The author of this paper combs the development process of live e-commerce, analyzes the reasons and opportunities of its outbreak, and shares with you.

The long history of TV shopping has proved the establishment of online shopping guide business model. In recent years, all kinds of live broadcast traffic platforms have developed user habits. The live broadcast results of Taobao e-commerce content-based in 2015 officially entered the public vision at the end of 2018.

2019 is known as the first year of live e-commerce, and live e-commerce has also become a prominent learning of online consumption. Many urban legends of overnight wealth guide the influx of massive players, stars, variety shows and all the traffic that can be imagined is not high.

For the early investors, the e-commerce market is too big, so it’s just like biting a bone. Today, we hope to trace back the causes of the outbreak of live e-commerce and the multidimensional phenomenon shown by the data, and talk about the platform opportunities that the live e-commerce track has prepared for startups.

Core argument:

Live content is truly consumable, evolving from a consumer of traffic to a creator, and will eventually exceed a trillion Gmv, becoming the industry standard.

Both increment and stock. With the user time as the denominator, the e-commerce efficiency of live broadcast may not be high.

The industry has entered the stage of clearing, a large number of influx and elimination of the formation of high turnover. Big brands and head anchors rely on the supply chain to control traffic, becoming more and more powerful, and long tail anchors and businesses have difficulties in survival. The direct broadcast base and pure MCN business are in the middle of the ice and snow.

In the four fields of vertical e-commerce, selection center, rebate diversion and data service, platform type start-ups may be generated.

After solving the problem of public domain traffic, wechat live broadcast has a strong threat.

Before discussing the core competitiveness and barriers, let’s first think about a question: what are the common ground logic and basic consensus we are used to?

“Guns, germs and steel” has been answering a question, why is the development speed of human society different in different continents of the world? Why did Eurasian civilization conquer America, Africa, Oceania instead of the other way around

In the education we acquire, we usually produce the following kinds of “educational guess” to explain: intelligence difference (ethnology); climate explanation (cold is easier to develop complex society); river breeds civilization.

But in fact, in the war of destroying the Inca Empire, it was the pathogens rather than the military confrontation that played a decisive role. 95% of the Native Americans died of the pathogens in Eurasia, mainly smallpox and typhoid, which spread so fast that the indigenous people were basically extinct before the colonizers went inland. Even in the military confrontation with an exaggerated proportion of casualties, in fact, the biggest advantage of Spaniards is that only the horses domesticated in Eurasia are available. So simply put, if we choose one that can best explain the destruction of the Inca people in the Americas, 95% of them are germs, 3% are horses, and the rest of the common sense tells us that the more advanced military organizations, artillery, writing, religion, ideology and so on are all within the remaining 2%. But how much of the modern society spends on the 2% of the reasons when discussing this topic ?

Barrier 1. Flow: endogenous flow and stock replacement of anti common sense

Gmv formula = flow * conversion rate * customer unit price

Note: the live broadcast has a good performance in the transformation process, further influencing the overall re purchase. (the conversion rate of Taobao live streaming into the store has reached 65%, and the previous best online Red live streaming e-commerce conversion rate is only 20%)

Question 1: with Gmv formula, is live broadcast a continuous traffic opportunity?

In 2020, the flow of e-commerce officially entered the stock game, which not only means that the market lacks new users but also new media. Due to the high concentration of e-commerce and traffic markets at both ends of the domestic market, there has been a flow type opportunity of bilateral diversion. Generally speaking, with the two sides connected through special forms, this kind of traffic will disappear after a short period of time. One of the characteristics is the decrease of gross profit / takerate.

So for this kind of companies that are channeling traffic between platforms, this is not a continuous traffic opportunity.

Find live broadcast in e-commerce category

But live e-commerce has counter common sense. The first is endogenous traffic.

Generally, the content-based e-commerce is extended along the path of graphic, short video and live broadcast. In addition to trying to restore the offline shopping scene online (Graphic – billboard / short video – limited time discount / live broadcast – shopping guide and buyer), it is more important to get rid of the constraints of the annual doubling of the external traffic purchase cost. For the first time in history, content e-commerce seems to be able to set up! Taobao’s live dau is estimated at 8-10 million, which is no less than the second-line traffic platform, and the duration is even more than 60 minutes.

The second is the stock replacement of transactions.

As a natural high transformation mode, it is natural that a large proportion of transactions (10-20%) will be completed by live broadcast after dynamic balance. The players who adapt to the change will get more benefits, and the players who are slow and hard to change will be cut off. This is also the reason why smaller e-commerce platforms move faster after the trend is established. Passively, even if you can’t accept the interactive form of live broadcast at all, you must embrace the change with a more open mind. Just like this epidemic, countless online marketing and research that are hard to be online have been put on the natural ground. Even the most stubborn 2B investors have to accept sharing and listening to roadshows online.

Question 2: can all traffic platforms be realized?

The main reason why the second-line traffic platform is difficult to realize by live e-commerce is that the traffic it grasps is usually vertical type of a certain crowd / region, which is not necessarily suitable for the transformation of live broadcasting, so from the traffic side, it is not necessarily cheaper than outsourcing. Furthermore, it does not master the supply chain, KOL / netred under the platform does not have good e-commerce transformation skills, and the transformation efficiency will not be high.

