Source: All-Weather Technology (ID:iawtmt)

Over the past year, livestream e-commerce has been like a rollercoaster, experiencing peaks and valleys. Now still in the eye of the storm, platforms and players are accelerating to face the reshuffle, with the situation unpredictable.

The internet is always full of challenges, but also infinite vitality. This is especially true for livestream e-commerce, which is at the center of the storm.

Looking back at the past year, the livestream e-commerce landscape has been volatile, with unexpected events and continued noise.

After nearly 30 years in the education and training industry, New Oriental founder Yu Minhong, at the age of 59, changed careers, diving headfirst into the livestream e-commerce industry at the tail end of 2021.

Leveraging his personal IP fame and platform traffic support, Yu Minhong's livestream debut lasted only 3 hours, but according to third-party platform statistics, the livestream accumulated 1.82 million viewers, sales of 4.81 million yuan, and audio income (tips) between 100,000 and 500,000 yuan.

The world always rises and falls, with new waves surging and old waves falling. Almost at the same time as Yu Minhong's livestream (evening of December 28), Zhang Ting, a celebrity livestream seller with over 33 million followers on Douyin and known as the "godmother of micro-business," faced a scandal.

Her cosmetics company, along with her husband Lin Ruiyang, was exposed for allegedly using the internet for pyramid scheme activities and was investigated, with property preservation freezing funds up to 600 million yuan.

This is not the first livestream anchor to "fall," nor the most influential. Before Zhang Ting, Taobao's two top anchors, Wei Ya and Xue Li, were penalized for tax evasion, their social media accounts banned, and they disappeared from livestreams.

Not only did Taobao Live lose its "super top anchors," but its external environment became more brutal. Douyin and Kuaishou, which followed closely, are developing vigorously, while platforms like Channels and Bilibili are also eager to break the old order and create new horizons.

If 2021 was the year for livestream e-commerce to break old rules and bad habits, then 2022 may be a turning point for the industry to mature.

The Ups and Downs of 2021

To sum up the livestream e-commerce world in 2021 in one word, it would be: ups and downs.

In the first half of the year, Douyin stole the spotlight, with some industry insiders even seeing it as the only platform that could rival Alibaba.

At the beginning of 2021, Douyin's e-commerce business was reported to have a full-year GMV target of 1 trillion yuan, double the previous year, equivalent to Pinduoduo's total transaction volume in 2019, shocking the oligopolistic livestream e-commerce market.

Douyin, which only completed its e-commerce transaction loop in the second half of 2020, became the industry's biggest "dark horse."

With the introduction of the "interest e-commerce" concept, Douyin e-commerce seemed to take off like a rocket, with not only a steady stream of ordinary and celebrity anchors but also the launch of the "brand flagship store" function, strongly supporting brands to open stores.

According to reports, as of early April 2021, over 1,000 brands had joined Douyin's brand account, and more than 220 brands had configured the "brand flagship store" function.

Official data shows that after the launch of brand flagship stores, compared to the simple product showcase stage, product exposure click-through rate increased by 250% month-on-month, and homepage traffic funnel conversion efficiency increased by 30% month-on-month.

The trend in the previous two years was for merchants to flock to Taobao Live to open official stores and start livestream selling; by 2021, this trend shifted to Douyin, with merchants tacitly agreeing to board the Douyin express, and Douyin showing signs of catching up.

A report by Ping An Securities pointed out that in terms of full-year GMV in 2020, Taobao Live GMV reached 400 billion yuan, Douyin Live GMV was around 500 billion yuan (with Douyin Shop GMV over 100 billion yuan), and Kuaishou Live GMV reached 381.2 billion yuan (with Kuaishou Shop GMV accounting for 85% in Q1 2021). The livestream e-commerce market presented a tripartite competition.

However, in 2021, Douyin e-commerce GMV growth rate significantly exceeded Taobao Live and Kuaishou. In July 2021, Douyin e-commerce creators' GMV grew 392% year-on-year; in Q2 2021, Kuaishou e-commerce maintained high growth of around 100%; in August 2021, Taobao Live GMV growth was only 55%.

(Source: Ping An Securities)

Until the arrival of the Double 11 shopping carnival, Wei Ya and Li Jiaqi refreshed the single-session transaction record with astonishing data, once again demonstrating that Taobao Live's "super top anchors" far surpass other platforms' livestream selling capabilities, enjoying a moment of glory.

Even an anchor with over 2 million Douyin followers said bluntly during a livestream chat that some daily products had good value for money, but during Double 11, they definitely couldn't compete with Li Jiaqi and Wei Ya, "so just lie flat."

Taobao Live, which had regained some ground, didn't enjoy comfort for long. On November 22, the Hangzhou Tax Service of the State Taxation Administration announced that through tax big data analysis, it found that two online anchors, Zhu Chenhui (online name: Xue Li) and Lin Shanshan, were suspected of tax evasion, and they were ordered to pay back taxes, late fees, and fines.

