In China’s e-commerce, Alibaba and JD are the two leading actors.
The entry point of station B is live broadcast e-commerce. The commodities in the live broadcast room of station B cover daily necessities, cosmetics and skin care, 3C digital and other categories. Station B, Xiaohongshu and Zhihu jointly promote the Double 11 Shopping Festival, which reflects the common commercial problems faced by the content community.
After years of accumulation, the three content communities have gradually become one of the main gathering places of domestic Internet users, with 100 million active users respectively, by building content ecology in the fields of anime, lifestyle, knowledge, etc.
However, with the change of the Internet environment, the weakness of commercialization of the three communities has become increasingly prominent. Whether it is traditional cash cow such as advertising and marketing services, or new businesses such as members and games, its growth rate has slowed down. The ceiling is clearly visible, and the business prospects are not optimistic.
The content community has the underlying logic of e-commerce. No matter how they adjust their strategy, the result is often twice the result.
In contrast, only by desalinating community attributes and emphasizing traffic efficiency can the platform give full play to its content advantages and gain market share from traditional e-commerce platforms. It is difficult for the content community to rewrite its content supremacy gene and decentralized traffic distribution model, which naturally makes it difficult for e-commerce to make a splash.
A. The traditional business logic of the content community is to expand the user scale and then realize the content. Along this path, Station B has extended two main realization paths.
One way is to sell content to users. Station B users buy big members and Zhihu users buy Yanxuan members. They are paying for high-quality content, similar to Aiyouteng, Tencent Music, Netease Cloud and other platforms.
However, most of the high-quality content in the content community comes from UGC or PUGC (user/professional user self-made content), and experts in all fields are the core content producers. Users are both content producers and consumers, which lowers the content cost of the entire ecosystem. The platform does not need to spend a lot of money to buy copyrights and self-made content like Aiyouteng, but can also sell more membership by virtue of the natural growth of content ecology.
The larger the number of users in the content community, the more excellent creators will be, further enhancing the attractiveness of paying members. In terms of finance, it is the synchronous growth of user scale and paid members. The platform does not need to increase the unit price, so it can obtain higher membership fee income.
The other way is to sell content to B-end customers, including hard advertising, soft advertising and so-called integrated marketing services.
Compared with the hard advertisements commonly used by portal websites, search engines and information flow platforms, the publishers of soft advertisements in content communities are often KOL with many fans. Good word-of-mouth superimposed implantation techniques allow users to be more tolerant of such content, thus bringing higher transaction conversion efficiency.
A research report from a market research company pointed out that among the main content platforms, the conversion rate of goods carried by Weibo is only 2.7%, that of Tiktok and Kwai is 8.1% and 9.1% respectively, and that of Xiaohongshu is as high as 21.4%. The addition of advertising effect by content community can be seen.
In the past few years, the B stations have initially run through the above two routes, and membership fees and advertising revenue have become the revenue pillars. However, with the change of the Internet environment, these two realization paths are suffering from increasing resistance.
On the one hand, the disappearance of the Internet dividend has led to a slowdown in the growth of the overall user scale, and the growth of paid members has naturally declined. On the other hand, businesses are more cautious in advertising costs. The content community lacks sufficient e-commerce infrastructure in the site, which makes it difficult to undertake more marketing traffic. The advertising revenue is naturally not optimistic. The MAU of Station B is half of Tiktok, and the DAU is 1/8 of the latter, but the advertising revenue is only 1/30.
From the perspective of station B, e-commerce is an attractive fruit only one step away.
What’s more, Tiktok and Kwai, which also attract a large number of users with content, seem to have found a feasible path “from marketing to e-commerce”.
Previously, Shakuai mainly sold its traffic to third-party merchants and platforms, but with the improvement of its own e-commerce capabilities and infrastructure, they successively chose to disconnect the e-commerce external chain, enclose the passenger flow, business flow and cash flow inside the platform, and squeeze into the table of e-commerce giants.
