existing needs to “habits being planted and needs being stimulated”. The path from planting grass to pulling grass no longer requires the use of a combination of punches from Zhihu, Xiaohongshu, Tmall and JD.com. Instead, the entire chain of social communication → occupying the mind → e-commerce transaction can be completed directly in Douyin e-commerce.

In the past two years, live streaming e-commerce has developed rapidly as a whole, with the market size increasing from 140 billion in 2018 to nearly 1 trillion, with an average annual growth rate of 174% and a penetration rate of 8.6% in the e-commerce industry. In the past year, the total merchandise volume (GMV) of Douyin e-commerce has risen rapidly. By January 2021, the platform's transaction volume had increased more than 50 times compared to January 2020. The new online retail track has begun to take shape.

Using live broadcast scenes to showcase products will allow consumers to clearly perceive their needs. It is no longer a problem that can be solved by categorizing them on a page. The function of Douyin e-commerce is to provide more display and more combination possibilities for products . This also provides an opportunity for both consumers and merchants.

Obviously, the incremental growth of commodity-oriented "shelves" is limited, while content-oriented "interests" are becoming the next battlefield for influencing consumer decisions. How to efficiently reach and convert users on Douyin e-commerce has become the most concerning issue for brands. It has been a while since Douyin e-commerce was launched. Countless businesses have already set their sights on this gold mine, and the competition for traffic has gradually become fierce.

Further exploring opportunities from the perspective of live streaming e-commerce, we found that self-broadcasting by brands is one of the huge incremental opportunities.

FeiGua data shows that since the beginning of 2021, brand self-broadcasting has grown rapidly, accounting for an average of 50% of total sales by February this year.

Why is this trend occurring?

First of all, it is a problem of underlying logic. In fact, store broadcasts have already appeared on major e-commerce platforms, but this is still the logic of "Details Page 2.0", and traffic will be concentrated in the hands of top influencers. If you want to gain incremental traffic from live streaming, you either have to attract traffic from outside or spend a lot of money to buy users into the store’s “private domain”. You need to have volume first, and live streaming is a tool to help with conversions.

Douyin’s e-commerce brand self-broadcasting is essentially a form of content, and the platform’s algorithm will bring natural traffic to high-quality content. Even if a business lacks traffic at the beginning, if the content is of high quality, it can start from scratch and increase both traffic and conversions.

Secondly, like other platforms, brands on Douyin e-commerce will also look for influencers to broadcast on their behalf, but as competition for traffic intensifies, prices will also rise.

From the perspective of long-term operation and stable profits, brands can gain more growth through self-broadcasting in stores.

2. The focus of brand self-broadcasting is on content

We learned that most brands officially launched Douyin e-commerce brand self-broadcasting from the end of 2020 to the beginning of 2021. The cycle is short, but the explosive power is extremely strong. Let’s first take a look at the self-broadcasting layout of major consumer brands:

Each book is planned to be broadcasted by itself and to reach others at the same time;

Teenie Weenie’s self-broadcasting business accounts for 98% of Douyin’s e-commerce;

In the first half of the year, Huiyuan's GMV contribution from Dabo was greater, but currently the GMV contributed by self-broadcasting accounts for the majority;

In the annual KPI set by Joyoung, the ratio of influencers to self-broadcasting is 1:1, but the benefit is that self-broadcasting GMV accounts for 2/3 and influencers account for 1/3. The performance of self-broadcasting obviously exceeded expectations.

Currently, the proportion of self-broadcasting in Neiwai’s stores in the entire live broadcasting activity is controlled at 60-70%, but it creates 90% of GMV, so the company is considering continuously increasing the proportion of self-broadcasting business.

So, what is the underlying thinking of the brand behind the remarkable data?

According to Teenie Weenie, after trying to operate self-broadcasting for a period of time, about 70% of the new products launched were sold out as soon as they were put on the shelves . The sales effect of the new products was very good, which further strengthened the brand's determination to do a good job in self-broadcasting.

