Douyin VS Taobao: The second half of the e-commerce battle

In recent years, with the expansion of consumption scale and the continuous upgrading of consumption methods, live broadcast e-commerce has shown a rapid development trend. The "live broadcast + e-commerce" model has become a big trend in the e-commerce industry. According to the "50th Statistical Report on the Development of China's Internet", as of June 2022, the number of Chinese e-commerce live broadcast users was 469 million, accounting for 44.6% of the total netizens. The penetration rate has grown rapidly from 0.27% in 2017 to 17.97% in 2021.

Taobao and Douyin, as the two major platforms for live-streaming e-commerce, have experienced fierce competition in recent years. From the perspective of active users , Taobao’s MAU in June 22 was 874.9156 million, and Douyin was 680.1735 million; from the perspective of platform share , according to the “Online Survey Report on Consumer Satisfaction of Live E-commerce Shopping” released by the China Consumers Association, Taobao Livestreaming consumers accounted for 68.5%, followed by Douyin livestreaming with 57.8%. From the perspective of market transaction volume, according to analysts' estimates, the GMV of Douyin e-commerce in 2021 will be around 800 billion yuan, and Taobao's GMV in fiscal year 2021 will exceed 500 billion yuan. From the data, we can see that Taobao has a first-mover advantage and a huge volume, while Douyin is full of momentum.

With the vigorous development of live broadcast e-commerce, a number of popular anchors and brand explosions have also been born. This year can be said to be a year full of turbulence in the live broadcast circle. With the successive fall of two super-head anchors, the phenomenal appearance of Dongfang Selection, Luo Yonghao and Yu Minhong announced cross-border live broadcast on the eve of Double Eleven, the original e-commerce market will be affected. What kind of impact? The new era of diversified development of e-commerce has come, who will dominate Taobao and Douyin?

Attack on Douyin

As the first e-commerce platform in China, Taobao has been repeatedly challenged by "rookies" in recent years.

Taobao played the role of traditional e-commerce in the past, that is, users have already decided on the products they need, then search for product information through search engines, and then choose to buy after comparison. In the past two years, new forms of "content e-commerce" such as short videos and live broadcasts have risen rapidly, impacting the original e-commerce market.

For example, Douyin took the express train of "content e-commerce" with the concept of "stimulating purchases with interest" and became the most beautiful boy in the e-commerce world. In 2021, Douyin e-commerce GMV will increase by 320% year-on-year, producing more than 200 million short videos and 9 million live broadcasts every month, and selling more than 10 billion items in total.

Compared with Douyin's dazzling growth rate, its peers seem to be a little bleak . In the same year , Taobao ’s live broadcast annual sales GMV increased by more than 90% year -on-year ; JD.com’s omni-channel GMV increased by nearly 80% year-on-year; Pinduoduo’s full-year GMV increased by 46% year-on-year.

The departure of Taobao's two super-head anchors has made Taobao even more depressed.

This year's 618 promotion is the first time that Li Jiaqi and Wei Ya are absent at the same time. The absence of the two super-head anchors seems to have hurt Taobao's vitality. Although the official did not disclose it, according to the magic mirror data, the total turnover of the platform 618 only increased by 1%, and some categories experienced negative growth.

Judging from the sales list, last year's 618 full-staff scouting is no longer a grand event. Instead, Douyin and Kuaishou jointly seize the market.

(Photo Tianfeng Securities)

It is also worth mentioning that during the window period when the "Two Super Leagues" exited, the "Oriental Selection" in the Douyin live broadcast room became popular on the whole network with its bilingual live broadcast. During the 618 period, it achieved a large sales growth (the transaction volume during the 613-619 period reached 340 million yuan, and the average UV value per game was 1.07).

(UV value = conversion rate * unit price per customer, conversion rate = (the number of customers who have made a purchase / the number of visitors who arrive at the store) × 100%)

The anchor of success, anchor of defeat

Taobao

Taobao has shown us with practical examples that there is a vulnerability to relying too much on the head anchors. Once the head anchors have problems, the price will be painful .

Taobao is also aware of the various drawbacks brought about by being too deeply tied to the head anchor. Cheng Daofang, general manager of Alibaba's Taobao live broadcast business group, said, "If a super-head anchor occupies a large proportion, it will cause business risks, so there must be a benign ecology one after another." The newly introduced Luo Yonghao and Yu Minhong are the results.

In addition to the joining of new forces, supporting mid-waist anchors is also one of Taobao's strategies. According to a report from China Central Broadcasting Network in October, Taobao Live's support for mid-waist anchors has achieved initial results. From May to September 2022, the monthly GMV of Taobao waist anchors will maintain a year-on-year growth of more than 50%. From October 1st to 9th, enjoying the spillover effect of Li Jiaqi's re-broadcast, the turnover of the waist anchor even achieved a 3-digit growth.

