Live streaming is broadcasting video content in real-time. It’s often used to share events, but it’s starting to mature and diversify in China.
Gaming has been around for years with platforms like Twitch (acquired by Amazon) in the West, or Douyu TV (supported by Tencent) in China. “Showroom” genre, where famous music stars and unknowns sing along karaoke-style to soundtracks or play their own songs, has been popular for a long time.
1. Now it’s all about shopping!
Taobao (from Alibaba) and its rival JD.com, two of China’s biggest online shopping platforms, have both launched their own live-streaming platforms: Taobao Live and JD Live. Shop owners and brands can hire popular influencers with large fan bases to help promote their products. While the streamer presents the products, links appear on the screen and allow the viewer to buy them.
Applications like Inke or Lai Feng allow daigous (Chinese agents who import foreign products in China for individuals) to attract even more potential clients. They can reassure purchasers of the quality of the products they show (most of these products are cosmetics or make-up).
46% of China’s internet population has used a live streaming app.
It’s important for shop owners and brands to produce their own web broadcasts, to prompt audience members with notifications that lead straight to the purchasing page.
2. Live ads in China
Unlike more casual live streaming shows, broadcasting for brands requires preparation and polish. For example, the Chinese content-creators network VS Media provides its live streamers with a studio. Staff is present to work behind and around the camera, helping streamers interact with their audience members. Sometimes on several apps at the same time.
In many ways, e-commerce live streaming shows are simply a new generation of ads: infomercials. But since everything is live, audience members can interact with the influencer, who can charm the audience to purchase more.
These real-time testimonials and interactive product reviews can be classified as persuasive advertisements. According to Alibaba, the conversion rate of content on Taobao Live is 32%, which means for one million views, 320,000 items are added to cart.
Each web influencer work like a small media company. They have small studios in a building lined dormitory-style corridors. This building holds many influencers and behind each door, a girl broadcasting to their communities via a tripod-mounted smartphone. Visitors compete for their attention by giving them e-gifts, that are bought with real money and can be converted back into cash.
This website 6.cn is based on this business model. You can find singers that are beautiful girls who work all the day, singing and interacting with fans. Have a look, it’s quite unusual for Westerners, but engaging for young Chinese boys.
A real business for web celebrities
For internet celebrities, e-commerce live streaming offers a very lucrative source of income. Which is better than depending on the generosity of the audience. One hour of live streaming for a brand will bring Tan Yuanwu (a 34-year-old beauty blogger) at least US$443. Another less well-known internet celebrity, Huo Qiu, quotes a minimum of US$295 per hour.
Easy money for most of them. Most influencers think it’s an easy way to earn pocket money
You even have gamers that play games, show game tips and make money. It’s a perfect job for students in a University.
For example, Ding is now a second-year student at Singapore Polytechnic. By “working” on live stream during his leisure time, Ding makes more than the average salary of University graduates in China.
“I broadcast about 60 hours a month, earning about 10,000 yuan ($1,450) by cashing out virtual gifts that my fans send me.” Ding told CNBC Asia.
By comparison, new University graduates entering the job market earn a bit more than a 1/3 of that amount, according to a 2014 report released by China’s Ministry of Education.
“I can earn more by live-streaming than working a normal day job, but I still have to look for a job after graduation,” said Ding.
The beauty industry is perfect for live streaming
Those figures can be higher if certain requirements from their audience are fulfilled (changing makeup, outfit, show their kids…).
Big-name brands like Lancôme and Elle are just starting to explore the advertising potential of live streaming. In May 2016, Maybelline ran a successful live streaming campaign featuring Chinese celebrity Angelababy on Meipai, selling 10,000 lipsticks in 2 hours.
3. Opportunities and Threats
There is potential for live streaming in travel and shopping, during Singles Days. (November 11, December 12, are equivalent to Black Friday in China, with huge discounts).
Live shopping shows could also be a major trend. For example, celebrities could be sent to boutiques in Seoul. Audience members would be able to shop with them, but would only have a few minutes to decide on what they want before the live streaming hosts leave the store.
However, a major threat is “overpopulation”. As it is the case with YouTube in the West. More and more influencers are becoming interested in live-streaming. The result could be too many streamers, and only the most original and creative could survive.
Is it good for brands to work with the new generation of influencers? Yes and no.
Some of them are good for brands but most of them don’t bring direct results. When you work with web celebrities, it’s better to be cautious and work with professionals and test and analyse the results.
If you have any questions, feel be free to ask.