Kuaishou e-commerce brand management methodology

In 2021, Kuaishou’s total e-commerce transaction volume (GMV) reached 680 billion yuan, a year-on-year increase of 78.4%.

In just five years, Kuaishou's e-commerce GMV increased from 97 million yuan in 2018 to 680 billion yuan in 2021, becoming a new star in China's e-commerce industry.

In 2018, when live streaming e-commerce was in full swing, Kuaishou, with the support of strong traffic, accelerated its layout in the e-commerce field.

In addition to the rapidly growing GMV, the repurchase rate of Kuaishou e-commerce is also impressive:

In 2020, the platform's average repurchase rate reached 65%. In September 2021, Kuaishou's e-commerce repurchase rate exceeded 70% , leading the live streaming e-commerce industry.

In 2021, Kuaishou and Douyin held e-commerce conferences and put forward concepts to interpret the value of live streaming e-commerce business on their own platforms.

Kuaishou announced that the traffic competition of public platforms has entered the era of stock competition. The era of live e-commerce 2.0 with "content + private domain" as the core has arrived. It hopes to reconstruct the consumption decisions of 1 billion people by building an ultimate trust relationship.
Douyin e-commerce emphasizes that it is neither live streaming e-commerce nor content e-commerce, but interest e-commerce .

1. Features of Kuaishou e-commerce

1. Characteristics of e-commerce model

On the Kuaishou platform, there is a natural trust relationship between users and short video content creators.

With trust as the core, Kuaishou has gradually explored a unique " trust e-commerce " model and ecology, promoting efficient conversion and monetization of traffic, which is also one of the main characteristics that distinguishes Kuaishou e-commerce from other live streaming e-commerce.

1) What is Trusted E-Commerce?

Trusted e-commerce is based on the strong connection between users and anchors . After introducing public domain traffic into the live broadcast room, it achieves efficient conversion from live broadcast viewers to consumers, and then completes the sedimentation and accumulation from the public domain to the private domain, continuously shortening the user's consumption decision-making path, and empowering many brands and merchants.

2) The trust ecosystem continues to improve

Based on the "trust triangle" composed of private domain traffic accumulation, diversified products, and old iron community culture, Kuaishou has launched "Trust Card" and other benefits for honest consumers, formulated intellectual property protection rules for settled brands and merchants, etc., further strengthening the trust relationship between brands, merchants and consumers, and effectively safeguarding the legitimate rights and interests of the three parties, forming a virtuous circle, and promoting the continuous improvement of the trust ecosystem.

Kuaishou E-commerce believes that trust is the starting point and foundation of all transaction relationships. In the live streaming e-commerce ecosystem, a stable consumer trust relationship depends on two aspects: on the one hand, the live streaming e-commerce platform's active intervention and governance of various violations of laws and regulations that undermine the trust ecosystem; on the other hand, it provides consumers with after-sales service measures that meet or even exceed expectations.

Based on this, Kuaishou has built a platform trust governance system, and based on the idea of social co-governance, has established a trust co-construction mechanism with the participation of governments, enterprises, industry organizations and the general public, in order to achieve comprehensive governance of the live e-commerce ecosystem.

It also launched a service brand "Trust Shopping" for the trust ecosystem. The brand connotation has three levels. On the one hand, it builds basic trust around transactions through platform governance and community power. On the other hand, it also launches industry upgrade solutions such as "True Treasure Warehouse" for official jewelry and jade authentication and 180-day warranty for second-hand mobile phones for different industries. At the same time, anchors are encouraged to carefully manage private trust between themselves and their fans, and to create "ultimate trust" between buyers and sellers through "refunds without returns" and fan group operations.

The governance logic of Kuaishou's "Trust Purchase" is not simply to endorse the merchant services or product quality as a platform. Kuaishou e-commerce will give priority recommendations to merchants who have opened "Trust Purchase", giving them more opportunities to gain exposure.

3) Create a closed loop for GMV growth

Content and trust relationships are the two key factors driving the growth of Kuaishou’s e-commerce GMV.

The GMV of traditional e-commerce is determined by UV, conversion rate and average order value. Merchants focus more on capturing and converting traffic in the public domain.

Kuaishou e-commerce GMV is composed of UV, content consumption time, order conversion rate per unit time, average order value and repurchase frequency. UV comes from the private traffic accumulated by merchants, the natural traffic obtained from the public domain, and commercial exposure.

High-quality content drives the continuous accumulation of private domain traffic and strengthens the trust between merchants and users. The trust relationship will continue to amplify the value of high-quality content, guide repeat purchases, and create a closed loop of merchant GMV growth.

2. The principle of universal benefits

Brands and merchants of different sizes have the opportunity to gain traffic exposure on the Kuaishou platform and achieve efficient accumulation and sedimentation of private domain traffic. The inclusive ecosystem will enable the role of experts on the entire platform to grow faster.

3. User characteristics

Among Kuaishou users, people from first- and second-tier cities account for 45%. Kuaishou's user profile is highly similar to that of Chinese society. At the same time, it has advantages among young people and high-potential young people from small towns.

2. STEPS Brand Management Methodology

For C-end consumers , trust is the most basic starting point. Kuaishou e-commerce needs to improve "trust e-commerce" and let "extreme trust" promote transactions between users and merchants.

On the B-side , the goal is to support traditional and new brands and reduce their difficulty, which is a further exploration of trust in e-commerce.