Although the size of the three major content communities is far from the fast, it is still an exciting commercial landscape. Compared with selling members and advertising, the potential space of e-commerce business should be 100 times. If we use the scale of “1/N Tiktok” users, Station B, Little Red Book and Zhihu are expected to achieve e-commerce GMV (total commodity transactions) of tens of billions or even hundreds of billions.
In this case, the three major content communities, on the one hand, guide brands and e-commerce platforms to earn marketing and traffic costs; On the other hand, I went off the stage personally and tried to find a new foothold with the game methods such as shelf e-commerce, live broadcast and goods.
It’s not too late for Station B to enter e-commerce, even several years earlier. However, up to now, the role of content community in e-commerce circuit is still a runner. Most of the cakes they cut from the e-commerce market are still advertising fees; The platform’s own e-commerce business, whether self-operated or merchant settlement mode, is still in the process of trial and error, and it is still far from being the sole winner.
On the other hand, the content community is also faced with the embarrassment that the growth of e-commerce cannot keep pace with the growth of users. In the second quarter of this year, the MAU of station B increased by 29% year-on-year, and the DAU (daily active user) increased by 33% year-on-year; However, total revenue only increased by 9%, while e-commerce and other revenue only increased by 4%. Relying on the scale of users, “making great efforts to create miracles” has supported the members and advertisements of the content community, but it is difficult to reproduce the magic in the e-commerce scene.
B. The content community tried to emulate Shakuai to become an e-commerce, but failed to do so. The key factor is the enterprise gene.
A company’s genes cover such factors as business model, market positioning and corporate culture. The starting point and growth path of Station B, Xiaohongshu and Zhihu are obviously different, but on the whole, their enterprise genes all contain “content first” and have a profound impact on management, creators and users.
For management, this means that content is given higher priority, commercialization needs to make way for content, and tactical decisions often lack flexibility. The atmosphere of content supremacy also affects the creator ecology. The top creators of the three communities are mostly good at content itself, and relatively lack e-commerce experience.
In contrast, the top celebrities of Tiktok and Kwai have strong e-commerce attributes. Those creators who can’t integrate with e-commerce in depth often find it difficult to continuously attract and transform traffic and are quickly marginalized by algorithms and users after relying on unique content for a flash in the pan.
On the other hand, the core users of the content community have been immersed in the atmosphere of content supremacy for a long time, and are more sensitive and intolerant to commercial content. In addition to the genetic barriers, the decentralized traffic distribution model of the content community also makes it difficult to provide sufficient fertile soil for e-commerce.
Station B, Xiaohongshu and Zhihu start with communities, and community products are naturally decentralized. Its basic particles are the single content produced by the creator, as well as the comments, likes and bullet screens gathered around the content. Users arrive at a certain content through browsing, searching and other paths. After viewing and interacting, they return to the public domain and repeat the above operations. It is difficult for the platform to really interfere with the flow direction of users, so it cannot really master the flow valve of the whole platform.
Managers of the content community have long recognized this feature. In the era of BBS and post bar, the moderator or bar mainly wants to give more exposure to a certain content, and usually can only use refinement, topping and other means, with extremely limited effect; After the rise of B stations, the exposure points and operation methods of the platform have increased significantly, but because the resource level is limited after all, the content community still cannot fundamentally solve the problem of traffic decentralization.
Although the algorithm recommendation element is added, the product design of the content community is still centered on “people looking for content”, and the most important traffic paths are search, partition and dynamic scenes. The content pushed by the platform occupies a key position, but it may not attract the most traffic, because most users will not click the opening screen, header, top recommendation position and other content first after opening the APP.
In contrast, Tiktok uses algorithm recommendation to establish a centralized traffic distribution model, which is matched with a single column video information flow design, so as to firmly hold the traffic in hand. Tiktok users are accustomed to downward video switching, and in a disguised way, they give the content selection right to the platform of the control algorithm. The simplification of the opening path allows the platform to more freely recommend different live broadcast rooms and product links with goods based on user portraits, that is, “content finding people”. The automatic playback of video also helps to improve the completion rate and dissemination of recommended content.
