It has become an acknowledged fact that online celebrity has great commercial capacity, which makes the majority of brands see an opportunity.
In the era of exhausted Internet traffic, increasing the conversion rate has become an important way to expand sales. Because of their trust and love for online celebrity, fans are prone to buy products recommended by them, which is the reason for the success of Viya and Zhang Dayi. The cooperation between merchants and online celebrity has gradually become a trend, and more and more people want to work in online celebrity, and MCN institutions have also emerged.
Because online celebrity holds a lot of traffic, and e-commerce is a profitable business, some MCN institutions are not willing to just play the role of diversion. Many institutions incubate IP to be online celebrity e-commerce, but this model is more complicated than simply bringing goods for brands, such as improving the supply chain and controlling the quality of goods.
On the other hand, in addition to the business model, online celebrity itself also has a lot of uncontrollable risks. Due to its growing influence, word of mouth and staffing have become factors that affect the public's consumption decisions.
MCN needs to overcome many obstacles to gain a foothold in the market. For these enterprises, it is easy to build a big IP, but it is difficult to build a big IP continuously.
The bitterness and joy of e-commerce in online celebrity
The greater the risk, the greater the benefit, which is very suitable for online celebrity e-commerce, and Ruhan is one of the representative enterprises.
Although Ruhan's revenue model can be divided into full-service model and platform model, for a long time, the full-service model (online celebrity e-commerce) is the pillar of Ruhan's performance. In fiscal year 20 18, fiscal year 20 19 and fiscal year 2020, the contribution of Zhang Dayi's stores to Ruhan's total revenue was 52%, 55% and 58% respectively. Under this model, Zhang Dayi, the red man, brought his own goods and even participated in product design. Ruhan is responsible for online store operation, logistics, after-sales and other links, just like the self-operated e-commerce business of JD.COM Platform.
Finding and incubating red people, and then opening a self-operated store to realize the signing of red people, this is the key business direction of Ruhan 20 19 years ago. But this heavy business model has great risks, especially in the supply chain.
Take the shops in Zhang Dayi as an example. My favorite wardrobe is often in short supply. Not only when the sales volume of Double Eleven has exceeded 100 million over the years, but even when it is new, the product page often prompts "delivery within 45 days". Due to the long delivery period, fans often complain in the Weibo comment area in Zhang Dayi.
In the whole real economy, the stronger the performance ability of the supply chain, the less opportunities left for buyers to return orders, and the gross profit can be improved. However, if the spot does too much, the store will face the problem of overstocked goods.
Not only clothing e-commerce in online celebrity, but also food e-commerce in online celebrity are also facing great risks.
Recently, some netizens said that they found blades in the snail powder of Liziqi brand. Before that, some netizens said that the brand snail powder had problems in food hygiene. Despite official website's denial in a statement, there is still a public discussion about whether online celebrity food can pass the quality control. As a brand spokesperson, Li Ziqi inevitably falls into the whirlpool of public opinion. Once this business model goes wrong, it will not only affect the realization of the organization, but also the red man himself may fall from the cloud.
Compared with the painstaking efforts of online celebrity e-commerce, the platform model is much easier. Under this model, the KOL's work is mainly to bring goods to brands, and MCN institutions do not have to intervene in any link in the supply chain. The revenue comes from charging advertising and other service fees to cooperative brands.
On the other hand, the platform model makes more profits. According to the report of Caijing Graffiti, the profit of focusing on serving third-party brands is higher, and its gross profit margin can reach more than 60%. After deducting all the labor costs of the contract team, incubation team, content production team and BD team, the operating profit rate is more than 30%. The self-operated model has inventory costs and needs to pay online celebrity service fees, with a gross profit margin of 30%-40%. The operating profit rate is about 5~ 10%. Moreover, this model does not need to consider supply chain problems such as inventory backlog.
The above unfavorable factors and the favorable factors of "speaking for the brand" prompted Ruhan to shift his focus to the platform model. In 20 17, Ruhan officially started the business, and was established as the future development direction by Ruhan in 20 19. At that time, Feng Min, CEO of Ruhan, said that "we had a deviation in the previous direction, and we made traffic to all KOLs and made our own brands."
After that, most of Ruhan's online celebrity began to bring goods to third-party brand owners, including Wen Wan, a well-known former blogger in Tik Tok who was very popular but banned. Even though he had accumulated a large number of fans in Tik Tok before, Ruhan still didn't build a self-operated store for him.
The results of the transformation of Ruhan are also very obvious. According to the financial report of the first quarter of fiscal year 20021,the number of kols participating in the platform model increased from 133 in the same period last year to 174, and the number of service brands increased from 278 to 43 1, and the related income increased by 74% year-on-year to1.
However, Ruhan also said that in the future, he will adhere to the "two-legged" business mode of self-operated e-commerce and brand service. Previously, Zhang Dayi had indicated in Weibo that she would bring goods live, and if she brought goods for a third-party clothing brand, it would conflict with her own store business. However, if Zhang Dayi, as the queen of wearing, did not accept the relevant business orders, the scale of cash realization would be reduced by a large part.
The big pit faced by MCN
No matter how Ruhan operates, it is enough to prove that online celebrity can generate huge economic benefits.
