When a new thing comes, people are always full of hope, exaggerating its sunny side and hoping to greedily capture infinite vitality in the sun. But people will ignore the dark side of the moon, forgetting that in places where the sun doesn't shine, there are bumps and pitfalls, and those countless traps often represent the real world.

On May 24, 2016, from 9 to 10 PM, celebrity Liu Yan recommended six products in that hour: Herborist's New Seven White Whitening and Nourishing Mask, Chow Tai Seng's Turan Princess Pendant, Yifutang's Honey Lemon Slices, Loulan Miyu's Jujube and Walnut Mix, Weigushi Sunglasses, and Shuangjian's Silk Electric Nail Trimmer. In an instant, live-stream e-commerce became a hot concept, and some even asserted, "There is no doubt that e-commerce live streaming is the next opportunity."

Why would e-commerce become the next opportunity for live streaming, or why would live streaming become the next opportunity for e-commerce? My consistent view is to first ask whether it is, then ask why.

TV Shopping in the Guise of the Internet

Let's first look at the advantages of live-stream e-commerce.

"It completely or partially solves some pain points of e-commerce users:

Based on video, you can understand the product or service more comprehensively. It goes without saying that video information has more dimensions than pictures and text. Live streaming ensures that the video you see is not retouched; it is real. For viewing houses or cars, video is the best way to convey information. Through anchors' explanations, demonstrations, and Q&A interactions, live streaming solves the shopping guide problem. When users buy large items or high-involvement products like home appliances, furniture, or cosmetics, they often have many questions. Shopping malls have patient guides to answer them, and live streaming can provide a similar experience."

Now replace "live streaming" with "TV shopping" and see if the above passage feels out of place and still applies. If live-stream e-commerce is to become the next opportunity, wouldn't TV shopping also become the next opportunity?

Of course, supporters of live-stream e-commerce might have noticed this issue and use the following to explain the difference between live-stream e-commerce and TV shopping:

"Compared to traditional TV shopping's 'I talk, you listen,' live streaming is instantly interactive. You can ask the anchor questions, and you can also communicate with other viewers via bullet comments. So live-stream e-commerce has some social attributes. A group of people who follow a certain star or a certain product gather to shop, which feels a bit like accompanying someone on a shopping trip, buying together. Traditional TV shopping and so-called T2O cannot achieve this."

This statement is not wrong, although TV shopping can achieve some of the above functions through phone calls for instant communication, but indeed live streaming's interaction is more convenient. However, this advantage is easily offset by its disadvantages.

First, live streaming and TV shopping target different audiences. TV shopping targets middle-aged and elderly women. This group has limited information access and weak consumption rationality. In plain terms, they are easy to fool. Although TV shopping lacks interactivity, it is easy to charge a premium. In contrast, live-stream viewers are more likely to be onlookers and have stronger consumption rationality. Both sides are in a state of information symmetry. To achieve high conversion rates and high sales, it inevitably falls into the price comparison competition mode of traditional e-commerce. In other words, this model provides a better experience for consumers, but it may not yield good results for merchants.

Second, whether interactive content is fully presented or selectively presented is a dilemma. It is not hard to imagine that if fully presented, the bullet comments during the live stream would include:

"Same product, my store is much cheaper, my link: www.xxxxx.com" "Used it, garbage!" "Office ladies, models, schoolgirls, add QQ: xxxxxxxxx" "xxx, I love you!" "Following the above, I am xxx!"

When such bullet comments fill the screen, the merchant's heart must be roaring with ten thousand alpacas. If selectively presented, only showing bullet comments favorable to sales, then the credibility of the live stream would be completely lost, and it would degenerate into the same model as traditional TV shopping.

Third, TV shopping has a low-cost advantage for merchants. Supporters of live-stream e-commerce claim that live-stream e-commerce is much cheaper than TV shopping. But that is not the case. Current TV shopping platforms take a cut of the profit, and neither the cost nor the risk is borne by the merchant. I don't know if those who say TV shopping is expensive are really stupid or just pretending to be.

