Click to read the original text for details In 2020, the hottest track is undoubtedly livestreaming. Consumers are frantically snapping up goods in livestream rooms, streamers are frantically grabbing market share, and some brands are swarming in, afraid that a second's delay will mean less profit. Some brands appear calm on the surface, but inside they are already itching to follow suit, pondering whether they need to join. -01- Livestream selling is not as good as you think Livestream selling is truly booming. Almost every few days, we see reports of a top streamer or brand selling XXX million yuan, breaking some record. Every such report deeply strikes the hearts of brands, making many of them excited. However, everything has two sides, and brands should pay more attention to the other side behind the prosperity. 1. Streamers, celebrities, and influencers often fail On the evening of June 29, Wu Xiaobo's first livestream selling "New National Products Launch" on Taobao failed. Some media reported that with a 600,000 yuan slot fee, he sold only 15 cans of milk powder that day, with 3 returned the next day, which netizens ridiculed as sky-high marketing costs. Later, Wu Xiaobo's side issued a statement saying some media reports were inaccurate and requested the removal of related articles, but the "failure" incident did not end, and many netizens continued to discuss it. Sketch comedian Xiao Shenyang brought liquor to a livestream, selling over 20 orders that night, but more than 10 were returned the next day, with actual sales not exceeding 10 orders. Image source: Internet In 2019, Li Xiang livestreamed a white goose down jacket with mink fur. During the event, the price was reduced from 4988 to 4188, but it still failed to attract consumers. After the livestream, not a single item was sold. 2. "Profiteering from the fire" Whether a livestream succeeds also depends on the streamer in the room. Top streamers have strong selling ability, but they also have stronger bargaining power. After a livestream, after slot fees and commissions, brand profits are minimal or even negative. Whether this "fire" is a blessing or a disaster for merchants is uncertain. Mid-tier and below streamers have more affordable slot fees, but after a livestream, the audience is average, and sales are also average. 3. Frequent data fraud Livestreaming is also a breeding ground for gray industries. Behind the astonishing sales data, there is astonishing fake data. Some platforms and merchants openly price data services for major livestream platforms, claiming to provide services such as views and follower increases, with prices ranging from a few yuan to hundreds or thousands of yuan. To attract brand attention and earn slot fees, many streamers treat this as routine. According to CCTV Finance survey data, increasing 20,000 views and 15 real interactions costs only 53 yuan in total, and the personnel involved have rich experience operating on different platforms. MCN agencies and streamers, to create a good livestream illusion, attract more brand attention, and gain more bargaining power, fake popularity, traffic, and even orders. After brands invest significant slot fees, the results are minimal. Additionally, some agencies, to create a sales atmosphere, fake orders by placing orders and then returning them, thereby defrauding commissions. -02- Brands should do some cool thinking Behind the seemingly prosperous livestreaming, there are hidden secrets, so brands should do some cool thinking before entering. 1. The purpose of livestream selling Livestreaming is hot, and many brands initially think, "Let's join the fun and test the waters." But given how deep the waters are, such thinking is dangerous. Therefore, before entering livestream selling, brands should consider clearly whether they want a fleeting appearance or long-term development. If you only want a fleeting appearance, then give up the idea early. If you want to achieve long-term development and win long-term consumer favor through livestreaming, you need to make detailed plans and strive to build a solid trust relationship with consumers. 2. Can you bear the backlash after livestream selling? Secondly, brands should also consider whether they can bear the backlash after entering livestream selling. The three most typical backlash effects are as follows: 1) No promotion, no discount, no sales; consumers have low shopping enthusiasm In livestream selling, "lowest price on the whole network" is necessary to attract consumers, and this is also a requirement from streamers. In the short term, it is popular with consumers, but once consumers catch on to the discount pattern, they will wait for low prices to buy. No promotion, no sales; no discount, no sales; consumer shopping enthusiasm is extremely low. 2) Brands lose the initiative Traditionally, product prices are dominated by brands, and in some regions, by stronger distributors. In this case, the price system for FMCG products is relatively stable. However, during livestreams, the streamer dominates product prices, and generally, it is the lowest price on the whole network. In this case, brands lose the initiative over products, and it is very likely that the "lowest price on the whole network" will affect the entire price system. On June 16, artist Zhang Yuqi brought the