In order to help merchants create value more efficiently in the Kuaishou e-commerce ecosystem and achieve explosive growth in their brands, Kuaishou E-commerce has released the "STEPS" merchant management methodology.

The “STEPS” methodology mainly includes five major contents:

Self-operation based on brand personality to establish a base;
It helps brands to get started with new stores in the initial stage through the operation and support of public domain traffic.
Cooperate with influencers in distribution (Elite-distribution) to explore the explosiveness of brands and products in the Kuaishou e-commerce ecosystem;
Based on Kuaishou's private domain economy, we conduct repurchase operations in short video and live broadcast scenarios;
Develop channel-specific products (Specific supply) to meet the needs of different channels.

The "STEPS" methodology runs through the entire life cycle of a brand, helping the brand grow rapidly.

1. Brand self-broadcast (S)

After achieving zero new stores through influencer distribution, brands usually choose to deepen operations through self-broadcasting. Brand self-broadcasting means that merchants set up their own live broadcast rooms to conduct stable live broadcasts and form sustainable delivery channels.
In the early stage of self-seeding, you can:

Create a matrix account;
Step-by-step product selection to launch hot-selling sets in single stores;
Repeatedly explain the popular sets;
The public domain purchase method can quickly get through the cold start phase.

2. Public domain traffic support (T)

Public domain traffic blessing means that merchants deliver traffic in the public domain, open up product access channels, guide order conversion and payment, make products and live broadcast rooms gain more exposure, and achieve goals such as attracting traffic to the live broadcast room.

The added value of public domain traffic is mainly reflected in the following three aspects:

Efficiently acquire traffic;
Build a fan base;
Reduce investment costs.

(Public and private domains are linked, and reasonable traffic strategies are used to significantly reduce traffic investment costs while improving traffic accumulation and conversion efficiency)

3. Expert Distribution (E)

Expert distribution is to help merchants achieve a rapid breakthrough from zero to one in the initial stage of brand operation by cooperating with experts to select and test products, anchor the target audience and sell goods through live streaming.

Expert distribution has four main values:

Low cost. The initial fixed cost is low, so brands can try new channels at low cost;
Quickly spread awareness and increase sales. When the distribution volume on the site reaches 1 million+, the initial performance of brand self-broadcasting is better;
Quick test. Identify the best sellers based on user feedback, and lay the foundation for subsequent self-broadcast group inventory and target audiences;
Data accumulation. Cooperating with different influencers and accumulating audience package data in each live broadcast room can pave the way for accurate traffic flow for brand self-broadcasting.

4. Private Domain Operation (P)

Private domain operation means that merchants build brand personality, form unique personality in a more concrete way, closely connect with users, build trust, and accumulate private domain traffic; and through event incentives, daily maintenance and other methods, conduct refined operations on users of the private domain traffic pool, activate existing fans, and drive higher frequency of repurchases.

The value of private domain operations is mainly reflected in the following three aspects:

Use personality to enhance trust;
Increase repurchase rate;
Tap into new traffic.

5. Channel special supply (S)

Channel exclusive supply means that the brand is deeply bound to the Kuaishou platform to form a strategic partnership. By further optimizing the supply chain, special products are developed for the Kuaishou channel to better meet the needs of platform customers.

The value of channel-specific supply is mainly reflected in the following three aspects:

Create product-specific funds;
Increase the average order value;
Improve channel operation efficiency.

3. STAGE live broadcast operation methodology

For each live broadcast with goods, brands or merchants can use the STAGE live broadcast operation methodology to achieve better GMV results.

The STAGE live broadcast operation methodology represents: Timing, Accurate Flow, Shaping Merchandise, Gifts Strategy, and Early-content.

Before the first live broadcast , merchants must clarify the rhythm of the live broadcast, create a live broadcast script, control the rhythm of the activity, strengthen their personal setting, and make adequate preparations for the live broadcast.

The second step is commercialization , which is traffic delivery. Commercial delivery needs to be put in place in advance. Take stock of the customer group composition corresponding to the GMV target of each live broadcast, match the corresponding commercial delivery strategy, and preliminarily set the delivery ratio for different time periods.

For the third batch of goods , we will formulate a product grouping plan, provide different product types, quantities, prices, and discount strategies for new and old fans to prevent fans from purchasing fatigue, prepare in advance from the supply chain end, design the structure of live broadcast products, and create popular products.

The fourth benefit is to keep users in the live broadcast room. You need to prepare benefit marketing in advance, make good use of marketing tools in the live broadcast, clarify the selling points of the products, and take over the user traffic to achieve conversion;

The fifth highlight is to lock in users through public domain exposure, set a warm-up rhythm, plan warm-up content, and attract more consumers to make appointments for live broadcasts.

4. Kuaishou vs. Douyin

Kuaishou focuses on "trust" and regards private domain value and relationships between people as the core choice to reduce transaction costs and create a high market value ceiling.

Douyin, on the other hand, chose "interest" , emphasizing the operational control of public domain traffic and the algorithm-based interest recommendation, hoping to discover users' hidden consumption needs and help merchants truly recommend products to people who are interested.

However, the live e-commerce logic of both emphasizes the conversion of content consumption , and the core advantage lies in: using high-quality content to take advantage of high frequency to defeat low frequency to intercept users' semi-certain or uncertain consumption needs.

Therefore, creating good content and improving the user experience of "shopping" while shopping remains the core for platforms and merchants.