The Secrets of Effective Livestreaming

Plus: Hermès' lipstick flop, in debt and on Douyin, and the CCI Report Corner.

Even before the coronavirus lockdown, livestreaming was taking off as an effective way to sell products to Chinese consumers. The livestreaming e-commerce market was already worth an estimated RMB 440 billion ($63 billion) in 2019, up 71% from the previous year, and representing almost 9% of all online sales and 1% total spending on consumer goods.

After the epidemic shut down retail outlets and kept people at home, livestreaming took on even greater relevance, offering yet another opportunity to improve the customer experience through content creation.   

A previous installment in this series highlighted the need for brands to maintain open lines of communications with consumers during the current crisis, and the expansion of livestreaming beyond a straightforward focus on sales offers a key way for brands to offer support and build brand equity.

Here are four innovative ways in which livestreaming has helped brands to forge new connections with audiences in China:

  1. New Product Launches: While major public events such as press conferences became an obvious no-go, some brands opted to delay the introduction of new products. But others saw an opportunity to create an even bigger event online. Mobile phone maker Xiaomi joined hands with video platform Bilibili for an inspirational multi-day launch event to surround the debut of its Mi 10 flagship 5G. More than 12 million viewers tuned in during the 72-hour streaming event, called “Life is Not Made for Defeat,” which included a two-hour press conference that featured a teary-eyed interview with Xiaomi founder Lei Jun, unboxing videos and product giveaways, along with coronavirus-related content such as vlogs from Wuhan residents, educational programming, a virtual art exhibit, and original songs intended to cheer up viewers.

  2. Shanghai Fashion Week: Tmall’s recent collaboration with Shanghai Fashion Week to livestream the entire roster of 150 designer shows has been heralded as a turning point for the luxury industry, and followed a marked increase in livestreaming activity targeting Chinese audiences from the global fashion shows that preceded it. Tmall’s Shanghai Fashion Week included not only staged runway shows, but also a wealth of supplementary livestreamed content, such as behind-the-scenes presentations, interviews, e-commerce broadcasts, celebrity segments, and efforts at more creative branded storytelling. The experience has forced at least some fashion brands to reconsider their relationships to audiences, livestreaming and the types of content that are most suitable for new digital platforms. 

  3. Customer Service: A range of businesses have turned to livestreaming to provide support to housebound consumers. Among automakers, Tesla was an early mover — even as its factories in China were closed, each of its showrooms in China launched a Douyin channel to help car owners get the most out of their vehicles and disseminate information to prospective buyers. Its staff also set up hundreds of groups on WeChat to provide more direct support. Beauty brands have been among the most digitally-savvy in China, and some that had to close retail stores redeployed their salespeople by training them to livestream and provide more personalized customer service. 

  4. Top Sellers Shifting to Entertainment: During the height of the coronavirus pandemic, overt product promotions could have been seen as in poor taste. That meant that top e-commerce livestreamers such as Viya and Li Jiaqi paused their non-stop sales broadcasts to focus on charity. The hugely popular Li, known as the “lipstick king,” has also seen his livestreams becoming less overtly commercial and more entertainment-oriented, showing how the trend of merging content and sales can go in both directions. Celebrities have sought out his broadcasts to connect with fans and promote new films and shows, and for some viewers, his programming is more entertaining than what’s on China’s stereotype-filled reality shows, drawing Li huge audiences in the process. 

China’s livestreaming ecosystem is more developed than anywhere else in the world, and Alibaba has been pushing this transformation by supporting enterprises large and small to make the shift — reporting a 110% year-on-year increase in livestream sessions in early February. “The current healthcare crisis is a wakeup call for retailers,” says Yu Feng, senior director of e-commerce content at Taobao. “It has prompted many to accelerate their digital makeovers so that their businesses have become more dynamic and resilient.”

And while Alibaba’s Taobao Live is the dominant player, just about every major e-commerce platform has developed livestreaming capabilities, as have the short video apps such as Douyin and Kuaishou. 

Mentioned in today’s newsletter: Alibaba, Bilibili, Douyin, Hermès, Kuaishou, Oppo, Smartisan, Tesla, Xiaomi.

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China’s Lipstick King Gives Hermès Line an Epic Eye Roll 

Hermès made its long-awaited beauty debut last month with the introduction of the Rouge Hermès lipstick collection, a move that was anticipated to resonate deeply with Chinese consumers seeking accessible luxury. Yet despite all the hype, it hasn’t been smooth sailing for the brand in that market.

  • For one, the line is not yet for sale in mainland China, even though the brand tops the list of luxury brands for consumers in the country, according to the UBS Evidence Lab 2020 Outlook Report. The decision not to launch in China has given rise to huge demand for daigou imports with steep markups well above the US$67 price tag.

  • Initial impressions of the lipstick line on social media were mixed, with complaints about the high price point and “Lego-like” design of the lipstick tubes.

  • Now, China’s top influencer has weighed in with a widely noticed negative review. Li Jiaqi, known as the aforementioned “Lipstick King” for his ability to try on hundreds of samples during a single livestream broadcast, recently bought the entire collection of lipstick for a segment, reportedly paying for it out of his own pocket.

