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After "going to Dong Yuhui", has Dongfang Selection walked out of the logic of Internet celebrity?

After "going to Dong Yuhui", has Dongfang Selection walked out of the logic of Internet celebrity?

文 | 增长工场,作者 | 相青,编辑 | 徐伟

4 months after the "small composition" turmoil, how is the self-operated route of Oriental Selection?

Since the beginning of this year, Dongfang Selection has continued to increase its self-operated business, on the one hand, it has continuously enriched its own products, launched 61 new products in March, and the total number of self-operated products has exceeded 400, involving food, daily chemicals, home textiles, clothing and other fields.

On the other hand, it continued to expand channels, first settled in Pinduoduo, and recently opened the hourly delivery business, with a total of nearly 60 self-operated products such as fresh food and snacks on the shelves, and the anchor personally broadcast the delivery to attract traffic.

But the capital markets are not buying it. Recently, the share price of Oriental Selection has fallen for several days, hitting a new low since it came out of the circle in July 2022 on April 12, reaching HK$15.02, down nearly 80% from the highest point in February 2023.

From the perspective of the development of Oriental Selection, whether it is the self-built Oriental Selection APP, the expansion of Taobao, Pinduoduo and other channels, or the layout of self-operated products, it reveals the ambition of being a self-operated e-commerce brand.

However, with Dongfang Selection further deepening the self-operated route and opening the hourly delivery business, there are three major challenges in front of Dongfang Selection: products, logistics, and the contradiction between the head anchor and the self-operated route.

The anchor broadcasts live delivery, and the layout is real-time retail

Dongfang Selection's hourly delivery business has been broadcast live for four consecutive days, what is its performance?

Archaeology plus data show that the sales volume of the first live broadcast in @东方甄选小时达 was 750-1,000 pieces, and the sales volume was 50,000-75,000 yuan. The sales of the next three live broadcasts remained between 10,000 and 25,000 yuan. At present, the total sales of live broadcast are 100,000-250,000, and in terms of volume, it is still in its early infancy.

Among them, Oriental Selection of South American white shrimp is the product with the highest sales, followed by waxy corn, pure milk, and grilled sausage.

In order to do a good job in the hourly delivery business, Dongfang Selection also found two good helpers.

One is Douyin, which solves the traffic problem.

Dongfang Selection's instant retail business was not launched on its own APP and channel channels, and only chose to start broadcasting on Douyin's "Oriental Selection Hour" account. Not only is it in line with the hourly delivery business currently promoted by Douyin, but it can also obtain organic traffic at a relatively low cost.

In order to attract users, the Oriental Selection anchor randomly selects orders to deliver them personally, and broadcasts the delivery process live at @Oriental SelectionHours. According to the observation of "Growth Works", the number of viewers in the live broadcast room of @东方甄选小时达 remained above 10,000, and the number of fans gained more than 80,000 on the first day of the broadcast, and as of press time, the number of fans of the new account has reached 121,000.

The other is JD.com, which solves the logistics problem.

For Dongfang Selection, logistics is a major pain point in the hourly delivery business, and cooperating with JD.com is the most worry-free and labor-saving way. It is understood that Dongfang selects goods to be warehoused in the front warehouse of Jingdong Logistics in Beijing, and Dada Express undertakes distribution. At present, Dongfang Selection has established cooperation with 17 front warehouses, and the distribution scope covers 80% of the area within the Fifth Ring Road of Beijing.

The layout of the hourly business is the inevitable choice for Dongfang to choose to take the self-operated route.

Dongfang Selection's self-operated business started as an agricultural product, which has the characteristics of instant and high-frequency consumption, and "hourly" can increase the frequency of user consumption and gradually establish consumption stickiness.

A number of brokerages emphasized that in the next five years, instant retail will become a trillion-dollar market. Dongfang Selection's entry into the game means that it will enter a higher latitude of competition - in the instant retail track, Dongfang Selection's opponents are no longer MCN institutions, but Internet companies such as Meituan, JD.com, and Douyin, as well as supermarkets such as Sam's and Hema.

In the future, instant retail will be a combination of supply chain, products, and logistics. Especially in logistics, the core of just-in-time retail is "fast". In the context of the giant's self-built warehousing and distribution, how to maximize the role of third-party warehousing and logistics will be a major challenge for Dongfang Selection to do hourly delivery business.

Can "Sam in the live broadcast world" get through?

The "hour" business is a further layout of Dongfang Selection's transformation to its own brand.

Yu Minhong has publicly expressed his concerns about the MCN model more than once, saying: "The lively business model established based on external platforms is very fragile. "Without an app, you don't have your own home, and if you don't have your own home, you'll always be a homeless." ”

After all, MCN is a traffic business, earning commissions, highly dependent on channels and anchors, and self-management is hard work, but it can accumulate reputation and establish a brand. Brand means loyalty, so you are no longer locked into a single channel and streamer.

Obviously, Dongfang Selection does not want to be an MCN, but to be a self-operated brand, and its target is Sam's.

However, to become the "Sam of the live broadcast industry", it has extremely high requirements for products and supply chains, one is high quality and high cost performance. It is true that Dongfang selected products have a good reputation among the core user groups, but they have also been questioned by some consumers and industry professionals.

Second, SKUs urgently need to expand. On social media, some consumers who have purchased Dongfang Selection members have reported that "many things they want to buy have to be bought on other platforms", including in the hourly delivery business, some users reported that "eggs can't be bought". This kind of high-frequency, just-in-demand goods still need to be further enriched and launched for hours.

Yu Minhong mentioned in October last year that "by the end of 2024, it is required to reach 400 to 500 varieties of self-operated varieties." According to the latest data released by Oriental Selection, at present, the total number of self-operated products exceeds 400.