From the perspective of anchors, in the first nine months of this year, Taobao Live has accumulated nearly 200 live broadcast rooms with a turnover of over 100 million yuan. Among them, there are many core waist anchors such as Sydney_Cherie, Lieerbao, Hu Ke, Huhu, etc. There are also Bee Surprise Club, Shiitake came and waited for the new generation live broadcast room. You must know that some new generation anchors have only been stationed on Taobao for 7 months.

Tik Tok

As we all know, "Oriental Selection" has set off a boom in the live broadcast industry, and the stock price of New Oriental Online has also climbed from 3.5 yuan on April 29 to the highest point of 34 yuan on September 2, a 10-fold increase in 4 months.

According to New Oriental Online's 2022 annual report, as of May 31 (before Oriental Selection became popular), the company's live broadcast e-commerce revenue in the fiscal year was only 24.6 million yuan . Yin Qiang, executive director and CFO of New Oriental Online, said in the 2022 fiscal year results conference call that the GMV of Oriental Selection has been around 2 billion yuan in the past three months , and it has achieved profitability.

However, the market's doubts about whether the "Oriental Selection" will be short-lived are also incessant.

By comparing the number of fans, viewers, and sales data of "Oriental Selection" from June to October, Jianzhi Research shows that although the average monthly sales is still stable at 1000W-2500W, it has been popular all over the Internet since June, and on June 18th After reaching the peak (number of viewers: 6167.3W), the number of viewers decreased month by month, and the growth of fans gradually weakened.

At the same time, the mildewing of peaches in June and the controversy over corn at 6 yuan in September brought New Oriental to the forefront again and again, and again raised questions from consumers: How exactly is "Oriental Selection" selected? Is the quality of its products really worthy of the publicity?

First of all, Seeing Wisdom Research believes that Dongfang Selection cannot be a permanent "top stream", and it is expected that it will cool down. This was analyzed as early as in " Eastern Selection Heat is bound to subside, but it is by no means a flash in the pan" . After all, in today's era of information explosion, the popularity of the Internet is always coming and going (Liu Genghong in April, Wang Xinling in May, Dong Yuhui in June), and aesthetic fatigue will definitely appear.

Secondly, Jianzhi Research believes that for live streaming, the success of the live streaming room is only the first step of success. Various factors such as the vacancy of "Super Head", the charismatic anchors, and the joy brought by knowledge have indeed brought a lot of popularity and traffic to Dongfang Selection, but in the final analysis, the core of live broadcast delivery is still "goods", and the real test is Whether the live broadcast is successful or not depends on the strong supply chain behind the live broadcast room.

Therefore, in addition to the traffic brought by feelings, Dongfang Selection should also strengthen quality management from the product source, strengthen the selection team, and strengthen capacity building from the entire supply chain. Only in this way can Dongfang Selection build a solid barrier and establish a good brand image. Although New Oriental has stated that it wants to build its own supply chain management system, Zhanzhi Research believes that the establishment of a supply chain management system requires a large investment, a long cycle and high requirements, and it cannot be accomplished overnight. Moreover, Alibaba, JD.com, SF Express and other companies have already deployed in the agricultural product supply chain early, and Dongfang Selection will have to seek a breakthrough in the dilemma of "difficulty in self-building" and "difficulty in forming core competitiveness without self-building".

This also reminds Jianzhi Research of T97 Coffee, which recently appeared in the Douyin live broadcast room, and the big mouth girl has gained 1.47 million followers in less than 2 months with the magic rap of Mouse Laibao. However, judging from the data on delivery, the highest GMV in a single live broadcast room in the past three months is only 100,000-250,000, which is not very eye-catching. Some netizens have dug out that the founder, Li Xiao, has been involved in negative turmoil such as illegal propaganda, illegal business operations, and pyramid schemes for many times. If it only depends on the content, will consumers really buy it? How long can Li Xiao want to surpass Ruixing's dream?

will eventually come back

Douyin and Taobao, "content e-commerce" and "shelf e-commerce", two e-commerce models with different paths are meeting fork in the road, and the future may come to the same destination.

As a typical shelf e-commerce, Taobao is characterized by the fact that most of the audience has direct consumption demand, so the order rate and transaction volume are generally higher. Rich categories and SKUs, and a strong commodity supply chain are its core competitiveness. However, in the past two years, the rise of content e-commerce has overwhelmed Taobao. As of September this year, Diantao’s share has fallen behind “Quick Shake”, and Taobao has to start a counterattack.

