"In the future, everyone will be famous for 15 minutes."

This 15-minute rule, although proposed by Andy Warhol, the father of American Pop Art, 50 years ago, is equally applicable in today's era of the rise of self-media. In today's world, being famous for 15 minutes is enough to bring "astronomical wealth" to any individual or platform.

For e-commerce platforms, this wave of "wealth" during this year's 618 shopping festival has been entrusted to the live streaming rooms of major brands. First, JD.com and Pinduoduo invested hundreds of millions, inviting well-known entrepreneurs like Zhou Hongyi to start live streaming and promote products. Later, video platforms upgraded their live streaming stores, investing heavily in rewriting codes and focusing on live streaming e-commerce. From this perspective, attracting traffic through live streaming and converting that traffic into orders is becoming the most relied-upon marketing model for platforms.

Against this backdrop, Taobao has provided a different solution: launching the "Forward-Thinking CEOs" project, targeting the source of live streaming sales - corporate IP.

Previously, Taobao established a live streaming e-commerce company, providing refined managed operation services for newcomers to Taobao. Now, it further states that as long as a CEO is willing to endorse their own company, regardless of whether they have live streaming experience or not, they can start broadcasting on Taobao with zero barriers. Taobao Live will provide a full-chain service from product inventory to live streaming room operations. Moreover, Taobao does not charge for providing this fully managed live streaming service.

The "managed" service + free model is a testament to Taobao's determination to win this battle for live streaming traffic. However, in today's fiercely competitive market, is it a good business to cultivate CEOs into live streaming anchors? What unique advantages does Taobao have? And what challenges do future entrepreneur live streams face?

CEO Transforming into Anchors: A Win-Win for Enterprises and Platforms

"The best investment in the world is to invest in yourself."

CEOs transforming into anchors and entering live streaming rooms to create personal IPs is no longer a novelty. From Xiaomi's CEO Lei Jun, 360 Group's Chairman Zhou Hongyi, to New Oriental's founder Yu Minhong, Gree Electric's Chairman Dong Mingzhu, and JD.com's founder Liu Qiangdong, Zhong Xuegao's founder Lin Sheng. Under the wave of huge traffic, entrepreneurs promoting products seems to have become the "standard configuration" across industries.

In addition to the first generation of entrepreneurs personally participating, the "second generation" and "third generation" of entrepreneurs are also publicly appearing on internet platforms, building their own personas and IPs, closely tied to their own companies and brands.

In February this year, Shi Zhancheng, the "second generation" of Jieliya Group, appeared in the short drama "Towel Empire," bringing the old brand Jieliya back into people's视野. On the evening of June 5th, Shi Zhancheng started live streaming, attracting a cumulative audience of 2.43 million viewers in 4 hours, with a GMV exceeding 5 million, ranking first on Douyin's overall sales chart and the bedding category chart. Data shows that during this year's 618 shopping festival, the sales of Jieliya's Tmall flagship store increased by 1300% year-on-year in the first 4 hours, becoming the top brand in Tmall's home textile industry.

Such excellent sales data illustrate one point: for enterprises, entrepreneurs actively going live to build IPs can help users understand the brand more directly and effectively. Moreover, based on the recognition of influencer "entrepreneur IPs," users' stickiness and recognition of the brand will increase, further helping the brand achieve a higher conversion rate.

Unlike merchants' gains at the data level, for Taobao, "capturing" CEOs means that Taobao will establish a very good competitive threshold for brand and product outflow among platform competitions, preventing platforms like Douyin, Kuaishou, and Xiaohongshu from diverting brands, including the diversion of business operation focus, products, users, and fans.

As Zhang Yi, CEO and Chief Analyst of iiMedia Consulting Group, puts it, this service caters to entrepreneurs' willingness to establish emerging channels for brand and product promotion and sales. In his view, the advantages of entrepreneur live streaming are very obvious. Entrepreneurs' personal brand reputation can increase consumers' trust, which is also a huge asset for e-commerce platforms. In addition, as business leaders, entrepreneurs can not only promote products but also further showcase the corporate culture and values behind the products, which also helps build the brand image.

Therefore, whether for enterprises or platforms, cultivating CEOs into anchors is a win-win business.

Taobao Achieves Low Prices in Its Own Way

"It's not that enterprises need to create IPs, but that this era needs IPs."

Looking at different brands, CEOs like Dong Mingzhu, Li Bin, and Lei Jun have chosen Douyin's live streaming rooms, while presidents of brands like YSL, TCL, P&G, and Yili chose JD.com's live streaming rooms during this year's 618.

