How to treat the "Internet celebrity economy" in 2020?

In recent years, the network celebrity economy has developed vigorously. In 20 18, "Double 1 1", the scale of goods brought by Weiya and Li Jiaqi was about 300 million, which shocked the whole network. 20 19 years, this figure became 10 billion. Zhang Dayi, the originator of social network celebrities, also helped his Taobao store to increase sales through the accumulated private domain name traffic. In recent years, "Double 65438"

It has become an acknowledged fact that online celebrities have huge commercial capacity, which makes most brands see opportunities.

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 celebrities, fans tend to buy the products they recommend, which is the reason for the success of VIA and Zhang Dayi. The cooperation between merchants and online celebrities has gradually become a trend. More and more people want to work as online celebrities, and MCN institutions have emerged.

Because network celebrities hold a lot of traffic, and e-commerce is a profitable business, some MCN institutions are unwilling to only play the role of diversion. Many organizations incubate IP as an 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 celebrities themselves also have many uncontrollable risks. Because of its growing influence, word-of-mouth and staffing have become the factors that affect public 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 Happiness of E-commerce among Internet Celebrities

The greater the risk, the greater the income, which is very suitable for online celebrity e-commerce. 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) has been the pillar of Ruhan's performance. In fiscal years 20 18, 20 19 and 2020, the contribution of Zhang Dayi stores to Ruhan's total revenue was 52%, 55% and 58% respectively. In this mode, 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 JD.COM Platform's self-operated e-commerce business.

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 before Ruhan 20 19. But this business-oriented 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 exceeds 100 million over the years, but also when new products are produced, the product page often prompts "delivery within 45 days". Due to the long delivery cycle, fans often complain in Zhang Dayi's Weibo comment area.

In the whole real economy, the stronger the performance ability of the supply chain, the less opportunities for buyers to return goods, and the higher the gross profit. However, if there is too much in stock, stores will face the problem of overstock of goods.

Not only the clothing e-commerce among network celebrities, but also the food e-commerce among network celebrities are facing great risks.

Recently, some netizens said that blades were found in Li Ziqi brand snail powder. Previously, some netizens said that there was a problem with the food hygiene of this brand of snail powder. Although the official website denied this statement in a statement, there is still an open discussion about whether online celebrity food can pass quality control. As a brand spokesperson, Li inevitably fell 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. In this mode, KOL's job is mainly to bring goods to the brand, and MCN institutions do not have to intervene in any link of the supply chain. Revenue comes from charging advertising and other service fees to cooperative brands.

On the other hand, the platform model is more profitable. 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 labor costs of contract team, incubation team, content production team and BD team, the operating profit rate is above 30%. The self-operated model has inventory cost, and needs to pay the service fee of online celebrities, 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 this business, and in 20 19, Ruhan established it as the future development direction. At that time, Feng Min, CEO of Ruhan, said that "our previous direction was biased, and we made traffic for all KOLs and made our own brand."

After that, most of Ruhan's online celebrities began to bring goods to third-party brands, including Wan Wen, a well-known former blogger who was popular in Tik Tok but was banned. Even though he had accumulated a large number of fans in Tik Tok before, Ruhan didn't build his own store for him.

The result of the transformation of Ruhan is also very obvious. The financial report of the first quarter of fiscal year 20021shows that 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 revenue increased by 74% year-on-year to1.

However, Ruhan also said that in the future, he will adhere to the business model of "two legs" for self-operated e-commerce and brand service. Previously, Zhang Dayi said in Weibo that he would bring goods live, and if he brought goods for a third-party clothing brand, it would conflict with his own shop business. However, if Zhang Dayi, as the queen of clothes, does not accept the relevant business orders, the scale of realization will be reduced by a large part.

The big pit faced by MCN

No matter how Han operates, it is enough to prove that online celebrities can produce 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 exceeded 3.5 trillion yuan in 20 19, 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 market size of online celebrity economy is expected to exceed 500 billion yuan in 2022.