Xue Li and Lin Shanshan belonged to the same MCN agency, and they usually used platforms like Weibo, Xiaohongshu, and WeChat official accounts to preview livestreams and expose products before going to Taobao Live to sell.

Within just one year of entering livestream e-commerce, Xue Li's sales performance on Taobao Live quickly rose to become second only to Wei Ya and Li Jiaqi; Lin Shanshan's Taobao store also maintained a Top 10 ranking in the women's clothing category.

Following their investigation, their accounts on Weibo, WeChat official accounts, Douyin, Xiaohongshu, and Taobao stores were quickly banned.

Just a month later, the same incident happened to Wei Ya, the "number one sister" of Taobao Live. This time, her accounts were sealed even faster, and the fine was higher.

Although Taobao Live did not comment on the matter, losing two key figures in a short period had foreseeable impacts.

After Wei Ya was penalized, Li Jiaqi, another "super top anchor" on Taobao Live, attracted much attention. For several consecutive days, a large number of consumers flooded into Li Jiaqi's livestream, not only to cheer him on but also to remind him to abide by the law.

After the storm, outsiders speculated that Li Jiaqi could absorb traffic from Wei Ya and Xue Li's livestreams, and Taobao Live might be spared. But contrary to expectations, after a slight increase, Li Jiaqi's livestream viewership fell back to previous average levels, with a hint of a downward trend.

(Li Jiaqi's livestream viewership: before Double 11 2021 (left) vs. end of December)

This is clearly not just a problem for Taobao Live, nor just about tax evasion. Mogujie, which was once popular and pioneered livestream e-commerce, was exposed at the end of 2021 for laying off about 30% of its staff due to business adjustments.

The company, which has been loss-making for five consecutive years and saw its market value evaporate by over $1.4 billion in three years since listing, clearly had a tough year.

The entire livestream e-commerce industry, from platforms to participants at all levels, felt like they were on a rollercoaster in 2021, with emotions fluctuating.

New Variables Emerge in the Arena

Tides rise and fall, and the surging livestream e-commerce world is not short of new variables.

On the evening of December 31, 2021, WeChat Channels held its first online New Year's Eve concert—FLY TO 2022 Mayday New Year's Eve Concert.

Data obtained by the author from Tencent Music showed that within two hours of QQ Music's official announcement, reservations exceeded 3 million, and within 16 hours, they exceeded 5.55 million. As of 12:00 on December 31, 2021, cumulative reservations across TME's four platforms—QQ Music, Kugou Music, Kuwo Music, and WeSing—approached 10 million.

For a long time, Tencent's short video apps were mocked as "unhelpful," even with Tencent's strong social DNA, they repeatedly failed and tried again, failing to produce a truly competitive product, ultimately resorting to an app "family bucket" approach to compete externally, but with little effect.

This time, the Channels platform, which planned the online concert, may be the key app to help Tencent clear its name and turn the tide.

In fact, before the Mayday concert, Channels also held an online concert with Westlife. Because it evoked countless people's youthful memories, the concert successfully trended across major social networks and topped hot lists.

According to incomplete statistics, this livestream attracted over 20 million views and over 130 million likes. Even after the official performance ended, many netizens stayed in the livestream to watch rehearsal highlights, unwilling to leave. This was another successful breakout for Channels after the 2020 Gemini meteor shower livestream that attracted millions of viewers.

Bailian Consulting analyst Zhuang Shuai believes that Channels' move is essentially to increase user activity and cultivate user habits through large-scale marketing events like online entertainment activities; at the same time, the platform can explore diversified business models such as livestream tipping and event sponsorship.

Since the second half of 2020, Tencent has poured all its efforts into supporting Channels, giving it full "face." It placed the Channels entrance prominently on WeChat's "Discover" page, added a feature to pin livestreams to Moments, achieved two-way integration with official accounts, and even added Channels to the official account feed, allowing users to perceive and access Channels from every corner of the WeChat ecosystem.

(WeChat Channels added to official account feed)

Even though user awareness of Channels is not fully established, Tencent is eager to explore commercialization paths, one of which is livestream e-commerce.

Since launching the "livestream task" feature in April last year to help creators monetize, Tencent Channels has enabled one-click store opening, user tipping, livestream selling, and other functions, and is currently grayscale testing the "short video shopping cart" feature.

At Youzan's 9th Anniversary Ecosystem Conference (November 2021), Youzan CEO Bai Ya stated that they firmly support Channels and are optimistic about its development: "Channels is gradually gaining public domain traffic. In the past three months, Channels' livestream selling has grown very fast, and we believe it will grow well in the coming year."

According to the "2021 Youzan WeChat Shop Star Products Review," Channels achieved "accelerated fast running" in the past year. From the Spring Festival launch in 2021 to the review's release, transaction volume from Channels livestreams reached nearly 1 billion yuan.

