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Ensure that all mature businesses of the company have clear standards to implement.

Text｜"Chinese Entrepreneurs" reporter Zhao Dongshan

Editor: Yao Yun

Source of header image｜Interviewee

"It won't sell. No matter what I do, it won't sell. The numbers won't jump. It crashed after only two hours of selling."

Xie Rudong, Chairman and CEO of Yaowang Technology, recalled that there was a period in the second half of last year when Jia Nailiang was in a bad state and only sold more than 10 million GMV a day. Xie Rudong watched from the side and felt that he was about to cry, "He took a break for more than ten minutes and then continued to work. He may have never sold so badly before. That time was quite devastating."

From a celebrity to the top influencer on TikTok, Xie Rudong has witnessed Jia Nailiang's efforts and changes along the way.

During the 618 shopping event this year, Jia Nailiang surpassed Yuhui Xingxing and Xiao Yangge to become the new top seller on the Douyin platform. In just the first live broadcast of 618, Jia Nailiang's live broadcast room achieved sales of 450 million yuan. According to Feigua data statistics, in the first half of this year, Jia Nailiang has repeatedly ranked first on the Douyin sales list.

Jia Nailiang Source: Douyin screenshot

In 2021, Jia Nailiang signed a contract with Yaowang Technology and started live streaming to sell goods, but for a long time, Jia Nailiang and the Yaowang team did not fully find the best rhythm that suited him.

In the past year, faced with the GMV of top anchors reaching hundreds of millions or even billions in a single day, Xie Rudong and Jia Nailiang had no choice but to review, summarize and make changes.From pre-live marketing warm-up to the order of product explanations in the live broadcast room, to the way of interacting with users in the live broadcast room, they have explored their own set of methodologies based on past experience.

For example, what product is sold first in the live broadcast room largely determines the mood of the anchor throughout the whole broadcast. Therefore, they will put the product that is most likely to generate GMV first. "The anchor's work intensity is high and the pressure is also high, so the establishment of mentality is also the most important part of the operation. If the first product has GMV, the second product is basically stable. Even if it is difficult to sell, there will be no loss of confidence." Xie Rudong told "China Entrepreneur".

Along with this, there is also a change in the delivery strategy. Previously, Yaowang Technology often only delivered live broadcasts of anchors such as Jia Nailiang on the Douyin platform. But later, Xie Rudong discovered that "when you become big, you may have users on every platform. After (delivery) is spread widely, the user conversion rate will increase significantly."

In addition, the interactive mode of the live broadcast room is also changing. In the past, Yaowang Technology would spend more energy to guide users to pay attention to the lucky bags in the live broadcast room, such as giving away mobile phones and other gifts, but now it is more concerned about whether it can really bring cost-effective things to users. Xie Rudong found that although the number of people online for live broadcasts is not that high, the conversion rate is very high.

Wang Wenting was one of the consumers of Jia Nailiang's live broadcast room during the 618 shopping event this year. She found that the beauty products in Jia Nailiang's live broadcast room were even cheaper than those in Li Jiaqi's live broadcast room. After comparing prices in several live broadcast rooms, she found that "Lancôme is 600 yuan cheaper in Jia Nailiang's live broadcast room, and Guerlain, which originally costs 1,000 yuan, is also 220 yuan cheaper. SkinCeuticals Color Correcting Essence (55ml) originally priced at 1,060 yuan can be bought for 770 yuan, and a 64ml sample and a parasol are also given as a gift."

From Luo Yonghao to Dong Yuhui to Xiao Yangge, it is not easy to be the top influencer on the Douyin platform. "Douyin's recommendation mechanism has eliminated the monopoly of super anchors."E-commerce industry expert and founder of Bailian Consulting Zhuang Shuai told China Entrepreneur.

Xie Rudong was also alert and prepared for this. He realized that "the era of being the best is over. It will be a bad mentality for anchors to always compete for the first place. The first and second place are not important. What is important is that the company maintains healthy development."

Improve efficiency

Behind Jia Nailiang's rise to become the number one on TikTok is Yaowang Technology's exploration of efficiency.

In 2023, Xie Rudong pointed out many management problems of the company through an internal letter, and proposed to reduce costs and increase efficiency.Over the past year, he has sorted out all the company's business processes and summarized them into a strategic white paper so that all business can be guided by the blueprint.

When Xie Rudong entered the live e-commerce market in 2019, he chose a less mainstream route. At the end of 2019, live e-commerce rose rapidly, and celebrities, entrepreneurs and others started live broadcasts. MCN agencies targeting live broadcasts also became star companies that attracted much attention at this time. The most popular ones at that time were Qianxun behind Wei Ya and Mei ONE behind Li Jiaqi.

