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The report predicts that the overall scale of live e-commerce this year will reach 1,050 billion yuan, and the penetration rate of live e-commerce in the entire e-commerce market will increase by more than four percentage points to 8.6%; and in 2021 these two figures will each reach 2.0 Trillion yuan and 14.3%.

In the future, it is expected that the development of live e-commerce will be more “ubiquitous”, integrating anyone (Anyone), anything (Anything), any venue(Anywhere), anytime (Anytime) The 4A development trend will become more and more obvious.

The sales path of live broadcast e-commerce can be simply regarded as goods-anchors-consumers. Goods are the key and core of live broadcast delivery. On the surface, live broadcast e-commerce is a competition of traffic, but behind it is right The test of supply chain capabilities.

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From the MCN-led industry scalping, defrauding merchants’ pit fees, and then conspiring to deceive consumers, the live broadcast that entered the outbreak period in 2019 was once regarded as a scam this year due to these fraud problems.

But whether it is the continuous soaring sales data: Luo Yonghao’s live broadcast of 110 million yuan on Douyin in 3 hours; Dong Mingzhu’s live broadcast of 703 million yuan on Jingdong in 3 hours; or everything from villas to rockets and other sales categories. It indicates that this controversial industry still has many questions to be solved.

At the moment of “no live broadcast, no marketing”, live broadcast brings goodsIs the turning point approaching, or will it continue to grow? With this question in mind, MIR interviewed Kang Yong, chief economist of KPMG China, and Jun Zhou, chief marketing officer and partner of KPMG China.

The two of them deeply participated in a research report on live e-commerce. On October 12, KPMG and the Ali Research Institute released this 4D long article. It is not difficult to guess their answer through the name of this report-“Live E-commerce Toward Trillions of Markets”.

The figures mentioned in the report are also worth paying attention to: They predict that the overall scale of live e-commerce will reach RMB 1,050 billion this year, and the penetration rate of live e-commerce in the entire e-commerce market will increase by more than four percentage points to 8.6%; In 2021, these two figures will reach 2.0 trillion yuan and 14.3% respectively.

On the one hand, in the real context, the live broadcast is constantly overturning, the profitability problems of brand owners, and the entire supply chain coordination ability from the anchor to the MCN and even the manufacturer to be tested; on the other hand, the industry’s soaring development data. These contradictions unanimously lead to a question: Why does live broadcast support the trillion-dollar market?

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MIR: As a more efficient marketing model based on new technology, from the perspective of macroeconomic development, what is the incremental value created by live broadcast? What is the nature of live streaming?

Kang Yong: Live e-commerce, as a commercial application of webcasting, is the use of instant video and audio communication technology to simultaneously introduce, display, explain, and promote products or services, and to communicate with them. It is a commercial activity that communicates and interacts with the purpose of closing a transaction.

Live broadcast e-commerce has four social and economic benefits: stimulating consumption, increasing employment, industrial upgrading and rural revitalization:

The first is to stimulate consumption and boost the double cycle. The epidemic has forced the accelerated development and continuous innovation of the new online consumption model of live streaming and delivery, releasing and expanding new consumption potential and turning it into actual purchasing power.

The second is to empower the traditional economy and drive industrial upgrading. Introducing live e-commerce into the factory production workshop, allowing consumers to fully view and understand the production process of the goods, can force the transformation and upgrading of upstream traditional manufacturing companies, allowing traditional manufacturing companies to jump out of their inherent thinking and discover problems in time , And come up with an optimization plan as soon as possible to encourage enterprises to innovate in production under the wave of digitization and intelligence.Product production model and marketing method.

The third is to foster new forms of employment and expand employment. On July 6, the Ministry of Human Resources and Social Security, the State Administration of Market Supervision, and the National Bureau of Statistics jointly announced 9 new professions. Among them, the most eye-catching one is “Internet Marketing”.

And the new job type of “live salesman” has been added under “Internet marketer”, which means that what we usually call “e-commerce anchor” and “carrying internet celebrities” finally have nationally recognized Official title. In addition, a variety of new jobs have been created in the live broadcast studio, including broadcast assistance, product selection, script planning, operation, and field control.

