Livestream Sales in China: How can you start selling in 2024
In 2023, the live streaming e-commerce market in China reached nearly five trillion yuan, showing a remarkable increase from 420 billion yuan in 2019 and forecast to surge to 8.16 trillion yuan by 2026, according to Statista. China still has the highest share of live shoppers in the world, at 81%. In comparison, other big eCommerce markets are the United States (40%), Germany (26%) and Japan (15%). With Douyin being by far the most popular livestream platfrom with amassed 755 million by February 2024, the app had established its leadership in the niche. But they are not the only players.
As a trend that mainly started with Gen Z and millennials in China, livestream sales have steadily grown to become a popular shopping channel for all age demographics in China.
Why concider livestreaming for your Chinese sales strategy?
If your brand is not a large multonational icon, and you dont have tens of millions of dollars to invest in your China marketing and sales strategy, then livestreaming trial is just what you need!
Think of it like an influencer campaign but with immediate commercial impact.
To be able to start sales you would need a Douyin brand account and the sale platfom’s store (which shall be run for at least one month and have 10 000 followers). This bit would cost you around 15 – 20K USD which includes the deposit to the platform (8500 usd), creation of the account, Chinese agency licence guarantee and other account management related costs. Then coming in the livestreaming crew – it could be a team that represents your brand (brand store), or a team of an influencer(s). In any case, the link to product would be coming from your created store.
Even though such a set
How Do Livestream Sales Work?
Livestream sales is a marketing tactic for selling products online that has exploded in popularity starting from 2016, growing out from the phenomenon of social shopping, the retail trend of mixing Ecommerce and social media.
Read more about Livestream sales services. Or contact us if you need a consultation.
Livestream sales usually consists of an influencer or a brand host presenting various products on livestreams and interacting with viewers in real time by answering their questions about the products. Often, products featured are heavily discounted and sold via flash sales. After influencers make the sales on the products they present, oftentimes they will also serve as customer service representatives for their audiences, building audience loyalty and serving as a liaison between buyers and brands.
The main platforms streamlined for this model of marketing include Douyin, Taobao Live, RED and Kuaishou. These platforms offer a variety of in-stream components that seamlessly meld ecommerce into livestreams: one-click purchase buttons, dynamic shopping tags, live updates when audiences buy items, physical location geotags to promote brick and mortar stores, as well as audience chat and reaction functions.
By combining the entertaining and interactive aspects of influencer livestreams with the instantly gratifying model of ecommerce, livestream sales have transformed the Chinese retail ecosystem in recent years.
sale has been made. This is more often the case with smaller KOLs and KOCs.
Can foreign brands do livestreaming from their own countries?
In short, yes. On an example of Douyin, here are the main points.
Foreign accounts can livestream if the next conditions are met:
- The store (even cross boarder) must have a guarantor/liable company in mainland China, that would be guaranteeing that the products sold are trustworthy and non harmful. This usually mean a partnership with a local agency or a contractual agreement.
- The KOL indentity: If the KOL is a foreign civil, it’s a must to have a China Permanent Residence Permit to apply for the livestreaming sales approval.If the screen only shows the product and no one is in the shot, there are no additional restrictions, the cetification can be done by borrowing a Chinese staff’s personal identity.
- General rules for Brand livestreaming vary from one platfrom to another, but for Douyin account:
a)at least 10,000 followersb)the account is registered at least 30 days previous to livestream event.c)then the KOL can apply the abroad livestreaming authority
What Products are Most Suitable for Livestream Sales?
Livestream sales are an interactive method of retail, similar to a sales representatives talking to and responding to questions from potential customers in a brick-and-mortar store. Therefore, products whose utility or value that can be effectively demonstrated in a video format are prime candidates for selling via livestream sales.
According to the previously cited eMarketer report, the most popular products sold on Taobao Live are “women’s fashion, cosmetics, food, home goods, jewelry, and accessories”. When looking at gross merchandise value, more expensive items such as computers and home appliances top the charts.