Xie Rudong chose a completely different path. He let celebrity live broadcasts take the lead, and then incubate amateur anchors after the celebrity live broadcasts became profitable and accumulated experience.With the popularity of livestreamers such as Wei Ya and Li Jiaqi, Xie Rudong thought that using the public influence of celebrities to livestream and sell goods was the fastest way to get in. Therefore, he decisively signed Wang Zulan at the beginning of his entry, and this was also the first livestream star signed by Yaowang Technology to sell goods.

In Xie Rudong's opinion, celebrities are better than most people in terms of innate conditions, especially in terms of camera performance and communication. More importantly, they are more professional, have a sense of contract, and are more resistant to risks. However, because most celebrities have multiple identities, they often encounter more other problems.

Xie Rudong asked the team to compile a "Common Artist Q&A List", which divides all the problems in working with artists into 10 categories and dozens of small questions. These questions include various issues, such as what to do if the live broadcast schedule cannot be fulfilled, what to do if the other party is not satisfied with the income distribution, which expenses are borne by the artist and which are borne by Yaowang, etc. In this list, under each problem, there is a corresponding solution.

Source: Respondents

In addition to artist communication, Yaowang has now begun to put risk assessment in the forefront. During the artist introduction stage, the team prepared a white paper on artist introduction assessment.If the introduction and judgment were based more on feelings in the past, now it needs to be strictly implemented according to the platform's labels. Behind each artist IP introduced by Yaowang, there are his total number of fans on the entire network, number of e-commerce fans, number of female fans, crowds and preference labels. Based on these labels, the team created live broadcast classification templates for different types of artist IPs, which greatly improved the efficiency of internal processes.

What Xie Rudong wants to do is to ensure that all the company's mature businesses have clear standards to implement.He admitted that Yaowang's product library was not useful in the past, "there was only one picture in it, and it was blurry. If you didn't click on it, you wouldn't even know what it was." But now, Yaowang's product library has 20 pictures for each product, just like shopping on Taobao.

From product libraries and knowledge bases to SOPs, he hates the chaos and opacity of past business operations. Now he places more emphasis on the alignment of information within the company.

After being organized, Yaowang is also showing results. At present, Yaowang Technology has a presence on mainstream e-commerce platforms such as Douyin, Kuaishou, and Taobao. Its MCN operating organization has signed more than 70 celebrity artists and nearly 200 anchors. In the first quarter of 2024, after the efficiency improvement, Yaowang Technology had more than 750 accounts and completed about 6,000 live broadcasts, an increase of 60% year-on-year.

Business sense

Unlike the teams of Wei Ya, Li Jiaqi and others, Xie Rudong had no previous experience in the field of live e-commerce, but he keenly smelled the business opportunities and acted decisively.

Xie Rudong is from Yuyao, Ningbo. He still remembers the summer of 2001 when he and his mother competed with others in Hangzhou for the Zhejiang general agent of Xtep before graduating from university. At that time, Xtep's brand awareness had just started to rise, and it had just signed Nicholas Tse as its spokesperson. With all these signs, Xie Rudong felt that this brand would definitely be popular.

But because the family could not afford so much cash at the time, the general agency was eventually taken away by another person who was 10 years younger than his mother. "This person has been the general agent of Xtep for more than 20 years and has made a lot of money as an agent for Xtep." In Xie Rudong's memory, it was an era when people "carried money in sacks."

"As long as you get the general agent, you will be rich. You may ask for more money at first, such as several million, but you can get your money back in one or two months." Xie Rudong recalled. He witnessed people bringing cash to buy goods, and the money counting machine next to them was smoking. After counting, they just threw the money into the sack and that was it.

After graduating from university in 2004, Xie Rudong's first thought was to start a business, and his first business was to run a personal website. At that time, the Internet had just emerged and there was a lack of content. All content forms such as novels, movies, and songs became Xie Rudong's goal. "Forums, S, mainly relying on advertising to make money."

It was the wild era of Internet entrepreneurship. Xie Rudong recalled that one could earn enough money by working only one hour a day. He started learning computers in fifth grade and majored in computer science in college. When he was a personal webmaster, he wrote an automatic update tool to collect data and update it before finishing his work for the day.

After making his first fortune, Xie Rudong worked as an advertising agent and a game company, which was later acquired by Shanda. He regarded his past business experiences as "naive entrepreneurship", but in these "naive" attempts, he grabbed the early platform dividends of live streaming.