Fourth is to help rural areas get rid of poverty and promote rural revitalization. More and more farmers become anchors and start to bring goods for their own agricultural products. Take Taobao Live’s “Village Broadcasting Plan” as an example. Since its launch in 2019, the number of live broadcasts has reached 1.4 million, covering more than 2,000 counties in 31 provinces, municipalities, and districts across the country, and more than 60,000 new farmers have joined the live broadcast. , The sales of agricultural products reached 6 billion yuan, and more than 500 county chiefs walked into the live broadcast room to bring goods to help county farmers increase their income.

In the future, we predict that the development of live e-commerce will be more “ubiquitous”, integrating anyone (Anyone), anything (Anything), any venue(Anywhere), anytime (Anytime) integrated 4A development trend will become more apparent.

The essence of live e-commerce is still e-commerce. Merchants, anchors, and service platforms participating in live broadcast e-commerce, as e-commerce operators and e-commerce platform operators, respectively, must abide by the “E-commerce Law” and “Consumer Rights Protection Law” and other relevant laws and regulations.

MIR: Some voices believe that the total retail market is determined by the economic level, and the proportion of the retail market in GDP is relatively stable. Does this mean that there is a ceiling for the growth of live streaming?

Kang Yong: Since 2019, the popularity of phenomenon-level top anchors and the outbreak of the new crown epidemic have brought the live e-commerce market into a real outbreak period.

In 2019, the overall live broadcast e-commerce market reached 433.8 billion yuan, a year-on-year increase of 210%. The penetration rate in the e-commerce market was (live e-commerce transactions The proportion of total e-commerce turnover) is 4.1%, and there is still much room for growth.

With the continuous expansion of the “people and goods market” in the live broadcast e-commerce industry, live broadcast will gradually penetrate into all areas of e-commerce in the future. Combining quantitative research and industry experts’ judgments, we predict that in 2020, the overall scale of live e-commerce will exceed one trillion yuan, reaching 1,050 billion yuan, and the penetration rate will reach 8.6%. In 2021, live broadcast e-commerce will continue to maintain rapid growth, with a scale of close to 2 trillion yuan and a penetration rate of 14.3%.

In addition, as the live broadcast user community becomes more mature, the demand for live broadcast content has become more professional. The “Twenty-eight Rule” will be difficult to continue to apply to the market, the demand curve will be further flattened, and demand in vertical segments will have unlimited potential in the future.

Next, live broadcast e-commerce will enter the stage of refined “deep cultivation”, with higher professional requirements, and the division of labor will become more and more refined.

Resident consumption is indeed closely related to the level of economic development, but I think there is still a lot of room for development in China’s resident consumption. At present, my country’s resident consumption accounts for less than 40% of GDP. Not only is there a gap with the world average level, but there is also a lot of room for improvement even when compared with China’s own historical level. For example, in 2000, my country’s resident consumption accounted for GDP. The proportion of China is 47%.

As the epidemic is gradually brought under control, we believe that consumption will play a greater role in the next stage of economic recovery. On the one hand, the increase in consumption will bring a larger market to live broadcast e-commerce.

On the other hand, live broadcast e-commerce also has an additional role in stimulating consumption, enabling some previously unmet needs to be realized. We believe that live broadcast e-commerce still has a lot of room for development.

This is also reflected in our questionnaire survey of brands. Nearly half of the respondents believe that live broadcast e-commerce will continue to maintain rapid growth in the future.

MIR: In your report, you mentioned that live e-commerce “empowers the traditional economy and promotes industrial upgrading”. Can it be carried out in detail?

Kang Yong: The sales path of live e-commerce can beSimply regarded as goods-anchor-consumer, goods are the key and core of live delivery. On the surface, live e-commerce is a competition of traffic, and behind it is a test of supply chain capabilities.

