New way to shop now on stream

Li Anlan
Livestreaming is the new way to buy for millions of Chinese consumers who are being introduced to products they may never have known existed.
Li Anlan

Just two weeks before the 2019 Double 11 online shopping spree, Willow Gu was introduced to Taobao Live shopping by a friend. Three minutes after she entered Viya’s shopping livestream on the Taobao app, she had placed orders to buy Pocky biscuits and paper napkins.

Gu, a 34-year-old working in the medical industry, shops more frequently online than offline. For her, the advantages of livestream shopping include price advantages, convenient shipping and a way of learning about new products.

“I recently watched a livestream for a few hours to buy a meat grinder, which was super handy,” said Gu. “Sometimes when I watch the livestream at night, I get the feeling that ‘so many people are working so hard’ and I myself must not slack off.”

After the Double 11 (November 11) and Double 12 (November 12) shopping sprees, Gu still watches livestream to buy the products she wants.

Taobao Live, launched by Alibaba in 2016, experienced an explosive growth on the occasion of 2019’s Double 11. Due to the increased complexity of the rules of the shopping spree, as well as Taobao’s strong promotion of livestream shopping, this new form of marketing finally reached a much broader audience.

The format seems familiar — a host promoting certain products in front of the camera and listing all the big selling points — much like TV shopping which was very big in the 1990s, only now it’s more convenient to buy the products directly from the listed links and there are opportunities to communicate with the hosts and ask questions.

Yuki Sun, a 31-year-old working in finance, is another consumer who joined the livestream shopping fun at the end of October, starting from buying facial masks.

“I usually watch Viya, Austin Li and bbgillian. I mostly buy skincare products, snacks and consumables like napkins and paper towels. Livestream shopping offers really good deals, some of the more niche products from abroad may even be cheaper here on livestream than in the country of origin,” she said.

With livestream shopping, the feeling of impulse shopping certainly exists. For Gu, that usually comes from buying clothes, while Sun finds it hard to say no to interesting snacks. Livestream shopping is not only about buying products, but also a kind of entertainment.

Nancy Zhang, a college teacher in her 30s, find shopping in livestream a quite pressure-relieving process. She started watching Taobao Live around the time of Double 11 to find better deals and shopping inspiration.

“I don’t feel there’s a distance between me and livestream shopping. It’s easy to accept and I find it very quick and easy to make purchases when the links pop up in the left corner of the screen, a one-stop service that saves the trouble of searching for products,” said Zhang.

New way to shop now on stream

Mi Yana (left), deputy chief of Xunwu County, Jiangxi Province, sold more than 10,000 kilos of passion fruit in two and half hours of livestreaming.

In the top livestreams, buying products is very competitive with millions of people fighting for limited quantities. It makes shopping a fun game to play every now and then.

The huge price advantages in livestream shopping are usually one-time deals that are only effective before the end of the session. For many companies, it’s important to control retail prices across different channels and a sudden discount by one seller may upset others. Sometimes companies need a huge boost in sales to promote a product, and livestream provides that opportunity. Special product links are created for the livestream and occasionally, when the discount is too big, streamers may remind buyers not to mention the price in the product’s comment section.

Livestream shopping is now a billion-dollar business. Zhang Junfeng, founder of Xiongke Hangzhou, a company specializing in Taobao content marketing and service, said the livestream platform has a much higher input-output ratio than conventional advertising and marketing. His company was among the earliest to engage in the livestream business in 2018 and now provides livestream services to more than 30 first-tier brands.

“We operate shop livestreaming and celebrity livestreaming, for the brands, they only need to pay us a service fee and can reach a daily turnover of hundreds of thousands,” said Zhang.

Many online shops are looking to companies like this to handle their livestream business. The basic package is made up of a monthly service fee and commission from sales. The streamers usually work four hours a day, five to six days a week, for one shop. For the special Double 11 and Double 12 events, the livestream was 24 hours nonstop.

Celebrities, including actors, singers and TV hosts, are doing livestream shopping with brands to promote sales. Zhang’s company did actress Annie Shizuka Inou’s livestream for PROYA Cosmetics. On November 11, PROYA’s CEO joined Inou on the livestream and together they sold a million yuan worth of a single product.

New way to shop now on stream
Ti Gong

A standard livestream studio is composed of one host and one assistant.

Conventional online shopping relies on searching keywords, finding products and comparing prices. Zhang said livestream shopping mostly attracts younger audiences around the age of 24 because of the entertainment nature of the format and its biggest advantage is presenting products in multiple dimensions.

