Original link: https://www.latepost.com/news/dj_detail?id=1682
Consumption can often reflect people’s subjective evaluation of the current economic situation. Under the influence of the three-year epidemic, 618 and Double 11 in 2022 will show the lowest increase in history.
However, this year when the haze of the epidemic has dissipated, the overall consumption data of the holiday has surpassed that of 2019. During the “May 1st” period, the sales of Beijing Xidan Joy City exceeded 77 million yuan. People’s consumption Enthusiasm and confidence are back. After the explosive growth of offline consumption, the first 618 e-commerce promotion festival after the epidemic is coming, and e-commerce platforms have also begun to deploy their own strategies early.
Live e-commerce is the most important increase in the e-commerce and retail industries in recent years: Kuaishou’s GMV in 2022 will reach 901.2 billion yuan, approaching a trillion yuan scale; Douyin’s GMV will exceed 1.4 trillion yuan, and the combined GMV of the two is close to 80% of JD.com’s GMV last year.
Both Kuaishou and Douyin have placed high expectations on e-commerce, and Cheng Yixiao, the founder of Kuaishou, personally led a team to manage the e-commerce business. According to people close to Kuaishou, Cheng Yixiao, CEO of Kuaishou, once explained this at the e-commerce general meeting: He recognized that the former person in charge Xiao Gu led the construction of Kuaishou e-commerce from 0 to 1, but the e-commerce business is very important to the company’s revenue. Importantly, as the founder and CEO, he can do many things that are not so easy for ordinary business leaders, and he is also able to make decisions and allocate resources for long-term benefit development.
Good products, good content, and good services are the core of all e-commerce platforms. Not long ago, at the annual strategy release “Gravity Conference” held by Kuaishou E-commerce, Cheng Yixiao stood in front of the stage for the first time and expressed his understanding to the public:
Platforms and operators should not only pursue to provide consumers with good products at low prices, but also pursue to output high-quality content and considerate services, and establish a deep mutual trust relationship with consumers. The unique opportunity of Kuaishou is that it covers the broadest mass market from the first to the fifth tier, and relies on the trust relationship of the semi-acquaintance community.
Black Ant Capital pointed out in the “Research on Consumption Trends of Young and Middle-aged People in County Area Markets” that in 2022, the proportion of offline and online shopping for youth in county areas will be 52:48, of which only the online categories of fast-moving food, personal care and clothing are online. Higher, this is a blue ocean market; the “acquaintance relationship” that counties and cities generally value is reflected in Kuaishou that they have a strong sense of trust in their favorite anchors. Grass brand recognition is also high.
For merchants, the most valuable asset of Kuaishou is the crowd advantage of the mass market and the trust between people based on platform and brand trust. For Cheng Yixiao, whether he can mobilize operators, including merchants and talents, to provide them with a “good and inexpensive life” in the way that Kuaishou veterans like is whether Kuaishou e-commerce can enter the second place smoothly. The key to a scale of one trillion yuan.
Find the broadest mass market in the cracks of traditional e-commerce
At the beginning of this 4D speech, Cheng Yixiao first corrected the stereotype that the sinking market is the “low-end market”, he replaced it with the term “mass market”, and mentioned in the sharing that the mass market is the one with the largest population base , the blue ocean market with the largest area and the greatest potential.
The “Hundred Cities, Thousand Streets, and Ten Thousand Stores” Consumption Index Report released by the Industrial and Commercial Bank of China and Xinhua News Agency Think Tank mentioned that in 2022, the rankings of first-tier and new first-tier cities will decline in multiple consumption indices, and third- and fourth-tier cities will In the first half of 2022, among the top 20 cities in the general consumer health index, third- and fourth-tier cities occupy 14 places.
The monthly income of people in these third- to fifth-tier cities is generally around 4,000-8,000 yuan. The upper limit of monthly income for small businesses will be higher, and the cost of living will be much lower than that of first-tier cities. For example, the cost of renting a house, which accounts for a large amount of expenditure in first-tier cities, is relatively low in low-tier cities. According to Black Ant Capital’s survey of 1,613 samples of youth in counties, 60% of county residents have their own houses, and 30% live with their parents. Only 6% of people need to live in rented houses.
At present, bringing brand influence into the mass market is a difficult problem faced by many brands. Taobao, Tmall, JD.com and major brands have their offline channel advantages concentrated in first- and second-tier cities, and Kuaishou e-commerce has the opportunity to push these brands to the mass market.
Xinxiangyin, one of the four major brands in the Chinese tissue market, has spent more than ten years spreading a large number of offline dealer channels, covering the main first- and second-tier urban population. When expanding to the third- and fourth-tier markets, I found that the average price of Xinxiangyin’s main product M-size pumping paper is 60-80 yuan, and uniformly uses 100% virgin wood pulp. Compared with the white brand that uses recycled wood pulp, the price is higher. A lot more expensive, the price advantage is not obvious.
