Uncovering the Truth about Live Streaming in China

5 minute read

By Paul Hickey, Hot Pot Strategist

Live streaming is the ‘in’ thing right now in China. Many have heard the astronomical sales figures that live streamers, like Li Jiaqi, brought in for brands on Single’s Day in 2019.

Tmall is cashing in on the explosion in live streaming popularity by encouraging brands to utilise in-platform live streaming to drive traffic to products. This growth in live streaming has led multiple other platforms, including WeChat, Douyin and Little Red Book, to develop their own live streaming capabilities. 

While many see the opportunity in live streaming as a quick way to garner massive sales, it’s important to understand what opportunities there are for your brand and what role, if any, live streaming could play. While many brands have seen success, there are other brands that have fallen foul of not following some basic principles and in turn, received backlash from Chinese consumers. Additionally, there have been recent rumblings that many brands are seeing inflated sales figures during a live stream, only to then have a huge quantity of returns, potentially negating the benefits of streaming.

If you’re considering live streaming for your brand in China, here are a few fundamental principles that you need to follow, to avoid costly mistakes and common pitfalls.

 

Establish Why You’re Live Streaming

Given that live streaming has been given so much press, many are looking at live streaming as a quick way to drive sales. However, it’s important to understand that live streaming serves multiple purposes and different categories perform differently on live streaming platforms.

Typically, FMCG, skincare, makeup, snacks, and wine and spirits have all seen strong sales through live streaming. Luxury, however, has seen live streaming be more effective as a branding and awareness channel.

It’s important that you understand why you’re live streaming. If you are looking to sell, then you should take a look at creating bundles or giving a great deal on individual products that aren’t your hero product. Pushing a hero product at a discounted price as part of a live stream can have a detrimental impact on brand image.

 

Know your Brand 

There’s an old adage – ‘know who you are and deliver it at all times’ – and nowhere is this more crucial than in China. Live streaming may look like a simple endeavour but there are many parts that make up a successful live stream.

One brand that failed to deliver on its own brand proposition was Louis Vuitton. The brand hosted an hour-long live stream session on Little Red Book to launch its summer collection, garnering over 152,000 views. However, there was much discussion around whether the live stream actually matched up to Louis Vuitton’s luxury credentials.

Viewers noted that the set up felt far too simple for a luxury brand and that in turn made the products seem unappealing. Many consumers also took umbrage with the choice of host, commenting that once again, she did not match the luxury proposition of LV. It’s essential that when looking to live stream, a brand understands their own proposition and develops a live stream proposition to match.

 

Invest

The basics are no longer enough. Live streaming is incredibly popular right now and therefore, brands are investing more and more to create a compelling proposition and attract people to watch their live stream instead of competitors.

One area that has seen tremendous growth is the use of sophisticated studio setups. Chelsea FC launched a live stream show on Weibo and Douyin. The Premier League club delivered a two-hour broadcast in a professional China production studio, reviewing Chelsea’s 2004-2005 Premier League championship season. The broadcast featured frontline reporters sharing their experience from Stamford Bridge and fans reminiscing about the team winning the championship.

The show garnered 7.5 million total views, the topic “Stamford Bridge Rising” had 2 million reads and 1 million interactions. 

 

In addition to investing in a professional set design, another major investment is in the person you choose to host the live stream. Brands have a number of options here. If embarking on a regular live stream (weekly, monthly), then it may be worth investing in internal talent and driving awareness through different channels. However, many brands look at working with influencers and celebrities in order to drive traffic from their fanbase to their brand.

Picking the right person is essential and can differ greatly depending on the objective of your live stream. Recently, Yanghao Luo, entrepreneur and one of China’s original internet celebrities, conducted a live stream that attracted 48 million viewers. Throughout the course of this live stream, he sold over £15.5 million of goods. This success was built on Luo’s reputation having founded his own smartphone brand as we;; as trust built through his work as a teacher. Tapping into this kind of meaningful and trustworthy influence can create big wins for a brand.

 

Regularity

As live streaming becomes more sophisticated, platforms are looking at working with brands to establish regularity in live streaming that brings consumers back to the platform on a more frequent basis. For example, Tmall is incentivising brands by giving them prominent positions and encouraging traffic.

This regularity was significantly increased during the COVID-19 pandemic with brands broadening their live streaming strategies from a purely sales-driven approach to include branding and engagement.

Lululemon offered dozens of daily live yoga classes and created a list of trainers offering online classes on its WeChat and Douyin accounts. The classes were on every Monday, Wednesday, and Friday night to provide free, regular training sessions which can be booked in advance. Using live streaming to engage consumers and bring them into a brand ecosystem, regardless of platform, is a great way for brands to achieve multiple objectives with one activity.

 

Do What You Can, As Well As You Can

Live streaming is already established and advanced in China, so consumer expectations are also high. They expect live streams to be a seamless experience that is in line with their perception of your brand. That isn’t to say you have to invest in elaborate sets or celebrities but you do need to ensure what you can do is done very well.

One of China’s top live streamers, Austin Li – also known as the Lipstick King – recently ran into trouble during a live stream with virtual singer Luo Tianyi. Luo Tianyi was supposed to perform a song, but the audience only saw Luo Tianyi dancing without any sound due to a technical failure. It was criticized by consumers as being a “gimmick without good preparation.”

 

In Conclusion

  • Live streaming is a great way to achieve a number of objectives, including sales, branding, awareness and engagement
  • Plan ahead as much as possible and stick to these essential rules when developing a live stream program
  • Running into live streaming expecting to sell millions of RMB in product without preparation or due diligence will likely end in disaster
  • Monitor the full impact of the ROI, including returns for items where the commission has already been paid to an influencer. Like all marketing activities in China, live streaming must be rooted in commercial goals and be integrated into a broader digital marketing approach.

Get in touch with us to find out how savvy strategic planning, campaign management and in-market support can help you make the most of the enhanced China opportunity.