There have been discussions about separating e-commerce and video since the beginning of the year. As an entertainment channel, users might be put off by too much selling.
Photo from CFP
By KE Xiaobin
AiSleep, a 14-year-old memory foam pillow brand, has always been sold online. Since last year, in addition to vanilla e-commerce, they have been experimenting with short-video apps. Now, a team of 10 runs its live stream channel on Douyin, the Chinese version of TikTok owned by ByteDance, bringing in about 50,000 yuan (US$7,835) every day. About 10 percent goes on promotions and another couple of thousand goes to influencers and their agents, CHEN Dengfeng, vice president of AiSleep said.
Douyin is not shy about its e-commerce ambitions. From January to September this year, the number of sellers more than doubled. Year-to-date GMV reached 600 billion yuan in August, more than twice that of its rival Kuaishou, and well on track to pass a trillion by the end of the year. During the most recent shopping festival, its live stream channels were watched 39 billion times. That is 25 million hours of advertising.
It has all moved fast. Bytedance, the parent company, has been toying with e-commerce since 2014, but only got serious last spring, opening an e-commerce unit in June. In September, it told sellers many of whom were using Douyin only as a marketing tool then, to stop directing viewers to their online shops elsewhere. The sellers were told what starts on Douyin should stay on it, and they were more than welcome to open stores on the Douyin.
Sales grew fast. GMV from January to August increased out of all proportions. During a sale, over 2.8 billion yuan of goods were sold in a single day. To keep sellers and buyers on the platform, Douyin launched its own mobile payment tool and is hiring for two newly-founded logistics companies.
A separate Douyin e-commerce app is reportedly being tested. “There have been a lot of discussions about separating e-commerce and video since the beginning of this year,” a company insider told Jiemian News. “Douyin, after all, is for entertainment. Users might be put off if it becomes purely a marketplace.”
The influx of sellers has already pushed up the cost of promotion. Cheng is also concerned about the rising costs. Ten times more spent on promotions will not bring in ten times more sales. A seller told Jiemian News 200,000 yuan spent on promotion could bring in 2 million in sales last year. Now, this is no longer possible. “The ice cream is all eaten,” he said. “Now you will lose money if you spend indiscriminately.”
Not only are sellers staying but they are creating thousands of previously unheard-of jobs. There are “live stream shelving specialists” — think of a store clerk when thousands of shoppers swarm into the store all at once — who are paid around 10,000 yuan a month to keep goods in stock and adjust prices according to demand. There are “web traffic specialists,” who use sophisticated analytics to decide how much to spend on promotion for each product.
“It’s more art than science,” a manager at a popular brand said. “Many so-called web-traffic specialists overpromise.” But he still plans to hire them.
