Since the development of the live streaming e-commerce business model, some contradictions have gradually emerged. So through these contradictions, how should we interpret this industry? In this article,HE Tuber the author tries to return to the industry and explore the boundaries of the live broadcast e-commerce model to maintain balance. Let’s take a look at the sharing of this article.

Before Double Eleven this year, negative comments about live streaming e-commerce and anchors have probably never been so rampant.

In an era of shrinking consumption, live streaming e-commerce, as one of the few emerging industries with the ability to quickly make money during the epidemic, has created countless wealth that is beyond the reach of ordinary people, and at the same time has also attracted huge attention and criticism to itself.

Its rise was once regarded as a representative of the short-chain economy and a model of equal rights among classes. It played an important role in smoothing transaction links during the epidemic. Now it is established as the opposite of the real economy and has become a target of public criticism;

The anchor once served as a bridge between production and consumption, gathering a large amount of affordable supply on a large scale and bringing it into the consumer market. However, the head effect and strong bargaining power also put itself in a dangerous position, thus becoming the seemingly insignificant person in the link. 

When live streaming e-commerce over-develops, it changes from a flexible joint to a greedy tumor. But if it is simply told as a story about a young boy who slays a dragon and eventually becomes an evil dragon, it becomes a meaningless moralist simplification.

The dilemma that live streaming e-commerce is facing today is not just the result of the host’s expanding ambitions, but the collusion of interests among all the actors. This is a shortcut. At first, everyone was pleasantly surprised by its efficiency and explosive power. They were actively or passively involved in this flywheel; when the flywheel became self-motivated, both the anchor, the platform and the brand were trapped in it and could not survive alone.

First of all, it is defined that the most important contradiction faced by live broadcast e-commerce, especially big anchors, is the extreme fragmentation of retail channels combined with the dividends brought by the concentration of Internet traffic, resulting in an imbalance of discourse power between channels and between channels and brands. It is and should be a brand issue, an industry issue and a retail issue.

The essence of this kind of situation is not complicated, but the reason why live broadcast has reached the forefront of public opinion is that in the context of fierce competition for e-commerce stock and low prices, big anchors who have stepped on the trend of the times and quickly completed the class jump have their own The topicality of the band can muddy the waters of public opinion to the greatest extent, and complete the transfer and establishment of low-priced minds on the platform in the chaos.

Therefore, we are concerned about the chaos and contradictions presented by live streaming e-commerce during this Double Eleven, and we should look beyond the noisy surface and return to the industry.

It must be clear that the emergence of live streaming e-commerce is an inevitable improvement in efficiency, and we need to be wary of voices that demonize it. The current problems are partly the inevitable result of the development of this business model, and the other side is the catalysis of the external environment of comprehensive low prices.

What we want to explore is where the boundaries of this business model have been to maintain balance as it has evolved to this day.

Since the development of live streaming e-commerce, the most acute problem is the conflict between brands and live broadcasts by experts. During this year’s Double Eleven, this bullet was first detonated by JD.com’s procurement and sales, and then from Li Jiaqi to Xiao Yang Ge to Simba, almost every major anchor with considerable influence was involved.

The root of the conflict is that the brand's price protection behavior is inconsistent with the anchor's demands for low prices and traffic.

Big anchors gather consumers through high-quality content and attractive products, and exchange promised sales and exposure with brands for lower prices. The low prices further bring greater traffic to the anchors. This is the positive business cycle that anchors rely on to survive.

The premise for the establishment of this business model is that the brand is willing to give profits to the anchors and consumers in order to obtain short-term sales and popularity, and the anchors are indeed capable of achieving those goals. At the peak of live broadcast e-commerce, mature brands, especially international brands, have embarked on this path that has been verified countless times out of the desire to complete sales KPIs, and new brands out of the desire to quickly start production and then continuously obtain new financing. shortcut.

But shortcuts come at a price. Frequent price cuts brought about by live streaming e-commerce have caused many brands to suffer. The originally well-organized and hierarchical distribution channels have been completely disrupted. Low prices have repeatedly eroded brand power, and consumers no longer recognize the price of products.

A high-end domestic skin care brand mentioned in its contact with "Narrow Broadcast" that during this year's Double 11, it cooperated with Li Jiaqi to provide a buy-one-get-free-formal-wear discount mechanism, which caused dissatisfaction among users in the brand community: "Many members felt that they had lost money with their previous purchases. It’s hurting seed users.” Some users complained on social media and suggested that product prices should be unified and not discounted.

Brands are beginning to pay more and more attention to the protection of the price system and their attitude towards anchors. The changes in the right to speak can be seen by comparing the two news items:

During Double 11 in 2021, because the post-price of L'Oreal ampoule mask in the official spot coupon was lower than the pre-sale price of Super Head's live broadcast, two Super Heads jointly issued a warning to "suspend all cooperation with the brand until the incident is resolved." By August 2022, Huazhizhi’s new Strawberry Rococo series products also had price loopholes in the process of cooperating with Douyin anchors. The brand’s apology announcement stated that “we promise not to cooperate with the influencers who violate the price breaking regulations.” Even though the differences are related to the voice positions of different anchors, the changes in the attitudes of the participants are still worth pondering.

"Wrong product" is a tactic commonly used by brands when facing anchors and platforms competing for low prices. In order to avoid effective price comparisons, brands tend to deploy different product specifications and product combinations in different channels.

"In order to avoid meaningless involvement of the brand, we may stagger SKUs and broadcast dates with other anchors. If every influencer wants the lowest price when negotiating, it will hurt the interests of brand friends. If the brand cannot make money, Once the money is collected, the ecosystem will be destroyed, and we don’t want to see this situation." Cui Dongsheng, vice president of MCN Organization Make Friends, told "Narrowcast".

This is the result of a compromise. But even so, there are still many uncontrollable factors when working with experts.

The dispute surrounding Simba during Double 11 is the conflict between channel interests. Anchors use offline prices and Tmall JD prices as benchmarks to highlight their low prices. This is a common method in live broadcast rooms. However, Mousse Mattress advocates that online and offline sales are not the same products, which is in the interests of dealers. protective action. The YSL air mattress sold by Crazy Little Yang's apprentice was accused of being "vulgar", which reflects the inevitable friction between high-end brands and popular anchors.

A major international brand that "Narrow Broadcast" came into contact with has begun to reduce the sales allocation of Li Jiaqi's live broadcast room this year, and is determined not to rely too much on live broadcasts by experts. It was almost a withdrawal. However, for mature brands with a stable foundation, the impact of abandoning major anchors may only lower growth expectations; in the past few years, there have been a large number of new brands that have been forcibly matured, and the sales volume of live broadcasts even accounted for 80%. Giving up The labor pains of big anchors are more severe, which makes it more difficult to make this decision.

What’s even more difficult is that in a zero-sum game, consumers’ attention is limited. If a merchant doesn’t do it, other merchants will immediately take over. Even if you want to build a good brand, it’s hard to avoid being involved in this. There is no way out of the vicious cycle.