Livestream Sale Case Studies
With livestreaming sales, influencers who may be popular through their short form video content or celebrity status might not be suited for the fast-paced interactive nature of selling products. On the other hand, influencers who may not have a large initial fanbase can come to dominate the arena, especially those with a background in retail sales. Because of this, there are a variety of approaches to livestream sales campaigns.
KOL/Celebrity Livestream Sales:
Top level KOLs and celebrities with over one million followers on their social media accounts are the top tier for livestream sales. For livestream sales with this tier of influencer, brand exposure and audience volume are guaranteed. However, due to their status, these influencers have considerably more bargaining power and less brand loyalty than smaller influencers. This means brands can expect to sell their products at much lower profit margins with these KOLs.
An often-cited case study would be of KOLs who rose to stardom via livestream sales such as Li Jiaqi, the “lipstick brother”, also known as Austin Li. In the runup to 2021’s Singles Day, the November 11th shopping holiday that can be considered China’s version of Black Friday, Austin Li’s livestream sale on Taobao Live sold 1.9 billion USD worth of goods. With products ranging from L’Oréal cosmetics to snack foods, Austin Li was able to sell 1% of China’s entire 2021 livestream sales market in a single session.
In 2o23 KOL Xinba辛巴 achieved GMV 10 billion RMB in 2 hours for a mattresses brand (Mu Si) during Double 11.
New upcoming KOL 刘一一(Liu Yi Yi) achieved 50 million RMB in 1 livestreaming for fashion items, it was her first Double 11 livestreaming sale.
And this year 李佳琦(Lee Jia Qi) achieved GMV 9.5 billion RMB (1.4 B USD) on the first day (Oct 20th) of Double 11 selling mainly cosmetics & snacks.
An interesting case study that blurs the lines between KOL and platform is private education giant New Oriental’s livestream channel Oriental Select. Oriental Select was launched as a new business strategy from New Oriental in response to the government crackdown on private tutoring. Centering on hosts who double as educators, Oriental Select conducts educational livestreams teaching English via presenting products in both English and Chinese. While the channel struggled to surpass $150,000 USD in sales per day in the months after launching, in June of this year, daily sales increased almost two orders of magnitude over a ten-day span from $110,000 USD to 9.4 million USD. In terms of business model, Oriental Select charges a flat 10% commission and sells mostly everyday items like agricultural, health, and wellness products.
KOC Livestream Sales:
KOCs and smaller KOLs usually cater to specific niche audiences for their products. These influencers have followers ranging from ten thousand to a few hundred thousand. As they have less bargaining power than top level KOLs and celebrities, these influencers have stronger brand loyalty and provide more favourable profit margins for brands. In addition, they have a more defined community than larger KOLs, allowing for more precision marketing tactics.
A case study of smaller KOCs reveal that smaller influencers can be help reach more specific target demographics. Degyi, a KOC with just over 20,000 followers on Douyin, creates short video content consisting of dance routines and skits with her husband. On average, her livestream sales sell 30,000 USD worth of product per stream. As an ethnic Tibetan, her niche as a KOC is selling for brands aiming to expand their offerings into Tibet.
In-House Brand Representative Livestream Sales:
As livestream sales are similar in scope to a retail environment with sales representatives, many brands have opted to strike it out on their own by creating their own livestream channels. Brands that choose this option are usually well established with large pre-existing social media followings. Oftentimes, having an in-house brand channel and doing livestreams campaigns with KOLs and KOCs need not be mutually exclusive. Sometimes brands will invite top tier KOLs and celebrities to appear on their brand’s livestream channel and continue selling products via KOC livestreams.
