How long will “live streaming with goods” remain popular?

This article will focus on interpreting and analyzing from the three dimensions of people-goods-place with specific examples, how long live streaming sales , the biggest trend in 2020, will continue to be popular.

1. Analysis of users and market of live streaming sales

First, let’s feel the current market popularity of live streaming e-commerce. Since Luo Yonghao’s first live streaming e-commerce show on Douyin on April 1, the popularity has remained high.

Let’s take a look at the number of related information keywords in Baidu:

• 【Retail】: 3.74 million
• 【New Retail】: 460,000
• 【Live Broadcast】: 2.67 million
• 【E-commerce live streaming】: 420,000
• 【Livestreaming Sales】: 510,000
• 【Products】: 1.12 million

This shows how popular topics related to live streaming and selling goods are at the moment.

Then let’s take a look at the users and market size of live streaming sales:

User scale:

There are 850 million Internet users in China and 430 million live streaming users. The penetration rate of live streaming has reached over 50%, which means that one out of every two Internet users is a live streaming user.

However, most live streaming users are users of game live streaming, show live streaming and other scenarios, while e-commerce live streaming is more closely related to e-commerce scenarios. If we want to increase the user scale of live streaming, there are two main methods:

• The first means is that live broadcast, short video and other content communities have vigorously expanded their business in this direction after realizing the high ROI of live broadcast sales;
• The second method is to target e-commerce platforms and increase traffic support for live streaming sales.

The above two points are based on the premise that live streaming can actually bring value to these platforms.

Market size of live streaming sales:

In 2019, the transaction volume of live streaming e-commerce has reached more than 430 billion yuan, and it is expected to reach a market size of 1 trillion yuan in 2020, with a growth rate of more than 100%.

Any field with a trillion-dollar market size will inevitably attract various platforms to participate in it. However, live streaming with goods is essentially e-commerce or a retail market. So is live streaming with goods a zero-sum market or a non-zero-sum market?

Personally, I tend to think that it is a non-zero-sum market, an incremental market , or at least a large part of it is an incremental market. It will bring about some irrational consumption and impulsive consumption, stimulating users' active purchases, especially under the country's strategy of vigorously promoting consumption upgrades.

2. Recent market data on live streaming sales

First, let’s take a look at the live streaming sales performance of the two short video communities, Douyin and Kuaishou. Douyin focuses on Luo Yonghao, while Kuaishou focuses on Simba’s team.

1. TikTok - Luo Yonghao

Luo Yonghao has been on Douyin for nearly a month and has conducted four live broadcasts to sell goods. Except for the first live broadcast which was extremely successful, the data from the other three were basically stable. In terms of sound waves, they were basically stable, except for the third one, which was basically the same. The third one increased the overall sales due to the pre-sale of OnePlus 8.

Judging from the data of these four live broadcasts, and combined with the sales data of Taobao’s top anchors, if Luo Yonghao increases the frequency of sales in the future, the overall weekly data will be basically stable. However, if you want to go to the next level, it will test the number and stickiness of fans. The stickiness and repurchase of fans depend more on the team's product selection and bargaining power, and whether they can continue to bring cost-effective products to fans.

2. Kuaishou-Simba Team

Simba's apprentice Dandan made his debut on Kuaishou live streaming, with sales exceeding 100 million in one hour, and cumulative sales on that day reaching nearly 500 million. Simba's other apprentice Shi Da Piaoliang's debut performance was even more shocking, with sales exceeding 100 million in 53 minutes, and cumulative sales of 520 million. While shocking, it also made people feel the popularity of live streaming.

In addition, Simba has formed a matrix for selling goods and incubated his own brand "Xin Youzhi Yanxuan". He has completely become the top seller and spokesperson for selling goods on Kuaishou.

