How does the Lifestyle App make money?

KOL (Opinion Leaders), which is a lifestyle entrepreneur, earned the first pot of gold on various App platforms. Compared with these individual entrepreneurs whose income sources are relatively stable, the platform and space for them to provide space for display are obviously more: profit model, financing pressure, product tonality, and business depth.

Due to the relatively low entrepreneurial threshold in technology and mode, mobile-end products around lifestyle have appeared in mobile app stores for two years. When capital has not yet focused on this area, these female-dominated founders try to find their own differentiated gameplay between commercialization of “selling advertising” and “selling goods” for commercial exploration.

Lifestyle is more difficult to promote than pan-interior, and the market is more niche. Talk to several founders in the field, and try to make a rough outline of lifestyle entrepreneurship from three “left or right” questions.

This week, Zhang Yi, the founder of the community and lifestyle app, made a big adjustment to the company's business. From the original graphic presentation, the short video field was expanded. The large amount of money supported KOL to contribute to the food and travel. Various short videos such as photography, home, private sharing, etc., aim to develop e-commerce through rich platform content.

This is not an easy decision.

Internally, short video UGC (user-originated content) is higher than the threshold of graphics, content quality requirements, bandwidth and storage requirements are new issues, before the pile of sugar is a picture and interest sharing community similar to Pinterest.

Externally, from the giant to the grassroots entrepreneurs in the past year, the short video has become a "Red Sea." Industry rookie "Pear Video" uploads 500 short videos a day; after Weibo adds a short video portal, WeChat recently opened the permission to upload short videos in local albums in the circle of friends. Choosing this opportunity to enter a short video, is it a window opportunity or a fierce competition?

Gourmet recipe sharing short video and kitchen e-commerce app "Day-Boil" co-founder and general manager Wang Xiaoyu optimistic that when more lifestyle entrepreneurs enter the field in short video form, on the one hand can provide KOL more More vertical opportunities are also easier to get capital attention.

Founded in Hong Kong in 2013, Rizhao is currently receiving a B+ round of financing of RMB 35 million. It is not an easy task to get capital favor in the entire lifestyle app field.

Zhang Wei gave a reason to expand short videos. She analyzed that the conversion rate of video content to product purchases is on average 4 times that of graphic content, which is easier to commercialize than simple text + images. The six-year-old pile of sugar has only been truly commercialized since last year, from the previous e-commerce shopping guide to the content e-commerce + brand advertising. In this direction, the conversion rate of content marketing is an important indicator.

In addition to the comprehensive lifestyle short video, some more vertical short video startup projects have appeared in the market, such as “immediate video” based on short video of knowledge, “kitchen story” based on sharing of western food recipes, sharing loneliness Diet "one person to eat" and so on. The integrated platform such as the pile of sugar has also opened up the entry of entrepreneurs for these vertical institutions, but the competitive relationship between them is a subtle problem that both sides have to face.

E-commerce or advertising

Content entrepreneurship has been called for two or three years, but entrepreneurs have never found a mature third profit path outside of advertising and e-commerce. Selling ads or selling goods, testing whether entrepreneurs can pass the profit model.

The starting path for a large number of lifestyle entrepreneurs is to first register an account on the WeChat public platform, accumulate fans through the operation of the content, and when the number of fans is enough to negotiate with the advertiser, advertising and brand advertising become the part of the business. Source of revenue.

For grassroots entrepreneurs, using WeChat platform instead of developing App alone to start a business can better digest the initial cost problem, but when there are too many porridges, how to follow them, most of them are still in the trial and error stage. If you want to play big, you still have to rely on e-commerce to reach the product layer. Luo Zhenyu, the founder of Luo Ji thought, holds this view.

High-end underwear recommended App Oxygen founder and CEO Xu Xiaoni gave the company the initial revenue direction of e-commerce, and the underwear experience division shared the conversion rate service. In order to improve quality and tonality, she did not open the consumer evaluation function on the product page. Since most of the choices are from foreign high-end brand underwear, the premium of design and brand on the platform depends on the experience of the platform. Therefore, she has very strict selection of the experiencer. “The previous 25 resumes passed one, now 10 Pass one."

In the current revenue structure of the pile of sugar, content e-commerce and brand advertising account for about 50% each, and the company has basically achieved breakeven. The number of monthly active users announced by it is 35 million, and more than 90% of them are women. From the recent transformation direction, content e-commerce will be expected to play more roles in the pile of sugar revenue.

For content entrepreneurs, the gross profit margin of the advertising model is very high, while the gross profit margin of the e-commerce model is low, which is quite different for the entrepreneur's thinking system. If the two modes are taken into consideration, it depends on whether the startup team can switch between the two modes. Wei Wuhui, a partner of Tianqi Amiba Investment Company, will focus on this factor when looking at such projects.

Specifically, the adoption of the advertising model must ensure the team's light weight and streamlined personnel. If the Internet content is also used for the entrepreneurial scale of the traditional media, the light wage cost will be crushed by the company; if it is based on e-commerce, To find a way to explore the warehouse allocation and supply chain links upstream of the industry chain, if it is limited to simple e-commerce shopping guides, this is still essentially an advertising model, not an e-commerce.

Sale or own brand

Creating a life brand of your own is the ultimate appeal of many content entrepreneurs who maintain the original intention of tonality and quality, but this may be the hardest road.

In the online store of sugar, most of the best-selling items are imported products such as Japanese coix seed lotion and innisfree mask. The unit price is only about 100 yuan, and the gross profit margin is low, up to 5%-8%.

This is not the advantage of content e-commerce. This should be the world of cross-border e-commerce that can be mass-purchased in large quantities, such as Netease Koala and Xiaohongshu, to reduce the cost of purchase. The e-commerce market has a larger premium. Space is not on the standard.

The future positioning of Zhang Wei to the company's e-commerce is similar to Muji's home-based daily necessities, including non-standard products such as home, daily miscellaneous, and cultural and creative. The gross profit of this product is expected to reach about 50%. She intends to combine the resources of designers in this field to test the water in the upstream direction of the industry chain and try to be their own brand.

Gross profit margin is a baton that allows content e-commerce to gradually dilute the sales model and develop its own brand. The main mode of Oxygen App is to purchase overseas underwear brands for domestic sales. The gross profit margin of this model is 50%. If you go upstream and develop your own brand, the gross profit margin is expected to reach 80% or even higher. This is the transformation direction of founder Xu Yuni, the self-built team turned the scheme of the external underwear designer into ready-to-wear.

In the self-owned brand, Feng Min, the founder of Han Electric, has provided the industry with a more successful model. The model of the culvert is to drive the sales of its own branded clothing through the personal charm of Net Red. In addition to handing over the production to the surrounding clothing foundries, the design, pattern making, fabrics, sales, user management and other aspects are all in their own hands. This will also control the pricing power of the goods, and have the opportunity to try C2B customized services. The premium part of the product above the basic attributes such as material is mainly driven by the content marketing of Net Red.

However, Feng Min is also facing operational pressures such as the rising cost of new powders.

The development of lifestyle entrepreneurship in the direction of its own brand will inevitably make the company's business become heavy, and cost pressure is a realistic problem that these e-commerce entrepreneurs will face next.