Online Sales Analysis: Live E-Commerce Is Not The Only Way Out For Enterprises

On the evening of August 24, mushroom Street released the Q1 financial report of fiscal year 2021 (the fiscal year from April 1 to March 31 of the next year), with revenue down 46.8% year-on-year. Since the publication of the first financial report after its listing in 2018 (Q2 in 2019), the revenue of mushroom street has been continuously declining, and the range is also gradually expanding.

By the end of the day, shares in mushroom Street fell 20.38%, with a market value of $271 million. Compared with its peak value of $3 billion, mushroom street has shrunk by less than 10% at that time.

In 2011, mogujie started from an e-commerce shopping guide platform and earned a huge commission by channeling Taobao. After being blocked by Taobao, mushroom street was transformed into an e-commerce platform in 2014 and listed on NASDAQ in 2018, becoming "the first share of fashion e-commerce". But over the past few years, mushroom street has not only lost money, but also jumped in several business models, such as overseas shopping, brand sale and content e-commerce.

Mushroom street, which has sought after multiple modes, has finally become a live e-commerce company: in the new quarter's financial report, the word most mentioned in mushroom street is lVb (live video live service). Live broadcast business contributed more than 70% of Gmv to the company, while in the last quarter, live Gmv accounted for 65.4% of the total.

Previously, founder Chen Qi mentioned in an internal letter in April that some businesses and core businesses deviated from the direction. In the future, mushroom Street will focus on live e-commerce business.

Live e-commerce is indeed the hottest outlet. After the epidemic, all platforms began to get involved in the field of live delivery with goods. However, when it comes to "live delivery with goods", people first think of the three head platforms of Taobao live, Shuo Yin and Kuaishou. Focusing on the market of live broadcasting e-commerce, mushroom street has also realized the growth of live broadcasting business for 18 consecutive quarters, with a year-on-year growth of 72.4% in this quarter. This result is still inferior to Taobao live - Alibaba's latest quarterly financial report shows that the Gmv growth of Taobao live is more than 100%.

Mushroom street, which only has live e-commerce, can't compare with its rivals on the same track in terms of Gmv scale, number of active users and user mentality. Is it possible for it to regain its appeal?

"The ancestor of live e-commerce" missed the outlet

In the live e-commerce world, mushroom street is regarded as the "ancestor".

Many people regard the launch of Taobao live broadcast in 2016 as the beginning of live e-commerce, but in fact, mushroom Street "invented" the mode of live delivery. It not only hatched the first batch of professional anchor with goods, but also the first one with more than one million anchors per field. Mushroom street is also the first platform for "supply chain live broadcasting".

Many people did not expect that the live broadcast has become a "wind outlet" after the epidemic. For mushroom street, which used to be the "fourth pole of e-commerce", the "tuyere" has long been lost.

Mushroom street used to be brilliant, because it stepped on the tuyere, it is now lonely, but also because of missing a lot of tuyeres.

In 2011, Chen Qi, who works in taobao.com, sold a suite and left to establish mushroom street community. Soon, mushroom Street ushered in the first transformation. Soon, this platform, which only discussed weight loss and clothing, was transformed into an e-commerce shopping guide platform - users can share goods in mushroom street, or jump to Taobao shopping through links.

At that time, Taobao did not make the function of "guess you like". Shopping is like looking through a dictionary. You need to search through various categories and choose the one you want from thousands of items. It's inefficient and the shopping experience is bad.

The main fashion category of mushroom street, like pinterest, is designed to look like a waterfall flow, which is suitable for product recommendation; products are classified according to popular elements and styles, and comprehensive user preferences and order conversion rate appear on the home page to ensure the accuracy and efficiency of the recommendation mechanism.

Compared with straight men's index shopping, many young girls prefer to choose from a good-looking shopping guide and then place an order on Taobao. At the same time with the mushroom Street shopping guide platform, as well as Meili Shuo and LC style network, now the former and mushroom Street merge, the latter has disappeared.

Ai Rui data shows that in 2013, mushroom Street attracted nearly 4 million users every day, and the conversion rate was as high as 10%. At the same time, the conversion rate of other shopping guide websites is generally 1%.

