From entering the game to breaking out: How do merchants tap new increases in video accounts?

In the last research report, we analyzed video accounts from the perspective of consumers and the market. To some extent, it was an outlook on the "end game": under factors such as changes in user behavior and changes in crowd structure, In addition to creating differentiated commercial value for video accounts, it provides a scenario for brands to establish in-depth relationships with users, so there is considerable room for new growth.

In this report, we switch our perspective back to brands and merchants and look at the emerging channel of video accounts:

How to enter the game - What are the current actions and feedback of merchants in the face of new opportunities?

Have you figured out why you need a video account? Is it just hype and following the trend?

What is the unique value brought by video accounts in the eyes of merchants?

Is the video account really perfect? Why do some people choose not to be a video account?

How do senior experts view the opportunities in the three aspects of the “people and goods market”?

How to break the situation - through reasonable business positioning, how can leading companies develop a profitable business model?

We found that nearly half of the merchants who HE Tuber have already brought goods to the video account only started to enter the market in 2023.

Combination boxing: 30% of businesses adopt a single business method. More than 40% of merchants choose to adopt two types of business methods. Regardless of whether it is a public domain or a private domain, the effect of refined link combination is greater than that of "one trick".

Emphasis on effects: Merchants tend to choose live broadcasts and short videos to directly bring goods, followed by product promotion needs. In the current market environment, merchants are eager to obtain more realistic performance.

Strong live streaming: Live streaming has a higher priority than short video delivery. According to our qualitative research, the GMV of most merchants’ short video delivery does not exceed 10%, but it is growing rapidly and is worth exploring.

Build and operate: Merchants’ priority for cooperation with experts is at the bottom. Although the master ecology of video accounts is gradually improving, merchants still tend to choose more mature methods.

At the same time, we began to think about a question: Since 2023, the publicity and exposure of video accounts has increased significantly, the platform has been active, and merchants have accelerated their entry at this time. Have they been affected by the traffic dividend thinking and begun to "follow the trend"? If the boss doesn't think clearly and just goes ahead, it will inevitably have a negative impact on the business.

But it turned out that we were overthinking it. Most merchants had clear logic for entering video accounts, and only 2 pairs had unclear goals:

Nearly 60% of merchants are optimistic about the unique value of Tencent’s ecosystem and should take the initiative to seize opportunities.

More than 30% of merchants believe that the involution of mainstream online channels is increasing, and deploying new channels is a passive choice.

More than 20% of merchants believe that video accounts are more suitable for their target users.

So, what exactly is the so-called "unique value" of Tencent Ecosystem? Merchants also gave two main answers:

Nearly 60% of merchants believe that the difference from other live streaming delivery platforms is that the public and private domains can better form linkages.

More than 50% of merchants believe that the difference from other live streaming platforms is that video accounts are decentralized and do not rely on top experts.

This also corresponds to the business ideas of merchants: although they are all doing live broadcasts to bring goods, most merchants do not directly copy the business strategies of other platforms, but rebuild a set of models based on the ecological characteristics of video accounts and adapt to local conditions. Secondly, some businesses choose a safer path, that is, copy it first, and then continuously optimize and adjust it - the purpose of moving it over is to have a basis for modification.

For merchants who have already entered the game, the attitude is generally optimistic: more than 80% expect to increase investment in video accounts in the next year. However, feedback from merchants also shows that the video account platform still needs to strengthen its infrastructure and service system to meet the business needs of merchants. For example, complete delivery tools, data analysis backend, etc. allow merchants to more efficiently understand consumer needs and match corresponding products and marketing resources. Another example is common platform waiter docking, business training, etc., which can provide guidance and suggestions to merchants and assist business decisions.

Of course, video accounts in their early stages are not perfect. Although the actual results in terms of reach, interaction, and retention have exceeded expectations, profit growth is still lower than expected, followed by GMV growth.

However, the qualitative research of Growth Black Box found that many leading brands not only have rapid GMV growth in video accounts, but also have top-notch net profits in all online channels, much higher than other live streaming channels.

Why is this so? We found that top brands tend to:

The team is fully configured and has corresponding organizational structure and assessment standards.

The strategic plan is clear and the "people and goods yard" has a good match

The operating methodology is relatively mature and can guide the continuous optimization of the business.

The difficulties for ordinary merchants in operating video accounts are exactly these three aspects.