Zhuben started to develop its own broadcasting business. On the one hand, it took a fancy to the content ecology of Douyin e-commerce, and on the other hand, it aimed at the new growth of live broadcasting. The two-in-one business ultimately achieved the goal of receiving sales orders. Neiwai also said that the self-broadcasting business is of great benefit to accumulating consumer assets.

Of course, brand considerations must be made in stages. When going from 0 to 1, the factors to be considered are the starting point and the scale of e-commerce. When going from 1 to N, the factors to be considered are cost, cost-effectiveness, and whether the traffic is in one's own hands. Therefore, the stage will directly affect the brand's self-broadcasting to reach broadcasting ratio.

For example, Joyoung, compared to self-broadcasting to meet daily needs, Dabo is used to recommend new products and cooperate with Joyoung brand activities. After all, influencers have advantages in terms of advertising, endorsements, number of fans, etc. Accelerating the layout and delivery of influencers and making consumers more mature can increase the speed at which users place orders in the live broadcast room.

However, before a brand starts preparing for its own broadcast, it often needs to undergo an adjustment in its mindset: from expanding products and purchasing volume through shelf e-commerce to content-driven interest e-commerce.

From the perspective of pursuing results, traffic is purchased with money no matter where it is. The reason why merchants are willing to continue to invest is not because paid traffic brings excess ROI, but because of the free natural traffic generated subsequently. In shelf e-commerce, sales purchased with money can improve search rankings, thereby bringing natural searches into the store, and then increasing LTV through cross-selling through expanded categories, which may make it possible to get ROI back.

But if you look at self-broadcasting from this perspective, you will inevitably be full of doubts: I bought traffic for the live broadcast room, but the audience turned around and left, and these people are not mine after the broadcast. Where is the natural traffic? What am I working so hard for?

Therefore, we need to look at the problem from a different perspective. The difference of Douyin e-commerce mentioned earlier is that content is distributed to the audience by algorithms. And this distribution process can happen naturally and for free. In other words, brands can spend very little money to accumulate a group of seed audiences, and through refined operations in the live broadcast room, improve data in various dimensions, so that the algorithm can determine that the content is high-quality and bring large-scale recommendations!

The quality of content is a more advanced a priori indicator than sales – this is why we believe that refined operations are an important strategy for brands to do a good job of self-broadcasting. As long as the user experience is in place, the platform will give you free traffic.

Although ROI is still an important indicator to measure the input-output ratio, GPM is undoubtedly more meaningful from the perspective of Douyin's e-commerce operations.

How to understand the value of GPM compared to ROI?

Let’s look at two examples:

The first is that the brand spent 10,000 yuan on traffic, which can be live broadcast or short video, and then obtained 30,000 views and a transaction volume of 5,000 yuan. Then the calculated ROI is 0.5. A negative value means "losing business." But the calculated GPM is impressively over 100.

The second is to invest 20,000 yuan in traffic, generate 4 million views and 100,000 yuan in sales. Then the ROI is 7.5, but the GPM is only 37.5.

This is the gap. From the ROI perspective, brands pay more attention to the transaction return rate of traffic delivery and tend to ignore the importance of dissemination in content e-commerce. The value of GPM lies in its emphasis on "content is the primary productive force", because the Douyin e-commerce system allocates traffic based on the merchant's conversion data. The core of the conversion rate lies in whether the content has enough power to stimulate users to place orders.

In other words, the difference between GPM and ROI and GMV is that GPM emphasizes the importance of content more.

However, although GPM is important, it is not the only criterion. Peacebird said that when the average order value is different, the objects of the thousand exposures are different. At this time, directly examining the GPM seems a bit one-sided. A more objective perspective is to focus on the click-through rate and conversion rate of orders.

We have observed that the live broadcast rooms of leading brands in the industry often have higher interactions and conversion rates.

