What do you think of the overwhelming Douyin advertisements in the 2021 Liaoning Spring Festival Gala?

As we all know, the Spring Festival Gala red envelope cooperation in the Year of the Ox is an ultra-short-distance race for interested Internet giants. Pinduoduo, which won the right to interact with red envelopes for the 2021 Spring Festival Gala early, was exposed to all kinds of shocking negative news after New Year's Day. Young employees died suddenly, employees were forcibly dismissed, and employees committed suicide. The company's values ??were highly controversial, and it finally lost the title of the Spring Festival Gala. Meat.

Since then, Douyin and Kuaishou have begun a rapid competition, and there is news that Alibaba is also interested in joining the competition. In less than half a month, Douyin won and will distribute red envelopes totaling 1.2 billion yuan on New Year’s Eve, February 11, setting a new record for the amount of Spring Festival Gala red envelopes in recent years.

On January 19, Douyin payment was launched urgently. When settling purchases within the Douyin APP, in addition to Alipay and WeChat payment, a "Douyin payment" entrance was added. There are various signs that Douyin’s payment business will be the protagonist of its “landing” in the Spring Festival Gala this time.

One can’t help but think that Baidu, which won the exclusive red envelope interaction rights for the 2019 Spring Festival Gala, paid huge marketing expenses and financial losses. The financial report shows that in the first quarter of 2019, including the Spring Festival Gala marketing activities, Baidu’s sales, general and administrative expenses totaled 6.1 billion yuan (approximately US$902 million), a year-on-year increase of 93%. This is Baidu’s first time since it went public in 2005. A quarterly loss report.

What’s embarrassing is that such a large cost did not bring in expected benefits. According to the number of new users of each APP in the seven days before 24:00 on February 4, 2019 monitored by the China International Finance Research and Innovation Center Regarding the retention situation, although Baidu mobile has gained over 100 million new users, by February 9, the retention rate was only 2%.

Drawing our attention back to this year’s protagonist Douyin, Douyin Pay was launched in such a hurry that it even launched emergency recruitment. In the face of high costs, is this wave worth it?

1 A battleground for military strategists

For a matter involving billions of dollars, it is difficult to make a general conclusion about whether it is worth it or not. It is more like the positive side of a coin. It's not worth looking at both sides of the competition.

Let’s take a look at the front first.

As a battleground for military strategists, cooperation with the Spring Festival Gala must be worthwhile.

On the one hand, it is to attract new traffic.

As China's annual top-notch program, the Spring Festival Gala carries a huge amount of attention and expectations. Even though the traffic on the entire network has bottomed out and become more expensive, the traffic of the Spring Festival Gala has not fallen but has increased. The total audience size of the Spring Festival Gala from 2016 to 2019 was 1.03 billion, 1.08 billion, 1.13 billion, and 1.17 billion respectively, and in 2020 it was 1.23 billion.

A small clip is enough to illustrate the magnitude of the traffic: During the 2018 Spring Festival Gala, in order to cope with the traffic on that day, Taobao expanded its server capacity three times based on the 2017 Double Eleven. As a result, the actual peak number of logins that night during the Spring Festival Gala , more than 15 times that of Double Eleven.

On the other hand, Douyin needs the Spring Festival Gala.

User growth has always been ByteDance’s strongest area, but according to third-party research agency Trustdata’s monthly active statistics of domestic mobile Internet APPs in the last three months of last year, from October to December last year, Douyin’s monthly active growth rates were a month-on-month decrease of 0.61%, a month-on-month decrease of 2.41%, and a month-on-month increase of 1.01%.

From a specific business perspective, the live broadcast e-commerce business that Douyin has vigorously developed in recent years also requires a larger mass base.

The live broadcast e-commerce data report released by the Internet Economics Society E-Commerce Research Center shows that due to the impact of the new crown epidemic, the live broadcast e-commerce transaction scale reached 456.12 billion yuan in the first half of 2020, exceeding the full-year transaction scale in 2019 . Among them, Taobao Live, Kuaishou and Douyin account for more than 90% of the market share. In this report, Douyin’s live broadcast e-commerce transaction volume in the first half of this year was 40 billion yuan, while Kuaishou’s was about 2.5 times that, and Taobao Live’s transaction volume was 300 billion yuan.

On the Spring Festival Gala stage, more middle-aged and elderly people and lower-tier users will participate. This traffic is what Douyin urgently needs.

Another fact that cannot be ignored is that as a battleground for many Internet giants, the operating costs of the Spring Festival Gala will only continue to rise.