On the evening of April 16th, the debut livestream of Liu Qiangdong's digital persona, "Cai Xiao Dong Ge" ("Procurement Xiao Dong Ge"), came to an end. Liu Qiangdong's digital persona appeared successively in two livestream rooms on JD.com, featuring home appliances and home furnishings, as well as procurement sales from JD Supermarket. Although each appearance lasted only a little over half an hour, the total viewership exceeded 24 million.
In terms of specific performance, "Cai Xiao Dong Ge" presented himself naturally, but due to the lack of interaction with the audience throughout the livestream, it created a strong sense of distance. Some netizens directly criticized: "(Liu Qiangdong) wants to be an internet celebrity but is unwilling to appear in person, so he created a digital persona. Moreover, he 'clocks out' after only half an hour of livestreaming, showing no sincerity. It's just about gaining traffic."
Although some were somewhat disappointed with the performance of "Cai Xiao Dong Ge," the news of Liu Qiangdong's livestream debut still successfully attracted public attention. Particularly, when JD.com used the rarely seen Liu Qiangdong as a gimmick to try and drive traffic to the platform through livestreaming, it signifies that amid the encirclement by content e-commerce platforms such as Douyin, Kuaishou, and Xiaohongshu, traditional e-commerce giants are restarting a new round of "traffic wars."
Livestreaming, Beyond Sales
In an interview with the media, Liu Qiangdong once said, "Don't compare us with Lei Jun in marketing; we can't compete with him in this aspect."
However, when Lei Jun successfully "sold" the Xiaomi Car SU7 through a livestreamed product launch event and triggered a trend of industry leaders entering livestreaming, what Liu Qiangdong and JD.com saw was the ultra-strong traffic effect brought by livestreaming.
According to the "China Internet Audiovisual Development Research Report (2024)," 71.2% of surveyed users shop online because of watching short videos and livestreams, and over 40% of internet users consider short videos and livestreams as their primary consumption channels. Additionally, according to data released by iiMedia Research, the transaction volume of live e-commerce in China reached 49 trillion yuan in 2023, with a growth rate of 35%, showing rapid growth momentum.
When livestreaming no longer serves merely as a means of selling products but becomes a marketing tool, traditional e-commerce platforms like JD.com seem to have embarked on a new method of "procuring traffic."
During the "Double 11" period in 2023, JD.com promoted its "JD Procurement Livestream Room" and successfully attracted the attention of the general public. Data shows that the total viewership of JD Procurement Livestream Room exceeded 380 million. On April 10th this year, JD.com officially announced that it will invest one billion yuan in cash and one billion yuan in traffic as rewards to attract more original creators and high-quality content institutions to join. Its core purpose is to cultivate top-tier influencers of JD.com and redirect traffic through their livestreams and content creation.
As a longtime rival of JD.com, Taobao adopts a "talent introduction" strategy. In 2023, Taobao successively invited several top anchors such as "Making Friends" and "Eastern Selection" to join, with impressive performance.
Official data shows that in 2023, the user base of content consumers on Taobao increased by 44% year-on-year, with 12,000 livestream rooms achieving monthly transactions exceeding one million yuan. In February 2024, Taobao established a livestreaming e-commerce company, stating its intention to train more mid-level anchors for the platform to compensate for the decline of top-tier anchors. In March, Taobao announced that it would inject billions of yuan in cash and tens of billions of yuan in traffic this year, significantly increasing investment in content e-commerce. At the same time, it announced that Zhang Xiaohui would soon join Taobao livestreaming.
As for Pinduoduo, it has maintained a relatively low profile. On November 5, 2023, the opening day of the Import Expo, Pinduoduo collaborated with CCTV News to host a special live-streaming event with billions in subsidies. At the end of January 2024, Pinduoduo launched the "Fu Yao Plan" for live streaming, incentivizing hosts to promote products through real-time traffic weighting and distributing advertising red packets.
The traditional e-commerce giants' coordinated strategies have shown positive results in their financial reports. According to JD.com's financial data, its net profit reached 24.2 billion yuan in 2023, compared to 10.4 billion yuan in the same period last year. Alibaba Group's financial report for the third quarter ending December 31, 2023, showed a quarterly revenue of 260.3 billion yuan, a 2% year-on-year increase. Taobao and Tmall Group achieved a revenue of 129.07 billion yuan, a 2% year-on-year increase. Pinduoduo's financial report indicated a revenue of 247.6 billion yuan in 2023, a 90% year-on-year increase, with a net profit of 60 billion yuan, also a 90% year-on-year increase.
