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Live Streaming in China – The Business Saviour or a Flash in the Pan?

“OMG!” he moves the lipstick closer to the camera and comments, “this is seduction! A devil. Its beauty makes me want to cry.“ Immediately, he made a crying face. ” Buy it, buy it, buy it!”

Youtube Screenshot

He is Jiaqi Li, an absolute superstar of the Chinese internet celebrities (网红), with over 60 million followers across Taobao, Weibo, and Tiktok. He is a real magician for brands, who drove about USD 142 million sales before and on the 2019 Singles’ Day through live-streaming (estimated by Alibaba). He is also known as China’s “Lipstick King”. Within 5 minutes of live-streaming, he sold 15,000 lipsticks online. Within 6 hours of live-streaming, he tried 380 lipsticks at one go.

I first heard about him only a few months ago. Novelty development in China always outpace us overseas Chinese. More often than not, it comes and goes, sometimes even faster than a fashion trend. I didn’t pay much attention to this name nor the “live-streaming + e-commerce” format he is labeled with.

But soon after, the related news became unavoidable. It flooded in through all channels: “Jiaqi Li and Jack Ma (Alibaba founder) compete on Single’s Day”, “Kim Kardashian collaborate with live-streaming queen Viya”, “Live-streaming total sales surpass USD 61 billion in 2019”.

Although internet celebrities have been around for a while, there was always a clear division between movie stars and them. Live-streaming was considered to be a downgrade for real celebrities, at least in my eyes. It’s largely because of the reputation it first gained. Rewinding 4 or 5 years when live-streaming first appeared, it had limited connection to e-commerce, rather a new way of killing time for youngsters. I remembered, an intern told me then that she would watch someone live-streaming knitting a sweater for 2 hours. Overnight, live-streaming platforms mushroomed, driven by crazy capital in the background. All kinds of funny, creative or vulgar live-streamer sprouted, fighting for fans and attentions. Back then, you would hardly spot any real celebrity there. But this changed slowly. By now, even top Chinese stars start to dip their toes in this pond. Instead of opening up their own channel, many celebrities simply join the top live streamers’ session.

Jiaqi Li and Mi Yang (Chinese movie star)
Picture from Jiaqi Li’s weibo

During coronavirus time, a new development appeared. From individual farmers to well-known business leaders and even mayors joined this craze and started their very first live-streaming session. The stagnation of off-line channel made e-commerce almost the only way. As a trial of self-rescue, they all jump on this train to promote their products. As a result, live-streaming expands into almost all industries and products categories, such as agricultural product, automobiles, services and even housing, far beyond the traditional small consumer goods sector. Some received immediate success. An apple farmer sold 100 to 150 kilos of apple per day through live-streaming. Ctrip CEO sold USD 1.4 million worth of holiday package for one destination at his live-streaming debut. Such number make it looks like a beacon in this dark time for business. However, can they maintain such level of sales in the long run, when they lose the “celebrity debut bonus”?

While writing this article, I had a discussion with a friend working in the internet industry in China. Similar to other analysis, she concurs that live-streaming, essentially, is another way of presenting product page. Its core is still price. Top live-streamers get the best price from the brand and take commissions from each product sold. Of course, if their criteria for recommending a product is solely based on commission instead of the product quality, they will eventually lose their audience. So top live-streamers usually have a team helping them selecting and testing products. For business and brands, the question they need to answer is how to perceive and utilise live-streaming. Is it to push short-term sales or to get exposure for brand awareness?

Some research predicts the market size of live-streaming in China will reach USD 128 billion in 2020. Meanwhile, there are also voices concerning how long this boom will last. Will it be a flash in the pan, or the start of a new e-commerce era, it remains to be seen.

See Li Jiaqi live in action

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