It is not surprising that China’s e-commerce has advanced significantly since COVID lockdowns. Chinese ecommerce is expected to reach $1 trillion in 2020. This compares with $862 billion in 2019. Over 700 million Chinese will shop online in 2020, compared to 600 million in 2018. According to eMarketer China is expected to have the highest e-commerce rate (over 35% in 2019), highest absolute sales level (more that 3 times the U.S. total, second largest country) and fastest growth rate from an already high base.
China’s E-Commerce Livestreaming Experiences Explosive Growth
Livestreaming E-Commerce allows you to promote and sell goods via influencer streams. These channels are most commonly located on China’s online shopping malls. It’s similar to Home Shopping Network but with charismatic and trendy anchors. It has been called part infomercial and part variety show. source
Start of livestreaming Weiya
Alibaba’s Taobao Live has around 80% of live-streaming.
Baidu and JD.com are other large Chinese tech and online commerce players that have joined the fray. Douyin, the Chinese version Tik Tok, and Kuaishou, its rival, are available for purchase via the apps. The same goes for MOGUJIE, the top fashion platform. The products featured include cosmetics, beauty aids, fashion and food. Livestreaming can be used by brands to increase awareness and move excess inventory. It is also a way for small local businesses, from artisans to farmers, to reach customers. This is especially important given the COVID lockdown restrictions this year. Taobao Live allows customers to shop online and entertain themselves at the same.
E-commerce via livestreaming is rapidly growing. It is estimated that it will reach $60 billion per year. Livestreams were viewed by 430 million viewers last year, which is 30% of China’s total population. In 2020, the projections are for 560 million, roughly 39%. Live streams will account for almost 9% of all online retail sales in 2020, up from 3% in 2019. Livestream shopping was used by 37% of China’s online shoppers in 2019. It has been driven by Gen Z and Millennials but middle-aged Chinese as well as seniors are now following the lead.
Top Chinese Livestream Influencers Have Become Mega Celebrities
Each night, top influencers host their own shows. They appear for approximately 4 hours, starting at 8 PM and ending at mid-night. They sell highly curated products at deep discounts. Each hour, approximately 12 products are shown. This is 48 products per night. Items can sell out quickly. Manufacturers pitch the influencers, and an estimated 1/10 of products are selected. Show hosts negotiate with manufacturers to obtain the best prices and to estimate how much they will buy. To maintain viewers’ excitement and drive them to action, it is important that there is a balance between supply and demand. The hosts demonstrate, critique, explain, and sometimes answer calls. They also sing and interact with celebrities. When coupons and links are revealed, there is a lot of music and beats. Anchors encourage viewers to take action with calls like “just purchase it” or “grab it right now.”
KOL in China…. Tips to maximize your results
KOL’s (key opinions leaders) are the host of livestream ecommerce, which has made them well-paid celebrities. In the U.S., influencers typically receive a flat fee per post. They are compensated in a different way. KOLs in China typically get an appearance fee and a substantial commission for products sold.
- 80% Brands are not able to make a profit from livestreaming e-commerce.
Brands must pay streamers with a minimum of a 20% sales commission and a basic fee. The service fee could be more than $61,590 (400,000 RMB), for the entire collaboration with a top streamer. Top streamers will not accept low-priced or high-value gifts. Even if you have a huge sales volume, it does not guarantee that your promotion will be profitable.
2. An online e-commerce livestreaming platform, is not a complete solution
Branding is necessary.
A platform for e-commerce is not a solution. It’s merely a tool brands can use to increase brand awareness, strengthen the target audience, and boost revenue. But, brands should not consider livestreaming platforms as a complete solution to all of these objectives. It is important to know what you want from each livestream, and how it can help you achieve your goals.
- Brand reputation and pre-marketing are key to achieving high ROI via livestreaming e-commerce.
E-commerce livestreaming can be compared to the last shot in football. E-commerce livestreaming can only help in the customer journey of awareness to consideration and purchase. However, it will not benefit streamer consideration as they will likely spend less than three minutes introducing each product. The target audience won’t buy luxury goods at high prices if they haven’t heard about the brand before the livestream. If a brand has not received enough positive mentions on social media platforms such as Xiaohongshu, it should not livestream.
- Your target audience might not be the viewers of your livestream
According to a recent report from Taobao Live, Taobangdan, netizens in Tier-2, 3 and 6 cities are most interested in e-commerce livestream purchasing. These are not necessarily the ideal target audience for all brands, particularly luxury brands. When selecting streamers, it’s not enough to evaluate their views and follower counts. It is important that we also consider whether the demographic matches the brand.
be carreful “Although Kols are amazing to reach out to your target audience, they are expensive and the market is so lucrative there are obviously fake. This is where working with an agency comes to use” source
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