Livestreaming in China: Selling Maserati’s, rockets and pearls

By Line Heidenheim Juul

TikTok, Taobao, JD Live, Little Red Book and Kuaishou. Perhaps you have heard of some of these livestreaming platforms. They are fully integrated with e-commerce, and offer customers live interaction, coupons and easy 1-click purchase solutions. It is now common to see celebrity influencers and CEO´s alike attending livestreaming sessions.

Livestreaming has been growing fast since 2017, and last year’s biggest shopping day Single’s day almost 10% of sales were generated via livestreaming. Put into figures that is around 2.8 billion USD in revenue. And this market is expected to grow.

One of the most famous influencers, Austin Li, managed to sell 15.000 pieces of lipsticks in 5 minutes via livestream on Alibaba’s Taobao.

That was 2 years ago. With the Covid outbreak consumer patterns change so does the platforms, brands and products available via livestream. It may have started in China, but it is being copied in Western markets now.

Services and products are sold live during Covid-19

In April, a rocket worth USD 5.6 million was sold within 10 minutes via a livestreaming session in China. Less extravagant, luxury cars such as Maserati and Audi were among 40 car brands offered via China’s largest group-buy livestreaming event. But not only physical products are offered via livestreaming now.

From February this year, service providers joined the trend. Music labels started offering cloud clubbing on stream, fitness studios offered free live video train-alongs, virtual tourism from locations outside China was available and local hotpot restaurant, Xiaolongkan, managed to sell tens of thousands of self-heating hotpots in 10 minutes via streaming, boosting a single day’s sales with 1200%.

Local companies have been the quickest to engage directly with consumers via livestreaming, and local beauty brand Lin Qingxue is a good example of a company that seized the opportunity during Covid-19. The company was only selling offline and saw a decline that would force the it to close within 2 months. The founder pulled available resources and quickly turned to live-streaming.

Using offline staff that already knew the products and could sell, the revenue grew 45% year on year in a month during first quarter. They contributed their own success to the fact that they knew their customers well from the offline space, and quickly jumped the trend.

Another example is the major home appliance manufacturer, Gree, who saw a hefty revenue decline of more than 70% in the first quarter. They chose to engage on the popular streaming platform KuaiShou, and on Sunday May 10th (Mother`s day) they sold over CNY 310 million worth of merchandise. Within five minutes, celebrity influencer Austin Li, sold CNU 6.8 million worth of air conditioners.

This was the first time Gree used livestreaming for sales, but the company CEO, Dong Mingzhu, who also participated in the sales on livestream said it was just the beginning for Gree. The participation of CEO`s and company leaders is not uncommon in China, where both Jack Ma from Alibaba group and Liang Jianzhang from giant travel site Trip.com both have been in streaming sessions wearing costumes and selling lipstick.

From farmer to millionaire streamer

I recently visited Alibaba to better understand livestreaming and e-commerce integration. I had the chance to try livestreaming with “Pearl Bro”, a famous rural pearl farmer from Zhuji turned livestreaming-star. Pearl Bro´s livestreaming sessions are fast and witty, and he can let customers see what they buy.

He opens the mussel and pops out the pearl, measures it, and answers the many questions, that viewers can type in directly in the Taobao app, while watching his stream. Viewers can ask questions, send virtual gifts and click directly to pay during the livestreaming session or they can get recommendations live via the app, while watching.

Pearl Bro`s traditional family business was not online before, but since he started livestreaming his daily revenue is reaching several hundred thousands, he has said. The city of Zhuji is famous for pearl farming, and with the advent of livestreaming the city`s revenue has skyrocketed from CNY 17 million to CNY 30 billion.

New opportunities during Covid-19

During the Covid-19 peak, major e-commerce platforms such as JD.com and Taobao both saw the opportunity to grow the livestreaming sales even more. They helped farmers and other industries to set up direct sales channels in a time where consumers had to buy online. Both companies actively engaged with farmers, educating them, speeding up licensing and giving them access to both a functioning channel, a logistics network and backend data on customers.

With 50.000 rural livestreamers, Alibaba`s Taobao Live is aiming for another 200.000 by the end of this year. Tencent´s WeChat naturally also launched a livestreaming mini-program (integrated mini app) in early March, and during Women´s day on March 8th more than 1.000 beauty brands were livestreaming via the mini-program, causing WeChat social commerce traffic to increase by 83%.

Line Juul at Alibaba headquarters in Hangzhou

Consumers require excellence

But not everyone is equally successful. McDonald’s hosted a 24-hour live streaming session, but did not integrate the streaming platform with the promised coupons, which created frustration for customers. The session was also criticized for bad content, incoherent speakers and general lack of quality.

The seamless integration of shopping that platforms like TikTok, KuaiShou, JD Live and Taobao Live offer is the normal in China. It makes it easy for the viewer to ask questions, understand the product, trust the seller and quality and with one click make a purchase. Not all brands have understood this yet, and there has also been critique that some brands have flash sales, but many goods are then returned later. This is all part of the development and experimentation in livestreaming in China.

Livestreaming is here to stay and China is the playground

Livestreaming is new to many companies in the West, but in China brands have already been experimenting for a while and many have noticeable success with increased sales during Covid-19, when done right. They are more sophisticated and experienced than their counterparts in the Western world, who are just now starting this trend. Major European brands such as Vero Moda has been streaming in China already, and just the past week dairy brand Arla tested out the streaming on five different platforms at the same time in China.