Although the goal was reached half a year ahead of schedule, compared with the product richness of other platforms, there is still a big gap between Dongfang Selection. Sam's SKUs have more than 5,000, and Hema has reduced SKUs to more than 2,000. In contrast, Dongfang Selection still needs a long time to enrich its self-operated product system.

Another test of becoming the "Sam of the live broadcast industry" is whether users can migrate and expand in different channels.

In July last year, Dongfang Selection launched a live broadcast for the first time on its own App. At present, how is the development of self-operated APP?

In terms of horizontal comparison, there is still a big gap between Oriental Selection and Sam's Club.

Qimai data shows that only from the perspective of APP Store channel downloads, in the past 30 days, the average daily downloads of Sam's Club are 20181, while Dongfang Selection is only 3444, and the two are not in the same order of magnitude. Judging from the past year, except before and after the debut of the APP live broadcast, the number of downloads of Oriental Selection is much lower than that of Sam's Club.

After "going to Dong Yuhui", has Dongfang Selection walked out of the logic of Internet celebrity?

Compared with the Douyin channel, there is still some room for improvement. According to the data, the cumulative number of downloads in the major app stores of Dongfang Selection App is about 19.1 million, close to the 20 million mark.

This data is still about 10 million fans short of Dongfang Selection's Douyin fans. However, when the number of downloads of the Dongfang Selection APP is equal to the number of Douyin fans, how to expand users and develop members is still a big test.

In addition to the self-operated APP, Dongfang Selection has also settled in e-commerce channels such as Taobao and Pinduoduo. In August last year, Dongfang Selection launched its Taobao live broadcast debut, with a GMV of more than 100 million. However, since then, the GMV and other related data of Taobao Live have not been released.

In March this year, Oriental Selection quietly settled in Pinduoduo and opened the "Oriental Selection Flagship Store". At present, more than 100 products have been put on the shelves, all of which are self-operated products selected by Dongfang. At present, there are 8,480 people in Pinduoduo stores, and about 17,000 orders have been put together in more than a month.

Although it continues to expand new channels, Dongfang Selection is still highly dependent on Douyin. According to the 2024 interim financial report, orders from the Douyin platform accounted for the "vast majority" of its total orders. From this point of view, whether it is product richness or channel migration ability, Dongfang Selection still has a long way to go.

Is the contradiction between the Internet celebrity model and the self-operated route solved?

The controversy surrounding Dongfang's selection of this company has never ended.

One view is that "Dongfang selection is based on Dong Yuhui", and the other view is that "Internet celebrities are just traffic, and only products are eternal".

Behind this is the contradiction between the Internet celebrity model and the self-operated product route.

No one doubts that Dongfang Selection is determined to take the route of self-operated products, after all, it is a real investment. According to the 2023 financial report, its total revenue cost for the current period was 1.7 billion yuan, an increase of 55% year-on-year, mainly due to the increase in inventory costs and transportation costs of self-operated products due to the substantial growth of business.

The self-operated product route will lead to short-term cost increases and profit declines, but this also means that Dongfang Selection does not want to rely on short-term anchor dividends to realize, but hopes to establish long-term brand advantages. However, the strong influencer effect and fan economy have created a conflict between the two.

The outbreak of the "Little Essay Incident" brought this conflict to a climax, but it also led to a certain solution.

Since then, Dongfang has selected Dong Yuhui to set up a separate @ with Hui, which has further amplified Dong Yuhui's Internet celebrity effect and ability to bring goods.

In March this year, the live broadcast room with Hui ranked first on Douyin with more than 600 million yuan, and Dongfang Selection ranked fifth with 286 million yuan. According to the data, with Hui in March, a total of 56 live broadcasts, with a cumulative sales volume of more than 9.17 million, an average sales of more than 10 million, and a conversion rate of 2.55%.

At the same time, with Hui and Dongfang Selection in the business cut very thoroughly.

Judging from the data such as field view, interaction, and GMV, there is a huge disparity in strength between Dongfang Selection and Hui's peers, but Dongfang Selection's self-operated products have never been sold in the live broadcast room of Hui's peers. There is no need for such a large amount of free traffic, which shows the strategic determination of Dongfang Selection to take the self-operated route.

In March this year, Dongfang Selection also transferred a number of its registered "Dong Yuhui" name and portrait trademarks to Youhui (Beijing) Technology Co., Ltd., which is the affiliated company of Youhui Tonghua Studio, which Dong Yuhui is currently responsible for. The trademark transfer is also to further cut with Dong Yuhui.

There are various signs that Dongfang Selection is completing the "de-Dong Yuhui" step by step, but this does not seem to be recognized by the outside world.

Dong Yuhui's every move will still be linked to Dongfang Selection, and it will even lead to stock price turmoil. For example, in February this year, Dong Yuhui was on the hot search on Weibo because of "refusing to explain underwear and underwear", and emptied his Weibo in a fit of anger, and on the day of emptying Weibo, Dongfang Selection fell by more than 6% intraday and closed with a decline of 3.89%.

Regarding the relationship between Dong Yuhui and Dongfang Selection, Yu Minhong said very clearly: "Dongfang Selection and Walking with Hui are not MCN relationships, MCN is a simple sharing model, usually the anchor sells goods in the live broadcast, the supply chain and investment flow are all done by the MCN company, and finally the anchor gets a certain percentage of sales. ”

In Yu Minhong's planning, the relationship between Dongfang Selection and Hui is a common development relationship under the governance structure of listed companies, and it is a modern organizational structure economy.

Dong Yuhui led the company to follow the Internet celebrity model, focusing on short-term interests, and Dongfang Selection focused on its own brand and laid out a long-term strategy, which may be the most ideal choice for Dongfang Selection at present.

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