The market reached $4.4 billion in 2018, growing 37 per cent on the year previous and attracting a total of 456 million viewers.
When in doubt, live stream it.
Live-streaming sessions have become increasingly popular in China in the last few years as consumers crave immersive experiences and personalised recommendations. According to consulting company Deloitte, the market reached $4.4 billion in 2018, growing 37 per cent on the year previous and attracting a total of 456 million viewers.
“Customers will not tolerate companies that have amnesia when it comes to remembering them and their preferences,” says Gene Alvarez, managing vice president at advisory firm Gartner. “This makes it imperative for companies to recognise their customers and to serve them pertinent content that demonstrates the proper recognition and treatment.”
Through live streaming, influencers like Viya and “lipstick queen” Li Jiaqi can engage tens of millions of potential consumers per day. E-commerce giants like Alibaba are also joining in. According to Alizila, the news hub for Alibaba Group, Alibaba’s Taobao marketplace hit RMB 100 billion (around $15.1 billion) in gross merchandise volume (GMV) through live streaming videos in 2018. Taobao Live, Alibaba’s dedicated live streaming unit, reached record-high sales of RMB 20 billion (around $2.85 billion) during the 2019 Singles Day shopping event, or 7.5 per cent of the group’s overall sales.
As live streaming popularity continues to grow, three key trend areas have emerged.
The rise of the superhost
Live-streaming hosts employ a range of rewards, discount battles and games to connect with consumers and monetise their relationship with them. At the same time, the most successful hosts are earning increasingly high cash rewards and “virtual gifts” from fans.Beauty blogger Austin Li Jiaqi, known as “lipstick queen”.
Each live-streaming platform has its own virtual gifts. On Yingke for example, viewers can give hosts virtual yachts, fireworks displays and Porsche cars that can then be converted into digital currency and finally real money (the value of a virtual Porsche car is around RMB 700, or $100). Popular hosts can make tens of thousands of dollars from virtual gifts, but even less famous hosts can earn their “pocket money” by live streaming their hobbies or daily activities. According to CNBC, teenage host Ding Gaoxing made about RMB 10,000 ($1,450) a month in 2016 from virtual gifts from his fans. This doesn’t even come close to Viya’s earning potential, who capitalised on her sales skills to make more than $4.2 million in 2017. On average, the top 10 hosts on Taobao made roughly $2 million per person.
Live streaming as teleshopping 2.0
While in the US the target audience of shopping channels like QVC is older, in China teenagers and young adults are drawn to teleshopping channels featuring vivacious hosts trying out products and responding in real-time to consumer enquiries.
Digital teleshopping isn’t new, but new technologies have given brands more opportunities to connect with consumers. One of the best examples of modern teleshopping is the annual Tmall Collection show, which follows a “see now, buy now” model. According to Alizila, the show attracted 87.8 million views in 2019, driving brand engagement and sales while building buzz around the event.
Domestic and international SMEs have also found an opportunity in video shopping, proving that live streaming is popular with a wide range of consumers in the country. Rural live-streaming host Chen Jiubei helped farmers in her hometown sell two million kilograms of unsellable oranges in 13 days. Alibaba’s Alizila highlights that in 2018, Taobao Live hosted more than 150,000 agriculture-related live streams, which drew over 400 million viewers.
Catching up in the West
The potential of live streaming wasn’t lost on Kim Kardashian West who, helped by Viya, sold 150,000 units of her KKW perfumes during a live streaming session on Alibaba’s Tmall on 6 November 2019. According to Alibaba, the stream attracted over 13 million viewers in China.Kim Kardashian West during her live streaming for Tmall.
The West has been slower in seizing the potential of live-streaming marketing, but brands and e-commerce platforms are catching up, driven by the popularity of live-streaming features among Gen Z and millennials.
Luxury brands like Gucci and Burberry have live streamed their fashion shows for years, but are yet to monetise the opportunity. In February 2019, Amazon launched “Amazon Live”, live streaming video shows where hosts present specific products available for sale on the platform. Wayfair also used live streaming during the 36-hour “Way Day” sales event.
Original Article by Vogue Business