SHANGHAI — Live-streaming is the format de jour in China’s fast-moving social media landscape, with hundreds of millions of consumers tuning in.
Unlike in the West, where brands are still scrambling to find ways for their social media efforts to directly drive sales, labels turning to live-streaming in China are already seeing a return on investment. A highly engaged, mobile-first Chinese consumer is helping major fashion and beauty players generate significant revenue from digital content centered around live events.
For instance, Maybelline paired with Chinese superstar Angelababy last year for an event on live-streaming platform Meipai, ostensibly to announce that the actress would become the brand’s new ambassador. Within two hours, viewers had clicked through from the video stream to purchase 10,000 Maybelline lipsticks. This crystallized the link between live video and purchasing, and to date, remains one of the most powerful examples that social media and live-streaming could be much more than a marketing tool.
China’s lead in the live-streaming arena, though, could also just be a case of sheer numbers. Live video is a tool associated with a few platforms in the West, with the majority of activity taking place on Facebook Live, Instagram’s Live Stories or to a lesser extent, Periscope. There are more than 200 apps and platforms that support live-streaming in China, according to research from Chinese consultancy iiMedia Research.
By the end of 2016, the number of people viewing live-streamed videos in the country hit 344 million, or 47.1 percent of Internet users, the China Internet Network Information Center, or CNNIC, reported. All these viewers translated into an industry Credit Suisse estimates will be worth $5 billion this year.
Given these figures, it’s not surprising brands are itching to live-stream their content. An AdMaster survey from December showed 37 percent of marketers and media agency professionals in China intend to utilize live-streaming platforms as part of their content marketing strategy this year. A strategy particularly useful in reaching younger consumers, with data from iResearch Consulting Group showing 76.5 percent of mobile live-streaming app users in China are under the age of 36.
The craze has also given rise to a new class of influencers — called Key Opinion Leaders, or KOLs, in China — who are jumping to take advantage of the opportunities live-streaming could afford them. Today, it’s commonplace for KOLs to derive a substantial portion of their income from live-streaming, as viewers send virtual gifts that can be redeemed for cash. This group is increasingly forging relationships with top fashion and beauty firms, quick to partner with any influencer boasting a sizable, engaged social following who can raise brand awareness — and hopefully sales.
“It’s the new thing that every brand wants to try, not necessarily with a clear idea of what they want to achieve,” said Pablo Mauron, China managing director of Digital Luxury Group.
“Brands throw these amazing events and then promote these events by inviting KOLs to come and post about it. But even if you look at those posts, it was still very limited in terms of ability to share the experience with people who couldn’t attend. Live-streaming offers the chance to maximize the reach of an event that brands have invested massively in.”
A report by L2 on the rise of live-streaming as a marketing tool in China showed around two-thirds of global cosmetics brands now use one or more of the 31 most prominent live-streaming platforms in China.
This direct link from live-streamed content to e-commerce purchasing is another major difference between the format in the West and in China. Major e-commerce platforms, including Alibaba’s Tmall and Taobao, as well as JD.com, all have their own live-streaming platforms.
As of April, more than 10 million users view “Taobao Live” per day and 1,000-plus hosts have streamed on the platform. On Taobao Live more than 30 percent of people who watch a live-streamed event will make a purchase while watching. Tmall, meanwhile, has a conversion rate between 10 and 20 percent.
“There is nowhere in the world where this is happening at the same rate as it is in China, the numbers they shift are massive. E-commerce is so embedded in the way Chinese people live their lives,” said Chloé Reuter, founder and chief executive officer of agency Reuter Communications.
Tommy Hilfiger is one Western brand that has embraced the trend for live-streaming in China. The brand hosted three live-stream events with Tmall in the past nine months — two of them for fashion shows in September and February, and the other for the Together Tour with Gigi Hadid in Shanghai in October.
According to data made available by the brand, the three events combined trended on Tmall’s homepage for more than 120 hours, achieved more than 646,000 engagements and resulted in “a significant increase” in sales not only in the Tommy Hilfiger Tmall store but also at tommy.com.cn.
