What’s the Trend?
There may be no other market in the world where commerce and entertainment are more integrated than in China. For one, the country is leading the world in using livestreaming to engage consumers on e-commerce platforms, where influencers leverage the medium to bring products to life when they might otherwise remain static on a webpage. Here’s proof that it’s working: Alibaba’s Taobao Marketplace generated more than 100 billion RMB ($15.1 billion) in gross merchandise volume (GMV) through livestreaming sessions in 2018, an increase of almost 400% year-on-year.
China has the largest livestreaming market in the world, in fact, which reached $4.4 billion in 2018 on 32% year-on-year growth, according to a report by Deloitte. The same report estimated that the number of livestream viewers last year in China totaled 456 million.
How China Is Different
While most livestreaming platforms in the West are focused on gaming and entertainment, livestreaming is the “go-to” option for Chinese consumers when seeking out new products and deciding on what to buy. It is an essential part of the discovery journey, unlike for consumers in the U.S. and Europe. Perhaps it’s not surprising then that Taobao also doubles as a content community: It’s home to over 4,000 livestream hosts, who generate 150,000 hours of content on a daily basis. And over 80% of them are females on the platform. As the livestreams take place within e-commerce platforms in China, fans are able to shop for the items they see immediately within the same app. On Taobao, customers are able to shop for over 600,000 products through livestream every day.
And livestreaming is the primary medium for key opinion leaders(KOLs) to engage their audience in China. In China, fans can ask questions about the products, post comments to the hosts and even send virtual gifts as a token of appreciation while watching the livestream. Platforms such as Youtube and Instagram have not yet scaled livestreaming activities for KOLs.
Diverse content is another differentiation point. In China, while fashion and beauty remain the top livestreaming categories, pretty much any category is fair game for video streams. Hosts chat about the latest beauty trends, try on different fashion items, introduce the most-popular succulent plants, showcase jade bracelets from local Burmese jewelry markets and even eat their favorite noodle soups. In particular, fresh produce livestreaming is gaining popularity, as product provenance is important to Chinese consumers. Livestream hosts often demonstrate how farmers pick the vegetables and catch live fish from a nearby river. Viewers can ask questions and make orders while watching the livestream.
Interesting content attracts an outsized fan base for top hosts. “E-commerce livestreaming has become popular, especially among female consumers in lower tier cities and rural areas. These women treat broadcasters like their close friends, someone they can turn to for product advice, someone whose recommendations they trust,” said Lauren Hallanan, vice president of Meet Group, a leading global social entertainment platform. “For many of them, purchasing products through livestreaming has already become a habit, and I only see this habit growing stronger in the future.”
Viya, known for her ability to sell hundreds of millions RMB worth of products in one session, regularly attracts several million viewers for her daily stream on Taobao. Beauty KOL Austin Jiaqi Li, or the “Lipstick Brother,” tries on 300 lipsticks a day. He once sold 15,000 lipsticks within 15 minutes. The lipsticks he features are often sold out across different e-commerce platforms not long after one of his broadcasts.
How International Brands Are Catching On
International brands are taking note of the power of livestreaming. Lancôme worked with Viya to feature its products in a livestreaming session this March for International Women’s Day, selling RMB 10 million worth of products. During major Chinese shopping holidays, livestreaming is an engaging way for international brands to reach their customers. For the 11.11 Global Shopping Festival last November, Tmall put on its third “see now, buy now” fashion show, featuring brands such as Guess, Clarks and Anna Sui, where Chinese consumers could order items straight from the runway while streaming on the Taobao app.
Livestreaming is not just for established brands, however. It also helps Chinese consumers to explore boutique brands from all over the world. U.S. handbag maker Welden sold $300,000 in GMV during a two-day livestreaming session on Taobao last year. And 1.7 million viewers tuned in.
The ‘New Retail’ Future of Livestreaming
Similar to the online-offline New Retail integration happening in the retail industry, livestreaming still has enormous potential to become the norm for commerce in China, bridging online and offline experiences. There has been a visible shift in livestreaming from broadcast rooms to offline retail stores, local farms and apparel factories on Taobao. For example, New York-based startup Shopshops is helping Chinese consumers discover local boutiques in major fashion capitals all over the world through livestreaming on Taobao. International brands have a unique opportunity to use cross-border livestreaming to bring Chinese consumers to their overseas flagship stores, apparel design studios or even music festivals such as Coachella in their home country in the future. (Source: alizila.com)