Therefore, for this model of live-stream e-commerce, most of its advantages are also possessed by TV shopping, and its advantages over TV shopping are not enough to cover its weaknesses. As the familiar joke goes: "Loan sharks renamed P2P, beggars renamed crowdfunding, fortune tellers renamed analysts, gossip tabloids renamed self-media, statistics renamed big data analysis, fooling renamed internet thinking, headphones renamed wearable devices, office rentals renamed incubators, land enclosure renamed tech parks, protection money renamed platform strategy, disruptors renamed disruptive innovation. Lending to reliable friends renamed angel investment, lending to unreliable friends renamed venture capital." This kind of live-stream e-commerce is nothing more than a transformation of TV shopping.

Promotion That Needs Promotion

Of course, just as TV shopping has indeed helped some companies collect IQ taxes from certain groups, live-stream e-commerce cannot be said to be completely worthless. At the very least, as a new form of presentation, it does improve conversion rates. As a form of promotion, e-commerce live streaming has its value. The question is whether this value is enough to cover its high costs.

Liu Yan's live stream brought 10 million traffic. The problem is that Liu Yan, as a sexual fantasy object for many otaku, naturally has huge self-generated traffic. But even so, the platform still needs to promote the live stream itself, with homepage carousels, pop-ups, affiliate networks, and various channel promotions. For ordinary merchants, these resources can be converted into real money. A form of promotion that needs to rely on other forms of promotion for promotion actually indicates that this form itself cannot bring traffic. Tmall and JD.com can use their huge financial strength and resource advantages to cover this cost, but how can ordinary merchants play? Burning money on Taobao Zhitongche or JD Express? Which is greater: the conversion rate benefits brought by live streaming, or using the cost of live streaming to burn on Zhitongche or JD Express?

Currently, there is no sales data for Liu Yan's live stream, but Wu Zun's live-stream sales data is more intuitive: on Taobao, Wu Zun did a live stream for Wyeth's Illuma formula, selling 1.2 million yuan in 60 minutes. Let's assume this data is true (we'll explain why we say 'assume' later). Then the question is: what is the cost of this marketing itself? Nowadays, the appearance fee for a third-tier celebrity is often 300,000 to 500,000 yuan. As a second-tier celebrity, Wu Zun, do you believe I can convince him to do a one-hour live stream for 200,000? According to conservative estimates, Wu Zun's appearance fee is 600,000, the initial promotion cost for the live stream itself is 200,000, and after deducting the e-commerce platform's commission, the product needs a 70% gross profit margin to break even. Well, I haven't even counted shipping costs. With such a high gross profit margin, do you believe it? Undoubtedly, for merchants, live-stream e-commerce is a loss-making venture that only earns applause.

Something Unusual Must Be Behind It

Take Wu Zun's Taobao live-stream selling formula as an example. After the event, statistics showed a conversion rate as high as 36%. Optimists see the high conversion rate of live-stream e-commerce, but as a pessimist who understands e-commerce operations, I feel that something unusual must be behind it.

There is an unspoken rule in e-commerce: for activities like big promotions, Juhuasuan, and flash sales, merchants need to declare the quantity of products. Once declared, they must sell out. If they cannot sell out, the merchant has to buy them back themselves, left hand to right hand. So the conversion rates for such activities are surprisingly high, but usually not as high as 36%. I am not saying that Wu Zun's live-stream sales definitely have problems, but in this era of prevalent unspoken rules, we have reason to be skeptical of this data.

And Liu Yan's 10 million clicks, in this era where 10,000 zombie fans cost 200 yuan and there are discounts for bulk purchases, please allow us to make some associations about its authenticity.

Hell Mode for Small Merchants

The above live-stream e-commerce cases all share a common feature: using the star's own fan base to amplify the traffic generated by promoting the live stream. But if we look back at similar TV shopping, you will find that TV shopping rarely uses stars for promotions. Why? Simply because the cost is too high.

Small and medium-sized merchants also face the problem of star costs.

Supporters of live-stream e-commerce suggest doing your own live streams. If you believe this, congratulations, you have chosen hell mode in this game.

