China's Soaring Livestream Trend: The What, Who & How

Walking through a mall in China, it is not unusual to see the quieter-than-normal stores buzzing with excitement. Key Opinion Leaders and animated shop assistants are discussing their merchandise while someone captures them on a smartphone, as retailers look to the livestream buzz to compensate for lower-than normal traditional sales.

Livestreaming was already on-trend in China, with Taobao Live revenue for Singles' Day last year almost clocking ¥20 billion ($2.82b), almost 10% of total revenue. 10 livestream 'rooms' sold over ¥100 million ($14m) worth of goods and over 100 rooms topped ¥10 million ($1.4m), with 2018's Singles' Day livestream revenue surpassed within 63 minutes.

China is forecast to have 526 million live-streaming video users this year, up from 504 million in 2019, however this forecast is likely to be blown out of the water as a result of COVID-19. The lockdown has taken live-streaming to a new level, expanding en masse beyond the traditional ecommerce streams to everything from education to fitness workouts.  Everyone from government officials and China's most famous entrepreneurs are jumping on board the craze.

Few of China's tech platforms haven't jumped on the trend. With youth-focused Bilibili showing propaganda streams about hospitals in Wuhan, to Douyin helping farmers sell ¥320 million ($45m) worth of produce. Poly Group sold 102 houses worth over ¥200 million ($28m) over 10 hours of livestreaming and Land Rover attracted 6 million viewers through 30 hours of streaming, selling 2,300 coupons and 21 deposits on cars, just pipped by Geely who sold 25 cars - 5 times the volume offline. Between January and February this year, the number of pet anchors on livestreams grew 133%, and with it, 238% viewing growth. Even the 'first Store of New China' Wangfujing (established 1955) live-streamed for 11 hours, attracting 830,000 viewers and ¥2.4 million ($340K) in sales.

What is Being Livestreamed in China?

There are few industries who aren't jumping on livestream train, although some of the fastest growing categories still have much less broadcasts relative to the established categories such as culture & education and gaming.

livestreaming industries versus growth in China

Who are China's Biggest Livestreamers?

There are two undistributed leaders in China's livestream scene, Viya and Austin Li.

Chinese livestream star Viya with Jack Ma

Livestreamer Austin Li competing with Jack Ma

Viya was one of the first anchors of Taobao Live, joining in May 2016, less than one month after it was launched.

In 2019 she had:

19 million Taobao Live fans

¥2.7 billion Singles' Day sales revenue (the equivalent of her 2018 sales in one day!)

Viya is often described as a “supermarket celebrity", which means she covers the most categories among livestream anchors, calling her audience “Viya’s girls.” In 2018 alone, she worked with over 5,000 brands. She is even said to have sold out discounted rockets on her stream - ¥45 million ($6.4m) down to ¥5 million($710K) - said to attract more than 800 people to pay deposits of ¥500K ($71K) within 5 minutes.

Her success can be explained by marketing theory of '7-Ps':

Product: common products from a wide range of categories with wide appeal.

Price: Making sure it’s the lowest. She even had an assistant threaten a supplier “Why I am going to let my audience down, let them buy expensive products, I want the lowest price, or I quit” in the livestream room, as a symbol of her bargaining power.

Place: Taobao Live (19.3M followers)

Promotion: Limited time, amount and price.

People: Nice appearance, great at talking.

Process: A strong team supporting her. From product selection to livestream preparation.

Physical evidence: A well-designed room, high quality for both picture and sound.

Austin Li has risen from beauty advisor to the “Lipstick King” of China.

He has:

23.5 million Taobao Live fans

42.8 million Douyin fans

Austin has learned his title as the "Lipstick King" have made the most lipstick applications in 30 seconds from the Guinness World Records in September 2018. That same year, he outsold Jack Ma in a lipstick-selling contest on Singles' Day. He has promoted 380 different lipsticks in two hours, sold 15,000 lipsticks in 5 minutes and has many other claims related to the product category. And he works hard, having live-streamed 389 sessions in 365 days.

His success can also be put down to his approach with the '7-'s':

Product: Austin test all products personally before he recommends them, although he has been caught out in the past by not testing them.

Price: The lowest. He blocked LANCOME and Pejoy because the price offered to him was a little bit higher than that offered to other anchor.

Place: Taobao Live (23.5M followers) and Douyin(42.8M followers) for a second-round spread.

Promotion: Limited time, amount and price.People: He is a genuine lipstick expert, a great talkerl, and will try products before recommending them.

Process: Team support. From product selection to livestream preparation.

Physical evidence: His famous tagline, "oh my god, buy it now" always triggers audience interest to buy. He’s also good at creating an atmosphere: “Attention! only 30,000 products available, ready, 3,2,1, link! 30k, 20k, 10k, ok sold out, next”. This leads to people buying products before they figure out what’s really happening - someone even bought a sofa after watching 5 minutes of his livestream.

Yonghao Luo original wanghong

The rise of livestreaming has seen the comeback of China's original internet celebrities and entrepreneurs, such as Yonghao Luo. He was first famous online in 2005, known for his personal charm, which originates his previous experience as a teacher, setting up a blog, smashing Siemens fridge in front of the Siemens HQ and creating the Smartisan smartphone brand.

Luo's first livestream on 1 April this year attracted 48 million viewers over the 197 minute show, sold 910 products worth ¥110 million ($15.5m), in addition to receiving and estimated ¥3.6 million in tips from almost 600,000 viewers, which he used to buy 300,000kg of oranges from Wuhan, selling them for ¥0.01/2.5kg (less than a cent) in the following show. Subsequent livestreams on April 10 and 16 sold ¥36 million ($5.1m) and ¥57 million ($8.1m) respectively.

Not All Livestreams Are Great

McDonald's has joined thousands of other brands on the livestream phenomenum, with its first stream promoting new products on 15 April.

The 24-hour livestream was themed 5G. In Chinese, the “G” sounds similar to “技”, here refers to features. 5G introduces five features of the new products. Based on the Weibo hashtag, which saw 140m views and 132k discussion, the results were quite promising. However there are some lessons to take about what not to do on livestreams:

1. Before the livestream, McDonalds borrowed many other slogans to promote this livestream, i.e. Your next phone is not a phone (iPhone). Make a friend, very sincerely (Yonghao Luo). People considered this unoriginal rather than clever.

2. Coupon delivery: The livestream was broadcast on Bilibili, but coupons were sent on WeChat, which wasn't smooth. Secondly, when asked how to get coupons on the livestream, they didn't respond. Then, they promised to give coupons on time, but didn't deliver in the promised time. As a result, few in the audience were shared their joy of them getting a coupon, which is usually the case on Chinese social media.

3. Inviting strangers to try new products. First, the anchors couldn't chat fluently. When they changed the topic, things were quite unnatural. Finally, the strangers were quite unprofessional and many viewers found the greasy hands and mouths unbearable.

4. The anchor's conversation was often awkward.

5. Viewers didn't appreciate ads and a video of chickens running around when the the next round of the broadcast was being prepared.

Where to From Here for Livestreaming?

While live-streaming usage hit highs when consumers had plenty of time during the lockdown, livestream's popularity is likely to track well above pre-COVID rates, in the medium term at least. Consumers are now in the habit of watching livestreams, and with more brands and personalities streaming, the breadth and quality of content has improved. These factors will encourage platforms to continually innovate creating a richer experience for viewers. Although the market is more contested than ever, brands should consider using the live-streaming platforms as that is where many of their customers will be.