Just as early as late October, the atmosphere of Singles' Day was already strong.

In recent days, Li Jiaqi announced that he would distribute a cumulative total of 500 million yuan in cash red envelopes starting from October 14. JD.com also announced that its procurement and sales live streaming room would broadcast simultaneously with Li Jiaqi's, and that "products would be sold immediately and a 10% discount would be offered on the same price."

The gunpowder smell of the big promotion is indeed quite strong.

This year's Singles' Day seems a bit different, with the warm-up period starting earlier and everyone seemingly putting in their best efforts. This may be related to the recent rise in the stock market, as consumer confidence in the market seems to have returned.

Friends in the e-commerce industry revealed that if this year's Singles' Day goes well, the performance will be very impressive. Last year's Singles' Day data was not good, and some live streaming rooms even performed worse than during last year's 618. If this year's Singles' Day delivers results, then the year-on-year GMV data may be easier to pull up.

Although the atmosphere has been hyped up, there have also been some less "harmonious" voices in the lead-up to Singles' Day. For example, Xiao Yangge's live streaming sales flipped, and the sale of "Hong Kong Meicheng mooncakes" was fined for suspected false advertising.

According to Tianyancha APP information, Xiao Yangge's company "Sanzhiyang Network" has only been established for a little over three years.

On the one hand, this year, with such high popularity for Singles' Day and such a strong gunpowder smell in live streaming sales, it has indeed filled brands, merchants, and consumers with anticipation;

On the other hand, whether it's Xiao Yangge, Li Jiaqi, or Xinba, which anchor hasn't flipped a car these days? Could it be that after so many iterations of the live streaming sales business model, there really isn't a "perfect" model?

This question urgently needs an answer.

01

Bugs in Live Streaming Sales

It's not just Xiao Yangge; this year's Li Jiaqi Singles' Day event also seems to have signs of a "flip."

During his live stream on October 4, Li Jiaqi announced that "on October 14, the first day of the 11.11 pre-sale, 5 million yuan in red envelopes will be distributed every 5 minutes." During the live stream, Li Jiaqi's team stated that "red envelopes will be distributed from morning to night, and you can calculate how much money in total will be distributed." Some netizens calculated based on an 8 am to 12 midnight time frame, and the total number of red envelopes would reach 960 million yuan.

Interestingly, during the November 14 live stream, Li Jiaqi suddenly changed his tune, saying that a total of 500 million yuan in red envelopes would be distributed over the two days from the 14th to the 15th, and that they would be distributed "irregularly." The 900 million yuan in red envelopes became 500 million, with the red envelopes directly "shrinking" by half...

Objectively speaking, whether it's red envelopes or lotteries, "the final interpretation right of the event belongs to the live streaming room," but some participating netizens said that "I squatted in the live streaming room for 5 hours and didn't manage to grab a single red envelope."

Live streaming sales is not just about the "difficulty in grabbing red envelopes."

Last year, Li Jiaqi's live streaming room began selling "79 yuan eyebrow pencils," but this year, keen-eyed netizens have noticed that some product prices in live streaming rooms seem to have increased. Whether it's the shrinking of red envelopes or price increases, perhaps for anchors who routinely break through the 100 million mark in sales, these are just minor issues.

Frequent "flips" in live streaming sales seem to indicate that there are still bugs in this business model that need to be fixed.

Why do anchors always flip?

Because live streaming sales is a business model centered around "people." Or rather, the first stage of live streaming sales development was "trust in people."

For example, most people who frequently place orders in Dong Yuhui's or Li Jiaqi's live streaming rooms trust Dong Yuhui and Li Jiaqi because fans initially believe that Dong Yuhui and Li Jiaqi can bring them low-priced, high-quality products.

There is no doubt that Li Jiaqi and Dong Yuhui are undisputedly in the first tier of live streaming sales, with complete product selection and after-sales teams, and are sufficiently professional in the matter of live streaming sales.

However, in any business model, trust built solely on "people" is always fragile because people will always make mistakes and will always "flip."

For example, what if the supply chain is not well-managed and product selection is problematic? What if the anchor speaks too quickly and makes a slip of the tongue? What if the anchor's personal time and energy are limited, and many things actually need to be delegated to other colleagues on the team, like the "small essay" incident?

