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Why did Dongfang Selection, Li Jiaqi and other superleaders start their own brands?

author:China Business Strategy
Why did Dongfang Selection, Li Jiaqi and other superleaders start their own brands?

  There is no longer a shortcut to live streaming.

  Text | Wang Youxin

  In 618 this year, the major e-commerce platforms have tried their best, but what they get may be the coldest summer.

  Although the major platforms continue to maintain a tacit understanding not to announce the total sales, Xingtu data tells everyone that this year's 618, the total sales of the whole network was 742.8 billion yuan, a year-on-year decrease of 7%. Although this data is not objective, the overall weakness is visible to the naked eye.

  Under the weakness of the overall market, live broadcast e-commerce, which is the growth pole of e-commerce, is also chilling.

  The 618 premiere of a major platform, the sales of many head anchors decreased by more than 70% year-on-year.

  Under pressure, change is happening.

  【Head Player Shifts Battlefield】

  In the past, anchors were seen as the core of the live streaming business model. But now, the frequency of super anchors in the live broadcast room is getting lower and lower.

  The institutions behind them are speeding up their pace towards a new battlefield.

  In addition to the basic actions of building a live broadcast room matrix and laying out shelf e-commerce, many leading players have set their sights on a more ultimate battlefield - making self-operated products, shifting from bringing goods to making goods, and creating their own product brands.

  The beautiful wrist recently launched the "beautiful wrist selection"; Three sheep's "Xiao Yang Zhenxuan" announced that its sales exceeded 10 million orders last year; Xin Xuan has coded more than 20 self-operated brands last year; Dongfang Selection can be said to be the self-operated benchmark and banner of the entire e-commerce field, and the sales volume of its self-operated products has exceeded 100 million orders on Douyin alone, and more than 100 products have entered the top three of the Douyin-related product list.

  Whether it is for the purpose of anti-risk or to seek greater imagination space to break the ceiling, in short, all leading players have made the same choice before the growth of e-commerce live broadcast has peaked - to use multiple channels and self-operated products to get rid of the dependence on super anchors.

  However, self-employment may be a good way out, but it is certainly not a good way to go.

  [There is no "metaphysics" in self-operated products]

  If it is said that what should be done in live broadcast is to string a chain, then to do self-operated products is to weave a net. Product development, inventory management, supply chain management, quality control, after-sales service, brand building...... The difficulty, pressure and risk of enterprise operation management have increased exponentially.

  In this case, doing the difficult things in a smarter and less labor-saving way has become the choice of most players.

  Open the "Beauty Wrist Preferred" flagship store, there are currently 7 products on sale, laundry pods, hair dryer hats, latex mats, face towels...... All of them are standardized industrial products.

  Looking at the "Xiao Yang Zhenxuan" of the three sheep, dozens of products on sale in the Douyin store are mainly snacks, daily necessities, clothing, etc., and there are only two fresh products: red Fuji apples and Korla fragrant pears.

  Even Xin Xuan, who is well-known in the field of live streaming of agricultural products, honestly avoids the fresh category when making self-operated products.

  Oriental selection is the only exception: more than 400 self-operated products, eighty percent of which are agricultural products.

Why did Dongfang Selection, Li Jiaqi and other superleaders start their own brands?

  This is the "pit" dug by Yu Minhong. As early as November 2021, in the first live broadcast of Dongfang Selection, Yu Minhong said that he would establish a large-scale agricultural platform to help the sales of agricultural products through live broadcast. Therefore, Dongfang selects self-operated products and takes agricultural products as the main track.

  At the beginning of reform and opening up, the chief designer said: "Compared with the four modernizations, agricultural modernization is more laborious. "To this day, agricultural products still have not been able to get rid of the quality control problems caused by non-standard attributes. In addition, the storage, transportation, and after-sales of agricultural products are buried with "mines" at every step.

