Top News

Size, color and smell: Livestreaming rings up big sales in China


By Brenda Goh

HANGZHOU, China (Reuters) - Zhang Dayi tugs at the sleeve of her gray sweater and rubs the material as 2.3 million viewers watch her every move.

"This sweater is lined on the inside with fleece, so it's very warm, is that correct?" she says, later pausing for a few seconds to look at the questions streaming in from viewers on her phone.

"I can show you the back: if you like it remember to add it to your basket!" she says.

Zhang, a popular influencer in China, is the face of a new way of shopping in the country, sweeping retailers in a boom dubbed 'live commerce' - the convergence of e-commerce and livestreaming.

Telegenic and chatty personalities like Zhang speak to shoppers in real time, answering questions about size, color and even smell and using limited-time discounts to encourage quick orders. Sessions go on for hours, and are especially long during big shopping extravaganzas like Nov. 11's Singles Day, and "Double 12" in December.

While e-commerce growth has slowed in a stuttering economy, the world's second-biggest, the livestreaming model has given retailers a shot in the arm. Alibaba Group said over 50% of its Tmall merchants used livestreaming to sell nearly 20 billion yuan ($2.84 billion) of products on Singles Day last month.

Retail sales in China rose 7.2% year-on-year in October, matching the more than 16-year low hit in April. The government does not give a breakdown for e-commerce sales.

JD.com and Pinduoduo also have livestreaming offerings while video sites like ByteDance's Douyin and Kuaishou give users the option to shop. Consultancy Deloitte estimated that 456 million people in China watched livestreams in 2018.

Brands are taking notice. During Singles Day, L'Oreal alone hosted over 600 hours of livestreaming between Oct. 21 to Nov. 11, Alibaba said.

"It was especially hard in the first half of 2018, we had to visit each company one by one," said Yang Zhao, head of Alibaba's Taobao Live Operations, recalling how hard it was back then to convince brands that Chinese consumers were keen to shop this way.

"Then it really exploded this year... They've started writing livestreaming into their annual strategy plans, how much they want to invest, make from it, and what content they want to create."

SHRINKING DISTANCE

Zhang is among China's most popular online celebrities, with 11.6 million followers on China's Twitter-like Weibo platform.

The 32-year-old ventured into e-commerce in 2014 with her own shop on Taobao, and started experimenting with live-streaming two years later. Her firm is backed by Nasdaq-listed influencer incubator, Ruhnn Holding , in which she also has a stake.

"There were some things that were difficult to achieve with photos and short videos - for example in short videos I cannot issue deal coupons, and I cannot communicate with my fans in real time," she told Reuters in an interview.

"Livestreaming pulls closer the distance between users and sellers and builds trust," she added.

Her company now employs models to livestream from around 9 a.m. to 11 p.m. daily, with Zhang making regular appearances. During the last Singles Day, sales throughout her online stores hit 340 million yuan compared with 7-8 million yuan in her debut 2014 year.

Since September, she has started livestreaming herself talking about products and deals from brands like Olay, Yves Saint Laurent and Yum China's KFC, joining a breed of popular influencers such as "Lipstick Brother" Li Jiaqi and Viya, who specialize in reviewing products.

Over the past year Western social media and e-commerce platforms have started similar channels, with Facebook's Instagram rolling out a feature allowing users to shop from the app, and Amazon.com Inc launching its "Amazon Live" livestreaming site. Snapchat also has a shopping function.

"While foreigners also watch videos, also watch Instagram, there is no platform quite similar to Kuaishou or the Taobao livestreaming platform. Chinese consumers watch this as a kind of entertainment, they think it's fun," said Lu Zhenwang, A Shanghai-based independent e-commerce analyst.

(This story refiles to correct typographical error in second paragraph)

(Reporting by Brenda Goh in Hangzhou, Additional Reporting by Sophie Yu in Beijing and Beijing Newsroom; Editing by Shri Navaratnam)

Recent Stories