Barrier 2. Supply chain: it is difficult to shorten and improve efficiency in other scenarios

Many things will be easier to understand if the anchor supply is regarded as a form of supply chain rather than a flow. For example, the mass death of the long tail self anchor can be understood as that the supply speed of the anchor exceeds the growth speed of the traffic, and the Matthew effect of the live broadcast is very strong. In the long run, a host who has not seen enough can’t build up enough advantages and break through the supply chain, so he can’t make money. The simple understanding of breaking through the supply chain can be imagined as the spot circulating in the live broadcast market, whether you have the lowest discount / whether you are the first node for the sale of this batch of goods or whether the difference of goods is large enough to be difficult to be replaced (for example, the second-hand luxury goods supply chain is extremely fragmented)

Question 1: will the demise of Taobao brand be repeated in live e-commerce?

After the completion of the historical mission of leading the e-commerce of regular brands, Taobao brand left the market with the dream of listing Taobao brand. Will MCN self broadcast become abandoned after the completion of guiding merchants to live broadcast?

Now Taobao hopes to encourage businesses to broadcast live, build a good content ecology, and have enough long tail anchors to resist systemic risks. But from the result, there is no good way to achieve it except for defensive investment head. The same problem occurs on other platforms. The underlying reason may be that the centralized e-commerce is difficult to breed a live broadcast ecosystem. In traditional e-commerce, users and merchants are forced to focus on the e-commerce platform, which retains the control of bilateral data and transactions. And live e-commerce requires merchants and users to interact in the scattered live broadcast room, and the stronger the interaction, the better the effect, which naturally forms the private domain traffic rather than the public domain traffic pool.

Shorten the link, flexible production – take clothing supply chain / jadeite as an example

The fast and high conversion way of live broadcast E-commerce makes the anchor out of stock for a long time. The supply and demand of the two sides match at the same time, forming a large number of interesting formats of pre broadcast and post production factories, bringing vitality to the dying large number of small and micro garment factories.

The head anchor can easily cover the annual capacity of small garment factories. Taobao has nearly 10000 anchor of clothing category, hundreds of signed MCN institutions, corresponding to 100000-200000 small and micro garment factories with annual output value less than 20 million yuan.

A single factory, seizing the opportunity of structural change, directly connecting with the front-end anchor, has rapidly increased its business volume, leaped to a comprehensive clothing supply chain enterprise, with the ability to copy money, design and organize goods, more flexible and more efficient.

In similar cases, the vertical track of multiple offline production bases, such as jade, has taken place. You must have a deep memory of the jade base where thousands of lattice live broadcast raw stones.

Supply chain with data efficiency: a case study of second-hand luxury goods

In the traditional front-end data collection, the anchor has a strong desire to share the accurate data between the user and the anchor with the supply chain, in order to achieve a more efficient matching of people and goods. This part, whether it is matching algorithm, group control tool, Bi analysis, etc., will multiply the single point efficiency. It is possible to quickly create popular products through efficient selection.

This is more obvious in the field of second-hand luxury goods. The complex supply chain integration needs a lot of capital support, and the pricing system and appraisal system behind it is difficult to establish a single anchor.

In terms of pricing, commodities are labeled from multiple dimensions according to different categories. By analyzing historical transaction data, the system automatically estimates the price category reference, and C-end users can price within the category; when commodities are sold, the data is fed back in real time, and the system can adjust the price dynamically.

There are more than 20000 SKUs and thousands of new SKUs in the warehouse every day, all of which make the operation more efficient through technical means.

Question 2: can the selection center be established?

Finally, we will discuss whether it is possible to generate a live e-commerce supply chain platform through the selection link.

In the long process of Internet development, there are many startups trying to graft the Selection Center for the traffic platform in the era of graphics and text. For example, Douban and Himalayas that have done physical e-commerce must still exist in your memory.

The so-called platform type selection center usually has two kinds of cut in angles. From the front to the back is to try to master stronger host control and C-end data capabilities through auxiliary live broadcasting tools; from the back to the front is to integrate specific supply chain, and to obtain stronger voice through continuous output of supply chain. Finally, we hope to extract takerate from the transaction.

Industrial Map

The first challenge of this kind of business model is the vague sense of boundary of its dependent platform. How much will the traffic platform transfer the business center to e-commerce? What’s more, is it necessary for the traffic platform to make great determination to carry out e-commerce business, but at the same time, it’s enough to be assured that the core selection center will be handed over to the start-up company?

The second challenge is that you really provide a thick enough service and generate enough value to get a commission, rather than a lower commission. Although it seems to be very common today, there are not many good things in the traditional business environment that can draw water without the need to advance / suppress goods. Generally speaking, if a specific service or product is provided, the gross profit will decrease with the increasing competition, which naturally involves the next problem.

Third, not every link has a platform attribute. As a platform, it must be able to change over time or with the increase of business volume

Tagged in: