Google wants to turn YouTube into an e-commerce platform. Is there a drama this time?

 Google, which has been coveting the e-commerce market, has recently made a new move. This time it is YouTube.

According to Bloomberg News, YouTube has recently started to require creators to use test software to mark and track products in videos, and at the same time is trying to further integrate with Shopify, the world's largest e-commerce SaaS platform. According to reports, Google wants to make YouTube a one-stop shopping platform, allowing users to complete purchases directly after watching videos on YouTube.

Google, which has been exploring e-commerce since 2013, has accelerated its pace of deployment in the past two years. Especially since the epidemic, the global advertising market has shrunk, and e-commerce has risen further. Anxious Google has indirectly introduced new policies on e-commerce in a few months.

The "reconstruction" of YouTube is regarded as a very valuable layout. Andy Ellwood, president of e-commerce startup Basket, commented that YouTube is one of the least utilized assets, and if they decide to invest, there will be a huge opportunity.

In general, YouTube is doing e-commerce, and there is a play.

01

YouTube’s “carrying goods” gene

YouTube has the potential to become an e-commerce platform. The core reason is that YouTube has a huge traffic scale and has established a content ecology with a "carrying stock" gene.

As the world's largest video creation and sharing platform, YouTube's content output and traffic scale are second to none.

YouTube has more than 2 billion monthly active users, and users watch more than 250 million hours of video daily. This provides a flow basis for e-commerce, a large-scale business.

In addition to having traffic, YouTube also has a large number of videos and KOLs with goods, as well as users who are used to videos with goods.

The evaluation of various products has always been one of the most important types of content on YouTube, which is a natural channel for businesses. In addition to the out-of-the-box evaluation, videos such as gift guides and shopping trips have also become good carriers for carrying goods.

User acceptance of the products recommended by YouTuber is quite high. An online consumer behavior report released by Google shows that in 2019, nearly 50% of online shoppers will search for related product videos before buying. Moreover, compared to celebrity recommendations, 60% of consumers are more inclined to buy goods recommended by YouTubers.

The super-carrying power of YouTube videos can be seen from Ryan Kaji. The little boy has been ranked No. 1 among Forbes' highest-paid YouTubers for two consecutive years and currently has nearly 30 million followers. His video content is mainly about introducing, commenting or sharing the process of playing with toys. The most viewed video has about 1.98 billion views.

How amazing is Ryan’s YouTube video delivery capabilities? Wal-Mart and Amazon have a series of Ryan's branded toys, clothing and household items. As long as it is a toy that Ryan has given praise, it will become a hot item of the season and sold out in an instant. Numerous players and manufacturers are vying to cooperate with Ryan.

Gen Z's preference for personalized consumption habits provides the possibility of video delivery. They focus on experience and sharing, and have strong stickiness to video content. For them, KOL goods have penetrated into daily life.

Therefore, YouTube, which gathers a large number of KOLs and video content, has gradually become an important channel for bringing goods. Users have gradually developed the habit of watching videos on YouTube to research and decide which products to buy.

02

The long-planned road to advancement

Despite its strong ability to carry goods, the previous YouTube is more like a "grass planting platform" rather than an e-commerce platform. In other words, YouTube is just an advertiser that drives e-commerce traffic, and has not formed its own closed-loop e-commerce.

However, since last year, YouTube has gradually strengthened its e-commerce attributes and opened up the link from content to purchase, in preparation for becoming an e-commerce platform.

The first is to increase product purchase chains connected with the picture. In May 2019, YouTube tested adding product shopping links with pricing at the bottom of the video, allowing users to jump to the shopping page with one click. For example, below Nike’s YouTube video, a link can jump to Google’s shopping platform.

In June of this year, YouTube also announced the addition of the ability to directly redirect advertisements to the brand's business page, allowing brands to add browsable product images at the bottom of the advertisement page to directly attract traffic to the product pages of each brand.

In addition, YouTube also tried to launch shopping ads. In November 2019, YouTube allowed brand owners to display goods and services on the homepage and search results. Like shopping ads that appear on other Google platforms, YouTube shopping ads do not use keywords, but use product details and information to match user interests.