3. Summary

Through the performance analysis of two typical live streaming hosts on Douyin and Kuaishou, Kuaishou is currently ahead of Douyin in the live streaming sales sector. Douyin's main monetization currently still comes from advertising business, but with the frequent collaborations recently, such as Dong Mingzhu's live streaming debut and the cooperation with CCTV, and various celebrities selling goods on Douyin recently, such as Li Xiaolu, and Zhao Wei, Huang Xiaoming, Lei Jiayin, Zheng Kai, Jia Nailiang and others who will be live streaming on May 1st, Douyin is currently rapidly developing the live streaming sales track.

In addition, recently various platforms such as Xiaohongshu, Meitu, Douyu, Sohu, etc. have been focusing on live streaming to sell goods. There are more and more players in the field, including various products with public domain traffic, private domain traffic, and mixed domain traffic, presenting a situation of flourishing development.

3. Analyze the development trend of live streaming sales from the three dimensions of people, goods and places

1. From the perspective of people

Live streaming with goods is essentially e-commerce and new retail. For live streaming with goods platforms, there are three main people involved: users on the consumer end, anchors who sell goods, and suppliers of goods. Each role has different demands, and the types of these three roles will also be different on different types of platforms.

For users on the consumer side and for the platform, the key is how to expand the traffic of consumer-side users. Being able to increase the traffic means that the entire market will develop better. So how can we better increase the traffic? The key is actually to meet the needs of this type of users.

For e-commerce platforms such as Taobao, Pinduoduo, and JD.com, users themselves have strong shopping needs, and live streaming is more aimed at users who do not have clear shopping goals. For these users, the goal is to increase the possibility of such users visiting the live broadcast room, and then improve the conversion rate of such users during the browsing process through real-time, interactive, and cost-effective products.

As for platforms with strong content attributes such as Douyin and Kuaishou, since users are more connected to the anchors they follow, if they want to increase the number of users on the consumer side, it is actually about how to cultivate more anchors who sell goods, and at the same time, they need to improve the entire after-sales service system.

There are two core influencing factors for consumer users: one is the trustworthiness of the anchor, and the other is the attributes of the product.

For anchors, the core needs are monetization and efficient conversion. The key test is the anchor's ability to connect with fans and select products. For platforms, they need to cultivate more mid-level anchors. Supporting their traffic can ensure a healthier development of the entire live streaming ecosystem.

For brands or merchants, by cooperating with top anchors, they can greatly enhance their brand influence and acquire more users. In particular, some small brands are more looking forward to cooperating with anchors. Compared with traditional traffic and advertising, the effect of live streaming can be more intuitive. You can actually see how many users are watching, how many users are buying, and how many new fans the store has gained. These are all real. At the same time, brands or merchants can also start broadcasting themselves and interact with users more intuitively, bringing a more realistic experience of the products and improving the overall product conversion rate.

Summarize

From the perspective of people, the number of users, anchors and brand merchants on the consumer side is growing, and the short-term potential is growing rapidly. Especially under the influence of the epidemic, anchors of various merchants such as online entities and shopping malls have started live streaming to sell goods, which not only cultivates users' mentality of live streaming to sell goods, but also brings real benefits to merchants and anchors, which further promotes the healthy development of the entire live streaming to sell goods ecosystem.

2. From the perspective of goods

In the live streaming sales scenario, users have changed from active consumption to passive consumption, so the products recommended by the anchor will greatly affect whether users will buy them.

For brands or merchants who start live broadcasts themselves, for some merchants with fewer product categories, since there is no problem with product selection, the key work is how to better interact with users in real time through live broadcasts, how to make their products more authentic, and how to show their products with higher cost-effectiveness, so as to increase the conversion of new customers and repurchase of old customers.

As for the live streaming model of celebrities, it tests two aspects of ability more: one is the ability to select products, and the other is the bargaining power.

• In terms of product selection ability, it is about how to match more suitable products based on the portraits of your fans;
• In terms of bargaining power, it is whether we can obtain greater benefits and pass them on to consumers.

For the top anchors, merchants, brands and goods all line up to come to them, but for some mid- and low-level anchors, they do not have a high ability to select products and have no bargaining power, which makes them very passive. Here, the platform actually needs to allocate certain resources and provide tools to help the mid-level anchors develop.