However, this product has recently become a hit on Kuaishou. Xinxiangyin has been in Kuaishou for a long time, but the profit of paper products is low, and the cost-effectiveness of distribution and delivery experts is not high; in addition, Kuaishou users have previously preferred industrial brands directly supplied by factories, and Xinxiangyin has been in Kuaishou for a long time. Time can’t find a breakthrough. Until last year, Xinxiangyin began to pay attention to brand distribution and content cultivation, and gradually discovered that users on Kuaishou actually have a strong willingness to buy branded products. After they adjusted their operating strategies in a timely manner, they opened up sales at once, and Hengan Group, the parent company of Xinxiangyin, also positioned Kuaishou as a high-increment channel internally.
According to Deng Yangfeng, who is in charge of investment promotion for the Kuaishou anchor “Super Dan” account who is good at distributing branded goods, after 2020, many anchors will start to improve their product categories, but they will find a problem. The main energy of the team can only be focused on the live broadcast room. More energy to do self-developed products, the solution is to cooperate with mature brands.
“Our cooperation with many brands is a win-win situation. The brand’s goal in Kuaishou is not only sales, they also hope to spread the brand concept, products, including new products in Kuaishou, so as to cultivate and reach more users.” Deng Yangfeng said that currently more than 90% of the GMV of the Super Dan account comes from other brands, and the remaining 10% is contributed by the host’s own brand.
Some brands that pay more attention to trends have grown faster. For example, Chivas, which sells large-scale furniture, has a unit price of several thousand yuan. Kuaishou sells well and is loved by a large number of customers in Northeast China. The reason is that in the counties and cities in Northeast China, there are a large number of self-built houses. The average area of these houses is more than 100 square meters, or self-built houses with 3-4 floors. Homeowners like to buy large furniture.
There is another layer of characteristics of the mass market: the smaller the city, the more obvious the characteristics of the acquaintance society, and the stronger the characteristics of the private domain. In Kuaishou, users have a strong sense of trust in “people”, which is what Kuaishou refers to as a “semi-acquaintance community”-users and anchors generate trust through long-term communication and interaction, and this trust will increase the conversion efficiency of the live broadcast room. Higher, higher repurchase rate, Kuaishou uses platform governance to further protect and amplify this trust.
The mass market with a huge crowd, the accumulation of fans brought about by trust, and the high growth per capita consumption power are naturally attractive to brands, and it also makes Kuaishou’s strategy clearer:
Kuaishou provides merchants with a huge mass market and anchors trusted by users. Merchants provide Kuaishou with affordable and good products and services. Together, we provide Kuaishou users with a “good and inexpensive life”.
Merchants and talent division of labor, the platform must have the ability to serve “business”
Selling through mature experts is the main mode of operation for brand merchants on the live broadcast e-commerce platform. This approach can use the influence of talents to quickly ship a large number of products, but it is not easy to accumulate their own user assets, and the brand side often has meager profits.
This problem also existed when many brands first came to Kuaishou.
For example, when Feike, a well-known domestic electrical appliance brand, first cooperated with Kuaishou head masters, the price of the products was lower than the normal price, and gifts were required, plus pit fees and commissions for the arrivals, so the brand was difficult to control Profits also have a certain impact on daily pricing. When Xinxiangyin first started working as a Kuaishou channel, it also found that the rate of cooperation with top talents was high, the traffic was expensive, and the profit margin of the tissue category was limited, so it was difficult to find a business idea for a while.
In fact, the breaking point of the cooperation between merchants and talents lies in the fact that the most significant function of distribution by talents is to instantly let a large number of Kuaishou users know that a certain brand has settled in Kuaishou and what the main products are; These core demands will ultimately be realized by the self-broadcasting of brand stores.
Therefore, the most important thing for Kuaishou this year is to do a good job as a service provider for merchants, solve the problem of fragmented flow of merchants and talents, and reduce the operating costs and thresholds of merchants.
First of all, Kuaishou’s resources and traffic will be tilted towards high-quality operators this year. Merchants do a good job in the management of content, products, and services. Correspondingly, there will be three scoring standards for store experience points, product points, and word-of-mouth points. Different from the previous scoring standards, these three scores will be directly linked to resources, affecting merchants’ access to traffic, rights, subsidies, etc.
The second is to distinguish the roles of merchants and experts. In the past, talents and merchants were mixed in the same field and traffic pool, but talents are more adaptable than merchants to the community ecology of Kuaishou with half-acquaintances, so it is easier for them to gain user attention and traffic. Beginning this year, Kuaishou e-commerce will operate separately for merchants and experts. Merchants mainly refer to brands, fast brands, white-label sellers and other sellers whose core competitiveness is commodities, while Daren is an anchor who is good at content, social networking and traffic. The two together constitute the operators of Kuaishou e-commerce.
In terms of operation direction: Kuaishou encourages merchants to provide consumers with more low-cost goods and considerate services, while taking into account content production; Daren further leverages the advantages of content and social networking, not only continuing to help merchants sell goods, but also doing a good job at the front end The content of grass planting, through planting grass rather than simply low price, break the price to drive sales.
