Stores shut in lockdown, yet sales rise in China as live-streaming retail staff, and internet celebrities, sell skincare, fashion and more online
- Live streaming in China is a mix of product education and entertainment. Big retailers and small players alike are using it as customers avoid physical stores
- Chinese internet influencers have a head start. One recently sold 70,000 boxes of spicy duck necks in seconds to her online audience of nearly 20 million people
As shoppers stayed home at the height of China’s coronavirus outbreak, skincare products maker Forest Cabin closed more than half of its 300 stores across the nation. With sales plunging, founder Sun Laichun decided it was time to reach his customers more directly.
“We knew it was time for us to focus on an online strategy to survive,” Sun said. The company didn’t launch an online ad blitz or announce big giveaways – instead, it trained hundreds of its salespeople to begin hosting live video streams where viewers could get skincare tips and buy products without ever cutting away from the online patter.
Within just a month, Sun said, Forest Cabin’s February sales were up by 20 per cent compared to a year earlier, despite a plunge in store sales.
Some of China’s largest e-commerce companies are betting big on live streaming. Alibaba’s Taobao Live platform saw a more than seven-fold increase in first-time business customers in February, while Pinduoduo’s live-streaming sessions grew five-fold from February to March. (Alibaba owns the South China Morning Post.)
Overall, live-streaming e-commerce revenue is likely to double this year to 961 billion yuan (US$135 billion), according to Chinese market intelligence firm iiMedia Research.
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Live streaming has also created a profitable new niche for existing live-stream stars, who are earning big commissions as their shows draw millions of viewers. The trend might even suggest alternatives for battered retailers in the US and Europe as those regions cope with stay-at-home orders and customers remain wary of crowds.
Commercial Chinese live streaming goes well beyond the American formula pioneered by television networks like the Home Shopping Network and QVC, which play infomercials around the clock, said Michael Norris, research and strategy manager at the marketing firm AgencyChina.
In China, “there’s actually education about products and how to use them, and elements of entertainment wrapped up in the live streaming”, he said. That, plus instant sales, makes live streaming an excellent marketing tool, he added.
Both go live for about four hours, five to six nights each week. Millions of viewers tune in to catch their suggestions on skincare, snacks and household products.
Within seconds, viewers snatched up 70,000 boxes, their purchases benefiting a Wuhan recovery charity initiative. By the end of her four-hour stint, Huang had hawked everything from sugar-free biscuits and Hello Kitty-branded mints to sanitary pads and pairs of white Skechers shoes, almost all of which sold out their limited inventories.
For viewers, the fast pace of celebrity live streams provide a constant sense of urgency that they’d be missing out on great deals if they don’t act quickly.
“It’s really exciting to watch,” said Coco Lu, a civil servant in Chongqing, a city roughly 650km (400 miles) west of Wuhan, who is still avoiding stores. “The hosts are very persuasive and there are giveaways, plus deals are only available for a very short period of time.”
Adam An, who works in marketing in Hangzhou, in Zhejiang province, finds the live streams a relaxing form of retail therapy. Watching a Li live stream “feels almost as if a friend is chatting with me, recommending me great products to buy”, he said.
Live-stream sales are a godsend for small entrepreneurs like Dou Ma, who sells discount clothing, mostly costing less than 50 yuan (US$7), from the comfort of her home in the southwestern city of Kunming. After putting her two young children to bed, she goes online and streams from her living room for about three hours.
All Dou needed to get started was her mobile phone. Her earliest streams in late March drew less than 20 viewers a night, but recently, they’ve begun drawing more than 100. She streams at a leisurely pace, warmly welcoming every viewer who joins and thanking them for their support.
“It’s OK if you don’t buy anything from me today, you’re welcome to just chat with me if you want,” Dou told nearly 100 viewers in a recent stream, as she held up a winter coat priced at just 59.90 yuan with shipping.
When a viewer asks about the sizing of a dress via the comments section, Dou whips out her measuring tape, rattling off measurements. During her streams, she chats with her viewers, talking about everything from parenting tips to previous holidays she’s taken.
“Because of this pandemic, live streaming has become a good option,” she said. “It’s no longer practical for newcomers like me to open an offline store any more.”
