Recently, live broadcast e-commerce institutions such as Make a Friend and Yuanwang Technology have handed over their 2023 report cards. Through the performance, it can be seen that the head live broadcast institutions are ushering in "polarization".
For example, Make a Friend will hand over the best answer sheet in history in 2023 - revenue will exceed 1 billion for the first time, an increase of 152.42%; Net profit (profit attributable to shareholders) surged 1397.51% to 120 million yuan.
And Yuanwang Technology is "mixed". In 2023, Yuanwang Technology's revenue will continue to rise, exceeding 4 billion for the first time, hitting a new high; However, its net profit fell 299.33% to -1.050 billion yuan.
In this regard, Yuanwang Technology revealed in its financial report that the main reasons for the decline in its net profit were the increased efforts to clean up inventory, the collection of accounts receivable was less than expected, and the investment in new consumption projects.
"In the past few years, the live streaming e-commerce industry has experienced explosive growth. While leading companies have certain advantages in the industry, they also face a number of challenges that require constant exploration and adaptation to ensure continued growth and success of the business. A senior industry insider said that once the head enterprise obtains replicable successful experience and capabilities, it will be a valuable asset for the entire industry.
The revenue of the three giants exceeded 10 billion for the first time
The leading live broadcast e-commerce institutions have ushered in a new breakthrough in terms of volume.
In 2023, the three leading enterprises of Dongfang Selection, Make a Friend, and Yuanwang Technology will have a revenue of more than 11 billion yuan (the statistical dimension of Dongfang Selection is from December 1, 2022 to November 30, 2023). Among them, the revenue of Dongfang Selection and Make a Friend has doubled, and the growth rate of Make a Friend has even reached 152.42%.
The key factor for the revenue breakthrough of the above three companies is the growth of live streaming.
Taking making a friend as an example, in 2023, its live GMV will exceed 12 billion yuan, which is the first time that it has exceeded 10 billion yuan.
For another example, in the half year of fiscal year 2024 (from June 1, 2023 to November 30, 2023), the GMV of Dongfang Selection exceeded 5.7 billion yuan; In fiscal year 2023 (from June 1, 2022 to May 31, 2023), its GMV has already exceeded 10 billion yuan.
Although Yuanwang Technology did not disclose the GMV data in 2023, its upward trend can also be seen from some node data. For example, during the Double 11 period in 2023, Yuanwang Technology achieved a total GMV of more than 3.29 billion yuan, a year-on-year increase of 38% (the statistical period is 10.1-11.11), and in the first quarter of 2024, its payment GMV reached 4.5 billion yuan, a year-on-year increase of about 80%.
In terms of net profit, in addition to making a friend to achieve a growth of more than 13 times, Dongfang Selection and Yuanwang Technology are in a state of decline. Taking Oriental Selection as an example, its interim report for fiscal year 2024 (from June 1, 2023 to November 30, 2023) shows that net profit fell by 57.42% to 249 million yuan during the period. Yuanwang Technology has been in a state of loss since 2021, and the loss will expand to -1.05 billion yuan in 2023.
The multi-platform layout has been completed
Beauty has become an important incremental field
From the perspective of the transformation and layout of the three enterprises, multi-platform development is still the top priority.
Make a friend said in the financial report that as of 2023, the group has more than 30 live broadcast rooms, with a total of more than 50 million fans, completed the multi-platform layout of Douyin, Taobao, and JD.com, and successfully walked out of a standardized and replicable matrix live broadcast room operation model.
Dongfang Selection's financial report said that within the six months ended November 30, 2023, it launched live broadcast channels on Taobao, WeChat mini programs and its own applications, thus entering the era of multi-line parallelism.
As early as 2022, Yuanwang Technology became the first company in the live broadcast e-commerce industry to complete the global layout of the three platforms of Douyin, Kuaishou and Taobao. On this basis, Yuanwang Technology has created a more diversified monetization matrix around IP operation trumpet matrix, distribution of live slices and IP commercial marketing.
In addition to multi-platform development, multi-category layout is also an important part of live streaming organizations. In particular, the beauty category has become one of the important growth categories for many live broadcast institutions.
For example, Make a Friend currently has 11 major live streaming accounts on Douyin alone, including Make a Friend, Beauty and Skin Care, Make a Friend, Sports and Outdoor, Make a Friend, Drink and Food, etc. Among them, the number of fans of Make a Friend Beauty and Skin Care has reached 1.085 million, successfully exceeding one million. According to the Douyin version of Feigua data, its GMV in the past 30 days is 1000w-2500w, and the GMV in the first quarter of this year is 7500w-100 million.
Oriental Selection's account focusing on beauty on the Douyin platform, Oriental Selection's beautiful life, also performed well. According to the Douyin version of Feigua data, this account currently has 4.138 million fans, and the GMV of bringing beauty products in the past 30 days is 1000w-2500w, and the GMV of bringing beauty products in the first quarter of this year is 100 million+.