But soon, Ali closed the Commission entrance and blocked mushroom street. This means that users will not be able to get involved in the transaction. In addition to losing the Commission of 500000 to 600000 yuan per day, the flow of mushroom street has also plummeted. It has to transform itself into an e-commerce business.

In order to differentiate itself from the e-commerce giants, mogujie tried several attempts including overseas shopping, brand sale and content e-commerce, but all failed. Later, foreign wharf, vipshop and little red book appeared in these tracks.

Many people think that 2016 will be the turning point of mushroom street. This year, mushroom Street began to set foot in live e-commerce; hemeishuo merged into "Meili union"; Tencent took a stake in mushroom street, accounting for the largest proportion of shareholders, reaching 18%, followed by Chen Qi, who accounted for 11.9%. The next year, mushroom street also occupied a place in the wechat app Jiugongge.

However, live e-commerce was not favored at that time, and "beautiful union" was also regarded as the group of vulnerable groups. Although Tencent shares, wechat app brought 17.8% and more than 30% Gmv to mushroom street in fiscal year 2018 and fiscal year 2019 respectively, which did not restore the decline of mushroom street.

The attraction of mushroom street is shared by content platforms like little red book and Taobao's personalized recommendation mechanism.

Taobao's "guess you like" has already completed the historical task of the shopping guide platform. The current shopping guide platform is more targeted at the rebate network for wool collecting users; the value of mushroom street in the content level is not as good as xiaohongshu: the currently valuable content of mushroom street is only the suggestions provided by red people according to different height and weight. In addition to fashion and make-up assessment, xiaohongshu even replaces some functions of travel platforms such as leehive and cookbook platforms such as kitchen. Even if advertisements and soft text are rampant, the rich content still makes the little red book a reference for many people's lifestyle.

In the cracks between Taobao and Jingdong, small and medium-sized e-commerce companies often encounter two problems: the quality of the business is uneven; the flow is expensive. To some extent, mushroom street and pinduoduo are similar: they also occupy a place in Jiugongge, survive in the cracks of e-commerce giants, and undertake businesses eliminated by Taobao. However, pinduoduo solved the problem of early traffic and accumulated a large number of original users.

Live e-commerce is indeed the best way out for mushroom street at present.

Mushroom Street started live e-commerce in March 2016, but the business was not clear at that time. It was only recently that the business of live e-commerce became clear with the elimination of the offshoots - in April this year, mushroom Street laid off 14%. According to the financial report, mushroom Street focuses on live e-commerce business and needs to adjust its non core business. At the same time, mogujie has reduced the sales of self-supporting commodities and turned to drawing commissions from cooperative businesses. Reflected in the financial report, the Commission proportion of mushroom Street live broadcast increased from 52% in the last quarter to 64.4%. This is the first time that the proportion of live broadcast Commission in mushroom street has exceeded half.

"Red man is the most valuable asset"

E-commerce live broadcasting is an ecology that requires the participation of multiple elements and roles: the field where chattering and fast hand store traffic through short video content. Taobao live broadcast has seized the advantage of goods. It not only transforms Taobao and tmall sellers into producers of live content, but also fosters an ecology: according to Ali's latest quarterly financial report, 80% of Taobao merchants have started to do shop self broadcasting, while store self broadcasting derives from agency broadcasting, which currently supports more than 200 agency broadcasting organizations.

Mushroom street thinks its advantage is "people".

In this quarter's earnings report, Chen Qi said: "our long-term cooperation with KOL has become the most valuable asset of mushroom street."

In the transformation of community e-commerce, content e-commerce and live e-commerce, mushroom street has always been dealing with MCN institutions and celebrities. Although the business model missed the outlet, but the resources of the red man still precipitated down. This is also why mushroom street has transformed from a shelf-life e-commerce into an e-commerce focusing on red men selling goods.

Since last year, mushroom street has been recruiting anchors and conducting "refined operation" on them.