Most major luxury fashion brands have opted for this route. Louis Vuitton was one of the first brands to try their hand at livestream sales, livestreaming on RED in 2020. However, poor production quality for their initial livestream sale drew criticism from consumers. Later, they shifted towards livestreaming their runway show as a livestream show, a move that better fit their brand image and garnered record-breaking views. Burberry tried a more innovative and interactive approach to livestream sales by livestreaming from the brand’s flagship store in Shanghai. They invited various fashion KOLs who acted as customers and had sales representatives provide information to the livestream viewers about the products KOLs were trying on, replicating the feel of an in-person store visit. The accessories on display were reportedly sold out an hour into the livestream.
Yanzhiwu (燕之屋), a brand of edible bird’s nest, provides a case study in innovative in-house livestream sales strategy for non-fashion products. Last year for Taobao’s “Spoil Fans Festival” in March, Yanzhiwu hosted a 16-hour livestream sale. The livestream garnered 150,000 viewers and grew GMV 990% compared to the year before. It achieved this massive growth by carefully drumming up interest for the livestream via a Weibo campaign and joining Taobao’s Livestream Ranking Competition. They also collaborated with a variety of other livestream sales channels to increase their brand exposure during the lead up to their livestream. They collaborated with KOL Cherie 雪梨, having her present Yanzhiwu products on her livestream sale the day before the Yanzhiwu brand account livestream sale. They also collaborated with other brands their target demographics would be interested in, placing their products in livestream sales from brands such as MARCHON, an eyewear brand, and Simpcare, a skincare brand. Finally, Yanzhiwu’s in-house livestream was held at their factory, allowing viewers to see their products’ manufacturing process.
Behind the Scenes
So, what goes on behind the scenes of a livestream sale? Production levels can range widely between livestreams.
For larger KOLs, celebrities, and brands, the behind the scenes of a livestream sale can be as professional as a TV production, streaming out of dedicated studio with makeup artists, professional sound, multiple camera angles, live visual effects, and teleprompters. Smaller KOLs and KOCs may sometimes only livestream from a single phone or tablet and present products in their own bedrooms. In between these two extremes, there are a wide variety of livestream influencers, from MCN affiliated influencers who are provided studios, teams, and equipment to brands livestreaming out of their warehouses or factories.
Experience for Consumers
Most livestream sales provide consumers a similar experience to TV infomercials, except that they can ask questions and interact with the hosts. They can ask to see various angles of a product, ask for information about their orders, and see questions and reviews from other people in the audience in real time. Why wade through pages of reviews when you can get your questioned answered live on video?
In addition, products are usually on discount during livestream sales, providing consumers a place to get good deals on products they want.
Experience For Brands
When brands work on a livestream sales campaign with KOLs and KOCs, brands do not usually need to pay upfront, unlike in traditional influencer marketing. However, the influencers get to sell the brand’s products at discounted prices, while taking a portion of the sales home as commission. The size of the discount and commission increase with KOL bargaining power. Often, brands can spend months negotiating with high level celebrity KOLs only to end up with razor thin profit margins from the livestream sale.
While similar to traditional KOL marketing campaigns in that they allow brands to attach a personality to their products, livestream sales with influencers provide more than just a human face to a brand. Oftentimes KOLs and KOCs also act as sales representatives for a brand and help with customer enquiries after the
The Most popular platforms for livestream sales
Increasingly, though, companies and entrepreneurs are capitalizing on the huge audiences available to meet their own commercial ends. They face two options: create their own livestreaming content, or place their brand within an already well-subscribed source of livestreams. The live streaming e-commerce market size in China has expanded 121% in 2021 compared to the previous year, and has reached 961 billion RMB! This market size is expected to rise by another 150.73 billion RMB by the end of 2022.
The former option offers perhaps the highest reward, but also involves the most risk, and will need significant investment of time and resources. Livestreaming is fiercely competitive, and brands will need to think very carefully about what might get the attention of audiences.