In e-commerce business, the content community faces the same embarrassment. The efficiency shortcomings of the decentralized traffic model are exposed, which is also the reason why Station B can’t always learn Tiktok e-commerce.
When content communities invest in e-commerce business, they often fall into strategic swing. At some times, they focus on guiding e-commerce platforms, at other times, they also need to cut off the external chain, access merchants to do e-commerce closed-loop, and occasionally try self-operated e-commerce. The reason behind the hesitation is that the content community doesn’t want to understand how to do e-commerce, or even whether it should do e-commerce.
C. The content community is unable to find a new realization path, indicating the shrinking of the value imagination space.
In the past, when observing the content community, investors used to build valuation models with “people” as the anchor point, and were interested in talking about user growth, portrait, consumption ability and other indicators. For example, young people in station B, fashionable women in Xiaohongshu, and high-minded people in Zhihu; Even Kwai with relatively weak community attributes and “old iron” piles have brought the daydream of sinking the market.
The logic of the capital market at that time was that the content community could rely on hundreds of millions of users with distinctive characteristics to cut into the market segments under different scenarios and build a closed loop of commercialization, so as to establish barriers in areas where the giants have not yet taken advantage. Stimulating growth and expanding scale are the first priority, while cashing out and making profits are not urgent.
According to public data, the number of domestic Internet users increased by less than 20 million in the first half of the year, and the Internet penetration rate of the total population was close to 3/4, while mobile Internet users accounted for 99.6% of the total number of Internet users. It is almost impossible for the content community to maintain the growth of more than 30% every quarter. What is more surprising is that the user value of the content community does not exceed the average level of Internet users, and is even at a disadvantage.
The above calculation is not accurate considering that the business models of each company are quite different and the commercialized capabilities vary greatly; However, the order of magnitude gap in single-user revenue still reflects that the content community has failed to obtain excess revenue with distinctive users.
The valuation model around users is no longer established. One of the most effective ways for Station B to boost the stock price and regain the favor of capital is to improve the financial statements. It is also an inevitable choice to do more businesses that make fast money.
Since entering the e-commerce circuit, Station B, Xiaohongshu and Zhihu have gone through various trials and even cut off with e-commerce giants at some times, but they can’t abandon the lucrative and strong cash flow diversion business. Xiaohongshu cut off the outer chain of Taobao on the 11th of last year, but this year, the 11th of this year, it made great efforts to cooperate with Tmall; Even Kwai has recently resumed the outer chain of Taobao commodities and reached new cooperation with JD.
At the same time, the content community cannot completely return to the status of selling traffic. They must continue to explore e-commerce and other emerging businesses, and perform at nodes such as the “Double 11”. Even if they cannot see obvious results for a while, they can still retain some imagination space.
However, the crux of content community’s failure to do well in e-commerce is the content gene and decentralized traffic distribution model. Diligence at the tactical level will not bring fundamental changes. The e-commerce actions of station B on the “Double 11” and earlier may hardly change the stereotype of the capital market.
On the other hand, investors may also need to reflect that the “loss for scale” growth model pursued by the Internet has failed. Long video, sharing economy, content community and so on have been popular for a while, attracting a large number of venture capital inflows, and growing rapidly by burning money. But now it seems that this methodology has been repeatedly proved to be impracticable.
In the era of rapid development of the Internet economy, VCs believe in a hundred or even a thousand times the return. Everyone dreams of turning stone into gold one day. However, with the change of the wind direction of the whole industry, investors have reached the crossroads of lowering their expectations, the return cycle will be significantly extended, and the ROI multiple will be significantly compressed. Those companies that have been matured by capital also need to return to business common sense, find a profit path as soon as possible, and find a new position in the second half of the real Internet.