If you want to count the hottest keywords in 2020, the popularity of live streaming must be positioned at the top. From celebrities to amateurs, from large group CEOs to general entrepreneurs, and even local government officials, “planting grass” to consumers through live broadcasts, and then harvesting from traffic, is already an important part of the business ecology. According to live broadcast data released by the Ministry of Commerce on August 20, in the first half of 2020, there will be more than 10 million live broadcasts of e-commerce, over 400,000 active anchors, over 50 billion viewers, and over 20 million items on the shelves.
“Today’s live broadcast is not just a promotion, it also has consumer education.” Zhong Xiaoming, executive vice president of Clarins Greater China, an established French cosmetics group, pointed out in an interview with a reporter from China Business News.
Perspective on the ecology of live streaming
After 95, Zhang Yan (pseudonym) has entered the workplace. She is still single. Her most frequent activity is watching Taobao live broadcast at home. “As little as once a week, as many as several times a week, I will chop hands in Li Jiaqi and Wei Ya’s live broadcast room. The cosmetics in the house are enough for three years, but I still can’t help being planted on Xiaohongshu.” Zhang Yan bluntly said in an interview with a reporter from China Business News, “Last year the most bought lipsticks, this year it is various masks and serums.”
Guotai Junan Research Report pointed out that e-commerce has become the largest channel for cosmetics since 2018. This has brought a turning point while the cosmetics consumer market has suffered a negative impact from the epidemic. In the first quarter of 2020, under the general pressure on optional consumption (beauty, clothing, jewelry, home appliances and automobiles), the retail sales of beauty cosmetics dropped the least, with a decline of 13%.
Among them, the enthusiasm of live streaming has played an indispensable role. Live delivery of goods is not new, but an epidemic in 2020 has pressed the fast forward button for the development of live delivery of goods, especially in the field of cosmetics and cosmetics. There is even a saying in the industry that “no live broadcast is not commercial”.
Ji Yun, general manager of Alibaba Group’s Tmall Beauty Care, pointed out that during the June 18th promotion this year, the traffic brought by live broadcast and the traffic brought by search were almost one to one in the beauty category of Tmall. The conversion rate of live broadcast is higher than search. The volume of self-broadcasting from 20 merchants’ stores exceeds the volume of transactions brought to the brand by the leading live broadcasters Wei Ya and Li Jiaqi.
The live broadcaster “Aunt Sun” told reporters that as a live broadcaster in the waist of the industry, although the traffic is not as good as the head anchor, the cooperation offer is cost-effective and the degree of cooperation is also high. At the same time, many waist anchors are even more in the vertical field. Be professional, so that you can still win the favor of the brand.
Although there is an IP matrix on platforms such as Station B, Xiaohongshu, Weibo, WeChat, etc., “Aunt Sun” said that Douyin is still its main battlefield for transformation. Whether it is a mid-waist anchor or a head anchor, they have their own main positions. After all, the styles of different platforms are very different, and the audience groups are also different.
“King Anne,” who focused on beauty evaluation, agreed with “Auntie Sun”. She told reporters that Xiaohongshu has advantages in short videos and graphics, while Station B is more suitable for long videos and needs to be more life-like; Douyin uses words to let users generate memory points, so it needs to be interesting. After studying different platform styles, “King Anne”, who only entered the live broadcast at the end of 2019, decided on the Xiaohongshu platform.
After more than ten months of operation, the account with the name “King Anne” has reached nearly 400,000 fans on Xiaohongshu. Compared with “Aunt Sun” and “King Anne”, Internet celebrity Zhang Mofan is the beneficiary of this wave of live broadcast dividends. She has 12.85 million fans on the Weibo platform, and her fans are comparable to popular stars.
Unlike “Aunt Sun” and “King Anne” who mainly serve brand owners, Zhang Mofan has also created his own skin care brand due to years of deep cultivation in the industry. Zhang Mofan told a reporter from China Business News: “Consumers need to complete the cognition in live broadcast, including leaving impressions, planting grass, placing orders, converting, and sharing. However, many brands currently only focus on conversion, and live broadcast is an amplifier. Let the product quickly expand its exposure and quickly achieve mass sales, and it can also expose the defects of the product to the greatest extent.”