First, not everyone can be a live streamer. Supporters of live-stream e-commerce propose two criteria: good eloquence and high appearance. As a shop assistant, this requirement is really not low! Not to mention that live-stream e-commerce is different from recorded broadcasts; each time it has to be re-recorded. High requirements plus heavy work inevitably lead to high prices. Moreover, someone has to write the live-stream script, right? You can't just go on and say: "Dear aunties and mothers, oh no, dear netizens, how much do you think this excellent product is worth? Not 9,999, not 999, only 99! My God, it's really only 99. 99, you can't lose, 99, you can't be fooled. Miss this once, regret countless times. What are you hesitating for? Pick up the phone now, oh no, the mouse..." Writing a live-stream script is probably not a skill every merchant has, right?

Second, non-celebrity live streamers do not bring traffic themselves. Not only can they not create traffic, but they also cannot amplify promotion through celebrities. Celebrity live streams can reduce promotion costs, but grassroots live streams cannot. The presence of a celebrity itself provides content for the live stream, but grassroots live streams lack content. Do you think people clicked on Liu Yan's live stream to see the products? They just went to see her chest. What? Your chest is also big? Sorry, no one knows, you don't have a reputation yet.

Third, the e-commerce live streams of Liu Yan and Han Geng are said to have been successful, but that is also because of the model upgrade dividend brought by the new gimmick of e-commerce live streaming. Once it becomes popular, there will be no dividend. Tell me, how many days has it been since you last opened a WeChat official account? Tell me, how many marketing Weibo accounts have you blocked? After the novelty wears off, it's just a mess.

The Way Out: Trust Common Sense

In fact, the combination of live programs and e-commerce has been around for many years, and many merchants have benefited greatly from it.

The most typical example is the Chinese e-sports industry. Many professional players, after retiring, started doing video live streams, advertising their Taobao stores during the streams, selling small items like mice, keyboards, pork floss cakes, and fish tofu. As a result, they not only made a lot of money but also pointed out the direction for the development of China's e-sports industry. The previously unknown Youchen Pork Floss Cake, through the Taobao stores of people like Xiao Cang, became a well-known internet brand.

Luo Zhenyu of "Logic Show" made a program popular and also made his own e-commerce platform popular, becoming the richest self-media person in China. Why did these outsiders succeed in the e-commerce field?

Content! Content! Content!

Important things are said three times.

Don't talk to me about viral communication, fan economy, interactive models, or free thinking. Without content, everything is useless. Content here can be as bottomless as Sister Furong, as rustic as Pang Mailang, as willing to undress as Gan Lulu, as eloquent as Luo Yonghao, as knowledgeable as Gao Xiaosong, or as agile as Papi Jiang. But no matter the form, it must first satisfy people's need for content. Form is important, but without content, it is nothing. This is the most basic common sense of internet communication, yet it is the most often ignored. The reason people ignore this common sense may not be stupidity, but greed and luck. Such greed and luck make people believe in classical scams like "rich widow seeking pregnancy," pyramid schemes, and lottery investments, and also make people believe in so-called internet communication that deviates from basic common sense.

In summary, combining live streaming with e-commerce is not impossible, nor is it without prospects, but the most important thing is to build it on a foundation of nutritious content, rather than moving TV shopping to the internet to continue collecting IQ taxes through opportunistic tricks.

The reason I wrote this article and provided this content is first because of my personality as a "must-complain-or-die" person, and on the other hand, we also want to play with internet marketing that respects common sense. The following is the advertisement time:

Meisi Meiyu Management Consulting Co., Ltd. is extremely familiar with traditional marketing and is committed to providing effective internet solutions for China's FMCG industry. Here, you won't see the magic touch that turns stone into gold, nor will you get promises of overnight wealth. What we have is decades of practical experience in FMCG planning and marketing, the most advanced execution system management tools, and professional ethics that combine professionalism and dedication. We are willing to do our best to diagnose your company and products with common-sense thinking and market-tested methods, allowing you to reap the huge dividends of consumption upgrade, communication upgrade, and channel upgrade.

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