At the same time, according to a previous report by "Cosmetics Observation", the beauty category of Yuanwang Technology accounts for a relatively high proportion, and the turnover of this category once accounted for more than 30% of the total turnover of institutions. At the same time, the maximum GMV of a single beauty brand cooperated by Yuanwang Technology reached 310 million yuan.
"Danger" and "opportunity" under the 5 trillion market
According to iResearch, in 2023, the overall scale of China's live broadcast e-commerce industry will reach 4.9 trillion yuan, a year-on-year increase of 35.2%.
According to the "2022-2027 China Live E-commerce Industry Market Analysis and Investment Risk Trend Forecast Research Report" released by the China Business Industry Research Institute, from 2018 to 2022, the penetration rate of China's live broadcast e-commerce transaction volume increased from 1.6% to 25.3%.
While the market is growing savagely, all kinds of problems are also coming.
Recently, Make a Friend was fined about 292,900 yuan by the Shanghai Municipal Administration for Market Regulation for publishing advertisements for medical treatment, drugs and medical devices in violation of the Advertising Law, and confiscated 292,900 yuan of advertising expenses, with a total of 585,900 yuan in fines and confiscations.
Coincidentally. A few days ago, Oriental Selection's affiliated company, Oriental Preferred (Beijing) Technology Co., Ltd., was fined 13,000 yuan by the Beijing Municipal Bureau of Culture and Tourism for operating a travel agency business as an online travel operator and failing to obtain a travel agency business license.
These two penalty cases are just the tip of the iceberg in the live broadcast e-commerce industry.
The above-mentioned senior industry insiders said that with the continuous expansion of the industry and the continuous growth of the company's business, the problems and challenges faced will also be greater. Especially in the live broadcast e-commerce industry, under the "magnifying glass" effect of the Internet, any topic may be rapidly amplified and spread, thus turning into a crisis for enterprises. For example, the head anchor Li Jiaqi's remark of "where is it expensive" is still criticized by many netizens.
It is worth mentioning that the "Regulations for the Implementation of the Law on the Protection of Consumer Rights and Interests", which will be officially implemented in July this year, will further standardize the characteristics and outstanding problems of live streaming, not only clarifying "who is bringing goods" and "whose goods are bringing", but also "everyone is responsible" if the live broadcast is illegal.
This undoubtedly puts forward higher requirements for live broadcast e-commerce institutions.
Yuanwang Technology said in the financial report: "Technological progress and changes in the relationship between supply and demand in the new consumption era continue to affect consumer behavior, and accurately capturing consumer demand has increasingly become a topic for brand market insight, and the growth momentum of the live broadcast e-commerce industry has changed from traffic-driven to product-driven, and improving product quality, building and improving the supply chain and providing brand services will become the core driving force for the development of the live broadcast e-commerce industry." ”
The three leading enterprises are also constantly strengthening their core competitiveness.
Dongfang Selection has made a breakthrough in the depth of the supply chain. For example, it has established economies of scale advantages in some popular single products, and the sales volume of single products has reached a high level in the industry. As of November 30, 2023, the total number of Dongfang Selection's self-operated products and live broadcast e-commerce teams has reached 1,587, of which 643 are in the supply chain and product teams. In addition, in the middle of fiscal 2024, the total revenue of its self-operated products reached approximately $1.9 billion.
Similarly, making a friend has further optimized the supply chain management system, and strives to make it easy for all cooperative merchants and brands to use the supply chain management system; At the same time, it has gradually built a "Friend Cloud" platform to realize the automation of the full-link process of live broadcast e-commerce; The Group continued to increase investment in software, systems, and data value, and helped the Group increase its number of live broadcast rooms from 15 to more than 30 by establishing the ability of comprehensive data operation.
Yuanwang Technology has achieved initial results in creating a new consumption benchmark of "digital and real integration". In December 2023, the 250,000-square-meter "Yuanwang X27 PARK" was officially opened in Linping, Hangzhou, which is a benchmark project for the "integration of data and reality" to build a "new technology-driven consumption service platform". It is reported that X27 can accommodate more than 350 live broadcasts at the same time, through digital empowerment of the physical complex, bringing real-life interaction to the social e-commerce platform, forming a new model of "online business + offline tourism" presented by hundreds of IP interweaving + thousands of elements + 10,000 products. The GMV of X27 exceeded 300 million in the first two days of its opening, marking the beginning of the concept of a new consumption scenario of "digital and real integration" of Yuanwang Technology.
On the whole, if live streaming e-commerce institutions want to maintain a leading position in the competition, they still need to continuously optimize and make breakthroughs in brand differentiation positioning, content innovation, supply chain optimization, technology investment, data analysis and other capabilities.
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