Budweiser took this route and excelled in 2020. When clubs and bars closed, or were emptied of patrons, because of COVID-19, they took to the online airwaves, streaming DJ sets and inviting people to party with them from home. As a result, they saw double-digit growth in direct online sales, and triple-digit growth in sales on third-party delivery apps.
The rise of KOLs in China is now well-charted territory. More commonly known as ‘influencers’ in the West, KOLs now play a huge part in the Chinese mediasphere and e-commerce.
They range from the expected – those who do makeup tutorials, post images living the ‘high life’, or narrate themselves while playing games – to the unconventional – those who eat a whole week’s worth of food in an hour (which is now actually prohibited), or simply sit and study in silence. Boasting follower and view counts whose numbers reach beyond seven-digits, it’s a no-brainer for brands who want exposure to try and get on board somehow.
Enlisting KOLs can involve simple product placement, a product review, or inviting them to a marketing event. Brands might organise parties, excursions or fashion shows, invite KOLs to livestream, and feel the knock-on benefits.
This is also a fairly competitive market, as viewers will want to see something new, and perhaps unique, from the stream. Chinese vlogging platform Xigua (西瓜) is a good place to look for examples – in 2018 they took a selection of their most popular content producers on an all-expenses-paid cruise from China to Japan and back.
So, where to start? Here’s an overview of the top platforms for livestreaming in 2021, then a few tips for how best to execute.
Livestreaming in China: The Top 10 Chinese Platforms
#1 Douyin
The app is simply a phenomena. For brands, the important thing here is to create truly creative, interesting content that is responsive to the latest trends.
Douyin is a the top 1 platform in China for Livestreaming sales. Connecting your Taobao and Red stores as well as Douyin native e-commerce shop, this tool is creating more than 9 million live-streaming sections per month.
According to the Douyin 2022 ecological convention, platforms gross merchandise value (GMV) growing 3.2 times year-over-year.
According to Statista ,in 2022 Douyin reported having 86.8% of its users streaming live content in China and spending at least 89 minutes watching videos on the platform each day!
Giving the perfect platform for Influencer marketing business, this tool is home to booming new talent: Liu GengHong (刘耕宏）, Dongyuhui (董宇辉 ) and Jianailiang (贾乃亮).
#2 XiaoHongShu
XiaoHongShu, aka ‘RED’ is another popular social media platform, compared with Instagram of the West. RED emerged in 2019 as a fairly unexpected e-commerce frontrunner. Favoured among young women, who make up around 90% of the user-base, it gained a reputation for reliability and authenticity.
The vast majority of the content is user-generated, and the platform itself is specifically geared towards e-commerce. If a user likes a product featured in a livestream, they are only one or two clicks away from viewing it, purchasing it, and having it delivered.
A brand account allows for direct interaction with users, allowing companies to respond to comments, convert interest into sales and maintain relationships.
#3 Kuaishou
Kuaishou is another relatively new kid on the block, and one that packs a punch. Known as “Douyin for thrid-tier cities”, It started as a GIF-sharing platform in 2011, but opened up livestreaming in 2016, and boasts upwards MAU in Q2 2023 exceeded 678 million, increasing by 14.8% year-on-year. The total number of daily interactions (including likes, comments and forwarding) reached 8 billion!
#4 Taobao Live
The granddaddy of e-commerce, Alibaba, and its offshoots Taobao and Tmall, represent the vanguard of China’s livestreaming sales boom. On Single’s Day (11th November) 2020, sales from livestreaming surpassed $3bn in less than 24 hours. For example, Estee Lauder’s Singles Day livestream pulled in US$28m in sales, garnering more than 500 million views.
Taobao Live is available year-round, however. The aforementioned Budweiser livestreaming campaign was a tie-in with Tmall, wherein they were cooperated to create an additional custom landing page for the products.
5. WeChat Live
6. Weibo
#7 Bilibili
What started as a video service for anime fans is increasingly being described as China’s closest equivalent to YouTube. For those new to the platform, they should know that its users are still very much tied in with its fandom history, however. Livestreams that involve cosplay or anime-themed elements are popular.