“Livestream apps are more advanced in China and the audiences using the apps are much larger. The popularity of live blogging commentary from influencer and celebrity hosts also makes these live digital events uniquely engaging and commercially successful,” said Avery Baker, Tommy Hilfiger Global’s chief brand officer.
According to statistics from Alibaba, top KOLs, such as Taobao store owner Zhang Dayi, can generate as much as 20 million yuan in sales over a two-hour live-streamed event.
“The great thing about KOLs in China today is that there are so many metrics, especially with e-commerce, that really measure how effective those people are. When you are doing a live-stream with Mr Bags [one of China’s top fashion KOLs with 1.3 million followers on Weibo and WeChat] on Tmall, and people are watching and buying, you can see that it’s a success,” Reuter said.
With so many platforms and KOLs to choose from, experts agree that brands should tread carefully when using KOL or celebrity partnerships and live-streamed events as part of a cohesive overall strategy.
“It’s started to get really popular so everybody is starting to do it. There’s no rules, no principals, anyone can do it so I don’t know if it’s a good fit for brands — particularly luxury brands,” said street-style star Fil Xiaobai, who has more than one million Weibo followers and has recently started partnering with brands for live-streaming events herself.
“I have done two live-streaming events for two brands and they paid me 100 thousand [yuan, or $14,712 at current exchange] for each one, but I am a professional with high-quality followers and I know what the brand is. I do live-streaming on my own Weibo and have had at least two million views for each one,” Xiaobai added.
Mauron cautioned that although these platforms offer a new format for KOLs to broadcast a message that sounds “authentic and genuine,” brands shouldn’t limit live-streaming activities to just working with KOLs.
Linking up with a KOL isn’t always the answer. Just like working with any celebrity, influencer or blogger, if the individual isn’t “on-brand” or doesn’t resonate with consumers, the partnership can be a miss.
“Bulgari just live-streamed Baselworld with [actor and singer] Kris Wu. The key criteria for success here was not the involvement of a KOL, but a top celebrity broadcasting cool content after a massive amount of advertising on Yizhibo [a Weibo partner live-streaming platform],” Mauron said.
Swiss brand Jaeger LeCoultre made waves earlier this year by working with live-streaming star Papi Jiang — who makes comedic videos poking fun at Chinese society. Many questioned whether Jiang’s audience, which largely identifies as “diaosi” (a self-deprecating term often translated as “loser”), was a good fit for a luxury watch company.
“I thought that was very random. For someone who is going to buy a Jaeger watch, they have to be pretty sophisticated, it’s a very discerning watch, are they really going to be influenced by Papi Jiang?” Reuter commented.
“The first question anyone should be asking themselves is: Why are we doing this? Why are we engaging with KOLs and live-streamers and what does success look like?”
Need to Know: China’s Live-streaming Platforms
It’s partnership with Weibo ensures compatibility with China’s dominant microblogging platform, Yizhibo has attracted many Chinese celebrities and brands to debut collections and products on its platform. It has 7.73 million daily active users.
Tmall Live and Taobao Live
Alibaba launched live-streaming features on Taobao and Tmall in early 2016 with the overt goal of using the feature to drive e-commerce sales. Tmall’s live-streaming operation has grown rapidly — an average of 733,000 users engaged per live-stream event in September, a number that skyrocketed to 4.7 million in October as Singles Day approached.
Launched in 2015, Huajiao partners with Chinese celebrities, and in mid-2016, it became the first live-streaming app in China to have a virtual reality function. It currently boasts more than five million daily active users.
This video-editing app added a live-streaming feature in January 2016. It has become particularly popular with international beauty brands, with L’Oréal, Maybelline and SK-II, all using the platform. As of June 2016, Chinese media reported that Meipai’s live-streams had garnered 570 million views.
Tencent owns WeChat, China’s dominant social media app, making its live-streaming platform a major player. Christian Dior exclusively live-streamed its haute couture spring 2017 show with the platform in January.