---
title: "Live-streaming commerce: just another passing fad?"
description: "Scan the QR code in the image to register. Nowadays, more and more streamers feel that it's getting harder to sell products. Consequently, discussions and attention on live-streaming commerce have significantly declined."
author: "关键"
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published: "2021-03-29"
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# Live-streaming commerce: just another passing fad?

> Scan the QR code in the image to register. Nowadays, more and more streamers feel that it's getting harder to sell products. Consequently, discussions and attention on live-streaming commerce have significantly declined.

**Scan the QR code in the image to register**
Nowadays, more and more streamers feel that it's getting harder to sell products. Consequently, discussions and attention on live-streaming commerce have significantly declined.
**-01-**
**Origin: What's happening with live-streaming commerce?**
A while ago, live-streaming commerce was really hot. A group of internet celebrities and big V's were giving orders and showing off; a bunch of stars flocked in and were invincible. Sales in live-streaming rooms repeatedly hit new highs, just as Zhao Yuanyuan, former head of Taobao Live operations, described: "Now, if a live stream doesn't bring in several hundred million, you'd be embarrassed to post a battle report or write a press release." Whether merchants or streamers, media or netizens, everyone seemed excited, having a great time.
But now, more and more streamers feel that it's getting harder to sell products.
According to media reports, a male celebrity whose first live-streaming sales exceeded 80 million yuan saw his sales drop by 90% by July 2020, and even with a rebound in August, single-stream sales were still less than 40 million yuan.
Consequently, discussions and attention on live-streaming commerce have significantly declined. Baidu Index shows that both its media index and information index have clearly dropped. Moreover, inflated performance and watered-down data have become rampant, with reports of fake orders, returns, and fraudulent orders constantly appearing, and incidents of streamers attacking each other also occurring from time to time.
In response, we can't help but ask: What's wrong with live-streaming commerce? For the once "hot" live-streaming commerce, what kind of "fire" is wrapped in its "paper"? Could it really be just another "wind" blowing by?
**-02-**
**Is live-streaming commerce old wine in a new bottle, or a marketing upgrade?**
Live-streaming commerce, in the final analysis, is selling goods through live streaming. Live streaming is the method and tool; selling goods is the purpose.
Regarding selling goods, I once raised this question: What is the essential difference among a company's sales department, marketing department, and brand department? I believe that **the sales department is performance-oriented, the marketing department is competition-oriented, and the brand department is value-oriented.**
In fact, this represents three levels of "selling goods."
The sales orientation often uses price as a lever, simply satisfying people's psychological need to "seek bargains";
The marketing orientation is to differentiate from competitors;
The brand orientation is to meet consumer needs and create consumer value.
For enterprises, these three marketing levels represent three market operation models or strategies.
A pure sales orientation is the "**red ocean**" model, characterized by homogenization, using promotions to wage price wars, resulting in continuous squeezing of corporate profit margins, jokingly called "civilized queuing, orderly jumping off buildings";
A market competition orientation is the "**blue ocean**" model, characterized by differentiation, using competitive advantages to seize market share, resulting in innovative and breakthrough performance growth for the enterprise;
A brand competition orientation is the "**green ocean**" model, whose essence is value creation, using solving consumer pain points, meeting rigid consumer needs, and creating core consumer value as competitive strategies, resulting in high value-added, long-term sustainable development for the enterprise.
So, which of the above business models does live-streaming commerce belong to? Is live-streaming commerce a sales game or a marketing upgrade?
**First, it is performance-oriented**
According to reports, during a live stream on August 21, 2020, a female celebrity, amid the host's constant urging of "sell, sell, sell...", had an emotional breakdown midway, constantly undermining the show, once again staging a "celebrity live-stream flop" drama.
The on-site DJ partially recreated the scene on Weibo: "×× actually disliked the constant selling, selling, selling. This was originally a commercial live stream; I believe she knew that. With over thirty product promotion points, if they weren't said on time and accurately, what would the client think? They all paid slot fees. If the host didn't help say more at this time, would they watch the team lose money?"
**Second, it is based on low prices**
A female celebrity who first became famous in live-streaming commerce was later called "X, the price cutter," implying she is very good at bargaining. All along, "the lowest price on the entire network" has become a necessary prerequisite for streamers to choose products and a necessary weapon to drive performance.
For example, Luo Yonghao once publicly stated on Weibo: "Here, the vast majority are the lowest prices on the entire network before 6·18 as promised by manufacturers" and "Trust Brother Long (Luo's self-proclaimed title) to always get the lowest price," as well as in Douyin promotional videos mentioning "fighting for the lowest price on the entire network for live-stream fans."