3. The growth path of brand store self-broadcasting

As we mentioned in the previous article, the current breakthrough point for brands in Douyin e-commerce is not “traffic” itself. We believe that brands should focus on two more systemic levels:

• "Tao" level: understand the platform algorithm and underlying logic, and follow the platform trend
• "Technical" level: refined operations improve the matching of people, goods and places, and satisfy consumers

From the perspective of "Tao", the first thing that emerging brands need to do when broadcasting themselves is to see what the brand's understanding and positioning of Douyin e-commerce is, or in other words, how the brand wants to develop itself through Douyin e-commerce. Some people use Douyin live streaming to clear inventory, some use Douyin e-commerce to specialize in low-price sales, some use Douyin e-commerce as a product promotion channel, and some use Douyin e-commerce as a starting point for new product promotion and creating popular products.

After positioning, it’s time to consider trading. Since self-broadcasting is done by the brands themselves, does it mean that every brand has its own tricks and each one is different?

In fact, when it comes to the "technique" level, there are rules to follow for self-broadcasting. Based on interviews with brands and data research, we have summarized a set of growth paths for cold-start self-broadcasting for brands that want to start from scratch.

Mandatory elements for self-broadcast cold start

From interviews with merchants, we found that the "people-goods-place" perspective often mentioned in the industry has certain reference value for starting self-broadcasting.

First, people. Joyoung pointed out that most industries in the current consumer retail market are facing consumers who are women aged 20-40. Therefore, it can be seen that the hosts of most live broadcast rooms are also dignified and generous young women, because this image satisfies consumers' yearning for a better life to a greater extent. For their products, if the host is too seductive, it will not really fit the tone of the product, so they hope to create an image of a comfortable and pleasing host.

Then it’s goods. Product selection, product grouping, new product launches and pricing, etc., all need to be accurately based on the brand's own situation.

Finally, the field. The venues are usually divided into two categories, one is the green screen or large screen live broadcast room, and the other is the physical scene. The purpose of the green screen is to better display some profit and marketing points, allowing users to make decisions more intuitively and quickly. For example, for mothers and working people, time is relatively precious, so it is very necessary to quickly display the profit points of the products; the real scene is more inclined to immersive experience. For example, when selling kitchenware, cooking in an elegant kitchen can effectively increase sales rate.

After clarifying the self-broadcasting strategy from the perspective of people, goods and places, you can officially start the cold launch. The strategy in the cold start phase is to create two-way attraction in the live broadcast room with traffic as the core purpose, so that the platform is willing to invest traffic and users are willing to wait.

The cold start is a stage where brands try out their products, but it is also a complete and complex set of actions. The whole process involves 8 elements, including time (live broadcast time period, frequency), personnel organizational structure, cost investment, goods, content (anchor personality, words, live broadcast room theme), testing, effect indicators, review, etc. Each element will affect the effect of the live broadcast. Let’s take some brands as examples to see what role each element plays.

Time: The longer the live broadcast time, the greater the chance of exposure. Most brands adopt long-term live broadcasts in shifts; some special categories choose to live broadcast at special times, such as OLLY's sleep live broadcast room, which will continue to live broadcast/accompany netizens from the evening to the early morning when people are prone to insomnia.

Personnel organization structure: Cold start generally requires less manpower but high labor efficiency. Taking Teenie Weenie as an example, there are 1-2 shifts of anchors, each shift is 6 hours, and 6-12 hours a day. High efficiency and few people.

The Douyin e-commerce learning center also gave summary suggestions:

Cost input: The fixed costs of cold start are usually not much different, with only some differences in proportions between different brands.

A certain generation of operating agencies explained to us the cost structure of brand self-broadcasting:

15% service fee, labor cost

10-15% Promotion Fee

30% Front-end operation

20-30% Customer service, factory, transportation

Goods: Taking Joyoung as an example, the logic of product grouping includes four types of products: flash sales, big hits, profits, and regular products.