The development of live e-commerce has provided a new opportunity for the transformation and upgrading of China’s traditional manufacturing industry. One way to combine traditional manufacturing with live e-commerce is factory live broadcast.

Previously, the production workshop of the goods was far away from the consumers, but now through the live broadcast of the factory, consumers can further understand the design, production, assembly and other aspects of the goods, so as to have a better understanding of the factory’s product manufacturing mode and process. With a comprehensive understanding, consumers can evaluate the manufacturing capabilities of a certain brand, so that consumers will be more targeted when purchasing products.

Introducing live e-commerce into the factory production workshop, allowing consumers to fully view and understand the production process of the goods, in fact also played a supervisory role, forcing the transformation and upgrading of upstream traditional manufacturing enterprises, allowing traditional manufacturing enterprises to jump out of their inherent thinking.

Enterprises need to carefully review all links in the industrial chain of goods from design, manufacturing, circulation to sales, after-sales, etc., find out the problems in time, and come up with optimization solutions as soon as possible, so as to promote enterprises in the wave of digitalization and intelligence. Provide consumers with reverse customization C2B customization methods, innovative product functions and marketing methods.

In addition, the introduction of live e-commerce into the manufacturing industry to realize direct live broadcast of the factory, which shortens the marketing link, enables the factory to more comprehensively and quickly grasp the preferences of consumers, and can quickly understand the style, fabric, and color of the goods Make adjustments to realize flexible factory production and reduce R&D costs and stocking pressure.

A large number of old factories, department stores, and wholesale markets have caught on the “express train” of live e-commerce, extending from offline to online, such as Hangzhou Sijiqing Garment Wholesale Market and Yunnan Ruili Jade Wholesale Market, achieving “Nirvana” Rebirth”.

MIR: You mentioned earlier that live broadcast e-commerce can shorten marketing links and realize flexible factory production. But in reality, the peak traffic brought by live broadcasts often brings great challenges to flexible production. How should the entire live broadcast industry ecology coordinate and solve these problems?

Kang Yong: The biggest advantage of live e-commerce over traditional e-commerce is that it has changed from “people looking for goods” to “goods looking for people.” “Finding people for goods” originally in live e-commerce mainly refers to anchors who recommend to the audience in the live broadcast room to find people for the goods of the brand.

In the live broadcast, it has become more popular. “Everyone can broadcast”, “Everything can be broadcast”, “Everything can be broadcast”, and the real future can be realized.Now the direct connection between consumers and factories is realized through live broadcast, and users drive production, thereby reducing channels such as distributors and retailers, reducing costs for enterprises and providing consumers with “factory prices”, which is C2M(customer to merchandiser) mode.

We believe that C2M may become an important direction for the future development of live e-commerce, and brand owners and platforms are also optimistic about the development of this model. For example, in March this year, Changhong TV started live broadcast on its 5G digital production line, and received more than 45,000 orders in two hours, with sales exceeding 100 million yuan.

E-commerce platforms have also deployed C2M models. Taobao first released its C2M strategy in March this year, and in April JD.com announced the launch of the “factory direct superior products” plan in the industrial belt in C2M mode.

In the C2M strategy released by Taobao, Taobao Special Edition APP, “Super Factory Plan” and “Double Hundred Target” are collectively referred to as the three pillars. The goal is to rely on core digital capabilities and Taobao Special Edition. In the next three years, Help 1,000 industrial belt factories upgrade to “super factories” with an output value of more than 100 million yuan, create 10 billion new orders for industrial belt companies, and focus on building 10 digital industrial belt clusters with an output value of more than 10 billion nationwide.

JD’s social e-commerce platform “Jingxi” launched the industrial belt “factory direct superior products” plan, which is trying to create a new industrial belt live broadcast through special cooperation with local governments, C2M and marketing empowerment for the sinking market Ecological and other measures to comprehensively promote the new retail infrastructure of industrial belts and origins to help create a new digital industrial belt.

The MIR: mentioned in the report, the “two puzzles of merchants in selling goods on live broadcast” touched upon the problem that merchants cannot realize profitability and eliminate brand value behind live broadcast of goods. How should brand owners carry out live broadcast of goods?