At the same time, this is also a process of dynamic change: as the business scale increases (GMV with goods), merchants’ difficulty priorities will shift from operational tactics and talents to strategic planning and platform cooperation. In other words, for small and medium-sized businesses in the initial stage, the most important thing is to first get through the closed business loop, figure out various tactical details and platform rules, and keep the lower limit first. After reaching a stable volume, merchants began to consider strategic integration across the board (such as dealers, online and offline, pallet allocation, etc.) and how to conduct in-depth cooperation with the platform to expand the upper limit.

Merchants still need to conduct more exploration and experimentation according to the stage they are in in order to find a business model that meets their expectations - there is indeed no shortcut to success in a new market (cases of leading brands' strategies will also be introduced below for your reference).

So, what strategies should merchants explore more? Where should the importance and priority be placed? Through preliminary research, we summarized the distribution of the current video account operating strategies: the Y-axis represents the score of the degree of application (whether it is used proficiently), the X-axis represents the score of the importance (how important it is for business growth), and the origin is The average value of each item.

The construction of the private domain system is a top priority. This represents both the initial traffic introduction of the front link and the acceptance and retention of the back link. As mentioned in our last report, although the public domain has opened wider, the foundation of the private domain cannot be let go.

Pallet and live broadcast room operations directly affect the conversion rate, so it is also another focus for merchants. However, the live streaming industry is already very mature, and merchants no longer need to create a system out of thin air, so the priority is not that high.

Advertising placement has not received much attention and is not widely used. There may be areas where the value is underestimated, and many businesses are unwilling to try and have not found opportunities to seize the new public domain traffic.

Content creation is at a very "mediocre" midpoint. On the one hand, merchants pay more attention to the transaction itself, and on the other hand, the cost of content creation is high. But our previous reports have shown that consumers attach great importance to content, which is the key to attracting them to shop on video accounts. Making features and innovations in content may be another area that is undervalued.

Finally, we also paid attention to a question: What is the status of those merchants who have not yet joined the video account? Are you just quitting because of the difficulties, or are you not optimistic about this market at all?

Even if they have not entered the game, nearly 70% of the merchants are still optimistic about the future growth space of video accounts, and nearly 60% of the merchants expect to enter the game in the future.

Merchants are not blocked from entering, but are waiting for the right opportunity. In fact, only about 10% of merchants gave up after trying it because the results were not satisfactory, and nearly 20% have already started the project. Nearly half of the merchants focus on their current existing channels and have no energy to open up new channels.

In the current market environment, the certainty of business is greater than anything else, and the mentality of "don't let the hawk out of sight" is normal. However, merchants should also consider using reasonable investment to "raise the eagle first" and stay on the card table to wait for the next opportunity. It’s actually too late to raise an eagle after seeing rabbits. The balance and trade-offs between old and new businesses are issues that companies need to spend more energy thinking about.

In order to get more facts about the business trends of video accounts, Growth Black Box interviewed Jian Feng, CEO of Lingyi Digits. As a leading service provider in private domain operations, Zero-One Digits won the top spot in 2022 for the total GMV of enterprise WeChat and video account agency operations. After our discussion, we summarized the incremental opportunities from three aspects: "people and goods market":

A new addition: older people who did not have strong online shopping habits before. The simple and fast method of video account + long-term habit of WeChat can easily reach them. This is not targeted at the "elderly people" aged 60-70 in the traditional definition, but the "middle-aged people" aged 40-50. This group of people has strong consumption power, and they are organized into families, with seniors and young children, and have more consumption scenarios than young people.

Converting inventory into increment: Represented by heavy users of Tmall, they already have strong online shopping habits. They tend to belong to the young "highly educated crowd", who have strong receptiveness to new things, quick migration of consumption behavior, and strong consumption power. Differentiated experiences can easily attract some people to migrate to video accounts for shopping, allowing merchants to dig out a user group that matches them from the stock.

Sinking is not the mainstream: Video account consumers are generally still in tier 1-3 cities, especially those in tier 1 have the strongest spending power. The chances of "going up" may be greater.

2) In terms of merchandise: There is a high probability that the video account will not become a channel for inventory clearance or sales promotion. Instead, it will match people and goods through new models and high quality.

Cheapness is not the point: most brands’ products on video accounts are the highest-end products in their online channels, and there are very few discounts and promotions. Cheap means sacrificing product quality, and video account consumers have relatively high quality requirements. Merchants should place high-quality products on the pallet instead of considering price advantages first.

White brands also need to be "branded": Judging from past history, online platforms started by bombing with white brands and then introducing brand harvesting, which was