Livestreaming shifts gears in China

Livestreaming has become an important sales channel in China but brands are beginning to reassess the value of a focus on discounting that relies on a “superhost” and to move towards a content-led approach.

What’s happening 

“Brands are building up their own channels as opposed to paying these other guys 40% to 50% of the revenue from a livestream,” Jacob Cooke, co-founder and chief executive of Beijing e-commerce consultants WPIC Marketing + Technologies, told Reuters. “That’s just unsustainable.”

In any case, superhosts have lost some of their lustre as they’ve run into various problems with the tax authorities among others. And for brands looking for people to front their own channels, there’s no shortage of alternatives: there are more than one million livestream hosts, supported by an industry of training academies and agencies.

Takeaways 

• Livestreaming began in sales platforms such as Tmall and Taobao, but entertainment and information-led platforms such as Douyin and Xiaohongshu are making inroads. 
• Superhosts still have a huge reach but are simply selling anything they can at a discount. While there’s a role for that, brands are becoming more interested in reaching the right people and building longer-term engagement. 
• They are more able to do that by telling stories to a smaller audience via a livestreamer whose character is a better fit for the product.

Key quote

“When you focus on building content instead of offering 40% off, you actually get more resonance with the consumer and you also get follow-up in terms of return sales” – William Lau, chief executive of multibrand beauty retailer Bonnie and Clyde.

Sourced from Reuters