The result of infinitely lowering prices is **infinitely reducing corporate profit margins**. According to "Daily Economic News," as of May 2020, in three collaborations, Mengjie Co., Ltd. paid a top streamer 2.1324 million yuan, with a commission rate of 22%; while in 2019, the average gross margin for Mengjie's bedding sets, quilt cores, pillow cores, and other products was around 40%, and after deducting costs, product profits were greatly reduced. **Sacrificing due profit margins for so-called business performance is无异于“饮鸩止渴” for enterprises.**
This "simple and crude" business approach not only traps enterprises in a pitfall of sacrificing long-term interests for immediate performance but also brings the entire industry's marketing level back to the "primitive" era.
**-03-**
**Live-streaming commerce: short-term performance or long-term value?**
**First, it makes the enterprise's marketing model return from value marketing to price marketing, which is undoubtedly a historical regression.** The significance of value marketing lies in continuously gaining insights into consumers' **pain points**, through sustained technological innovation, creating more and better brand added value in products or services, thereby continuously meeting consumers' rigid needs, optimizing consumer application experience, and ultimately bringing **high-profit, sustainable** long-term development to the enterprise.
In contrast, the "sales" model with price wars as its core strategy is a relatively low-level market operation model, whether from the perspective of consumers' core interests or the enterprise's development interests. It often brings consumers benefits limited to "spending," while for enterprises, it only brings short-term performance growth.
Continuously compressed profit margins are very detrimental to the long-term development of enterprises, as Mr. Ren Zhengfei warned: "Low prices, low quality, and low costs will destroy our future strategic competitiveness. Enterprises must have reasonable profits to continue investing in R&D. Without appropriate profit accumulation, it is actually strategically undermining the product."
**Second, it is not conducive to quality development centered on future brand economy**
As is well known, although Chinese products sell well globally and manufacturing levels are among the world's top, China's international brands are still rare. Even companies in the Fortune 500 are mostly resource-based or asset-based. However, future international competition is an out-and-out brand competition rooted in **core technological innovation**.
The popularity of live-streaming commerce will cause many enterprises to focus on short-term market interests. Eagerness for quick success makes enterprises uninterested in continuously exploring consumers' potential needs and enhancing consumer value experience. The decline in profit margins also means enterprises lack the strength to continuously invest in new technologies and product R&D, making it impossible for them to continuously improve their core competitiveness and sustainable development capabilities.
At the same time, the "lowest price on the entire network" of live-streaming commerce will disrupt the enterprise's original market price system and disturb the existing distribution channel system. While seemingly bringing considerable sales performance, it greatly damages the interests of original distributors, destroys the cooperation mechanism and credit between enterprises and merchants, and ultimately leads to a situation of "picking up sesame seeds and losing watermelons."
**Third, it causes varying degrees of damage to existing brand images**
Performance-driven, price-leveraged streamers are, in essence, a special channel and special form of distributors for enterprises. Broadly speaking, **distributors have a purely commercial relationship with enterprises and have no responsibility or obligation for brand property rights.** They will not spend manpower, material resources, or financial resources, and importantly, they are also incapable of maintaining the brand and optimizing consumer relationships on behalf of the enterprise. The same applies to those streamers who sell products.
Driven by interests, there have even been games between streamers and brands, leading to rifts among consumers regarding different brands, distorting consumers' perception of brand value itself, and greatly harming the relationship construction between brands and consumers.
For example, some streamers, when refused after forcibly demanding further price reductions, even instigated consumers to return goods. To achieve their goal, they even warned fans that if they didn't return goods, they wouldn't get the original subsidies.
Another example: when two streamers had different prices for the same product in their respective live rooms, the one who didn't get the "lowest price" even joined forces with fans to threaten: permanently block ×× brand. This even put enterprises in the embarrassing situation where consumers only recognize the streamer, not the brand.
Furthermore, those brands that have positioned themselves as mid-to-high-end have also participated at low prices, swept up by the live-streaming commerce craze. This directly disrupts the original brand positioning, interferes with consumers' perception of the brand's established image, and creates difficulties for future market positioning and expansion.
In this regard, how can enterprises establish professional and systematic cognitive stability in core competitiveness and sustainable development, and not be driven by "trends" or moved by "fashions"? The solution is to conduct rational and objective research and judgment on those "momentary fads"—does this matter conform to its inherent essence? Does it follow its development laws?
Recently, multiple top streamers have been complained about by consumers, and issues such as false advertising in live-streaming commerce have attracted social and regulatory attention. How can the frequently "flopping" internet celebrity live-streaming commerce get back on track?
**-04-**
**Live-streaming commerce: warnings about essence and laws**
If we rationally examine this live-streaming commerce craze and deeply reflect on this momentary "rise and fall," there are at least two warnings worth pondering.
**First, things that do not conform to essence will not last long**
When human society suddenly enters an era of rapid iteration, facing the rapid development of technology, we often focus our attention on "change," repeatedly emphasizing that "change is the only constant." In fact, no matter how the world "changes," there will always be an "unchanging" core within it.