In a horizontal comparison, Taobao has introduced Erke's Chairman Wu Rongzhao, Tianfu Cola's Chairman Jiang Lin, Zhongtu Net's CEO Huang Ping, New Oriental's founder Yu Minhong, and others to start live streaming on Taobao. Meanwhile, Taobao's fully managed service has also attracted hundreds of celebrities like Wang Lin (known as "Snow Auntie") and Jin Sha with her boyfriend Sun Chengxiao to join Taobao during the 618 period.

Comparing the two, it's not hard to see that Taobao's years of accumulated trading atmosphere and newly launched fully managed model are more friendly to small and medium-sized brands. As Cheng Dao, General Manager of Taobao's Content E-commerce Department, mentioned previously, in the second half of live streaming, Taobao's operational capabilities, product advantages, and user mindset give Taobao Live a significant advantage in undertaking IP-related resources.

It can be foreseen that, as traffic costs gradually increase, the cost-effectiveness and possibility of these small and medium-sized brands achieving brand transitions through buying traffic are relatively low. Therefore, having the boss step into the live streaming room, coupled with the platform's resources and traffic support, as well as Taobao's strong trading atmosphere, a batch of brands rooted in Taobao's ecosystem have the potential to stand out.

In addition, one of the differences between this fully managed service and previous promotions is that it places more emphasis on long-term operations.

In the past, most presidents entering store live streaming rooms were special marketing and communication actions at specific nodes, mostly to create momentum for festivals. However, choosing a fully managed model means that CEOs need to operate live streaming on a long-term basis. The information collected by Taobao from entrepreneurs interested in starting live streaming includes not only the brand, main business, style, and personal experience of the entrepreneur but also whether the CEO can open a Taobao Live talent account and the frequency of weekly live streaming planned by the CEO.

For brands, long-term operational IPs can save on celebrity endorsement fees and anchor commissions, reflecting more affordable prices for products. In an era where low prices reign supreme, reducing brand prices also helps enhance Taobao's price competitiveness.

Taking Pinduoduo as an example, in its low-price competition with Taobao, Taobao's reforms over a long period have narrowed the price gap with Pinduoduo, but it is still difficult to achieve an overwhelming lower price. Even objectively speaking, some products on Taobao still cost more than on Pinduoduo.

However, Pinduoduo's low-price traffic mechanism cannot support the "long-term and stable" growth of brands and stores. This is why there are always only low-priced products on Pinduoduo, without low-priced brands and merchants. Therefore, while Taobao can have CEOs endorse their brands, it is difficult for Pinduoduo to do so.

From this perspective, since Taobao cannot compete with Pinduoduo on low prices, it first lowers the barriers for entrepreneurs to go live and then utilizes the cost savings from CEO live streaming to lower product prices. Ultimately, this approach ensures the sustainable development of the platform and brand positioning while maintaining a certain competitiveness in the price war.

CEOs and Taobao Face Long-Term Considerations

Although Taobao's fully managed service has unique competitive advantages, it also brings two issues:

For the platform, the fully managed model requires the platform to complete all preparations both on and off-stage, which is a heavy asset operation model. From initial product selection, process planning, traffic operation, to final after-sales service, a live stream involves the coordination of multiple parties like the supply chain, merchants, agencies, and the platform itself.

Data shows that the previously launched fully managed live streaming talent service attracted and contacted over 3,000 celebrities and influencers, but not all of them completed the integration and debut. Meanwhile, on the evening of June 5th, after Taobao released the CEO live streaming integration group, nearly 70 users joined the group chat within a day, inquiring about the project's registration thresholds, processes, and cooperation models.

This indicates that supply is still abundant in the fully managed project, and the bottleneck may lie in the platform's digestion capacity. As Cheng Dao, General Manager of Taobao's Content E-commerce Department, puts it, the current business's biggest challenge is limited team capacity and insufficient digestion capabilities. "Managed operations are indeed resource-intensive, and we are under significant recruitment pressure."

For CEOs, the immediacy and uncontrollability of live streaming interactions are still a double-edged sword. Cases where improper statements by CEOs have negatively impacted brand images and even corporate stock prices do exist. Previously, Yu Minhong's remark of "chaotic" caused New Oriental's stock price to plummet by 27%, halving its year-to-date performance. Water can carry a boat, but it can also capsize it. While enjoying the benefits brought by traffic, one must also face the potential risk of backlash.

From this perspective, entrepreneurs moving to the forefront to become influencers cannot solely aim for traffic but must premise it on high-quality product quality, becoming a channel of communication with users, ultimately enhancing the popularity and reputation of products, brands, and enterprises. As Philip Kotler, the father of modern marketing, puts it, "Marketing is the art of attracting and retaining profitable customers." Marketing attracts customers, and products retain them.

After all, traffic can only help brands complete initial accumulation. Ultimately, for long-term development, products remain king.

Source: Songguo Finance