  • Li’s verdict: the five years it took Hermès to develop the line has rendered it out-of-date, and he “approved” only two of the 29 colors in the collection, leading a number of viewers to share that they were no longer interested in buying the products. At times, Li even rolled his eyes in exasperation, and the phrase “Li Jiaqi’s expression” became a hot search term on Weibo following the broadcast. 

  • While Li and other e-commerce livestreamers are usually paid to endorse and sell products, Li’s move into more impartial and critical reviewing is another step toward prioritizing content over commerce in his broadcasts.

  • The incident also shows once again that luxury brands cannot rely on the cachet of their names alone to succeed in China’s increasingly sophisticated market — consumers (and influencers) need to feel heard and understood. 

A Big Boss Goes Big on Livestreaming E-commerce 

In other livestreaming news, the industry’s newest star is a somewhat notorious and heavily indebted tech entrepreneur who is turning to e-commerce broadcasts to help pay off his significant debts. Luo Yonghao, founder and CEO of troubled phone maker Smartisan, has partnered with Douyin for what he hopes can turn him into a top influencer on par with Li Jiaqi.

While Li’s origins as a beauty influencer brought him a huge audience of female fans, Luo’s target demographic is quite different. More than 84% of his existing fans are male, most under the age of 35 and hailing from first- and second-tier cities.

After some speculation over which platform he would appear on, Luo went with Douyin’s fast-rising livestreaming platform over Alibaba’s market-leading Taobao Live, for which he earned a signing fee reported at RMB 60 million ($8.4 million). 

Luo’s first broadcast lived up to the hype, at least in terms of numbers. Luo’s debut livestream on April 1 racked up a reported RMB 150 million ($21.1 million) in gross merchandise volume, with 48 million viewers tuning in. More than 2,500 brands sought out a spot on the broadcast, but only 22 were selected, though these were, for the most part, inexpensive products such as snack foods and personal-use items such as an electric toothbrush and gel pen. 

Critics pointed out several shortcomings in Luo’s livestream performance, such as his nervous demeanor, lack of enthusiasm and a mistake he made with one brand name. Others noted that although he promised the lowest prices on his deals, some products were available for less elsewhere. And three of the brands he hawked have been cited for false advertising in the past, leading to questions over his trustworthiness as a salesperson.

These are all potential red flags for his long-term success as a livestreamer, and it remains to be seen whether the entertainment value of an entrepreneur-turned-livestreamer will be enough to retain viewers. 

Top 5 Products sold on Luo Yonghao’s debut livestream (units sold)

  1. Xin Liang Ji Spicy Crawfish (170,000)

  2. Mi electric toothbrush (106,000)

  3. Naixue Tea vouchers (91,500)

  4. Mi Gel Pen (75,400)

  5. Daily Dark Chocolate (73,000)

Brand Film: Oppo Finds International Stars for Global Push 

For the past decade, mobile phone maker Oppo has stood out among its Chinese competitors by featuring international celebrities in its brand films, starting with Leonardo DiCaprio in the suspenseful “Find Me” (2011)  and “Find More” (2012). In 2018, the brand followed up with the sci-fi mystery-inspired “Find X,” starring Brazilian soccer star Neymar.

This year Oppo has returned with another “Find More” series that is documentary in tone, with a diverse cast of characters: actor Eddie Redmayne, climber Alex Honnold, Youtuber Marques Brownlee, and Chinese writer and director Han Han.

The campaign aims to promote Oppo’s flagship 5G Find X2 model to international consumers. (See this article for more on the brand’s recent marketing in China.) Each film highlights its star at work and engaged in self-exploration —  Redmayne preparing for a role, Honnold maintaining his motivation, Brownlee using technology, and Han directing — and is paired with a corresponding behind-the-scenes video.

Redmayne has also been named as a worldwide brand ambassador for Oppo, another step in the brand’s ambitions to go global. 

Report Corner

  • The latest consumer survey from McKinsey & Company shows cautious optimism amid “new normal” of post-coronavirus China. 

  • A study of 30 markets from Kantar shares what consumers expect from brands (communications and relevance) and how media habits have changed as a result of the coronavirus. 

  • An in-depth presentation from Chatly on how brands can best utilize the numerous consumer touchpoints available on the WeChat ecosystem. 

News in English

  • In addition to boosting its livestreaming presence, Douyin is also becoming a movie streaming platform, with dozens of acclaimed films now available to view for free. Abacus

  • Weibo has opened up its e-commerce management tool to all of its 500 million-plus users, along with incentives to help boost monetization on the platform, such as livestreaming opportunities. KrAsia

  • Anime-inspired virtual influencers are growing increasingly popular with brands: “They don’t have any real ‘people’ problems, they can just be selling products and working 24/7.” Radii

  • A Q&A with Taobao Live’s Grace Hsu, a former livestreaming producer who now works on developing user-generated content on the platform. Alizila

  • A guide to the key players in China’s booming short video sector, from the biggest names (Douyin and Kuaishou) to lesser-known platforms (Pear Video and Vue Vlog). KrAsia

  • How global beauty brands are preparing for greater reliance on the Chinese market in light of the global coronavirus pandemic. Glossy

We’ve Got China Covered

Thank you for reading! For those of you in quarantine and/or lockdown — as most of our team is — we hope you and your families remain safe and healthy. We’ll be back next Tuesday. In the meantime, why not let us know what you’re enjoying in the CCI newsletter, what you’d like to see more (or less) of, and anything else on your mind?