Among them, the “Sichuan Flow Plan” is the key to building bridges between merchants and experts, so that the two sides have different divisions of labor and flow in the same direction. In the past, Daren helped merchants do distribution and completed a settlement, which could not help merchants accumulate fans and brands. Through the “Sichuan Stream Plan”, users who purchase branded products in Daren’s live broadcast room are more likely to be recommended to the live broadcast room of the store of the brand merchant to achieve the same flow of traffic. Through the “Chuanliu Plan”, brands can better complete product testing, cold start, and accumulate fans, and participating talents will also receive traffic rewards. This year, the Chuanliu plan will use at least 60 billion traffic as incentives.
For Daren, it is also of great significance to maintain a long-term good cooperation with the brand. Deng Yangfeng found that at the beginning of live broadcast e-commerce in 2019, many users just started to contact live broadcast e-commerce, and they were more inclined to accept some “cheap or cost-effective” products, but now the anchors and users are more mature, especially users, The focus on good products and effective products is higher than the focus on price.
“A good brand has its own traffic.” Deng Yangfeng said that cooperation with mature brands is more in line with Daren’s long-term pursuit of interests. After users experience more and better services in Kuaishou, he will be more willing to repurchase in the live broadcast room .
Use the method of global operation to become an indispensable channel for the brand
In the past two years, many brands have begun to realize the crowd value of Kuaishou, and have found growth that cannot be broken through in the traditional shelf e-commerce and offline distribution systems.
Taking 3C products as an example, most of them are difficult to find a suitable breakthrough point on the live broadcast e-commerce platform, because the decision-making of such products is complex, the repurchase is low, and the industry competition is fierce, resulting in low profit margins, while the costs of anchor commissions and pit fees are low. Not low. However, Feike, which mainly focuses on small home appliances, not only sold incremental sales on the Kuaishou channel, but also sold its own products with high customer unit prices, mainly because it found the right business strategy.
Feike’s initial appeal for entering Kuaishou is to gain brand growth through expanding new channels, and at the same time be able to sell its own high-customer unit price products. Under the original dealer system, dealers focus on profit, and generally only sell the best-selling low-priced models of 69, 79, and 89 yuan, while Feike’s main new razors are priced at 169, 199 yuan. Too long a price system is not conducive to Feike’s promotion of new products.
When it first entered Kuaishou, Feike mainly promoted low-priced models of 69 and 99 yuan, and 97% of the users were male users. At that time, Kuaishou e-commerce was doing activities in various promotion nodes. During a Father’s Day promotion, they unexpectedly found that the transaction rate of gift boxes was very high, and the buyers were all women. In the subsequent big promotion node, Feike’s live broadcast team deliberately strengthened the gift attribute of the razor, and raised the unit price to 199 yuan, and the transaction was still very good, and 90% of the order users were women, generally aged Around 18~35 years old.
At present, the unit prices of the three best products sold by Feike on Kuaishou are 169, 199, and 299 yuan respectively. The crowd and the unit price are very different from the offline distribution system.
BESTORE, which operates highly repurchased snack foods, has also achieved a balance between GMV and profit after Kuaishou changed from cooperating with top talents to cooperating with mid-waist anchors. The unit price of the main products is from about 50 yuan. , turned into a gift bag of more than 100 yuan.
Based on the above cases, the core logic of merchants operating in Kuaishou can be summarized as follows: global operations, good products are not expensive.
The so-called “global management” is first of all in the Kuaishou ecology, to connect the talent traffic/talent distribution and store traffic/store self-broadcasting, to achieve business-to-business cooperation, each perform their own duties, and jointly increase traffic and sales.
Secondly, it is necessary to connect good content with e-commerce traffic, and pay special attention to the value of front-end planting.
Finally, when the brand has already gained popularity and user awareness in the Kuaishou ecosystem, it can obtain new sales growth in the pan-shelf field by building permanent store items and participating in mall registration. Taking Lenovo Kuaishou’s official flagship store as an example, the payment GMV in 2022 will increase by 223% year-on-year, of which pan-shelf accounts for as much as 28%.
“Good products are not expensive” refers to providing Kuaishou users with products they like and have a price advantage, rather than 9.9 free shipping. In his speech, Cheng Yixiao repeatedly mentioned cases of high unit price per customer, such as Zhuimi washing machine with an average unit price of 2,300 yuan, a complete set of Haier home appliances that cost 5,000 to 6,000 yuan, and iQOO digital series mobile phones that cost more than 3,000 yuan.
At the end of the e-commerce conference, Cheng Yixiao recalled a series of shifts of trust in his memory from grocery stores, brands, offline supermarkets to e-commerce platforms, and then to content platforms. Chance.
“I think that every change in consumer decision-making is a particularly big business opportunity, and a very different company will grow. Has the trust between platforms, operators and users become more and more through transactions?” Shen, this is a real big opportunity for us in the future.” Cheng Yixiao summed it up like this.
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