Joyoung obtains free traffic through flash sale products (non-profit products). This method is difficult to make a profit in the first spread, but if it can be accumulated again or even fissioned, the second spread can bring profits. Huiyuan directly enters the market with paid traffic + free traffic. Paid traffic can stimulate some free traffic. Conversely, recommending free traffic can improve the accuracy of paid traffic.

Content: The host in the live broadcast room needs a personality that matches the attributes of the category.

In the home appliance industry, such as Joyoung, the anchor’s down-to-earth image brings users closer and creates empathy for them to buy; OLLY creates content by digging deep into products, such as the “Sleep Live Room” that highlights product ingredients and functional features; Neiwai’s user portrait is young female consumers aged 25-35, so they pay attention to seasons, fashion, and frequent new products to meet users’ needs for trying new things; AOEO pays more attention to consumers’ skin care needs and pain points, and provides solutions, using the two keywords “amino acid” and “gentle and non-irritating” to hit the user’s mind and use hard-core strength to attract user attention.

Testing : One month is too short and half a year is too long. The testing period for brand cold-starting Douyin e-commerce brand self-broadcasting is usually around 3 months.

During the testing period, the platform will first give the brand some free traffic for testing. The test objects include the crowd, account positioning, the quality of short video output, etc. Then the brand will also try to put some traffic, summarize its own self-broadcasting SOP, and at the same time study the intelligent technology of Douyin e-commerce. Taking Huiyuan as an example, in the third month of the testing period, the average output of a 6-hour live broadcast could reach more than 7,000. The company basically figured out the rules, including the live broadcast time period, distribution population, means of obtaining traffic, etc., and was ready for the traffic explosion that might come at any time in the future.

Performance indicators: What data indicators do brands pay attention to? During the interview, we learned that the basic indicators that brands pay most attention to are interaction volume, likes, user stay time, conversion rate, and fan increase rate . They will further pay attention to GMV, comprehensive ROI, and the GPM mentioned in the previous article. When considering funding investment, they will examine the proportion of natural traffic and paid traffic. Overall, they will also compare the industry as a whole.

Review: The review cycle varies from brand to brand. Some brands review daily, and the longest review cycle does not exceed one week.

After the cold start is successfully completed, self-broadcasting enters the daily operation stage.

First, the daily operation has expanded the personnel structure. It is no longer just one or two anchors. Huiyuan's self-broadcasting team requires 20-30 people, divided into front-end operations (platform operations + anchors) + logistics support (product combination, shipping, customer service, venue construction, content planning, shooting); secondly, matrix accounts are allocated according to product lines, including factory stores and dealer stores in various places, each with its own account; finally, data tools can be used to detect the effect, such as Douyin E-commerce Compass, Chanmama, Feigua Data, etc., so as to make timely adjustments.

In short, for brands, Douyin’s e-commerce brand self-broadcasting functions cover multiple levels from traffic generation, services to image building.

The power of the platform

The platform provides a platform for brands, and the brands create content for the platform. Ultimately, it is a win-win situation for both the platform and the brand.

Therefore, Douyin e-commerce has set up an incentive mechanism for merchants to create content, and merchants also have channels to obtain precise results from Douyin e-commerce.

Specifically, the brand's investment in Douyin e-commerce is weighted according to type: short videos of brand accounts, live streaming of e-commerce products, and search.

The brand’s content output in short videos and self-broadcasting will cover physical objects (goods) + services (brand value/company).

The short videos of Peacebird are divided into three types: hot topics, grass-planting topics, and live broadcast previews, each with different functions. The main function of hot topic short videos is to create strong exposure and increase the overall playback volume of the brand; the purpose of promoting products is to assist in bringing in goods and product marketing; and the live broadcast preview is to capture part of the content during the live broadcast, edit it and publish it, which can effectively bring traffic to the live broadcast room. All content production is the responsibility of a dedicated content team.

There is no doubt that different content needs to be designed at different stages of traffic development to help achieve advancement.

