According to PWC, China's eCommerce Is now setting a benchmark for retail and eCommerce all over the world. This normous market is driven by mobile-first customer behavior, omnichannel social commerce model and a digital infrastructure. There’s always a famous saying that in live commerce, as in almost all other eCommerce trends, Chinese shopping habits and technological capabilities are at least 3 years ahead of the rest of the world.
In China - the world’s future of live commerce, eCommerce live streaming was a key battleground for brands in 2020's 11.11 Global Shopping Festival. According to Forbes, during the hottest sale period from November 1st through November 11th, approximately 300 million Taobao users watched live streams, paying more than 100 million RMB ($15 million) in sales. In fact, these numbers don't come as a surprise as live streaming became the main way for customers to shop without the fear of fraud and fake products during Covid-19 lockdowns. Another reason is the changes in customer demographics to GenZ with their tech savvy and high computer literacy.
It is predicted that live commerce’s popularity has continued long after China’s offline retailers re-opened.
To trigger impulse purchases, products need to look good on small and large screens and be positioned as good value for the money
In 2020, early adopters of the livestreaming sales model saw immediate return on investment. But as 2021 comes and people started getting vaccinated, yields have been slowly chipped away alongside the rising popularity of livestreaming. Livestreaming is similar to eCommerce - it is a busy, competitive marketplace.
For brands outside China, now might be the perfect time to explore live-commerce because it’s still early days - which means customers will be more forgiving and influencers will be more open to experimenting with format and style to see what works best.
Along with the development of technology is the growth of social channels. Our customers are now present everywhere, switching restlessly from platform to platform, accounts to accounts. That’s why brands would miss significant opportunities for exposure by limiting themselves to a single platform.
Take China for example. Here, Taobao live is the leader in eCommerce livestreaming. And yet, other channels are strong in their games with Douyin Live contributing over 340 million RMB (a little over US$52 million), in revenue to WHOO, Lancôme, and Estée Lauder. Another internet giant called Kuaishou also contributed over 5 million RMB (US$770,000), in revenue to Estée Lauder on just May 25, 2021, alone.
This example shows merchants the gap they need to fill if they want to maximize profits, especially in the peak season at the end of every year.
Live Commerce Checklist: 12 Steps to Live Stream Success HERE
When Kim Kardashian West - a famous American reality TV star launched her new line of fragrance in China, she didn’t fly to China to attend a meticulously organized event on her private jet. Instead, she sat down in front of an iPhone in her suite at the Ritz Carlton in New York City and started livestreaming. In just minutes, Kardashian reached more than 13 million Chinese consumers and sold out of her entire stock of lip-shaped perfume bottles.
That is the power of KOL/ celebrity livestream shopping. Kardashian joined other mega influencers such as Viya Huang, who commands an audience of more than 74 million followers. There are thousands of livestream influencers like Huang in China
One year ago, Xiaomi Corp founder and chief executive Lei Jun showed the company's new Mi TV LUX Transparent Edition in Beijing through a livestreaming platform. The CEO’s livestreaming debut got more than 50 million viewers and gained over 210 million yuan (US$30 million) in smartphone and television sales in just two-hour, according to SCMP.
Xiaomi CEO Lei Jun Makes $30 Million in Sales in Livestreaming Debut - Caixin Global
This success can be attributed to the fact that Xiaomi’s CEO is the one understanding their products the best and has unique in-depth knowledge enough to persuade people. As such, they can build up trust with the high-quality users and consumers within that category. Additionally, livestreamers that have gained the confidence of users typically boast higher conversion rates and average order amounts. Taobao Live has recently launched an incubation program in May 2021 that targeted streamers who specialize in selected categories to catch wind of these trends.
Another underlying reason for this trend is the limit of celebrity. For there’s an obvious disparity between fame and sales (fans tend to pay more attention to the celebrity livestreamers than the products they are advertising), attempting to achieve high purchase rates based solely on a celebrity’s popularity could backfire. Unlike celebrities, professional KOLs assist viewers with the objectivity from their deep understanding involved in a product’s placement and tons of relevant knowledge. According to China's media, unless the chosen celebrity happens to be the expert in a certain merchandise type, KOL anchors typically yield better results.
Li Jiaqi, the Lipstick King, is a popular livestreaming influencer in China
The reviews from experts or influencers who have worked in their field act as a powerful tool in marketing and sales because consumers tend to trust recommendations from third parties over the brands themselves. The same reason can be found in why people trust PR and find advertising loud, unfaithful, and exaggerated.
Increasingly, brand executives and employees are also livestreaming directly to their consumers. Even farmers are getting in on the action to showcase the provenance of agricultural products. This method works best when the influencer represents the brand but is also well-known enough to attract large targeted audiences.
For the risk of scandals, in 2021, celebrities are not top-of-mind for brands anymore but virtual idols, the animated replicas of a person, have become increasingly popular. The trend has migrated to livestreaming platforms, with CBNDATA showing that virtual idol streamers have joined increasingly more eCommerce livestreamings since August 2020. I
In terms of physical ability, the risks of scandals, and even booking prices, virtual streamers gain obvious advantages over celebrities. They have helped some brands extend livestreaming hours and replace streamers when they become sick or unable to perform. Despite their equally obvious disadvantages: they can not test products, give out expert-level reviews or smoothly interact with viewers in a human-like manner, some virtual streamers are still warmly received. I’m Bu Bai Chi - a Douyin virtual streamer is a great example as she has generated over 100 million RMB (US$15.4 million) per year for food products recommendation and food knowledge sharing. As technological innovations allow virtual idols to become increasingly human-like, marketers may begin to reduce costs and make the switch over to virtual idols for many livestreaming promotional campaigns.
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