It’s no secret that offline sales have declined since the onset of the pandemic in 2020. Catalysed by social distancing measures, the already-burgeoning e-commerce market has seen exponential growth in the past two years and shows no sign of slowing. The increasing reliance from consumers on online shopping has given rise to rapid development of online sales channels, which in turn has greatly changed the advertising industry.
Within the booming online shopping landscape, livestream e-commerce in particular has gone from strength to strength, with many brands scrambling to have their products featured in livestreaming rooms at all costs. However, livestreaming isn’t the lucrative one-and-done solution it may appear to be at first glance.
Cindy Yan Chan, chief strategy officer and partner of Focus Media, points out, “If brands rely on online promotion and live e-commerce by top hosts only, they are likely to get good sales figures yet no profit because of the margin between the high costs of pit fees, commission to livestream shopping hosts, expenses on paid traffic and the ‘lowest online price.’ With the little profit left, companies cannot afford to further develop their brands and with this vicious cycle, sales promotion leads to non-sales.”
Additionally, Chan notes that livestreams tend to result in small purchases such as daily necessities as a result of consumers’ lacklustre confidence in brands they haven’t otherwise heard of. Instead of relying entirely on online sales channels, a more holistic approach that builds brand recognition and increases the likelihood that they will purchase instinctively.
Many companies realise the importance of branding, so they have returned to increasing the value of their brands and creating brand awareness. Chan says, “Companies that have strong brand value will own the hearts of consumers as well as the market. The stronger the brand power and greater the awareness, coupled with online promotion, the better the sales will be.”
Exporting lift media overseas
Focus Media started to expand to the highly promising overseas market in 2017 and has now established branches in Hong Kong, Korea, Thailand, Singapore, and Indonesia, covering more than 30 major cities across Asia. In 2021, Focus Media started to see profit in its business in Korea and Singapore, and branched out into India, the Philippines and Malaysia.
Chan shares, “In some countries, we have tapped the market by establishing joint ventures with their local mainstream media corporations, and have been proactively adapting to customs and traditions of local consumers through localization. For example, the shape and the style of the facilities, and the forms of broadcasting are different in different countries, but what remains the same is our digital and intelligent management system.”
Noting that mainland China always leads Asia Pacific in internet development — about a year ahead of other countries — Chan is optimistic about the future of branding across the region. “The current trend in Mainland China is to gradually return to the branding itself and to adopt a combination of branding and social media. I believe that in the rest of Asia Pacific, we will also see a resurgence of brand advertising very soon.”
Focus Media Korea Company Limited
Target Media Culcreative pte Ltd