How Luxury Brands Can Profit From China’s Top E-Commerce Trend

On August 5, Jing Daily and Content Commerce Insider hosted a webinar on how luxury brands can profit from China’s hottest new e-commerce trend — e-commerce livestreaming. The conversation was moderated by Jing Daily's editor-in-chief, Enrique Menendez, with a presentation led by Sky Canaves, editorial director of Content Commerce Insider (CCI). Featured panelists included Kevin Jiang, the president of international business at JD.com fashion and lifestyle; Masha Ma, owner and lead fashion designer of MASHAMA; and Anny Fan, a top luxury KOL and influencer. Together, they covered how e-commerce livestreaming would continue to play a critical role in China’s luxury retail sector during the post-COVID-19 era and beyond. The hour-long webinar started with a presentation by Canaves, who introduced China’s booming livestreaming industry. First, she explained how the business originated in the entertainment industry in the 2010s but saw rapid expansion in other sectors this year thanks to COVID-19. China is home to 905 million internet users, and over 60 percent of them are engaging with some form of livestreaming. In 2020, e-commerce livestreaming became the biggest livestreaming sector — overtaking the video game industry — yet there’s still room for growth. New trends in e-commerce livestreaming continue to pop up across the industry, as celebrities, sales staff, and even CEOs have now joined the livestream hosting ranks. Canaves then went on to highlight the risks and rewards of China’s livestreaming business. Brands must be aware that the best livestreaming experiences create a positive impression with consumers but don’t necessarily translate to sales. At the same time, livestream content innovation is highly valued and can build brand equity. Brands, she explained, should experiment with various platforms to see which one works best, and since fake traffic and sales fraud can be problems, brands need to choose their livestreaming partners carefully. After Canaves’ analysis of livestreaming, she — along with Jiang, Ma, and Fan — dove into a discussion about the top livestreaming tech platforms and content management systems. They also debated the most strategic ways for brands to use this new marketing tool. Below, Jing Daily takes an in-depth look at three key takeaways from the webinar: Lower-tier cities in China are fueling e-commerce livestreaming The speakers began their discussion on the topic of why livestreaming has gone viral in China. Recently, livestreaming has become a crucial way for consumers across the full spectrum of Chinese netizens to purchase products and educate themselves about brands. Jiang noted that China’s lower-tier cities (those outside top-tier cities like Beijing, Shanghai, and Guangzhou) make up two-thirds of the massive online consumer market in the country. “The people who live in lower-tier cities have more time to spare, less work/life pressure, and are looking for something interesting to help kill time,” he said. This group of consumers and their strong spending power is what has fueled the e-commerce livestreaming industry. The rapid development of telecommunication technology, affordable cell phones, and more convenient express delivery services have made it much easier for people to watch livestreams and place orders. Sales-driven versus content-driven livestreaming platforms Livestreaming platforms in China can be categorized as either sales-driven or content-driven. The first category is best represented by Chinese e-commerce giants like JD.com and Alibaba. The second usually refers to tech companies like Tencent or Little Red Book. But because of greater use, the boundaries between these platform types are continuing to blur. Content-driven short video apps have been steadily moving into the e-commerce sector, while big internet retailers have been upgrading their offerings with programming that's more often associated with video and entertainment platforms, from a whitepaper by Jing Daily and Content Commerce Insider (CCI) titled Next-Level Livestreaming: How Luxury Brands Can Stand Out to Drive E-Commerce Sales. At this point, Fan went on to share her livestreaming experiences on both types of platforms, using Tmall and Little Red Book as examples. She concluded that Tmall is good for presenting product features, while Little Red Book is handy for heightening brand awareness and collecting genuine user feedback. She felt that livestreaming shortens the distance between KOLs and followers and is a great way to engage with fans. When it comes to choosing the right platform, Jiang noted that massive platform traffic doesn’t necessarily mean higher conversion rates, so brands must be aware of each platform’s target audience when choosing a platform. There’s no such thing as ‘the right’ KOL As more and more hosts hop onto livestreams — including celebrities, CEOs, salespeople, and even virtual idols — how to choose a KOL to best represent your brand is now a concern. “There’s no such thing as the right KOL,” said Ma, adding that every KOL has their own livestreaming style, and some might not be the best fit for a luxury brand. Therefore, just because a KOL has a massive fanbase, that doesn’t necessarily mean they will deliver a greater sales performance. Fan added that the KOLs have to be familiar with a brand they’re promoting in a livestream. Jiang concluded that brands should allocate their budgets wisely, and they shouldn’t expect one livestream or KOL to make a massive difference for their brand. Building brand awareness, he said, requires a systematic marketing matrix that includes articles, short videos, and advertisements. Livestreaming is simply one of many available tools. To access our full report on Next-Level Livestreaming, click here.

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How Luxury Brands Can Profit From China’s Top E-Commerce Trend