Therefore, the factor of "people" is often the biggest variable, and this variable can make business better or worse. And at the heart of live streaming sales is precisely this not-so-"controllable" variable.

It can be said that "people" are the biggest "bug" in the business of live streaming sales.

The core of the live streaming sales business is "people," but live streaming sales does not entirely rely on people. After so many years of development in the e-commerce industry, most consumers actually understand the simple principle that "you get what you pay for," but everyone still hopes to buy good products at cheap prices.

Buying things cheaply is the "first principle," so the "anchor" of live streaming sales is actually price.

Do you remember how Li Jiaqi established his position as the "number one anchor" back then? It was through absolute low prices, negotiating "exclusive lowest prices on the entire network" with brands.

In other words, the "price anchor" in the live streaming industry in the past was more like a form of "price suppression." The anchor team leveraged traffic and users, then "marked up" prices to suppliers, thereby aggregating traffic again to sell products and monetize at "the lowest prices on the entire network."

In this process, users did indeed buy products at low prices, but as competition intensified, excessively low prices compromised quality, and brands could only "lose money to make a noise."

Now, the situation is starting to change.

In today's e-commerce industry, the so-called low price is not a "hard" standard. For consumers, what is desired is not an absolute low price but rather "low-priced, good products" and even "good service."

For example, one phenomenon is the change in product categories sold in live streaming rooms.

In previous years, low-priced products sold well in live streaming rooms, but in recent years, there has been a notable shift towards selling more high-priced products, such as digital cameras, tablets, and Dyson products priced at over a thousand yuan.

This change indicates that the core group demand in live streaming sales is actually for "low-priced, good products," and many consumers in live streaming rooms have also provided feedback hoping for faster logistics and more convenient returns.

This illustrates one thing: when people place orders in live streaming rooms, the factor of "products" is far more important than "people."

After all, with so many live streaming rooms and so many top anchors, each one claims to have "the lowest prices on the entire network." In the end, it all comes down to the products and how good they are. Comparing product prices in Li Jiaqi's or Dong Yuhui's live streaming rooms may provide the answer.

Therefore, when the market shifts from "people" to "products," can the business of live streaming sales evolve from "trust in people" to the next stage: "trust in products"?

The Internet community believes that this is possible.

This year's Singles' Day, JD.com has taken an interesting step by allowing frontline procurement and sales staff to enter live streaming rooms after previously increasing their salaries. This is an effort to let professionals handle professional matters.

Can procurement and sales live streaming "blaze a new trail" for the live streaming sales industry? This is a crucial question.

02

The "New Species" of Procurement and Sales Live Streaming

Procurement and sales live streaming is a unique capability of JD.com and a "brand" or "model" that JD.com wants to promote externally.

But in reality, procurement and sales live streaming is actually a "new species."

What sets procurement and sales live streaming apart from previous live streams is that the focus of the live streaming room is on "products." In procurement and sales live streaming, the anchor's greatest value lies in conveying information about the products.

If anchors like Li Jiaqi, Viya, and Lao Luo relied on "people" to build trust, then procurement and sales live streaming essentially relies on "information" to build trust.

Trust built on information is solid.

When consumers have access to sufficient information about "products," they naturally develop trust and make rational decisions when placing orders. Such transactions tend to be more stable and easier to form into consumer habits. For the e-commerce industry, to drive annual GMV, short-term promotions are necessary, but long-term success relies on habits.

Consumers obtain information and make decisions based on that information, essentially hoping to maximize their benefits in commercial transactions. People want not only low prices but also good products.

Therefore, the process of consumption is also a process of negotiation.

In this negotiation process, having more information gives buyers more advantages in decision-making.

To maximize their benefits and buy truly low-priced, good products, consumers need to have access to a lot of information. This includes product quality, price, platform services, and comparative analysis of similar products.

Therefore, to truly achieve the ultimate cost-effectiveness in shopping, "sisters" must be very skilled data analysts. However, in reality, most consumers don't have the time or energy to conduct such detailed analysis at a "granular" level.