“What we mean by multi-dimensional content is listing all the pros and cons of a product through face-to-face communication and blending the product in real life scenarios. The motivating language can stimulate consumers quickly and help them find reasons subconsciously to buy the product,” said Zhang. “The weakness of livestream is that it’s real-time, consumers may cool down later and decide that they don’t actually need the products and it’s a waste of money, so that creates a certain return and refund rate for the brand.”

Livestream shopping presents huge opportunities for companies to sell products efficiently. But it’s not a game for everybody. A bad livestream is worse than no livestream.

“If the streamer is not familiar with the products and makes mistakes in explaining the deals, it could cause a series of problems for customer service as well as a bad reputation for the products and brands,” said Zhang.

A good streamer needs to be well-prepared. Professional streamers hired by companies, such as Xiongke Hangzhou, are trained by the brands they are responsible for and must look good and communicate well as well as have expertise in the field.

Though livestream helps online shops make more money in a short amount of time, it has a challenge of how to keep audiences. A single shop promoting the same category of products repeatedly every day can easily become boring.

“Many shops think that they must only sell their own products and not help others, and if they are not introducing new products frequently, it’s difficult to solve the problem. What they need to do is converge more content in the livestream and give audiences insights into the factories or labs, thus improve audience loyalty,” Zhang said.

Another solution is to work with related brands and sell their products. For example, a stove and range hood brand can sell cookware and dinnerware, creating a chain of products in the livestream without introducing competition.

The format of livestream marketing can be applied by many industries, including hospitality and tourism. In meeting the livestream trend, hotels were also doing livestreams to promote deals, inviting streamers to tour the facilities and explain the features.

Livestream presents a more real way to see hotels and tourism destinations, filter-free, as well as be a more immersive viewing experience. But tourism-related livestreams face the issue of timeliness, as products are purchased maybe months ahead and sales are only complete when vouchers are redeemed.

New way to shop now on stream
Ti Gong

Professional streamers commonly work four hours a night, five to six nights a week, for online shops.

Livestream shopping has the advantage of introducing new products to existing audiences directly at a cost much lower than starting a marketing campaign from scratch and advertising across all channels, not to mention the amount of time and manpower saved.

This particular feature of livestream shopping has been helping Chinese farmers sell products and local specialties directly to customers who may not have known about the particular product before.

Top streamers are using their experience and huge audiences to help those in need, providing a platform to help farmers and small businesses.

For example, Viya’s trip to Henan Province on December 6 introduced a series of local specialties, including a mahua (fried dough twist) snack from Ruyang, a county near Luoyang. Even for Henan natives, it’s a new product from a not-so-well-known place, but that livestream provided an opportunity to try it. About 5,000 orders (two bags per order) were prepared for that livestream session. They were gone in seconds.

A couple of weeks later, the mahua brand’s Taobao store started to sell more products and the title they used included the “Viya Recommended” prefix. A video clip of Viya promoting the product was placed before photos of the product.

On the night of December 12, top streamer Austin Li, known for lipstick swatches, and musician Gao Xiaosong joined forces in a livestream to help poor counties sell farm products. Gao wore red lipstick to boost the entertainment effect. Together, they sold 200,000 kilos of rice from Jalaid in the Inner Mongolia Autonomous Region, 50,000 tins of walnuts from Jinzhai County, Anhui Province, and 120,000 bags of oat flour from Kangbao County in Hebei Province, all gone in seconds.

That livestream session generated 4.39 million yuan in revenue for 1,114 poverty-stricken families in the three counties.

New way to shop now on stream

Austin Li (left) and Gao Xiaosong’s livestream on December 12 sold over 4 million yuan worth of farm products.

Ding Qiulei is another example. The young woman from Yangbi Bi Autonomous County in Yunnan Province brought along 20,000 women in her hometown to crack walnuts and sold 170 tons of them on Taobao Live. The project even included a 94-year-old grandmother in the village, who made some pocket money as a result. Ding works tirelessly to help the people in her hometown. In 2018 alone, she did more than 360 livestreams.

Video apps such as Kuaishou and TikTok are generating huge profits for farmers. In the past three years, streamers have shown audiences a different world — catching free-range chicken on the hill, harvesting honey and making cured meats — leading to a flood of orders.

The platforms are also connecting brands with buyers in an unprecedented way. Sany, the Changsha-based global manufacturer of construction and mining equipment, did a livestream on Kuaishou in May 2019 and sold 31 road rollers in an hour.

The company conducted a survey and found out that 70 to 80 percent of their customers were users of Kuaishou, and that presented a huge market opportunity.

New way to shop now on stream

Livestream marketing has enabled farmers in remote areas to reach customers nationwide and showcase the products’ places of origin.

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