Zhou Jun: Brand owners should have a clear strategic positioning and comprehensive consideration to avoid blindly choosing live broadcasts. In terms of the formulation and implementation of live broadcast marketing, the four-element principle: supply chain + anchor + anchor fans + platform, based on the brand’s own situation and the current live broadcast’s expected purpose, realizes the best live broadcast selection.

In terms of goal setting, it is clear that short-term goals are mainly sales and product promotion, and long-term goals are mainly brand planting and market user cultivation. In terms of consumer focus, it pays attention to the needs of different levels of people on the platform, and gradually penetrates all circles of the platform to seek high conversion rates.

There is another factor in live deliveryWhat brand owners cannot avoid is to make profit. Brand discount is a short-term weapon to promote product sales, and it is also one of the important characteristics of live e-commerce. But this runs counter to the idea of ​​brand building and creating long-term brand premium effects. In actual marketing, how should this unavoidable problem be considered?

First of all, what needs to be considered is the development stage of the category itself, and whether consumers will cause “discount inertia” in consumer psychology due to the discount in the short-term discount behavior at this stage. Businesses should establish appropriate mechanisms such as “seasonal restrictions” and “net celebrity exclusives” to lower consumer psychology expectations.

Secondly, it is necessary to strengthen the display of product differentiation characteristics. In the early stage and the middle stage of category development, brand differentiation should be strengthened, and the strong psychological relationship between promotion and price should be weakened. The reasonable choice of Internet celebrity live broadcast can effectively avoid this risk.

Finally, when choosing the time point for brand discounts, it should combine event marketing, hot marketing, and channel marketing to achieve resonance. What needs to be caused is that discounts are an “incidental” low probability event rather than a “normal” high incidence event.

In fact, there are many participants in the live broadcast e-commerce ecosystem. In addition to brand owners, they also include platforms, MCN agencies, and government agencies. As an emerging business that has only developed for more than four years, live broadcast e-commerce still needs the joint efforts of many parties to truly achieve sustainable development.

As far as brand owners are concerned, during the research process, many brands said that they are not proficient in live broadcasting operations and lack live broadcasting experience as outstanding pain points in the live broadcasting marketing process. Many brands have almost zero experience in live broadcast marketing, but because the epidemic has made offline sales weak, they have to actively cater to the changes and join the big wave of e-commerce live broadcasts.

This also shows that brands have a high demand for live broadcast training. For example, MCN institutions and platforms can carry out some related training, such as the process of conducting live broadcasts, how to increase the popularity of live broadcast rooms, and how to achieve topic interaction to help brands Make better use of live broadcast, a new marketing method.

MIR: Affected by the new crown epidemic, live delivery of goods seems to play a more important role in helping companies clear inventories. If you want to develop the industry in the future, which aspects are of vital importance?

Kang Yong: As a rapidly developing emerging format, live broadcast does have some risk points. In addition to product quality and price system disorder caused by inventory clearance, there are also Some anchors exaggerated or falsely promoted the product, the anchor cost was too high and the sales effect was not as good as expected, Exaggerated sales figures, irregular tax payment, etc.

For the healthy development of the industry, all parties involved need to work together.

Brand owners need to develop appropriate live broadcast marketing strategies. MCN agencies and anchors need to focus on how to further improve the cost-effectiveness of their products in order to gain consumer recognition.

The platform needs to further refine the supervision and management responsibilities of the live broadcast e-commerce business, strengthen the review of the operators on the platform, improve the qualification review standards for the anchors, focus on the quality of the products recommended by the anchors, and further improve the protection of consumer rights.

While government agencies support live broadcast e-commerce and promote its sustainable development, we suggest that different types of live broadcasts with different risk points and risk levels can be classified and managed.

Considering the application fields of webcasting, application scenarios and the openness of the field, the types of information content, consumer consumption purposes and other factors, analyze the compliance risks of different types of webcasts, so as to make more targeted To achieve the unity of development promotion and limited supervision.