Matthew Keegan
Aug 21, 2023

How brands are taking back ownership of livestreaming in China

While livestreaming remains the mainstay of marketing in China's e-commerce sector, brands are increasingly building their own channels to compete with the industry's superhosts.

Photo: Getty Images.
Photo: Getty Images.

Breaking records is literally just a few minutes’ work for Chinese livestreaming megastar Austin Li Jiaqi. Selling more than 15,000 lipsticks on Taobao Live in five minutes, earned him the nickname "The Lipstick King" and transformed him from a former shop assistant into the poster boy of China's live commerce revolution.

As China's top livestreamers increasingly rake in millions and gain celebrity status in the process, a growing number of young Chinese people are using livestreaming to make money while promoting products for well-known brands on platforms such as Alibaba's Tmall and Taobao and Bytedance's Douyin—TikTok's Chinese sister site, all hoping to follow in the footsteps of superhosts like Austin Li.

According to Statista, monthly incomes for most livestreamers in China range from US$687—US$1,374 (5,000–10,000 yuan) making it an increasingly popular career path for China's youth. In a study conducted last month of more than 10,000 young people on the social media platform Sina Weibo, more than 60% of them expressed interest in working as online influencers or livestreaming hosts.

It comes at a time when millions of young Chinese people are facing record unemployment, with official estimates putting the figure at 21%, but some estimates claiming it to be closer to 40%. In China, a person is considered employed if they work at least one hour a week at any job. 

"The rapid urbanisation and the competitive nature of the job market in China has led to a situation where many young individuals find themselves either unemployed or underemployed," says Jun Yan, head of influencer marketing, We Are Social China. "Livestreaming commerce provides an avenue for these individuals to not only showcase their talents and skills, but also monetise them. The low entry barriers, coupled with the potential for high returns, has made it an attractive proposition for many."

A hit and miss industry

While livestreaming may have transformed online shopping in China (according to research firm eMarketer, it generated sales of US$480 billion in China last year that are likely to jump 30% this year) experts say that in reality, collaborating with live streamers is a bit hit and miss.

"While there was a time when brands favoured streamers over traditional influencers, as they thought streamers can sell, these days they know better," says Ashley Dudarenok, founder of ChoZan 超赞 and Alarice. "No matter how big, small, professional the external livestreamer is, they rarely deliver a positive ROI. Anchors are expensive. They work great for awareness, first time purchase, campaigns—after which it’s up to a brand to leverage and stretch the afterglow."

Olivia Plotnick, founder of Wai Social says livestreamers are particularly powerful for direct sales and engagement, while traditional influencers might be better suited for creating brand awareness, storytelling, and long-term partnerships.

Photo: Getty Images

"In addition, livestreamers have been proven to drive high conversion rates due to the urgency created during live sessions," says Plotnick. "Plus, the incorporated entertainment values make the shopping experience more enjoyable."

Yan points out that there are some clear distinctions between influencers who specialise in creating intriguing content and live streamers who primarily focus on real-time engagement and sales-driven activities.

"Live streamers offer brands the opportunity for immediate interaction with their audience, real-time feedback, and the potential for instant sales conversions," says Yan. "On the other hand, traditional influencers often have a more curated approach, focusing on content creation that aligns with their personal brand and resonates with their followers over a longer period."

Downsides and deadly competition

Back in 2021, livestreaming superhost Austin Li pre-sold US$1.9 billion in products in a marathon 12-hour live-stream on Alibaba’s Taobao online marketplace that attracted nearly 250 million views, a record for any show live-streamed on the platform.

While there are record breaking success stories like that of Li’s, with rising competition in the livestreaming space, it's not always the dream job or opportunity to make easy money that some young people imagine it to be.

"Competition for eyeballs is fierce, it’s increasingly challenging to stand out," says Dudarenok. "This leads to constant pressure to come up with attention-grabbing stunts or strategies, which rarely aligns with genuine and authentic content creation."

In one such stunt, a young male Chinese live streamer recently died after he was seen drinking excessive amounts of alcohol on Douyin, China's version of TikTok. The streamer who went by the username of 'Brother Three Thousand' was reported to have drank at least seven bottles of baijiu spirits during a live stream, and was found dead 12 hours after his broadcast, Chinese media reported. His death, which was widely discussed on China's internet, has led to calls for stricter rules for the country's expanding livestreaming sector.

"Regulation is another concern," adds Dudarenok. "Without clear guidelines and regulations, it’s often the Wild West with unsafe products and services, patchy after-sales services, and more. As the live commerce landscape evolves and matures, influencers, brands, MCNs, agencies are working together to shape what ‘good looks like’ for the next 10 years."

Elisa Harca, CEO & co-founder, Red Ant Asia Ltd, points out that from a brand perspective, one of the main downsides of working with a livestreamer could be a dilution of the brand.

"If you only rely on live streamers to tell your brand narrative, it will be quite diluted," says Harca. "Live streamers focus on those 'sound bites' that are there to encourage people to sell and they have no interest in pushing messages that they deem are not relevant e.g. if sustainability is key to your brand, it’s unlikely a livestreamer will tell this story for you. Hence you need to balance your livestreaming with true brand marketing, with and without content creators."

Photo: Getty Images

How brands are taking back ownership of livestreaming

While livestreaming superhosts like Austin Li and Viya remain popular in China, brands are increasingly building up their own live stream channels instead of paying individual live streamers 40% to 50% of the revenue.

"Brands prefers KOEs = key opinions employees to run the shows eight hours a day vs external anchors," says Dudarenok. "Plus virtual hosts can also be a great way to complement the real human anchor at peak times, and fully substitute them during slow hours."

It's highly likely that we will see more brands producing livestreams themselves, using employees or virtual hosts, to engage with their audience and drive sales.

Recently, tech giant Apple hosted their first live shopping event on China's Tmall and did so without the usual deep discounts or a celebrity host to draw millions of viewers, indicating a shifting landscape for the live stream arena.

"First of all, when brands produce their own live streams, they have full control over the messaging, presentation, and branding. This ensures that the content aligns closely with the brand's identity and values," says Plotnick. "Second, using employees or internal experts as hosts adds authenticity. Customers tend to trust information coming directly from brand representatives, as it showcases expertise and a genuine understanding of the products."

Apple joining the live shopping arena follows a number of other brands who are also hosting their own livestreaming events, taking back ownership of them from individual influencers.

"GREE, one of the biggest home appliances companies, achieved over US$656 million in revenue in 2020 with the appearance of their CEO, Ms. Dong Mingzhu," says Yan of We Are Social China. "Virtual hosts have also been adopted by almost all the social shopping and traditional e-commerce platforms, as well as well-known brands such as YSL, OLAY, and L'Oréal. In some cases, livestreaming sessions with virtual hosts even achieved higher conversion rates than human hosts. In fact, it has been projected that China’s virtual hosting industry will reach US$37.25 billion in 2023.”

However, whether the hosts are real or virtual, there's no disputing that livestreaming continues to be a phenomenon in China, making one wonder how long it will take for other markets to embrace the trend with the same voracity.

"It doesn’t seem to be catching up very fast," says Red Ant's Harca. "On our recent business trip to the USA, it seems that brands are still waiting for it to take off as it has in China, but they don’t feel that it will happen anytime soon.”

This could be due to the fact that live stream content in China is deeply rooted in local culture, and this foundation is built upon a mature market where most users are frequent online shoppers.

"If this trend were to expand to other markets, it would be tailored based on their online shopping behaviours and culturally relevant contents," adds Harca. "It wouldn’t be a mere replication."

Campaign Asia

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