In 20 14, Zhang Dayi, who became popular through social networks, set an annual sales record of 1 100 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, "Shuang 1 1" created a record of sales exceeding 100 million in 28 minutes; By 20 19, the daily turnover of the store "Shuang 1 1" has reached 340 million yuan. Well-known e-commerce anchors Via 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 veterans like Han and Wei Nian, traditional retail enterprises like this also signed contracts to incubate online celebrities on Saturday. Although IMS Tianxiaxiu, who has been engaged in the network celebrity economy industry for a long time, also participated in it, it did not copy the same business model.

Different from other MCN organizations, Tianxiaxiu, which is positioned as a "water supplier" in the industry, launched the IMsocial Red Man Accelerator on 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 contracts with online celebrities, is like a pure service provider, which means that the company can't get a lot of benefits through the e-commerce of online celebrities or cooperation with brands, but at the same time, compared with institutions such as Korea, its risks are also greatly reduced.

Before the launch of 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, to provide comprehensive solutions for large enterprises and to build a red man value evaluation system. The brand resources accumulated by Tianxiaxiu and the established online celebrity evaluation system have been able to help them build an MCN organization, but building a celebrity accelerator is much safer than becoming the second one, because once the head online celebrity "rolls over", the organization behind it will suffer heavy losses.

Red stars have all kinds of uncontrollable risks, and Han is one of them.

In April this year, executives of Zhang Dayi and well-known Internet companies were caught in a storm of public opinion because of their personal styles, which led to a sharp drop in sales of my wardrobe products, seriously dragging down Ruhan's self-operated business.

Ruhan's financial report for the first quarter of fiscal year 20021shows that the sales revenue of commodities fell to 654.38+67 million yuan, a decrease of 33%. In the first quarter of 2020, when the epidemic was the most serious, the sales revenue of Ruhan commodities decreased by only 1 1%. Moreover, 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 confirms that the impairment cost of intangible assets is 53.2 million yuan, it will further erode profits.

This is not a crisis faced by an enterprise. Behind every MCN, there is a Zhang Dayi.

Li Jiaqi, the "first brother of lipstick", apologized at the Weibo this year for "pushing people" for security guards, improper words and deeds to Yang Mi, embarrassing people in the live broadcast room, etc ... 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 almost faces the crisis of losing powder at any time.

Internet celebrity Li Ziqi, the head of Weinian, was also influenced by the recent incident of "snail powder eating blades". Although Wei Nian 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 Li's IP, only read has been very restrained in commercial realization. Li started making videos on 20 16, but it was not until 20 18 that she opened her own shop on Taobao. At present, Li has more than 20 million fans on Weibo and 7 million fans on Youtube, but she still hasn't received any advertisements or endorsements.

However cautious MCN is, it is difficult to end the problems in Zhang Dayi and Li Jiaqi. For MCN organizations, the fundamental way to solve the problem is that when a head network celebrity encounters a crisis, there are other head network celebrities to support the field, which is the biggest test for the platform.

Difficult MCN institutions

Among more than 100 network celebrities signed by Ruhan, only Zhang Dayi, Li Beilin and Daikin brought economic benefits to the company. They all brought over 100 million GMV to Ruhan, but the other two are far less famous than Zhang Dayi. Weibo Zhang Dayi's fans have reached10 million, while Li Beilin and Daikin have only10 million.

Because Li Jiaqi's Beauty No.1 and Victoria's modest culture are also in this state. This means that many MCN companies may have exploded, but institutions with sustainability and scale are rare.

For the short video track, the team should be able to continuously output high-quality works, the theme should be able to arouse public interest and * * *, and the online celebrities themselves 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 a part that MCN needs to continue to study.

These are all issues that MCN needs to consider. In the context of the continuous upgrading of online celebrities, the online celebrity economy is a good business for companies in the industry, but it is not an easy business.