For some businesses in China, the outraging COVID-19 pandemic is not merely a challenge but an opportunity to boom. For some, bad news, because they do not understand the live-streaming story.
In 2020, live-streaming has shown unprecedented vitality. Various live-streaming platforms are becoming a part of the mainstream as the epidemic has led to the growth of online work, entertainment, and consumption.
Huge Potential for Sales
Live-streaming e-commerce is growing every day. There’s a current trend for sales live-streams by top brass at big companies. Luo Yonghao, one of China’s most famous tech entrepreneurs, has entered the fray with sales during his first live-stream in April 2020 exceeding RMB 110 million (about AU$22.6 million). Dong Mingzhu, president of China’s largest household appliance maker, Gree Electric, sold more than RMB 300 million (about AU$61.7 million) of products on Kuaishou and more than RMB 700 million (about AU$144 million) products on JD.com doing live-streams.
Brick and mortar shopping malls, along with other sectors, are being rescued by live-streaming e-commerce and everyone is trying to be the next Li Jiaqi or Viya.
During the epidemic, with 5G developing, live-streaming has shown even more possibilities. 5G capabilities have made a big difference, as signals are more stable and pictures are clearer. In addition to retail, live-streaming has really stood out in education, entertainment, and tourism.
iResearch predicts that by the end of 2020, China will have 524 million online live-streaming users. This means 40% of Chinese people and 62% of the country’s netizens will be live-streamers. The total scale of China’s live streaming e-commerce industry reached RMB 433.8 billion (about AU$89.1 billion) in 2019 and is expected to double by the end of 2020.
Given that in 2019, live-streaming e-commerce only accounted for 4.1% of the online retail market and it accounted for 1.1% of overall e-commerce, it still has plenty of room for growth.
During the pandemic, industries turned to live-streaming and it moved beyond the standard products. People were even selling houses. On April 24, Evergrande Group, one of China’s biggest real estate companies, had over 3.8 million viewers for its live-stream and it racked up 7.12 million likes. During the broadcast, 38 discounted apartments sold out in only one second.—-edited from Ashley Dudarenok, technode
An Entrepreneur’s New Career as A KOL
Last year, founder of smart-phone maker Smartisan, Luo Yonghao, found himself banned from planes and high speed trains after landing himself on China’s notorious debtor blacklist.
But he promised to repay his debts and seems to have found a perfect way out: Live streaming on Douyin (Chinese version of TikTok). During his live streaming debut, the entrepreneur made more than 110 million yuan (US$15.5 million) with 48 million people tuning in to watch him sell 22 different products, according to local media.
His company Smartisan made a deal to transfer some of its patents and employees to TikTok owner ByteDance, enabling the tech giant to launch the so-called TikTok phone.—edited from Masha Borak, South China Morning Post
The Superwoman of Gree Tried Live-Streaming and Nailed It
Gree had reported a 50% drop in revenue and a 72.5% drop in net profit in the first quarter of year 2020.
Gree Electric Appliances chairwoman Dong Mingzhu, known as the China’s “home appliances queen”, sold more than 300 million RMB of goods in a three-hour live streaming event on a Chinese short video platform Kuaishou, showing the power of the sales channel in China.
The event, which started at 7:30pm, attracted 16 million viewers in total and saw ‘Queen Dong’ introduce an air purifier aimed at preventing the spread of Covid-19 and a juicing cup. The live-streaming session featured other internet celebrities who introduced more products from the Zhuhai-based Gree.
“We need to boost domestic demand and hope to use live streaming to promote sales, which seems to bring a new market,” Dong said in a post on her official WeChat account on Monday. “Gree has more than 30,000 offline distributors and I hope they can combine online and offline [sales channels]. I just started off by exploring the way for them.”
Many shopping malls and stores in China closed during recent months and most consumers stayed at home amid lockdowns and social distancing measure to prevent the spread of Covid-19.–edited from Jane Zhang, South China Morning Post
After hosting a record-breaking live-stream sale on Monday, the chairwoman of leading Chinese air-conditioner maker Gree Electric Appliances Inc. reassured her 30,000 brick-and-mortar dealers that her company would not abandon them.
Livestreaming e-commerce took off during the coronavirus pandemic when physical stores were shut and consumers were stuck at home, but it remains a major trend in China even after the virus has been largely brought under control. Business leaders, movie stars and even some local government cadres have joined streaming platforms to promote and sell goods online, with over 4 million e-commerce live-streams broadcast in the first quarter of this year, according to the Ministry of Commerce.
Dong was only able to make 230,000 yuan of sales in her live-streaming debut on Douyin in late April, which she attributed to “inexperience” and “lack of preparation” at the shareholders’ meeting. But despite her lackluster first attempt, Dong’s next live-streams on Kuaishou and JD.com in May netted around 310 million and 703 million yuan in sales, respectively.
Given Gree’s remarkable online sales results and poor offline sales, brick-and-mortar dealers worried for their future, but Dong said at the company meeting that online and offline channels need not conflict. “Integrating them is the real ‘New Retail,’” she said, adding that the company would not abandon the millions of employees running its offline stores.
She did, however, say that the stores must be transformed in light of the “unstoppable” new retail trend, and some physical stores ran their own live-stream promotions alongside Dong’s on Monday, providing the same discounts.
Dong also disclosed at the meeting that the Zhuhai municipal government had provided the company with tremendous support, including subsidies worth tens of millions of yuan.—edited from Isabelle Li , Caixinglobal.com
The Magic In the Screen
As the new-comer entrepreneurs like Luo Yonghao and Dong Mingzhu did more than ‘pretty well’ in their opening live-streaming shows, there are problems for them to continue the magic sales.
Several commentators point out the lowest-price strategy in live-streaming shows can be the key to attract tremendous traffic online. When the viewers click the ‘buy’ button, KOLs harvest their commissions but not necessarily do the brands make profits. Due to the widening intensive subsidy policies, sometimes the more products they sell through live-streaming shows, the more money they will loss.
Another side-effect is the pricing. While customers purchase online through these ‘lowest price’ channels, the brands will have to re-positioning their price tags in the brick-and-mortar stores and even some traditional E-commerce channels. No one pays the normal prices, the good old days are gone.
‘The magic in the screen’, is not only concerning merchants/brands/service providers, but these new-comer entrepreneurs. Are these eye-catchy live-streaming shows going to make or break their image and products? We’ll see.