First, Taobao is transforming into . If the search function is updated, in the past, when consumers searched for keywords, only the graphic information of the products would be displayed, but now some products appear directly in the form of short videos .

At the same time, at the Taobao Live Broadcasting Ceremony in September this year, Taobao Live 2.0 "New Content Era" was officially released. This strategy clarifies Taobao 's new two-wheel-driven growth path from "content planting to transaction explosion" , and at the same time, it has released four anchor policies, including the New Pilot Program, the Lighting Alliance, the Super New Coffee Program, and the Yuanli Program. It is to introduce more new forces and create more mid-waist anchors to get rid of dependence on one or two head anchors.

·Jianzhi Research believes that Taobao's urgent transformation to "content e-commerce" has two main reasons:

1. The conversion rate of short video is higher than that of graphic mode. On the one hand, the information density and stimulation brought by short videos are stronger, and it is easy for users to have the urge to place an order. On the other hand, short videos are more likely to create a feeling of "going around". During the process of "going around", users have more opportunities to discover unrealized needs, and then be "planted" to realize the content to the place of the order. transform.

2. In the face of the rookies' attacks in recent years, Taobao must counter-attack. With the growth of Douyin e-commerce, Douyin pays more and more attention to short videos. Since Douyin proposed "interesting e-commerce" last year, Taobao has continued to make efforts in the field of content, and even changed the slogan from "Taobao, Taobao until you say yes" to "It's too good to shop".

In the face of Taobao's counterattack, Douyin is not to be outdone, and is determined to live broadcast and grab the shelves.

On May 31, 2022, Wei Wenwen, President of Douyin E-commerce, announced that the positioning of Douyin E-commerce will be upgraded from "interest e-commerce" to "global interest e-commerce", covering users' full-scenario and full-link shopping needs. In other words, Douyin has expanded its strategy from the "goods looking for people" model of content e-commerce to the "people looking for goods" of traditional shelf e-commerce, in line with Taobao.

In order to move closer to shelf e-commerce, Douyin began to develop mall construction and marketing. While establishing an independent Douyin mall section, it has vigorously launched shopping coupons and membership functions to increase the rate of consumers placing orders and repurchasing.

However, live e-commerce is not without its drawbacks. First of all, not everyone likes to "go shopping", especially in the face of clear and urgent needs, live broadcast e-commerce is obviously unable to meet. In addition, not all products are suitable for live broadcast, such as jewelry with complicated purchase process and high return rate.

Summarize

In general, Jianzhi Research believes that whether it is traditional e-commerce such as Taobao, JD.com, and Pinduoduo, or emerging rookies such as "Doukuai", the reliance of various e-commerce companies on content is obvious to all. It will become the determining factor for the traffic of the e-commerce platform. Content is undoubtedly Douyin's advantage, and "Oriental Selection"'s distinctive knowledge-based live broadcast out of the circle also proves the importance of refined content operation in the post-live broadcast e-commerce era.

However, it is difficult for a clever woman to cook without rice. You can't forget that the essence of live streaming with goods is still "goods". In the final analysis, consumers are most concerned about the price and quality of goods. This is a very test of the product selection .

You must know that there is a complete supply chain system behind the super-heads, from the supervision of the supply chain to the selection, delivery and after-sales. The recently hit "Offer 2 of All Girls" Li Jiaqi even more exquisitely reflects his powerful brand resources and bargaining power. This is the secret to increasing fan retention and user stickiness. Fresh and interesting content may bring temporary popularity, but the most important thing is to build its own moat with a strong supply chain.

As the two giants of live e-commerce platforms, Douyin and Taobao have launched their own new strategies this year. Jianzhi Research believes that from the current point of view, Taobao has a large volume, clear user goals, and a higher order rate, but it has not yet opened up the entire shopping link from user discovery, grass planting, decision-making, ordering, and service; and Douyin has many Consumers only come for content. Douyin e-commerce is still in the early stage of development, and it is still in the cultivation stage from the supply chain to the customer group. However, with the adjustment and transformation of their respective strategies, the fate of the two may be the same.

Double Eleven is approaching, and the horn of war has sounded for various e-commerce platforms. Kuaishou has already started pre-sale on the 13th of this month; JD.com is earlier than Taobao, and started pre-sale on October 20th and today, respectively, and the e-commerce war is about to break out. Taobao has the blessing of Yu Minhong and Luo Yonghao, the two top players of Douyin, and the rebroadcast of Li Jiaqi. Can it be a beautiful turnaround? Double Eleven is just the first battle of the e-commerce melee. The era of diversified development of e-commerce has come, and the second half of the battle has just begun.

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E-commerce melee is imminent**