iPhone 11 to a livestream on Kuaishou. The original price was over 5,000 yuan, and the livestream room pressured the price down to 4,099 yuan. However, Zhang Yuqi did not follow the script and directly quoted 3,899 yuan, saying the number 3,899 was more auspicious, and stated that she would make up the difference. Xin Ba, a top Kuaishou streamer on the same show, was shocked by Zhang Yuqi's move and reminded her that for over 10,000 phones, she would need to make up millions of yuan. Eventually, after communication, the brand decided to sell at 4,099 yuan, and after opening the phone, a 200 yuan cash subsidy would be given to fulfill the streamer's promised price. Even for such high-priced Apple phones, it is difficult to control prices. For FMCG products with recognized value and lower unit prices, it is even harder to control prices. When streamers control product prices, FMCG brands are put in a passive position. 3) Whether the platform and streamer match the brand's tone Each platform and streamer has its own characteristics, and the consumer groups behind them are different. Therefore, not all products are suitable for any platform or streamer. If the chosen streamer and platform do not match the brand's tone, it is a disaster for the brand. Among common platforms, Taobao is for merchants and streamers to sell, Douyin is mainly for influencer streamers and entertainment, while Kuaishou tends to favor influencer families for selling. -03- How to view livestream selling calmly How should brands correctly view and use livestream selling? First, clarify a concept: livestreaming is actually a tool, a marketing and sales tool. Simply put, it is like a small supermarket, but the supermarket's location and foot traffic are limited, and the location is more fixed. Livestreaming is not like that; it is more flexible, generally facing a broader consumer base, and product displays are more vivid and lively. The "promoter" is also more appealing to consumers. So for brands and consumers, livestreaming should be like this. 1. Big brands launch new products First, big brands have already established their own development barriers, with mature network channels and products with market reputation. At this time, livestreaming is not suitable as a corporate development strategy. For big brands, livestreaming is more like a marketing tool, playing a role of adding brilliance to the present splendor. For example, compared to the sky-high video and print advertising costs for new product launches, which often yield little results, brands can consider investing in top streamers' livestream rooms. Through the celebrity endorsement value of top streamers, they can assist in promoting new products, and also obtain the first batch of KOCs for the products through livestreaming. 2. Small brands hit charts and drive traffic For more small brands or brands that focus more on online channels, livestreaming can drive sales, hit charts, and then gain some platform traffic tilt. More traffic means more sales, and more sales mean more traffic, thus forming what Mr. Liu Run calls an enhancement loop. At the same time, the strong endorsement value of streamers is essentially the best "spokesperson," allowing products and brands to be promoted and pushing products to more consumers. 3. Price is king Among all factors influencing consumer purchase decisions, price is the biggest factor. The vast majority of consumers come for the lowest price on the whole network, and only a few come for the streamer. Secondly, even if they come for the streamer, without the "lowest price on the whole network," consumers will not place orders. As livestreaming develops, consumers are becoming more rational. Without price advantage and demand, consumers do not buy. 4. Early sales depend on the streamer, later repurchase depends on the product When brands livestream, a streamer with professional skills, product knowledge, humor, and accurate control of the livestream rhythm is crucial and can often promote sales. But livestreaming is not just for current sales; it is for the brand's long-term development. So after consumers make the purchase, the repurchase rate needs to be considered, and the repurchase rate reflects the brand's shaping of product power. Repurchase does not have the explanation and promotion of livestreaming. In this case, if consumers are still attracted to repurchase, it shows that the product created by the brand meets consumer needs, and the product power is excellent, leading to repurchase. This indicates that the product has been successfully created and the goal of long-term development has been achieved. Final words: Livestreaming is hot, and many brands are rushing in. Should "I" follow or not? Follow cautiously. Livestreaming is both a windfall and a volcano mouth. It depends on how to choose the entry point and how to formulate relevant plans. But if brands blindly follow the trend and fashion, and rashly invest money for short-term sales growth, the likelihood of success is low. After all, it is now industry consensus that livestreaming does not make money. Therefore, brands should clearly understand the pitfalls and basic logic behind livestreaming, and then decide whether to follow based on their own development needs. Be careful not to march in triumph and return in defeat.