Mogujie told e-commerce online that anchors would be divided into 10 levels according to the number of fans, the ability to bring goods, the intimacy value and the number of video releases. Compared with the increasingly fierce Matthew effect in most of the platform live broadcasting rooms, the development of the anchors in mushroom street is relatively balanced, showing a pyramid distribution: among the more than 20000 anchors in mushroom street, the number of novice anchors in K1 and K2 is the largest, and the number of middle waist anchors with tens of thousands to 100000 fans is more than 2000, while the number of head anchors with single sales of more than 10 million is no more than 10. For platforms and MCN institutions, such a structure is more conducive to organization and management, and there is also room for incubation of new celebrities.

For different levels of anchors, mushroom Street will adopt different modes of cooperation: the head anchor is the equity cooperation, while the anchor below the middle waist is the signed divided cooperation. At the end of May, Chen Qi also said in an online live summit that the platform would pay a monthly minimum salary of 30000 yuan to the mushroom Street anchor.

Although there are no anchors like Weiya, Li Jiaqi or Simba who can make a circle, the ability of the middle waist anchor to bring vertical categories is no less than that of other platforms: during 618, the top 3 anchor of the platform "little sweetheart"_ (1.831 million fans), "Yiye yzzz" (1.256 million), "York Yuer" (900000) of the total number of live broadcast products with more than 100 million. Among them, "little sweetheart" alone brought more than 65 million yuan. Luo Yonghao, who has 13 million fans, brought 64.99 million goods in June in the top 50 Gmv monthly list of live e-commerce anchors released by Guoji Union and others.

E-commerce experience of mushroom Street

Compared with the chattering sound and quick hand without e-commerce foundation, mushroom street has a deeper accumulation in the supply chain.

Accumulated e-commerce experience from mushroom street in the past few years. Since last year, mushroom street has launched the global beauty supply chain pool, and has introduced 2000 Ka supply chains. Chen Qi also said publicly before that mushroom street is establishing a deep cooperation relationship with the supply chain of clothing and beauty. If the products meet the recruitment requirements of mushroom street, the brand or manufacturer can get free commission or exclusive sales for one year. So far, mushroom Street Supply Chain pool covers more than 2500 beauty brands.

In the past year, Shuo Yin has started to establish an e-commerce closed-loop. It not only recruits merchants to settle in the store, but also cooperates with Suning and other third-party platforms to make up for the shortage of goods. But in the live studio of the head anchor of shaking sound, most of the commodities are still linked with Taobao chain. In mushroom street, 30% of the products come from its own supply chain.

Mushroom Street mentioned a set of figures in the financial report: active lVb buyers increased by 37.0% year-on-year to 3.7 million. On average, users spend 71 minutes watching the live broadcast every day, with an average of 21 days per month. The repurchase rate of 30 days is as high as 91%.

The high viscosity of this group of users is expected. But on the one hand, 3.7 million users are not large. Secondly, due to the low-cost nature of mushroom Street live broadcasting, how long this group of users can follow remains to be discussed.

If you look at the page of mushroom street, you will find that the home page only has "low price". No matter from the banner page of the home page to the content channel, or from the live room, there are no more than 100 yuan of goods, the most prominent places are 19 yuan jeans, 40 yuan old shoes and 40 yuan sweater.

Products with low price, high frequency and high premium are indeed more popular in the studio. But when there is only low price for live broadcasting, the industry space will become narrower and narrower. Consumers who go for cheap goods are not loyal enough and are easy to migrate because other platforms offer higher prices and benefits. In the long run, it is not a good thing for platforms and businesses. The concept of "low price" is the most important thing for live e-commerce to change. It is not only a tool to use low-cost drainage to inventory, but also a tool for businesses to open stores.

Mushroom Street's return to its peak looks unlikely in the short term.

Mushroom street also told "e-commerce online" that on the vertical track of live e-commerce, it is a "small and beautiful" company, "e-commerce has many modes.".

At present, mushroom street now has the advantage of "people". In the short board of replenishment, what is lacking is the flow.

Previously, the operation director of an MCN organization told e-commerce online that the traffic of short video platforms was becoming more and more expensive. "Last year, a twitter fan cost $1, but now it costs $3 or even $5.".

When the traffic of short video platform becomes expensive, mushroom street may have to think about how to solve this problem that has not been solved.