This means that when users are looking for shopping inspiration and products on YouTube, they can see a series of recommended products directly above the video displayed in the search results, and these products will also be displayed in the form of carousel ads on the homepage.

In terms of getting through the closed loop, YouTube also tested the integration with Shopify. Google and Shopify maintain a long-term cooperative relationship and gradually expand the scope of cooperation. According to reports, at the end of last year, YouTube began testing Shopify integration, allowing Internet celebrities to use the digital carousel below the video to list up to 12 products.

This time, in the process of officially testing the shopping function, YouTube asked creators to track and mark the products in their video works when using the software. These data will be linked to Google's analysis and shopping tools. For every item seen on YouTube, users can place an order directly on YouTube.

Direct purchase means that at least at the functional level, YouTube has officially advanced to an e-commerce platform.

03

Google's determination and blessing

In the field of e-commerce, Google has made many attempts. Although there are more defeats than less, but he has not given up.

In 2013, Google launched Google Shopping Express to provide free same-day delivery services. This business ultimately failed. Since then, Google’s biggest move in the field of e-commerce has been its launch of Google Shopping, a shopping platform that will be open to sellers in all aspects in 2018.

In addition, since 2018, Google has started an alliance with multiple e-commerce players. In June 2018, it was reported that Google and Carrefour reached an agreement to jointly sell groceries through online channels. Almost at the same time, Google announced that it would invest US$550 million in cash on JD.com and have formed a strategic partnership with JD.com to develop retail solutions on a global scale and jointly explore the creation of next-generation retail infrastructure solutions.

Since this year, Google continues to increase its e-commerce. At the beginning of the year, Google invited former PayPal executive Bill Ready (Bill Ready) as president of commerce. In April, Google announced that it would allow free release of product information on its shopping platform without having to buy ads first.

Since July, Google has successively launched a series of preferential policies for its shopping site Google Shopping, including exemption of sales commissions, no longer restricting merchants to only use the system provided by Google, and allowing them to use third-party payment systems and order management services.

At the same time, Google also launched a video shopping platform Shoploop, which integrates short video, social networking and online celebrity delivery and other elements to compete with Amazon, Facebook and Instagram in the video shopping field.

However, despite many efforts, Google e-commerce still seems to be tepid in the eyes of the outside world. However, repeated failures still did not stop Google's determination to "deadly" e-commerce. YouTube has become another force in the field of e-commerce.

This may have something to do with the performance pressure caused by the epidemic. In Q2 of this year, Google’s core advertising revenue fell by 8% year-on-year, and the weakness of its cash cow business also led to its dismal performance. At the same time, e-commerce giant Amazon's performance has increased by 40% year-on-year, which can be described as an ice and a fire.

Looking at it this way, Google, which is determined to enter e-commerce, will have no small determination and investment in "transforming" YouTube. Moreover, Google's previous efforts in e-commerce were not completely ineffective, and it also provided more support for YouTube's e-commerce business.

First of all, through the operation of Google Shopping, Google has initially explored the operating model of the e-commerce platform, forming a closed loop of e-commerce in multiple dimensions such as sales, orders, and inventory. In addition, the layout of payment, logistics, marketing and other aspects also helps YouTube to make adequate preparations.

In terms of payment, in addition to the cooperation with PayPal, Google also owns the payment software Google Pay, and has already opened up with YouTube.

Logistics, Google launched Google in 2013, the Google Express courier services, has been cover 2016 when cover the United States 75% of the regions of the country last year, Google has incorporated this feature in Google Shopping.

In terms of marketing, Google has multiple tools covering multiple aspects such as analysis, keywords, and trends. The data shows that more than 70% of the videos users watch on YouTube are determined by its recommendation algorithm. YouTube can use these marketing tools to further accurately push products and related video content to consumers.

It can be seen that the infrastructure required by YouTube to build an e-commerce platform is basically complete, and this time Google uses it as a starting point to launch an assault on e-commerce again, and there are more possibilities for success.

Next, how to truly bridge the huge gap between content and e-commerce, how to ensure the balance between user experience and complete platform transformation, may be a challenge that Google and YouTube need to face.