A Closer Look at Live Streaming in China
Updated: May 22, 2020
In China, 11th November, aka Double 11, is a holiday originally dedicated to bachelors and soon becomes the largest online and offline shopping day in the World. On 11th Nov. 2019, the sales of Alibaba Group reached 34.94 billion euro in one day, which set a new record for its single-day sales. The big sales success marked the new trend of digital marketing in China.
Tmall's full-day GMV on Nov 11, 2019
While digital technologies are drastically reshaping traditional marketing, we notice the sprout of a large number of live streaming platforms where celebrities, social media influencers, and even government officials participate in marketing. During Nov 11, 2019, GMV (gross merchandise volume) induced by Taobao live streaming exceeded 1.3 billion euro in 24 hours, 10% of that of the entire 2018. [Taobao.com generated more than 13 billion euro in GMV through live streaming in 2018, an increase of almost 400% compared with 2017.] More than half of the sellers sold more with the help of live streaming. The user base of live-streaming apps in China keeps growing. For example, Tiktok (known as Douyin in China) with live streaming function has obtained 400 million daily active users (DAU) in China and 800 million worldwide since its worldwide launch in 2018. It is safe to say live streaming has become a crucial part of digital marketing in China nowadays. This article will help you grasp the significance of live streaming in China. Later on, we will introduce popular live-streaming platforms in China and provide insights on developing your own marketing strategies in other articles.
The New Trend
Since 2019, live streaming has become the most profitable way of marketing. During Alibaba's Double 11 2019 shopping event, Taobao Live (Taobao's live streaming platform) generated sales of 2.6 billion euro, which accounted for around 7.5% of the company's total GMV that day. More than 10 live streaming studios each has reached sales of over 13 million euro. The success of Taobao Live has encouraged more applications to develop the live streaming function. There are various types of platforms for live streaming in China, for example:
e-commerce platforms such as Taobao, Jingdong;
short-video platforms such as Tiktok, Kuaishou;
social media platforms such as Weibo and WeChat;
gaming platforms such as Huya, Douyu;
platform with combined functions such as Xiaohongshu, Mogujie, Bilibili.
The target users vary from one platform to another. We will give a comprehensive introduction to various platforms in our future insights.
The pandemic of 2020 has made the live streaming a predominant entertainment for Chinese people. A large number of brands have even boosted sales with live streaming during the lockdown. Forest Cabin, a Chinese cosmetic brand suffered a 90% plummet of sales at the beginning of February. With the help of Taobao Live, Forest Cabin sees an increase of 15 days sales by 45% compared with the sales figure at the same period last year. The incredible profit generated by live streaming draws the attention of international brands. E-commerce platform Mogujie has established cooperation with more than 400 international brands in 2019. By introducing the brands with live streaming, Chinese customers become familiar with the foreign brands which has led to sales growth in the Chinese market. Young brands such as Drunk Elephant, a cosmetic brand from the USA also opted for live streaming to enter the Chinese market. Furthermore, Louis Vuitton made its first live streaming fashion debut on the Xiaohongshu.
Reasons behind the huge popularity of live streaming in China
Live streaming is a powerful way to convert internet traffic into sales and profits. Many live streaming platforms have solid user basis for effective marketing and promotions. Live streaming makes it easier for brands, products, or services to captivate the attention of the audiences. The wave of live streaming is sweeping the whole world. In China, the popularity of live streaming is even more prominent than that of any other countries. Based on our research, experience, and culture insights, we conclude two main reasons behind the success of live streaming.
Live streaming conforms to Chinese habits
For many Chinese people nowadays, watching live streams is not only a way of shopping but also entertainment. Therefore, it has become a lifestyle. As of the third quarter of 2019, Chinese internet users have reached 904 million and they spent, on average, nearly six hours per day using the internet. People watch live streaming talent shows to enjoy watching dancing and singing, at the same time they can also satisfy their social needs by interacting with streamers and other viewers. With the increasing cost of living in China, it is not strange that Chinese people incline more and more towards less costly entertainment. The integration of various technologies, such as VR and AR, enables live streaming to be more interesting, accessible and affordable. Lately, live streaming has also become an important channel for distant learning, especially amongst students. The application and user groups of live streaming platforms are becoming increasingly diversified. Live streaming services gradually cover almost every aspect of daily life which means enormous network traffic and great business opportunities can be expected. By June 2019, the time spent on applications for live streaming, online videos and short videos has already accounted for 29.2%. During the 2020 lockdown, more industries start to take advantage of live streaming, e-commerce, gaming, entertainment, social media, education, just to name a few. Many platforms initially built for short videos, social media, entertainment, or e-commerce are joining in the live streaming business.
Live streaming satisfies the need for authentic communication
The marriage of live streaming and e-commerce perfectly addresses consumers' needs for intimacy and authenticity.
Firstly, the connection between the live streamers and viewers enables the latter to trust the comments of a product, because the viewers believe that what the streamers say is more authentic than an advertisement. The community built in some platforms greatly enhance the interaction and engagement among live streamers and audiences.
Secondly, there is one concept you must grasp: the Key Opinion Leaders (KOLs). KOLs not only introduce products to others but also share their thoughts and lives. For some of the KOLs, their entire life is an open book. Many audiences regard interactions with KOLs as a way to get inspirations for their own lives. The charisma and charms of KOLs make their point of views and life-choices influential and impactful to their audiences. The more charming they are, the more influential they can become.
Currently, more and more brands become aware of the effectiveness of live streaming. Only by fulfilling customers' needs can the brands win their hearts. That being said, a sincere streamer and inspiring messages in your live streams can make a big difference.
As mentioned earlier, each live streaming platform has its own target users, specific domains, and fulfils different needs. It is overwhelming for anyone who is not very familiar with the Chinese market or Chinese culture. Connect Flow International can help you to select the most suitable platforms for your products or services to gain the attention of your target users or potential customers. Contact us for more information.