Sort out the three most important basic elements in a live broadcast, namely: the brand, the anchor and the platform. The MCN agency is the bridge connecting these three parties. In other words, the MCN organization is a platform for operating Internet celebrities, which not only connects brands but also controls a certain number of Internet celebrities.
According to the introduction, MCN agencies usually have a full set of screenwriting, photography, business, and public relations, which can turn an amateur into an internet celebrity from scratch, help internet celebrities receive advertisements, broadcast live broadcasts, and realize their influence. MCN institutions not only play the role of brokers and intermediaries, but at the same time, their platform role in the distribution of live content cannot be underestimated.
According to iiMedia Consulting’s data, the MCN market will reach 24.5 billion yuan in 2020, and the number of institutions will reach 28,000, with an average year-on-year growth rate greater than 100%.
Whose wool did the live broadcast bring the goods?
Participants in live streaming are mainly professional organizations or industry insiders. However, under the catalysis of the epidemic, celebrities, entrepreneurs, and even government officials have been involved in this wave. But who is the beneficiary of live streaming? Who has harvested the traffic and realized the conversion of benefits?
Hyaluronic acid leader Huaxi Bio (688363.SH)’s Runbaiyan is one of the skin care brands that has grown up from the live broadcast bonus.
In the interim report disclosed by Huaxi Bio, the reporter noticed that functional skin care brands including Runbaiyan and Quadi are the main engines of its performance growth. In the first half of the year, Huaxi Biotechnology achieved operating income of 947 million yuan, a year-on-year increase of 17.05%; realized net profit attributable to owners of the parent company of 267 million yuan, a year-on-year increase of 0.75%.
Huaxi Biotech stated in its financial report that offline consumption in the cosmetics market has shrunk due to the impact of the new crown pneumonia epidemic, and has shifted to online consumption, while the live broadcast platform business has further exploded. In this regard, functional brands such as Runbaiyan, Quandi, Mibeil, and BM Muscle Life under Huaxi Biology actively embrace live broadcast, reach the vast fan base behind the anchor through live broadcast, and expand the brand’s popularity and influence. At the same time, brands such as Mibeil and Quandi quickly adjusted their marketing models, increased their online operation investment, and used different channels such as Tmall and WeChat mall to achieve rapid growth in performance.
Yang Jun, general manager of Runbaiyan skin care products, pointed out in an interview with a reporter from China Business News that Runbaiyan, which started with medical beauty, has focused on online channels since it entered the mass market, and currently has no offline layout. From a strategic point of view, Runbaiyan is the first strategic brand of Huaxi Biology. Facing a wider range of consumers is an important goal of its development this year. Therefore, the cost of marketing investment is relatively high.
The financial report shows that in the first half of 2020, Huaxi Biological sales expenses increased by 88.65% over the same period of the previous year. Yang Jun said that Runbaiyan’s marketing investment mainly covers anchors including Wei Ya, and core KOLs on platforms such as Douyin and Xiaohongshu. In traditional marketing channels such as hard-broadcasting or titled variety shows, Runbaiyan hardly makes any sales.
What’s interesting is that Yuze, a functional skin care product under Shanghai Jahwa, cooperated with Li Jiaqi for 28 live broadcasts from January to June this year. The daily real-time trading volume (GMV) of the live broadcast accounted for about 70% of the brand’s total turnover. During June 18th, Yuze was in the live broadcast of Li Jiaqi for the fourth time. In the performance of Shanghai Jahwa’s interim report, Yuze’s contribution to Shanghai Jahwa’s performance has also been repeatedly mentioned by the management.
Sorting out the brands that benefit from live broadcasts, the reporter found that not only functional skin care brands such as Runbaiyan and Yuze, but also Yujiahui (300740.SZ), which is the outlet of the “Internet celebrity live broadcast economy”, will be launched in 2020. Since April of 2009, its market value has doubled.
In May of this year, Yujiahui said in response to an inquiry letter from the Shenzhen Stock Exchange that in 2019, the company’s revenue through the promotion of online celebrity live broadcast and short video services accounted for about 10% of the company’s annual operating income, or 241 million. yuan. The revenue of this model in the first three quarters of 2019 was 63 million yuan.