While it's difficult to attribute the growth in financial numbers entirely to the streaming marketing's traffic effect, the significant investments made by traditional e-commerce platforms in content commerce are indeed happening, raising further curiosity about their underlying motives.
Can traditional e-commerce platforms truly transition into content commerce?
In the era of traffic, traditional e-commerce platforms have mostly dominated the retail market share through their supply chains, logistics systems, and services. "People, goods, and scenes" have become the key terms when summarizing their successful experiences. However, with the advent of content marketing, video content commerce represented by platforms like Douyin and Kuaishou has redefined the meaning of "people, goods, and scenes."
The scope of "people" has expanded to include not only consumers but also anchors and influencers responsible for product selection, marketing strategies, and stimulating consumer purchasing intentions. The matching of "goods" with consumer demands has become more precise, thanks to targeted product selection based on big data feedback, meeting consumers' pursuit of high cost-performance ratio. The "scenes" have become more diverse, ranging from live streaming rooms to real-life scenarios and virtual worlds. The concept of scenes based on time and space has been completely shattered, integrating into people's fragmented time and driving more consumption demand.
Video content commerce has transformed the logic from "matching people with goods for different scenes" to "matching goods with people who need them in different scenes." Therefore, although both traditional e-commerce giants like JD.com, Taobao, and Pinduoduo, and platforms like Douyin and Kuaishou utilize "video content + e-commerce," their logics are entirely different.
In 2016, JD.com already introduced the "watch videos and buy products" feature in its product information flow, mostly focusing on product reviews. This aligns with JD.com's emphasis on "quality" as a platform characteristic. By 2021, JD.com's app homepage added a "browse" section, incorporating short video content and live streaming, aligning closely with the diversity of content on platforms like Douyin and Kuaishou.
In 2017, Taobao introduced "Discovery" on its mobile app, focusing on short video content. Unlike JD.com, Taobao's short video content mainly revolves around "grass planting," inspired by Jack Ma's statement: "Every night, 17 million Taobao users are using the app, but they're not buying anything." Thus, Taobao aims to stimulate consumer impulse through "grass planting" videos. In 2021, Taobao launched the "Browse" section, later renamed "Videos," aligning its short video content with that of short video platforms.
In comparison, Pinduoduo, known for its low prices and popularity, seems unconcerned about traffic challenges. It introduced "Duoduo Videos" in 2020 and began focusing on it in 2022.
Thus, traditional e-commerce platforms have caught up with TikTok and Kuaishou in terms of short video content. However, they struggle to transition into true video content e-commerce platforms for three reasons:
Firstly, traditional e-commerce platforms habitually view short videos and live streaming as traffic diversion tools. Even if they import content from TikTok or Kuaishou by paying creators and influencers hefty sums, their aim is not to showcase the creative value but to gain more traffic value.
Secondly, the original relationship between traditional e-commerce platforms and users is hard to change. These platforms initially established a transactional relationship based on actual consumption needs, where they are seen as shopping tools. Even Taobao, which initially focused on video grass planting, is perceived as merely a "more user-friendly shopping tool." Traditional e-commerce platforms provide consumer value, while short video content platforms like TikTok and Kuaishou offer interest and emotional value from the start.
According to data from Joyus, a US short video shopping website, short videos generate 5.15 times higher conversion rates for product purchases compared to traditional text and image content. Data from iResearch shows that 68.0% of users accept grass planting, and among them, 70.7% will buy based on the situation, while 26.2% will almost always make a purchase. Therefore, when TikTok and Kuaishou transition into e-commerce, users still accept products presented in the form of grass planting short videos or live streaming explanations, as they satisfy their interest in shopping and consumer emotions.
Thirdly, due to differences in user value and platform positioning, influencers are not inclined to focus on traditional e-commerce platforms. The influencer ecosystem follows a typical "pyramid model," where the majority of market share is held by top influencers. However, top influencers often face bans due to various issues, prompting content e-commerce platforms in recent years to avoid excessive reliance on individual top influencers.
Traditional e-commerce platforms have evidently found their breakthrough by vigorously supporting mid-level and even lower-level influencers, hoping to nurture a "golden phoenix" on their platforms through substantial investment.