Neiwai, which is in a period of stable traffic, is combining brand marketing activities and new product launch plans to create new content; Huiyuan happened to encounter a special event that triggered a traffic peak and needed sufficient content to absorb the traffic; Teenie Weenie allowed the anchors to systematically learn the brand product craftsmanship to create content that users are interested in, thereby increasing the average order value of the product, because users with medium and high order values ​​are usually difficult to impress, and they need to first establish a strong sense of trust with them.

In addition to showing off their respective strengths, the platform also provides brands with multi-faceted support. First, there are platform incentives. Brand merchants can receive rewards after accepting tasks and completing the conditions regarding live broadcast days, settlement GMV and number of purchases. Secondly, there is platform training. Douyin E-commerce has set up a learning center, opened courses and updated Douyin E-commerce rules in real time. There is also 1v1 diagnosis. In response to the needs of merchants for self-broadcasting, the platform can diagnose the brand and provide support for self-broadcasting business.

It is worth mentioning that Douyin E-commerce has also launched a monthly self-broadcasting event - "Brand Self-broadcasting Peak Competition", which enhances the brand's enthusiasm for self-broadcasting through rankings, tasks, Boss is coming, traceability of big-name products and other competition systems, as well as millions of Qianchuan coupons incentives, and innovates more new self-broadcasting methods with brands.

With the support of the platform's various gameplays, the GMV of many brands has shown an upward trend. Among the brands that participated in the self-broadcasting peak competition in July, nearly 2,000 doubled their average daily sales compared to June.

OLLY said that the fact that brands can participate in Douyin e-commerce’s brand self-broadcasting peak competition, challenge competition, etc. actually represents the platform’s recognition of the brand to a certain extent. This is especially critical in the fiercely competitive consumer wave.

However, the premise of all live broadcasts and activities is to first check whether the products are genuine. Ultimately, if you want to get a good GPM and GMV, what matters is the degree of investment of the brand, because Douyin e-commerce is a platform and a resource. Whether it can be well utilized depends on whether the brand is willing to put in the effort.

Conclusion

Having said so much, what brands want to get from Douyin e-commerce can be summed up in two words - content acquisition and new customer conversion. All of this is built on the basis of huge traffic.

But even with more traffic, when thousands of brands come in, will it be enough to share?

Peacebird has had some concerns about this because they found that their sales growth has gradually reached a bottleneck. "For traffic, everyone is vying for the top spot. After reaching a certain level, the cost of traffic becomes very expensive, and then what matters is the number of fans."

But AOEO’s view is exactly the opposite. They firmly believe that even if the platform traffic reaches its peak one day, it will not have much to do with merchants. For emerging brands, no matter how big the traffic pool is, only a part of it can be reached and converted. The traffic of Douyin itself is improving consumer stickiness through continuous iteration, which has given brands more users and more opportunities to be noticed.

Relevant people told us: When brands find that they are getting less traffic, it is not because the platform’s traffic has decreased, but that the brand’s ability to obtain traffic has not improved. The Douyin platform is a content-based platform. If the content is not good, it will affect the user experience when it is pushed to users. Therefore, good content is the core competitiveness for brands to break through bottlenecks.

Therefore, we believe that Douyin e-commerce’s incentives for brand merchants are actually a mutually beneficial process for both parties. The brand's continuous output of high-quality content has accumulated resources for the e-commerce platform, attracting and consolidating Douyin e-commerce's user base; conversely, Douyin e-commerce has also provided the brand with accurate and effective traffic and growth, forming an organic cycle.

Our old friend Evan, the founder of JiChuangMeiao, also said: Based on the practical experience of the past year, there is no shortcut to self-broadcasting by Douyin e-commerce brands. The rapidly booming market brings about a rapid increase in operational capabilities. In this context, only brands that can actually solve the problem of product mechanism and standardization of anchor capabilities can iterate and grow quickly. The painful iteration process is like moving mountains, but it is often with this attitude that brands can reap benefits beyond their imagination.

Author: Growthbox

Source: Growthbox