In China, live-stream sales success stretches from wealthy influencers to savvy farmers

Illustration by Lau Ka-kuen

“You need it!” Building to a high-pitched tone, China’s top streamer, the “Lipstick King” Austin Li Jiaqi, is trying to convince his online followers to buy a range of products from tissues to towels and toothpaste.

“Oh my god, it’s just for you!” Li says in a live-streamed broadcast on Taobao, China’s largest e-commerce platform.

“Grab the coupon. Buy now to secure the best price,” he continues gesturing wildly. “The coupon link is only valid for 30 seconds. All girls go! Go! Go!”

Time-limited tactics are an old sales trick. And yet, combined with the charisma of live-streaming influencers, they have strong appeal for young consumers, helping to create sales records in China’s e-commerce sector.

Last year, during the Singles’ Day online shopping festival which runs from late Oct to Nov 11, the total gross merchandise value (GMV) of China’s e-commerce platforms hit a record 965 billion yuan (S$205 billion), up 12 per cent from the previous year.

The GMV of live commerce reached 131.9 billion yuan, surging 81 per cent from a year ago, according to data provider Syntun.

On October 20, Taoboa’s first presale day, Li’s live broadcast was viewed 248 million times and raked in 11.5 billion yuan in sales.

The achievements of Li, 29, a former comsmetics shop assistant, were nearly matched by Huang Wei, 36, aka Viya, a former singer, who sold 8.5 billion yuan of products online on the same day.

Live-stream e-commerce has been booming in mainland China, while viewers followed influencers to splurge a total of 1.2 trillion yuan in 2020.

The annual sales figure was more than 50 times that of 2017 and is set to double to 2.7 trillion yuan this year, according to the Shanghai-based iResearch Consulting.

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The power of Chinese live-stream sales has recently been used by foreign diplomats in China to sell products from their home countries and by the Chinese government to promote diplomatic ties with Afghanistan.

In November, state television network CCTV screened a high-profile live stream hosted by Li, CCTV reporter Wang Bingbing and Pashtun-speaking Chinese reporter Chen Zhong.

In two hours, they sold 26 tonnes of pine nuts, one of Afghanistan’s main export crops as well as 22 other products from African and Asian countries at the Chinese International Import Expo.

“China lagged behind the US in television-based home shopping. In the internet era, however, it has become the world leader in live commerce,” said Mei Xinyu, a researcher with the Ministry of Commerce.

“I expect it to continue developing in the coming years, though the growth is unlikely to be as explosive as before due to regulatory changes.”

Thanks to China’s sound internet infrastructure, advanced logistics system and the world’s largest number of internet users, live commerce has become a reliable digital tool for brands to boost their sales.

Consumers – especially Generation Z and millennials who value interaction – also welcome the opportunity to pursue the best prices while engaging with opinion leaders.

By last June, live commerce was used by 384 million people – more than 30 per cent of Chinese internet users – official data showed.

Taobao, owned by Alibaba, the South China Morning Post ’s parent company, remains the world’s biggest player, with a market share of 33 per cent, followed by short video platforms Kuaishou and Douyin , better known as TikTok outside China.

There are at least 1.23 million “professional” live-streaming hosts and assistants across the nation, according to iResearch, some of whom, such as Li and Viya, have become million or even billionaires.

In 2019, Li made it onto the Hurun “China Under 30s To Watch” list and was on the Forbes “30 Under 30 Asia” list in 2020. Li was among a handful of Chinese people included on the 2021 “TIME100 Next” list.

But the sector’s explosive growth has prompted increased scrutiny from the authorities that has shone an uncomfortable spotlight on some of its biggest names.

Viya was fined 1.3 billion yuan in December for allegedly evading about 700 million yuan in tax payments between 2019 and 2020. Several other live-streaming hosts were also fined for tax evasion last year.

In December, the Zhejiang Consumer Protection Commission said that of the 80 live-streamed Singles’ Day sessions they watched, nearly 40 per cent of products sold by 17 hosts were substandard. Those criticised included Li after they found problems with some of the product labelling.

