Text/Mu Yu
In the past two years, Chinese the Internet content community to collectively step into e-commerce, is it brave or crazy?
For this group of content communities, the story of growth has come to an end, and survival has become their collective consensus.
Represented by Xiaohongshu, Station B, Zhihu, Keep, and Dewu, they are all soaring in their respective outlets, and have won the favor of capital with the grand narrative familiar to the Internet, both the market value and valuation have reached a certain volume, the highest has exceeded 100 billion, but on the other hand, the growth of users has stagnated, but the influence has not really been transformed into equivalent commercial value.
Monetization has become the highest priority, and after a lot of exploration, they have invariably gone to e-commerce, what is the reason behind this? In the face of a red sea of e-commerce market, can they finally stand out?
Why are the communities doing e-commerce?
For content communities, what is more difficult than getting traffic is how to monetize traffic.
The ultimate problem that all content communities cannot avoid is how to balance the community atmosphere and the commercial atmosphere, and the content traffic and commercial traffic are naturally unable to merge, Douban and Weibo, which are the two extreme representatives presented under the pull of these two forces, the former is difficult to make a profit, and the latter has a bad reputation. Because of the separation of product model and profit model, user satisfaction and business monetization rate of the content community do not show a linear relationship.
Zhihu and Xiaohongshu naturally do not want to follow the old path of their predecessors, but they have fallen into a more embarrassing situation, because the valuation from the capital market has far exceeded the commercial value they can create, and they can't go back to Douban and can't go to Weibo.
Zhihu, Little Red Book e-commerce channel
In the era of traffic stock, the imagination of possibilities is constantly being compressed, and the rising cost of customer acquisition further pressures the financial model.
For the content community, the feelings and vision must be put aside first, and it is imperative to shake off the shoulders and make money, which makes the essence of the problem return to the efficiency of traffic monetization.
As the most common mainstream profit model in major content communities, although advertising is stable and mature, it is obviously inefficient, which is why the commercial value of pure media platforms is always not high, not to mention, advertising is becoming more and more difficult to do. According to the "2021 China Internet Advertising Data Report", advertising for the whole year increased by 9.32% year-on-year, a slowdown of 4.53 percentage points over the previous year.
In the remaining optional Internet business monetization model, in fact, the most suitable for the content community product form is knowledge payment, or member value-added services, such as Zhihu, B station and Keep have opened the corresponding services, but obviously not enough, this is the typical difference between the Chinese and foreign Internet, domestic users are not used to further payment for services.
Then the only thing that can reverse the status quo of loss is e-commerce, the end of the universe, or with goods.
Even if there is no successful precedent for the content community to e-commerce, it is also a choice without choice, and the popularity of live e-commerce has further improved the efficiency of traffic conversion while pushing up the ceiling of e-commerce. According to iResearch's "2021 China Live E-commerce Industry Research Report", the scale of China's live e-commerce market will exceed 1.2 trillion yuan in 2020 and is expected to exceed 4.9 trillion yuan in 2023.
"2021 China Live E-commerce Industry Research Report"
On October 14, 2021, Zhihu held an e-commerce industry conference in Hangzhou with the theme of "good content is good business"; in 2021, Station B started to test the waters of live streaming with goods... Forced the highest level of knowledge and power generation for love of the B station have gone to the sea, Xiaohongshu repeated defeats are still persistent, "poison" renamed "get things", constantly increase e-commerce, overwhelming advertising, Keep quietly built a mall, and even sold snacks, e-commerce business accounted for more than half of the total revenue.
In the transformation of e-commerce, the above can be divided into two categories: a transformation of integrated e-commerce platforms, and a move towards the vertical e-commerce field. Each has to face different problems.
The embarrassment of the mass breakout
The imagination of traffic is not unlimited.
Xiaohongshu, B station, and Zhihu have moved from the former vertical community to today's comprehensive content community step by step, and the expansion of the content boundary has diluted the concentration of the initial mainstream users while expanding the scale of the entire user, and moving towards pan-life entertainment. If it is only the growth of pure traffic, the end of this road is Weibo, which has national-level influence, but in the same traffic-level platform, the commercial value is far inferior to that of Douyin and Taobao.
Traffic efficiency is the essence of business value judgment.
No matter how high the DAU and MAU and MAU of content community platforms such as Xiaohongshu have, they have achieved great success at the product level, but in the GMV that measures conversion, it is completely unable to match the e-commerce platform.
Little Red Book Live Room
This is essentially two sets of logic of two product models, and all content communities have to face several key problems when transforming into e-commerce platforms.
First, the contradiction of product logic.
The content community needs your consumption time, from content precipitation to relationship precipitation, and then to emotional precipitation, users with strong viscosity are more valuable, it is a product with a strong humanistic color; and the e-commerce platform is to let you consume money, more shopping as soon as possible to place orders, consumers with strong consumption are more valuable, is a product with a strong consumerism color. And humanism and consumerism have always existed in opposition, so B station live streaming users will scold just bad money, Taobao do community no one wants to go shopping.
Second, the conflict of business interests.
Originally the community planted grass - e-commerce transactions are a marketing closed loop, everyone makes their own money, and Ali, JD.com, Pinduoduo are important advertisers of content platforms, and now your content community wants to leave transactions in the station, will they be happy? The construction of the e-commerce system is a very complex process, behind the supply chain construction, brand business cooperation there is a direct competitive relationship, if it is so easy, B station and Zhihu will not be hesitant in e-commerce.
B station member purchase
Third, what is more subtle is the inertia at the mental level.