#8 Huya Live
Known internationally as Nimo TV, Huya mainly focuses on E-sports livestreams. It provides official coverage of esports competitions. Tie-ins could include more traditional advertising deals, or collaboration with gaming KOLs.
On the evening of May 13, 2024 Beijing time, Huya Company released its financial report for the first quarter of 2024. According to the financial report, in the first quarter of 2024, Huya Company’s total revenue was 1.5 billion yuan; Under non US GAAP, the net profit attributable to Huya Company for the quarter was 92.5 million yuan. In terms of user data, in the first quarter of 2024, Huya Live’s mobile MAU (monthly active users) increased year-on-year to 82.6 million.
Huang Junhong, Co CEO and Senior Vice President of Huya Company, said, “We have also made positive progress in the commercialization of game related services. Benefiting from the rapid growth of game distribution and advertising services, as well as game prop sales revenue, Huya Company’s game related services, advertising, and other revenue reached 244 million yuan in the first quarter, a year-on-year increase of 137.6% and a month on month increase of 30.7%. In addition, the paid users of Huya Live in the quarter also increased to 4.4 million. These improvements reflect the strong and high-quality game user base of the Huya platform and verify the development prospects of new business directions. More importantly, the game related service business with higher gross profit margins will promote the overall profitability improvement.”
#9 Douyu
Another huge gaming and e-sports livestreaming service which, in 2021, is slated to merge with Huya Live. Douyu is a space to stream League of Legends (LOL)g, CrossFire (CF), dota2 live streaming, beauty live streaming and other popular game events.
On June 5th, Douyu released its first quarter financial report for 2024. During the reporting period, Douyu achieved a total revenue of 1.04 billion yuan and an adjusted net loss of 85.7 million yuan.
In terms of user data, the average MAU on Douyu Mobile is 45.3 million, with a total of 3.4 million households paying fees.
Regarding the company’s performance in the first quarter, the Douyu Temporary Management Committee stated that the company’s diversified business capabilities continue to strengthen, and fine operational management will be strengthened by optimizing the company structure and adjusting operational strategies.
According to the financial report, Douyu’s revenue from advertising and other businesses in the first quarter was 239 million yuan, a year-on-year increase of 109.4%, accounting for 23% of the total revenue, compared to only 7.7% in the same period of 2023.
Want to enter Chinese e-commerce market? Learn about 5 options besides Tmall!
How to set up your Livestreaming Campaign in China in 2024
Set up an account or create a collaboration.
First thing first – business side of the story. Who hosts the links (and stock), and where does the money go?
Pick a host for your livestreaming in China.
This needn’t necessarily be a KOL – there are agencies now who represent livestreaming hosts, just as agencies represent TV hosts. Think carefully about the target audience, and who they might relate to, or look up to.
Plan your content very carefully
You do not want to be going viral for the wrong reasons. First, consider the regulations around which words, phrases and topics may or may not be used. For an outline of these, click here.
Second, think about the culturally sensitive topics you may wish to avoid. A quick search on the internet for brands falling fowl of Chinese consumers is a good place to start.
Promote your livestreaming in China in advance
Use more traditional social media to get the message out there, and build hype.
Choose an appropriate timeline
Is it Singles Day? Okay, a 20-hour livestream marathon may be okay. If not, consider commuting times, or evenings after dinner.
HI-COM is a multilingual communication agency dedicated to providing China-specific social media communication and e-commerce marketing services to businesses around the world. Working with more than 100 brands, HI-COM is the go-to partner of companies that want to enter China market! Contact us for your free consultation today!
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HI-COM is a digital marketing agency dedicated to providing China-specific strategy, social media communication and e-commerce marketing services to businesses around the world. Working with more than 100 brands, HI-COM is the go-to partner of companies that want to enter the China market! Contact us for your free consultation today!