The first anchor incubated by Yaowang Technology was Yu Dagongzi. On Kuaishou, it took only 9 months for Yu Dagongzi's single live broadcast GMV to increase from 1,000 yuan to 20 million yuan. Two months later, his single live broadcast GMV reached more than 300 million yuan. Xie Rudong remembers that he was so busy that he couldn't meet with all the merchants at that time. "If you say you want to hold an investment promotion meeting today, you will be full of merchants tomorrow."

But the first two months were tough.

At that time, the GMV of Yu Dagongzi's live broadcast on Kuaishou was about 1,000 to 2,000 yuan per show. "Every day was like begging for food, and I couldn't even make back the electricity bill." Xie Rudong recalled. At that time, Kuaishou was considered a private domain platform, and all traffic came from private domains. If you want to get more traffic, you can only cooperate with big anchors, and these big anchors often raise prices at will.

The opportunity came in April 2020, when Kuaishou launched its official commercial platform, Xiaodiantong, the predecessor of Magnet Engine. Having worked as an advertising traffic agent in the past, Xie Rudong keenly captured this opportunity and increased the investment on the basis of content. Yu Dagongzi could gain more than 1 million fans in one day. The greater the traffic, the more brands and merchants can be contacted. Coupled with multiple live marketing events, Yu Dagongzi only took 11 months to achieve a single live broadcast GMV of more than 300 million yuan.

"The reason why Jia Nailiang can become the new top live-streaming influencer on TikTok is not only because he has bid farewell to the entertainment industry and is professional in live-streaming, but also because of Yaowang Technology's marketing, traffic, supply chain and operational capabilities," Zhuang Shuai told China Entrepreneur.

Today, Yaowang has signed more than 70 celebrity artists including Wang Zulan, Jia Nailiang, and Cecilia Cheung, and has incubated more than 100 anchors including Yu Dagongzi and Li Xuanzhuo. More than 25,000 domestic and foreign brands have settled in Yaowang's supply chain system.

Future layout

After the live streaming e-commerce industry bid farewell to the high-growth era, all live streaming e-commerce companies are exploring diversified businesses. For example, Luo Yonghao founded Xihongxian, Xiao Yangge started to plan short dramas, and Xie Rudong's strategic focus is also shifting.

Source: Respondents

This year, Xie Rudong has been staying in a shopping mall in Hangzhou. At the end of 2023, the "Yaowang X27 PARK" shopping mall opened, covering an area of ​​250,000 square meters, and Yaowang extended its business tentacles to offline. At the end of 2022, after Xie Rudong proposed a comprehensive transformation, Yaowang Technology focused on the live e-commerce business, integrated operational resources in the areas of supply chain, intelligent management, IP commercialization, and continued to increase investment in new businesses such as new consumption, overseas live broadcasting, cultural tourism consumption, and short dramas.

In his vision, "Yaowang X27 PARK" is a fully managed platform for anchors, brands, and suppliers. Its business model is mainly "self-operated + open to the outside world". The mall will be open to different anchors and studios from outside, and optional operation and supply chain services will be provided at the same time. In addition to live broadcasting, Yaowang X27 also plans to undertake instant retail, short drama customization, celebrity variety shows and other businesses around the company's IP.

“Yaowang is undergoing a transformation from a herbaceous plant to a woody plant. Because it is a single herb, it is relatively weak. When it becomes a woody plant, your root system will be more developed and more stable."Xie Rudong told China Entrepreneur.

However, while exploring new diversified businesses, Yaowang is also experiencing the pain of transformation. In 2023, Yaowang Technology's annual revenue was 4.777 billion yuan, a year-on-year increase of 22.48%, but its net profit was a loss of 1.057 billion yuan, more than three times the year-on-year.

Regarding the losses, Xie Rudong told China Entrepreneur: "Our main business is profitable, but the innovative business accounts for half, and is still in the investment period. Last year's loss of 1 billion yuan was not large in the actual business. Most of it was impairment and amortization. Too much was invested in new projects, and I have to control my desire. In addition, I have to learn to cooperate. Not all business needs to be done by myself."

In Xie Rudong's view, what he wants to do most at present is to accumulate core resources and capabilities in the system and open up more cooperation possibilities. "The self-operated business can be a benchmark, and the cooperative alliance can achieve growth. Continue to expand the scale, this is the best certainty."

According to the performance announcement of Yaowang Technology at the end of April this year, after a year of difficult transformation, Yaowang's revenue in the first quarter of 2024 was 1.581 billion yuan, a year-on-year increase of 43.44%, and its operating cash flow has turned from negative to positive.