Whether it is the "million per capita" Zhihu, the "Z+ era" B station, or the middle-class white-collar women's Xiaohongshu, its users have high consumption capacity, but they do not spend money on these platforms, Xiaohongshu as the largest grass planting platform Chinese the Internet, such a strong consumption atmosphere, but in the end only completed the brand marketing, and can not achieve the consumption closed loop in the station. Users in the mind of the product will have a classification by default, the content community is the consumer content, the e-commerce platform is the consumer product, online, from the content community to the e-commerce platform there is no migration cost, reopen an APP thing.
The above points are doomed, the integrated content community in the transformation into an integrated e-commerce platform, facing a very embarrassing situation, the initial product architecture determines the low efficiency of traffic, but now to monetize with high efficiency.
The helplessness of niche growth
Vertical e-commerce as a recognized pseudo-proposition, can get things and Keep break this spell?
Around 2010, it was the highlight of domestic vertical e-commerce. When Dangwang topped the top of the largest online bookstore in China; Fanke Eslite looked for Han Han and Wang Luodan to endorse the whole network; Chen Ou came out with Jumei Youpin, who raised more than 420 million US dollars, and went to the New York Stock Exchange to ring the bell in 3 years... Various vertical e-commerce entrepreneurial platforms are emerging in an endless stream.
Huang Ruo, a partner at Warburg Pincus Investment, predicted: "In the past decade, e-commerce has mainly been the success of the platform, but the next decade belongs to the market segment. ”
However, within two years, the golden age of vertical e-commerce withered rapidly, and it was constantly defeated in the war with comprehensive e-commerce, and the industry finally came to a conclusion - vertical e-commerce is a false proposition.
Image source: Network
There are three main reasons for this -
First, although the user group is focused, the growth is slow, and the accurate traffic will increase the cost of customer acquisition;
Second, it is difficult to establish a scale effect, integrated e-commerce has a more perfect supply chain, more advantages in profit margins, more balanced revenue structure, once the price war is launched vertical e-commerce will be very passive;
Third, the problem of "high frequency playing low frequency", integrated e-commerce obviously has a higher frequency of use.
For Chinese consumers, they are more accustomed to one-stop solutions, and it is best to solve all their needs on one e-commerce platform, which is also a typical difference between Chinese and foreign consumption habits.
But vertical e-commerce is not without opportunities, Liu Qiangdong once had a summary, "in the future, e-commerce companies can only survive in two models, one is platform, and the other is a personalized and branded vertical website." "It just so happens that Get-Things and Keep are personalization and branded verticals.
Moreover, as a content community, Dewu and Keep itself have accurate traffic entrances and a high frequency of use, so compared with standardized vertical e-commerce, there are more possibilities for breakthroughs.
The reason why vertical e-commerce once rose, in the final analysis, the advantage lies in "professional" and "focused", in the user's mind can play "ecological bit", in the consolidation of cognition, vertical community is naturally the best form, which is also the unique advantage of Keep relative to the small red book, B station and Zhihu, there is a natural greatest common divisor in the product category, such as the sale of shoes is logical, but knowing that selling a coffee is twisted and pinched.
E-commerce channel
But in the same way, the single of the crowd also limits the expansion of the category, because of the "fried shoes" to break the circle, but trapped in this label, it tries to use the trend of the whole category to open the market, from the tide shoes to the tide of clothing, tide play, and farther beauty and digital, after all, in a sense, the trend culture can be attached to any commodity, but this is already on the comprehensive e-commerce platform in the category, vertical is only the crowd and culture.
And the question is, how big is China's trendy consumer market? Does it have the ability to lead the trend of consumption? How to ensure the level of supply chain and product quality in the expanded categories? On the whole, the object is still a bit niche, it is not as good as the Little Red Book in planting grass, it is not as good as Zhihu in terms of public opinion influence, and it is not as good as B station in fan viscosity.
The other more vertical Keep, with the label of fitness professional, more naturally transitioned to the e-commerce field, and adopted a self-operated approach, endorsing its own products with brand operation.
In April last year, at the 2021 strategy and new product launch conference held by Keep, co-founder Liu Dong said that the online sales of Keep consumer goods in 2020 have reached 1 billion yuan, more than the other two major business ads and members combined. And Liu Dong also said that the consumption scene will be further expanded to the "eat, wear, use, practice" sports life product category. Half a year later, on Double Eleven, Keep really focused on promoting food.
It is not difficult to see that Keep is planning to build an ecosystem around the fitness perimeter and consolidate the moat with brand operation, but this also limits its own ceiling.
Keep2021 strategy and new product launch
From a market point of view, the penetration rate of the mainland fitness population is less than 5%, which is still a long way from 20% in the United States.
In addition, Xiaomi, Huawei, Baidu and other technology companies have joined the fitness hardware track, in terms of scientific and technological intelligence, Keep is obviously not competitive enough. And technology companies with a larger user base also have the advantage of dimensionality reduction in the ecological chain, compared with Keep's 30 million monthly active users, Huawei's sports and health app's global monthly active has reached 83 million. In terms of products, Keep's biggest advantage lies in its own brand endorsement, but that's all.
Whether it is Dewu or Keep, they have achieved a sudden rise because of the vertical community, but on the road of e-commerce, they must also encounter the dimensionality reduction blow of giants, whether it is comprehensive e-commerce or technology giants, perhaps they can retain a place after all with strong user viscosity, but in the end the ceiling is limited.
Chinese since the emergence of the word "ecology" on the Internet, all enterprises have been like wild horses that have lost their reins, abandoned their "duty", constantly stepped into each other's territory, and opened an all-out war, but in the final analysis, traffic is limited by business logic and basic common sense.
The content community holds a huge amount of traffic, whether it is the capital behind it or the founders themselves, they are not willing to make wedding dresses for others, in their view, they are not entering the hinterland of e-commerce companies, but starting another stove.
But consumer goods will eventually meet on a battlefield, when all self-consistent logic will be lost, and only the choice of consumers will determine everything.