  Let's talk about quality control first. Compared with standard industrial products such as daily chemicals, snacks, and clothing, the biggest feature of agricultural products is instability. In the case of apples, not to mention the differences between apples from different origins and different years, even the same tree at the same time will produce different fruit quality, and each apple is unique.

  How can we ensure quality in this case? "Stupid kung fu" can't be saved, the origin has to run one by one, the supplier has to talk about it one by one, and the product has to be tasted one by one.

  It also has to be technological. Last year, Dongfang Selection did a live broadcast of its own Luochuan apple traceability, and the cooperative factory used an intelligent sorting line to detect the sugar content, remove defective fruits, and classify them according to the size of the fruit diameter. These are hard inputs.

Why did Dongfang Selection, Li Jiaqi and other superleaders start their own brands?

  A good product is only the first step, and how to deliver it to consumers is also a huge test.

  Agricultural products are fragile and difficult to store, and they must be kept fresh, and their storage and distribution are often called "hellish" difficulties. For example, strawberries and other products need low temperature, cold chain, control the speed within 80 km/h, and use special packaging methods and specific pressure differences in the car to control the wear and tear within 15%.

  How to fix it? It's still a stupid way: cooperate with the best logistics service providers on the market to establish stronger logistics and distribution capabilities at a greater cost. In addition to room temperature delivery and cold chain logistics, Dongfang Selection has started a front-end warehouse and "hour delivery" this year, so that fresh products can reach consumers in a better state.

  There are no secrets to all this, and there are no shortcuts. If there are elements of "metaphysics" and "luck" in the birth of super anchors to a certain extent, then the matter of making self-operated products is so simple and straightforward that it is not sexy at all, and there is no "metaphysics" at all.

  Looking back now, choosing agricultural products as the main track has allowed Dongfang Selection to gnaw the hardest bones together, but it has also gained benefits: first, it has excellent supply chain capabilities, quality control standards and operating systems, and it has also taken advantage of brand creation.

  Agricultural products are related to health but the quality is uneven, and there has always been a lack of good agricultural product brands in the market, which gives Dongfang the opportunity and space for selection:

  It turns the public goodwill accumulated by Yu Minhong and New Oriental over the years into a unique core advantage, so that its self-operated products can quickly form a brand effect, and the timely and stronger supply chain and quality and service experience will further consolidate user loyalty and strengthen brand potential. According to the data recently disclosed by Dongfang Selection, the overall praise rate of its self-operated products exceeds 95%, and the repurchase rate reaches 59%.

  【Long slope and thick snow】

  Every investor wants to find a company with long slopes and thick snow, and every company also wants to have its own long slopes and thick snow.

  But where is the real long slope and thick snow?

  The product is the foundation of everything. Even though everyone often thinks that the traffic-driven business model of live streaming is 1, the anchor is 1, and the product is the 0 behind, but the real long slope and thick snow should obviously be the product itself, the product is 1, and the anchor is the 0 behind.

  Compared with selling goods at a stall, making self-operated products is undoubtedly a difficult and high-risk thing. It requires the industry to have its own investment and creation throughout the supply chain, and the longer the chain, the more risks, and any one link can be lost.

  This may also be the reason why few other players in the industry have risen to a strategic height to redo their own products like Dongfang Selection.

Why did Dongfang Selection, Li Jiaqi and other superleaders start their own brands?

  But there are pros and cons to both sides, behind the long chain and many risk points, there are more opportunities and space to create value, and behind the high difficulty is that once the difficulties are overcome, it often means the formation of core capabilities, taking the lead, and building a high moat.

  Ability to help the company to transcend the industrial economic cycle, continuous qualitative change and transcendence.

  The ability is the long slope and thick snow.

  Live e-commerce is also often classified as content e-commerce, and in the business of consumer goods, the best content is undoubtedly the product itself. In this sense, the next super anchor of live e-commerce may no longer be a certain person, but a certain product.

  ——END——

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