As of November 2021, the number of merchants completing transactions on Youzan Channels increased by over 6 times month-on-month; merchant GMV grew over 7 times month-on-month; livestream duration increased over 8 times month-on-month.

Bilibili, which has been breaking out of its niche and seeing its market value soar in recent years, is also eager to try. To help more UP主 monetize traffic and enrich the platform's business model, Bilibili first obtained an internet payment license through public auction, and recently launched the "little yellow cart" feature, allowing users to shop while watching.

Combined with its existing livestream function, Bilibili is one step closer to fully launching livestream e-commerce.

Financial reports show that in Q3 2021, Bilibili had an average of 267 million monthly active users, up 35% year-on-year; mobile monthly active users grew 36% to 250 million; daily active users reached 72 million, up 35% year-on-year.

In addition to showing high user activity in its community, Bilibili also demonstrated high stickiness, with average daily usage time increasing to 88 minutes in that quarter, a record high; monthly interactions exceeded 10 billion, reaching 10.2 billion, up 86% year-on-year.

Considering both traffic scale and traffic value, Bilibili has certain competitiveness among many players. Establishing livestream e-commerce channels for UP主 may be one way to leverage its traffic value and turn the company profitable.

How Will 2022 Go?

The competition and replacement of old and new forces mean that the livestream e-commerce landscape may face a new round of reshuffling. How big will the gap be between Taobao, Douyin, and Kuaishou, which have been damaged to varying degrees, and players like Channels and Bilibili?

Zhuang Shuai analyzed that the "fall" of anchors like Xue Li and Wei Ya is a normal business development process. From their sales share, the impact on Taobao Live or Alibaba itself is very small.

Secondly, since Taobao Live was reported to have undergone organizational restructuring in March 2020, the platform has been supporting merchant self-broadcasting. Currently, brand livestreaming is gradually improving: "Closing the livestream rooms of top anchors won't have a big impact on the platform because core products are still on Taobao, and users are still on Taobao."

According to Alibaba's financial report, in fiscal year 2021, including China retail market ($1.144 trillion), cross-border and global retail markets, and local life services, Alibaba's ecosystem GMV was 8.119 trillion yuan ($1.239 trillion).

It is worth noting that Taobao Live's GMV in fiscal year 2021 exceeded 500 billion yuan, but it only accounted for 6.16% of Alibaba's total, less than one-tenth.

Even in the over 500 billion yuan Taobao Live market, Wei Ya and Xue Li were only a relatively small part.

Phoenix Net E-commerce Research Institute's "2020 Livestream E-commerce Influencer Ranking" showed that Wei Ya won the championship with 20.208 billion yuan in GMV; Xue Li's dehydrated sales were 4.233 billion yuan, ranking sixth nationwide; Lin Shanshan was not in the top ten.

If calculated this way, the combined sales of Wei Ya and Xue Li only accounted for 4.89% of Taobao Live.

(Source: Phoenix Net E-commerce Research Institute)

A clear characteristic is that even though "super top anchors" attract a lot of platform traffic, as business develops, consumer dependence on individual anchors is limited. This means that to make livestream e-commerce bigger and stronger in the future, relying on influencer IP may not work; it must return to the livestream room and brands.

During the strategic adjustment process, new opportunities may emerge. Overall, industry insiders generally believe that the livestream e-commerce track may have three variables in the future:

First, driven by technology, virtual anchors may see new development. Their main role is to assist real anchors in extending livestream coverage time and increasing coverage scenarios.

Second, Channels may experience explosive growth. Various signs indicate that Tencent is being patient with Channels this time, so from a long-term perspective, Channels as a variable also has opportunities.

"According to industry estimates, the future livestream e-commerce market size will reach 10 trillion yuan, with Taobao, Douyin, and Kuaishou taking a larger share, possibly half or more; the remaining third or so will be divided among platforms like JD.com, Pinduoduo, and Channels. From this perspective, Channels indeed has great opportunities," Zhuang Shuai said.

Third, same-city retail and livestream e-commerce may have business cooperation. For example, livestreaming linked with physical stores, encouraging offline merchants to do livestreaming.

Today's livestream e-commerce, even at the forefront, is still just a "child." It's normal for a growing "child" to make mistakes, fail, and get sick, which requires help and reminders from "adults."

From the results, regulation has not dampened the enthusiasm of anchors and platforms; on the contrary, increasingly complete rules and regulations have promoted the progress and maturity of the livestream e-commerce industry, and to some extent, improved the overall quality of anchors.

One "Wei Ya" falls, but thousands of "Wei Yas" are rising. Only the people and platform stories change; the pace of livestream e-commerce will not change.

But among the crowd standing at the forefront, who will laugh last? The answer is not yet revealed.

Are you "watching" me?