As I have always stated: things in human society are based on two major characteristics: **one is human nature, and the other is the characteristics of the times.** The former is the unchanging amid change; the latter is the ever-changing amid the unchanging. Therefore, only by adhering to the survival rule of "standing on the unchanging nature of human nature to respond to the ever-changing characteristics of the times" can we stay at the forefront and remain standing.
The same applies to marketing. The essence of marketing is transaction, and the essence of transaction is the exchange between value and interests. Price is just a form of comparison between value and interests. Therefore, we say that the essence of marketing is value-driven, not price-driven. "Buying useful things, buying better things" is the most fundamental and eternal mental driver for consumers to exchange price for value.
Therefore, all marketing must return to the essence of value-driven. The reason pyramid schemes are prohibited by law is that this investment-return-driven approach has deviated from the **value-driven** essence of marketing. This makes pyramid schemes not aim at consumers' final use and consumption of products, but rather make products a gimmick and a prop, through exaggerated efficacy and false propaganda, to obtain investment returns beyond a reasonable range. Thus, this pseudo-marketing approach is doomed not to last.
The same is true for those once-popular internet-famous restaurants. Whether it's Huang Taiji or Diaoye Niunan, they did not focus on product and service quality as core competitiveness, but rather on the novelty and fun of marketing methods. Taking Diaoye Niunan as an example, the menu was limited to four main dishes, leaving consumers with very limited choices.
At the same time, although the price was mid-range dining, the taste did not have very distinctive features compared to similar competitors. Both of these points made it difficult for consumers to have the motivation to go again after eating. After all, diners go to restaurants mainly to eat. Therefore, product and service are the essence that businesses must follow.
**Second, things that do not follow laws will be chaotic**
Everything in the world has its objective laws; those who follow them prosper, and those who go against them perish. As mentioned above, all marketing that ultimately cannot improve products or optimize experiences is pseudo-marketing that does not conform to the essence and laws of marketing; market performance generated by promotions is destined to be fleeting clouds that will eventually drift away with the wind.
Especially in terms of growth cycles, things that are force-ripened will never achieve positive results. As is well known, rice from Northeast China is generally tastier than rice from the South. Why? The former grows one season a year, while the latter grows two seasons. Why can only wild ginseng that has grown in natural soil for 15 years be called wild ginseng? Because the quality of all crops is proportional to their maturation time. And crops "helped" to grow through non-natural means have either lost their original taste or have greatly reduced quality.
The same applies to marketing. A company's market share and business performance must be based on the nourishment of the "soil" of product strength, conform to the "growth laws" of value-driven, and cannot be "helped" by so-called performance or "force-ripened" by so-called marketing. Even world-class companies like Apple are no exception.
Sculley, who once led Pepsi to overtake Coca-Cola with extraordinary marketing offensives and was later "tricked" by Jobs with the line "Do you want to sell sugar water for the rest of your life, or do you want to come with me and change the world?", soon after becoming Apple's CEO, "dumped" Jobs and began to steer the ship alone. But chaos soon began.
First, products were "messy," with numerous and chaotic product lines, but few outstanding products; at the same time, marketing was "chaotic," with increasingly novel methods and increasingly colorful sentiments.
But all of this could no longer "change the world." Even Apple itself lost its composure and its way, living off its past glory throughout the 1990s until it could no longer sustain itself. Fortunately, "Brother Qiao" returned in time and, with a $150 million investment from its former "mortal enemy" Microsoft, managed to keep Apple alive to this day.
Live-streaming commerce is, to a large extent, like a force-ripened fruit: red on the surface but green inside.
Zhao Yuanyuan described it thoroughly: "The pandemic force-ripened live streaming, making a child who could barely read in elementary school go to junior high; he can't keep up." Zhuang Shuai, a long-time e-commerce practitioner and founder of Bailian Consulting, interpreted this "force-ripening" as "blindness and impulsiveness in evolution"; well-known financial writer Wu Xiaobo was even more blunt: **live-streaming commerce is in a barbaric growth period, with 600% compound growth and rampant chaos.**
**-05-**
**Conclusion: Only with wings can one soar thousands of miles**
Regarding the future and trends of the digital era, and the popularity and trends of interactive marketing, we need to have forward-looking cognition and prediction. From government governance to platform control, from practitioner self-discipline to legal prevention, in fact, we can do more and do better.
After all, we have experienced forty years of market economy tempering. Whether it's debt-driven growth from overconsumption or bubble growth from financial innovation; whether it's the information technology revolution once revered as a myth or the Nasdaq once infinitely admired... between truth and fallacy, between objectivity and illusion, after all, we have also experienced many cycles of practice.
What must be remembered is that the cute "piggy" may be able to fly into the sky with the help of the "wind," but it will never soar thousands of miles like an eagle, spreading its wings and flying high.
Source: Enterprise Management Magazine (id:qyglzz)


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