While domestic brands have gained a firm foothold in the live broadcast wave, there are also top international brands in the live broadcast wave. Ma Lan, vice president of L’Oréal China and general manager of active health cosmetics, said in an interview with a reporter from China Business News that, as the world’s largest cosmetics company, L’Oréal has long noticed the possibilities that live broadcasts can bring to business operations. One month after Taobao just launched its live broadcast service in March 2016, at a Maybelline New York product launch event, L’Oreal tested the live broadcast.
“At that time, actress Yang Ying, who was going to the New York launch of Maybelline’s brand under the L’Oréal Group, was blocked on the road. During the traffic jam, the accompanying staff used their mobile phones to broadcast live broadcasts of Yang Ying’s rush to the scene to the audience, and How she put on lipstick. Within two hours, without any publicity, the lipstick sold 10,000 on Tmall.” Ma Lan said.
After experiencing the sweetness of live streaming, L’Oréal Group as a whole began to enter the field of live streaming in 2018. In addition to actively cooperating with leading Internet celebrity anchors, L’Oréal also IP-based live broadcasts based on brand positioning and audiences.
Functional skin care product La Roche-Posay during this year’s “5·25 Skin Day” series of activities, every night will be held in the official live broadcast room of Tmall flagship store for one hour, “All the people ask the experts” special live broadcast of skin doctors, inviting skin doctors and skin experts , For consumers to answer questions about skin problems.
In an interview with the media, La Roche-Posay brand director Marie Ho pointed out that the official live broadcast room of the brand is an excellent window to shape the brand image and provide consumers with good services. The official live broadcast room exists for the purpose of product promotion and survival promotion. “Bringing goods” is only a natural result after these two.
When will bad competition cease
So far, the most distinctive label of live streaming is low price. The bargaining ability is promoted by the top anchor as the core competitiveness. This also extends the competition of “the lowest price on the whole network”.
Zhang Mofan told reporters that the essence of live broadcasting is marketing. Brands must be clear about their specific needs before doing live broadcasts, and that consumers must make purchases based on the value of the brand and the product itself, rather than relying on discounts to stimulate one-time impulse consumption.
“If the brand regards the anchor as a cash cow and consumers only buy it for cheap, not the product itself, this vicious circle will ultimately harm the brand.” Zhang Mofan said.
In fact, the disorderly price of products is the tip of the iceberg in the chaos of live broadcast delivery. Due to the lack of clear industry standards and supervision mechanisms, live broadcast delivery has been frequently criticized for multiple routines and data fraud. Many chaos have also highlighted the importance of standardized development.
Taking data fraud as an example, a brand measures the cost of an anchor’s cooperation, which is mainly determined by relevant data, including indicators such as the number of fans, views, sales, and conversion rates. When the anchor is in order to meet the data standards expected by the brand, an optimized data provider comes into being. Among them, there is no lack of black-box operations of MCN institutions.
For example, a brand spends tens of thousands of dollars in “pit fee” but less than a thousand yuan for the goods; or the anchor has successfully brought hundreds of thousands of dollars, and the merchant has not had time to be happy, and the return rate exceeds 80%. Traffic fraud is not uncommon. Regarding the falsification of anchors or MCN agency data, multiple beauty brands told reporters that they could not intervene in them. This is bad competition in the rapid development of the industry.
According to reports, large companies have their own set of strategies to avoid false data. For example, when L’Oréal Group cooperates with anchors or MCN agencies, it only pays commissions based on actual sales, and settlement is done 15 days after the transaction. However, small companies tend to be in a passive position in cooperating with anchors or MCN agencies, and “step on pits” are quite frequent.
As time enters September, the dates for e-commerce carnivals such as “Double 11” and “Double 12” are getting closer and closer. Whether it is brand owners, anchors, and MCN agencies, they are gearing up. Shao, general manager of sales of Dayu Media, an established MCN agency Not long ago, Feng stated at the 13th China Cosmetics Conference that the live broadcast of goods is very hot. However, the survey found that many brands do not make money with live broadcasts. More importantly, selling explosive products in live streaming is not the same as being a brand. Many explosive products have done well, but the brand has not done it. Therefore, it is necessary to think deeply about what brand value to convey. High-quality live broadcasts should achieve a win-win situation for brand reputation and sales.