Can Bilibili become the fourth pole of live streaming e-commerce?

During the Mid-Autumn Festival that just passed, Bilibili officially joined the live streaming e-commerce battlefield.

On the evening of September 19, Bilibili invited four UP hosts to hold a live broadcast of selling goods that lasted for four hours. The products recommended by Fanshi, Xie Anran, Liangfeng Kaze, and Han Xiaomu include figures, B station peripherals, uniforms, and other pan-two-dimensional cultural products. The entire live broadcast covered nearly 30 anime characters, virtual idols, and game IPs.

This live broadcast is part of the "Benming Goods Festival", the fourth anniversary celebration of B Station's membership shopping, and it is also the first time that B Station has tried a large-scale live broadcast to sell goods. No specific sales data was released for this live broadcast, but Bilibili said that the cumulative sales far exceeded expectations.

In fact, before the official intervention, some UP hosts and brands also tried to sell goods through live streaming on Bilibili in 2020, but it did not cause much splash.

Live streaming e-commerce undoubtedly has a large market size. If Bilibili has the opportunity and demand, it will certainly not turn a blind eye to it. It is worth thinking about whether Bilibili needs live streaming to sell goods? Can Bilibili do a good job in selling goods through live streaming?

Does Bilibili need live streaming to sell products?

Bilibili has entered the live streaming e-commerce business, which has the need to monetize its own content creators as well as the need to monetize the Bilibili platform.

In the early days, Bilibili was a gathering place for ACG users, and the friendly community atmosphere also attracted many creators to submit their works.

Since 2016, Bilibili has gradually increased its subsidies for UP masters. First, it encouraged users to reward creators through the "UP Master Charging Plan", and then launched the "Creation Incentive Plan" and "Rising Star Plan" to distribute income to creators and support content.

But these subsidies are not enough to support their full-time production. Therefore, advertising monetization becomes a necessary monetization channel.

In 2017, Bilibili launched the "Oasis Plan" to help UP hosts connect with business resources and conduct business negotiations. This plan was upgraded in 2018. Bilibili classified UP hosts in terms of scale and circle, and matched different operating methods to meet the requirements of brands.

On July 8, 2020, Bilibili announced a new upgrade of the Fireworks UP host business cooperation platform. Based on the platform's big data, Fireworks provides UP hosts with system quotation references, order process management, platform security settlement and other services. At the same time, Fireworks provides brand owners with UP host intelligent recommendations, multi-dimensional data display, multi-project collaborative management and other services. This move not only regulates the business behavior of UP hosts and increases their income, but also increases Bilibili's profits from advertising business.

At the same time as "Fireworks" was officially launched, Bilibili also conducted internal beta investment promotion, and Taobao links can be linked to UP hosts' videos and live broadcast rooms. When watching videos and live broadcasts, users can directly find the product link entrance and click it to jump to the product details page on the third-party e-commerce platform.

At the same time, in the era of attention war, retaining UP hosts can strengthen the content moat. Bilibili must accelerate its efforts to help them monetize .

Previously, there have been reports of external platforms poaching UP hosts from Bilibili, such as "Wizard Finance", "Fisherman Afeng", "Taro SAMA who loves cooking", etc., which have stopped updating on Bilibili and moved to other platforms. It is normal for creators to have mobility, but the continuous departure of UP hosts is undoubtedly detrimental to Bilibili. How Bilibili can create benefits for UP hosts and balance the benefits, and drive Bilibili towards a "beautiful community", is a big problem.

For UP hosts, live streaming can not only break through the ceiling of traditional monetization scale, but also enable creators to form closer cooperative relationships with brand owners, thereby obtaining new sources of income outside of daily advertising orders. This format can also accommodate more mid-level and low-level bloggers. What’s more, at a time when new consumer brands are in a frenzy of internal competition, brands also need the enthusiastic recommendations of these UP hosts.

Bilibili has already made plans for e-commerce business.

In July 2018, Bilibili invited 11 UP hosts including Yeshi Xiaoge and Xu Jiao to test the e-commerce function. In March 2019, Bilibili continued to launch the e-commerce mini program "Potential List Planting Machine". The official said that this is an upgraded version of the UP host store and is in the internal testing stage.

"Potential Energy List Planting Machine" applet

Since the beginning of 2021, Bilibili Member Purchase has launched a crowdfunding project and actively intervened in the planning and promotion of products. When talking about the live broadcast business, Chen Rui, chairman of Bilibili, also said that after all the monthly active UP hosts join the live broadcast in the future, it will become a live broadcast with great potential.

More importantly, from the perspective of Bilibili's commercialization, live streaming and e-commerce have long been the two most important revenue growth engines for Bilibili besides games and advertising. According to Bilibili's second quarter 2021 financial report, revenue from live streaming and value-added services was 1.63 billion yuan, a year-on-year increase of 98%, and revenue from e-commerce and other businesses reached 580 million yuan, a year-on-year increase of 195%.

As of now, Bilibili has not yet emerged from the quagmire of losses, and seeking more diversified commercial monetization opportunities is also a must for maintaining the development of the company and the community. Bilibili has both traffic and commercial scenarios, so combining e-commerce and live streaming is something worth trying.

In addition to Taobao, Douyin and Kuaishou, can Bilibili become the fourth pole of live streaming e-commerce?

Although live streaming is not new and e-commerce is not new either, live streaming + e-commerce is a new species that is still growing rapidly. If Bilibili wants to officially join the live streaming e-commerce battle, it will be facing a new and rapidly changing industry.