According to the Research Report on China Red Man's New Economic Business Model and Trend in 2020 released by iResearch, the scale of fan economy related industries in 20 19 years exceeded 3.5 trillion yuan, with a growth rate of 24.3%, and it is expected to exceed 6 trillion yuan in 2023. In the next five years, it will maintain a steady growth rate of around 15%. China Commercial Industry Research Institute predicts that the scale of online celebrity's economic market is expected to exceed 500 billion yuan in 2022.
In 20 14, Zhang Dayi, who became popular through social networks, set an annual sales volume of 100 million yuan for his personal store "My Happy Wardrobe". 20 17 years "double 1 1", the daily sales of online stores in Zhang Dayi exceeded10.70 billion yuan; In 20 18, "Double 1 1" created a record of sales exceeding 100 million in 28 minutes; By 20 19, the daily turnover of the store "Double 1 1" had reached 340 million yuan. Well-known e-commerce anchors Viya and Li Jiaqi can even make hundreds of millions of sales in a live broadcast.
This makes more and more people enter the game. In addition to such veterans as Han and Wei Nian, traditional retail enterprises like Saturday also signed contracts to incubate online celebrity. Although IMS Tianxiaxiu, which has been in online celebrity's economic industry for a long time, also participated in it, it did not copy the same business model.
Different from other MCN organizations, Tianxiaxiu, which positioned itself as a "water delivery provider" in the industry, launched the IMsocial Red Man Accelerator in August 20 19. Its business is mainly to provide red man training, fan operation, business hosting, IP incubation and other services for the settled red man and MCN.
Tianxiaxiu, which doesn't sign a contract with online celebrity, is like a pure service provider, which also means that the company can't get a lot of revenue through e-commerce in online celebrity or cooperation with brands, but at the same time, compared with MCN institutions such as Han, its risks are greatly reduced.
Before launching the IMsocial Red Man Accelerator, the company mainly built three business segments, namely SMART, WEIQ and TOPKLOUT, to provide red man advertising tools for small and medium-sized enterprises, comprehensive solutions for large enterprises and build a value evaluation system for red men. The brand resources accumulated by Tianxiaxiu and the established online celebrity evaluation system have been able to help them build an MCN organization, but it is much safer to build a Red Man Accelerator than to become the second one, because once the head online celebrity "rolls over", the organization behind it will suffer heavy losses.
Red man has all kinds of uncontrollable risks, such as Han is one of them.
In April this year, Zhang Dayi and senior executives of well-known Internet companies were caught in a storm of public opinion because of their personal style, which led to a sharp drop in the sales of my favorite wardrobe products, which seriously dragged down Ruhan's self-operated business.
For example, the financial report of the first quarter of 20021fiscal year shows that the sales revenue of commodities fell to167 million yuan, a decrease of 33%. In the first quarter of 2020, when the epidemic was the worst, the decline of sales revenue of commodities such as Han was only 1 1%. Not only that, as an exclusive contract signed by KOL, the commercial value of Zhang Dayi belongs to the intangible assets of the company. After evaluating the future impact of the event, if Han confirmed the impairment cost of intangible assets of 53.2 million yuan, it further eroded profits.
This is not a crisis faced by an enterprise, and there is a Zhang Dayi behind every MCN.
Li Jiaqi, the "first lipstick brother", apologized at the Weibo this year for various things, such as the security guard "pushing people", improper words and deeds to Yang Mi, and embarrassing people in the live broadcast room ... Although these problems have nothing to do with the products sold, they are still accused by the public that people have collapsed, and Li Jiaqi is facing the crisis of falling powder almost at any time.
Online celebrity Liziqi, the head of Weinian, was also affected by the recent incident of "snail powder eating a blade". Although Weinian said that his online celebrity was framed, it is hard to say whether it can completely quell the doubts. In fact, in order to maintain the IP of Li Ziqi, Wei Nian has always been restrained in commercial realization. Li Ziqi started making videos in 20 16, but only in 20 18 did she start her own shop on Taobao. At present, Li Ziqi has more than 20 million fans in Weibo and 7 million fans in Youtube, but she still hasn't received advertisements or made endorsements.
But no matter how cautious MCN is, it is difficult to put an end to the problems of Zhang Dayi and Li Jiaqi. For MCN institutions, the fundamental way to solve the problem is that when one head online celebrity encounters a crisis, there are other heads online celebrity to support the field, which is the biggest test for the platform.
Difficult MCN institutions
Among more than 100 online celebrity signed by Ruhan, only Zhang Dayi, Libeilin and Daikin have brought economic benefits to the company. They have all brought GMV of over 100 million yuan to Ruhan, but the popularity of the other two is far less than that of Zhang Dayi. Zhang Dayi's fans in Weibo have reached tens of millions, while Libeilin and Daikin have only millions.
Because Li Jiaqi's beauty ONE and Viya's modest culture are also in this state. This means that many MCN companies may have exploded, but the institutions with sustainability and scale are rare.
For the short video track, the team should be able to continuously output high-quality works, and the theme should be able to arouse public interest and * * *, and online celebrity himself may have professionalism, personality and characteristics; On the live track, different segments have different requirements. E-commerce live broadcast requires the team to choose products, and the anchor needs to know more about goods and consumer psychology; Crisis public relations is also the part that MCN needs to continue to study.
These are all issues that MCN needs to consider. In the context of online celebrity's continuous upgrading, online celebrity's economy is a good business for companies in the industry, but it is not an easy business.