“No sector can grow wildly forever. A better regulated regime will come sooner rather than later,” Mei said.

“However, I don’t think the tighter grip means to suffocate the sector. After all, live commerce helps create jobs and many local governments, especially in rural areas, are pinning their hopes on it to help the poor and revitalise the economy,” he said.

China’s economic recovery has been petering out, with GDP growth easing sharply from 7.9 per cent in the second quarter last year to 4.9 per cent in the third quarter.

By September, the urban unemployment rate was 4.9 per cent, while 14.9 per cent of young people aged 16-24, were out of a job, according to the National Bureau of Statistics.

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Many people view live commerce as a flexible job. Youngsters have been filling up training courses to learn how to perform well in front of a camera.

Teachers laid off by private education companies, which were forced to become non-profit in an industry crackdown last year, have also been reinventing themselves as e-shop hosts.

Even Michael Yu Minhong, the founder, chairman and chief executive of New Oriental Education & Technology Group, hosted his first live commerce session last month, pitching farm products such as cherries on Douyin.

During the session, Yu, often described as China’s most famous English teacher, highlighted New Oriental’s plan to launch a live-streaming e-commerce platform as part of efforts to diversify its operations.

New Oriental, with nearly 70,000 employees across the nation, said the power of live streaming could be used to “help more farmers, with the goal of achieving common prosperity”, an allusion to President Xi Jinping’s push to improve all citzens’ living standards.

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Local governments are eager to jump on the wagon, with officials joining hands with influencers to promote local products, starting from the Wuhan government’s live-streaming sale of Hot Dry Noodles, crayfish, tea leaves and oranges in April 2020 after the city’s lockdown ended.

In 2020, some 600 million people in China were estimated to live on a monthly income of 1,000 yuan or less – meaning e-commerce has a huge potential to improve their living standards.

In the eastern province of Zhejiang, the pilot zone for Xi’s common prosperity drive, the local government of Kecheng, a district in Quzhou city, said it would foster and support more than 50 “village live-commerce celebrities” to promote B&Bs, tourism and farm produce. It aims to achieve annual revenues of 2 billion yuan by 2025.

In the northeastern province of Jilin, Wangqing county government has recently arranged for farmers in the Manhe village to sit in on talk show sessions to improve their live-streaming skills.

Manhe villagers have opened 33 Taobao shops in recent years and each shop receives 3,000 yuan to 5,000 yuan a month selling funghi and other local specialities. Nearly 40,000 – or half the county’s workers – are involved in the fungus industry, according to a CCTV report last week.

Li Tianyu, 32, a host and owner of a Taobao shop in Jilin’s Fusong county, said it took him three years to gain 130,000 followers. He made his debut broadcast in 2018, after being convinced by a friend that live commerce had big potential.

“At the beginning, I was totally directionless. I spoke to nobody for at least five hours a day in front of my mobile phone for 30 days in the trial period as required by Taobao when viewers were blocked,” he said. “No listeners. No customers. It’s like walking in darkness. I didn’t give up because I had to make a living.”

When the first three viewers emerged a couple of months later, Li was so excited he sent out free pine nuts and honey.

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Since 2020, the county government has supported his business by sending officials to be guest hosts for his live sessions, which helped him expand his supplier network and boost business, he said.

Now Li owns a company which employs 18 people, including young men who have returned to their hometown from Beijing amid the pandemic and older farmers.

As the competition in the live commerce sector becomes more fierce, Li tries to provide viewers with novel experiences to set his sessions apart from those of his rivals.

“We live-broadcast ginseng digging and mushroom picking in the forests. To impress customers, we use as many outdoor scenes as possible. To facilitate broadcasts in remote areas, we even had an optic cable erected in the mountains to ensure a good signal,” he said.

“In the past, I only cared about selling goods. Now we repay society by donating to social causes.

“I operate a medium to small shop with 10 or so goods available. In terms of sales, it’s not comparable to those of Li Jiaqi and his peers.

“Live commerce is a lifeline for me. I think small shop owners like me will benefit from the regulatory measures as the competition environment hopefully becomes more fair.”

This article was first published in South China Morning Post.