However, the short video content on current traditional e-commerce platforms is still primarily "reposts" of content initially published on TikTok or Kuaishou, lacking genuinely enticing "original" content that attracts consumers. This indirectly indicates that influencers are not optimistic about creating "original video content" on traditional e-commerce platforms.
Micro-dramas: an opportunity for traditional e-commerce platforms
Although traditional e-commerce platforms lack the cognitive foundation for "transitioning" into content e-commerce at both the user and influencer levels, there are still opportunities, such as leveraging the new trend of micro-dramas for a strategic maneuver.
Firstly, the user base and profiles of micro-drama viewers naturally align with the needs of traditional e-commerce platforms. According to the "China Internet Audiovisual Development Research Report (2024)," micro-dramas rank third in terms of frequently watched content types among users, with 39.9% of users. Among surveyed users, 31.9% have paid for micro-drama content.
Furthermore, data shows that in the first half of 2023, 64.8% of users who watched popular micro-dramas were aged 15-29. This indicates that micro-drama viewers not only have a certain willingness to consume but also overlap with the Z generation demographic that traditional e-commerce platforms are targeting.
Secondly, micro-dramas do not suffer from "sole platform recognition," meaning a large portion of micro-drama viewers have not formed stable usage relationships with a single platform. This suggests that traditional e-commerce platforms have the opportunity to seize this new traffic hotspot.
According to the "China Internet Audiovisual Development Research Report (2024)," in 2023, a total of 557 micro-dramas with 12,630 episodes were registered and went online in the "Key Network Audiovisual Drama Information Filing System" under the State Administration of Radio, Film, and Television. Among them, 384 micro-dramas were launched on key online platforms in 2023, more than double the 172 launched in 2022.
The narrative of short dramas unfolds quickly, offering thrilling moments throughout and often concluding with unexpected twists. Short dramas inherit their storytelling logic and pacing from longer formats, making them copyrighted video content.
In the realm of copyrighted videos, Aiyouteng's long-standing competitive strategy in acquiring rights for long-form videos is something traditional e-commerce platforms can emulate and learn from. Their approach revolves around securing rights for top-tier short dramas. While pursuing high-quality short drama copyrights, they also strengthen their capabilities in producing original short drama series and accumulating intellectual property projects. This strategy not only avoids direct competition with platforms like Douyin and Kuaishou for short video users but also attracts users proactively with premium short drama content. This approach represents the long-term development space for traditional e-commerce platforms.
Moreover, according to the "2023-2024 China Micro-Drama Market Research Report," the market size of micro-dramas in China surged to 37.39 billion yuan in 2023, a growth of 267.65% from 10.17 billion yuan in 2022, accounting for nearly 70% of the concurrent film market size (with a total box office of over 54.9 billion yuan). It is projected that by 2027, the market size of micro-dramas in China will exceed the 100 billion yuan mark. This indicates that traditional e-commerce platforms can tap into new growth trajectories through the development of short dramas.
In fact, many traditional e-commerce platforms have already outlined clear strategies for their short drama businesses.
In December 2023, Duoduo Video launched the "Duoduo Has Good Drama Plan," supporting premium short drama content through recommendation weighting, revenue sharing, and other models.
In late March of this year, Taobao announced its short drama support policy for 2024, targeting short drama ecosystem partners. They declared plans to invest millions in brand-customized dramas and provide over 1 billion yuan in traffic support for 2024, collaborating with popular IPs, celebrities, top labels, key influencers, and institutional partners to create premium short drama content. As of now, Taobao has launched over 20 brand short dramas on its platform.
As for JD.com, its "Double Billion" plan probably also includes support and investment in short video content.
In the past, when traditional e-commerce giants emerged, offline retailers experienced similar anxieties as those felt by JD.com and Taobao today. However, traditional offline retailers successfully transformed themselves by embracing electronic payments and adopting new retail strategies, making themselves even more indispensable.
Now, it's time for the old guard of e-commerce to undergo transformation pains. They need to constantly explore and innovate to find a more suitable path for their video content development.
In reality, the internet has never lacked traffic. It's just that within the internet ecosystem guided by user preferences, traffic continuously circulates among different platforms according to new patterns. Platforms need to grasp user preferences and find ways to attract, stabilize, and even create traffic.