But there is a group of people whose primary job is precisely this: procurement and sales staff.

For example, how many layers of tissue paper are the most useful? What percentage of down should a down jacket contain for the start of winter and the winter solstice? These details closely related to consumers are well-known to procurement and sales staff. JD.com has many seasoned procurement and sales staff with over a decade of experience who work daily in frontline factories and production areas, repeatedly comparing product functionality, quality, and price.

Therefore, in terms of product selection, frontline procurement and sales staff may be much more professional than "Li Jiaqi or Xiao Yangge." It could even be described as a "dimensional downgrade."

There's a common saying: "Don't challenge someone's livelihood with your hobby." Selecting and purchasing products meticulously is precisely the "livelihood" of procurement and sales staff.

What does procurement and sales live streaming mean for live streaming sales?

Not only is it easier to gain consumers' trust, but it may also mean a reshuffling of the "pricing power" for low-priced, good products.

JD.com's self-operated live streaming rooms do not charge slot fees or commission to influencers, so JD.com has fewer concerns when it comes to product selection and pricing. This "lack of concerns" allows procurement and sales live streaming rooms to have a wider range of product options and genuine "pricing power" over low-priced, good products.

Why has live streaming sales been popular for so many years?

There are two main reasons:

Low-price competition due to oversupply remains the primary strategy for most brands to sell products.

Live streaming sales has always held the pricing power for "low prices."

This year's Singles' Day has not changed the situation of oversupply in the market. What has changed is that the previous practice of "losing money to make a noise" and signing "lowest price agreements across live streaming rooms on the entire network" is no longer suitable for this era.

For brands and factories, most hope that live streaming sales can lead to "cost reduction and efficiency enhancement" rather than high marketing expenses.

Therefore, for the industry, the original live streaming sales model was unsustainable and urgently needed a new model.

Why have some top anchor's live streaming rooms raised prices? Or put another way, why have they added some high-priced products? The reason is not difficult to guess. It is likely that the slot fees are too high, and brands and merchants are not making money, so they must increase unit prices and gross margins.

Therefore, in a sense, price increases in the live streaming industry are inevitable and, in a sense, are paying for the previous "low-price monopoly."

Why does procurement and sales live streaming have the potential to regain pricing power?

The reason lies in the natural cost advantages of supply scale, coupled with a mature model and correct operating methods.

For platforms like JD.com, achieving "low-priced, good products" is not a difficult task. JD.com's supply chain scale and quality are among the first tier in the e-commerce and even retail industries, which is recognized by the industry.

Moreover, if a low-cost "live streaming sales" model can be found to help brands sell products, more brands and merchants will participate in the new supply system, thereby rapidly achieving scale on the supply side. The more good products enter live streaming rooms, the easier it will be for procurement and sales live streaming to take off.

Secondly, once the mindset of low-priced, good products is thoroughly established, procurement and sales live streaming rooms will attract "enormous traffic."

Good e-commerce platforms never lack good supply but rather have a greater demand for traffic.

With pricing power over low-priced, good products, when JD.com's seasoned procurement and sales staff begin to take center stage, the issue of traffic may be resolved as well.

An essential logic of the live streaming sales business is that low-priced, good products inherently attract traffic.

Why has Pinduoduo been able to achieve a similar scale to Alibaba? It's because the influx of traffic brought by low prices has led to rapid GMV growth.

Using the same logic, once procurement and sales live streaming establishes the mindset of low-priced, good products, enormous traffic will also pour into the live streaming rooms. With abundant traffic and good product supply, the procurement and sales live streaming model will grow like a snowball and may quickly take off.

By then, how to handle this enormous traffic will be a question worth considering for every brand and merchant.

Final Thoughts:

A thousand readers have a thousand Hamlets, and the live streaming sales business model will also have different solutions in the hands of different platforms.

The emergence of procurement and sales live streaming, a new species, may be the beginning of the evolution of this business model. After JD.com takes this step, more "procurement and sales live streaming" may emerge in the future.

By then, the "bugs" in the live streaming industry model are expected to be completely eliminated, and the entire e-commerce consumption will also usher in a true rebirth and growth.