According to relevant data from the Alibaba Research Institute, the overall GMV of live e-commerce will reach nearly 2 trillion in 2021, with an annual growth rate of about 90%, and the overall penetration rate is still less than 15%. There is still a lot of room for growth in the future. 2021 will also be a key year for businesses to comprehensively deploy live e-commerce and achieve large-scale growth.

At present, the live streaming e-commerce industry still maintains a three-way competition. The "2021 (Part 1) China Live Streaming E-commerce Market Data Report" shows that Taobao Live's GMV exceeded 400 billion in 2020; according to Kuaishou's financial report, Kuaishou's e-commerce GMV in 2020 was 381.2 billion; and according to "LatePost", Douyin's e-commerce GMV in 2020 exceeded 500 billion yuan, of which about 1/5 was completed in Douyin stores.

Changes in Kuaishou e-commerce revenue and GMV (Source: Borui Consulting)

From the perspective of the "people-goods-place" theory of live streaming e-commerce, compared with these leading players, Bilibili has obvious differences, with both advantages and shortcomings.

At the user level, in the second quarter of 2021, the number of monthly active users of Bilibili increased to 237 million, 86% of users were under 35 years old, and the average user age was 22.8 years old.

In terms of content creation, the average monthly number of active UP hosts on Bilibili in the second quarter of 2021 was 2.4 million, a year-on-year increase of 25%; the number of UP hosts with more than 10,000 fans increased by 47% year-on-year.

At the same time, Bilibili has a rich content ecosystem.

According to user portrait analysis, in the second quarter of 2021, life, entertainment, games, science and technology knowledge, and animation became the top five most popular content categories among users of Bilibili, and the general knowledge content field grew rapidly. In 2020, more than 113 million users learned by watching knowledge-based content on Bilibili. Among these, content in the food area, life area, fashion area, etc. is suitable for monetization, while the monetization attributes of general knowledge content such as finance are relatively not that strong.

With a huge user base and consumption capacity, Bilibili is, to some extent, a traffic pool. Just imagine, if a considerable number of UP hosts transformed themselves into live-streaming hosts, the supply problem of hosts at Bilibili would be solved.

However, not all UP hosts are suitable for and willing to monetize their products through live streaming. Bilibili has not established an atmosphere for live streaming sales, and the extent of user acceptance is still unknown. The platform needs to balance the interests of various types of content creators. It is not cost-effective to sacrifice the richness of the content to achieve short-term commercialization.

In terms of "goods", if Bilibili officially enters the live streaming e-commerce market, it will certainly not only sell products with two-dimensional attributes (for example, "three-pit" clothing, figures, etc.). Categories such as beauty, food and beverages, and jewelry are the ones that can push up GMV and expand the scale of e-commerce. In these popular categories, Bilibili has no advantage at all.

The supply chain capabilities of major shareholder Taobao will expand the depth and breadth of goods for Bilibili. In January 2019, Bilibili "married" Alibaba and sold approximately 8% of its total share capital to Alibaba's wholly-owned subsidiary Taobao China.

But this cooperation is not a one-time thing. In the early days of Bilibili’s live e-commerce development, Bilibili and Taobao could naturally reach cooperation at the supply chain level. However, if B station wants to form a closed loop of live e-commerce business, in the middle and late stages, it will probably have to cut off external links and establish its own supply chain and payment system. Whether the cooperation with third-party platforms such as Taobao can continue at this time depends on the competitive and cooperative relationship between the two parties.

From a brand perspective, Bilibili is considered to be a gathering place for young people. Major brands have already settled in Bilibili and are doing things in various ways to attract the attention of young users.

Wu Yuefeng, fund manager of Fengjing Capital, once shared on Weibo, "Bilibili has two and a half sections with the highest monetization rate, one is fashion, one is games, and one is cross-section brand promotion. Unlike Zhihu, the public relations teams of various companies have a good reputation for the brand promotion effect of Bilibili. ——There is a reason why so many official ladies go dancing."

However, brands focus on the young user attributes and publicity exposure capabilities of Bilibili. If they want to conduct self-broadcasting and manage their own private traffic here, this will become a new problem.

In May last year, McDonald’s “5G” new product suffered a marketing failure. Not only was its creativity far-fetched, but its live streaming model on Bilibili was also criticized by consumers.

If live streaming wants to attract users, in addition to low prices, it also needs to provide a convenient purchase jump path to stimulate sales conversions. However, this McDonald’s live broadcast requires users to watch the live broadcast on Bilibili and then go to the WeChat mini program to grab free coupons, and there is no jump path in between.

Screenshot of McDonald's live broadcast on Station B

Although there is only one extra step, it does not conform to the purchasing method that users are already familiar with on other platforms, thus causing dissatisfaction among many users. In fact, this is also related to the imperfect live broadcast infrastructure of the Bilibili platform.

In addition, if brands only regard Bilibili as an exposure channel rather than a business base, this will make merchants less willing to broadcast their own content, and there will be little room for imagination in Bilibili's live streaming sales.

The good news is that Bilibili's monthly active users are still growing rapidly, and Bilibili chairman Chen Rui has set a user cap of 500 million for this community. In the absence of a basic shortage of traffic, the competition among live streaming e-commerce platforms will be on content including operational capabilities, supply chain, and even the entire ecosystem.

Considering the precedent of Douyin store GMV growing 50 times in one year, if B station regards live streaming e-commerce as a new growth pole and goes all out, it is not without opportunities.

Zhuang Shuai, founder of Bailian Consulting and an e-commerce industry observer, told KasData: "Categories and merchants need to expand rapidly, the number of users and anchors needs to continue to grow, the live broadcast ecosystem needs to be established, and platform rules and governance need to be improved. It can serve as a new growth pole, but whether it can develop on a large scale remains to be seen."

Author: Kas Data

Source: CAAS Data (caasdata6)