Another core issue is the after-sales service of products. E-commerce platforms such as Taobao and JD.com already have a good after-sales system for products. However, for traffic platforms such as Kuaishou and Douyin, they have both their own e-commerce platforms and third-party platforms. Therefore, they need to build a good after-sales system for products and control the quality and entry threshold of products.

Summarize:

Goods are a very important part for both anchors and consumers. At present, the types of goods sold through live streaming have gradually expanded from high-profit categories such as skin care cosmetics in the beginning to all categories. At the same time, various large brands have also begun to join the ranks of live streaming. With more and more varieties, the focus needs to be on improving the cost-effectiveness and after-sales capabilities of the goods, so as to promote the long-term development of live streaming.

3. From the perspective of the field

The field is the scene and platform that connects the anchor, products and consumers in the entire live streaming e-commerce. From the dimension of the field, in fact, more and more platforms have joined the live streaming e-commerce industry, enriching the entire live streaming e-commerce gameplay.

Brand Live

Most of them are store shopping guides, driven by product brand power, and pay more attention to long-term operation. However, for some small businesses with fewer product categories, it will only increase the conversion rate of products, and building such a system is actually more conducive to the development of the live streaming ecosystem;

Red Live

Most of them are internet celebrities, stars and famous anchors cultivated by various MSNs. They rely on the trust of the anchors to spread the news. The cost of attracting new customers is relatively high, but the repurchase and conversion will be better. After accumulating popularity, it is easy to explode. As the saying goes, the anchors are permanent but the goods are transient. If you become a fan of a famous anchor, and the anchor can also bring a variety of cost-effective products, the fans will continue to be driven to consume.

• For top short video content communities such as Douyin and Kuaishou, they are currently vigorously developing live streaming to sell goods, mainly from the platform function ecology, the training and signing of anchors, and cooperation with MSN, etc., to provide strong support and traffic allocation to cultivate users' shopping habits on the platform;
• As for tool platforms, such as Tencent Kandian Live and Weimeng, they are mainly tools for merchants and anchors to use live broadcasts. For this type of players, it is more about breaking the circle, that is, the limitation of private domain traffic of pictures, which can import public domain traffic to players on the platform and empower merchants and anchors.
• For e-commerce platforms, live streaming with goods will become a standard feature of live streaming platforms in both the short and long term. It is not only a contribution to GMV, but also carries the responsibility of killing time for the platform. It can gather users on the platform through live streaming with goods and seize users' time.

IV. Conclusion

Live streaming e-commerce has been developing for nearly four years. With the outbreak of this year's epidemic, more and more players have joined in. If we look at the short-term and long-term trends of live streaming e-commerce from the three dimensions of people, goods and places, there will actually be differences.

1. Short-term trends

In the short term, whether it is an e-commerce platform or other live streaming platforms, the increasing number of anchors and products is an inevitable trend. The top anchors will definitely have a good life this year, but with the addition of more and more live broadcasts, the competition among long-tail anchors will become more and more fierce. At the same time, the cost-effectiveness of the products and the after-sales system will be the key to whether the entire ecosystem can develop healthily in the short term.

In addition, with the participation of more and more platforms, the construction of the initial platform function system is tested, which is a development opportunity for product managers, operations and various MSN organizations of live streaming.

2. Long-term trend

For a long time in the future, live streaming with goods is essentially a tool. Before more efficient tools emerge, live streaming with goods will become a standard feature for e-commerce platforms. The author cannot predict what model will replace live streaming with goods in the future. At the same time, for the live streaming e-commerce scenario, standardized policies and management will also determine whether this model can develop healthily in the long run.

In addition to live streaming sales on e-commerce platforms, sales on other types of platforms will inevitably fail due to insufficient resources, management, and capital. However, there is not much differentiated competition in live streaming sales, so the key to ultimately determining whether these platforms can continue to develop is the competition in resources and operations.

Author: harryli

Source: Mr. Harry Li's notes

Related reading:

Tips for selling goods through short video live streaming

How to play short video live streaming? Tips for live streaming operations!

2020 Short Video Live Streaming Operation and Monetization Guide