The Limits of Luxury Livestreaming

Key Takeaways: Digital investments, human resource limits, and image control are barriers to growth in China’s live-commerce era. A tendency to underestimate the digital medium’s production value and relying on content outsourcing are common problems preventing luxury brands from getting livestreaming right. To connect with consumers via livestreaming while maintaining the right look and feel, brands need to treat it as a proper production and build capacity in-house. A year of COVID-fueled digital lockdowns, which have led to the use of live commerce to connect with Chinese consumers, has turned livestreaming from a “yes-or-no” dilemma to a “how-to” question for luxury brands. According to Coresight Research, Chinese consumers are expected to spend 300 billion on products featured in livestreaming videos this year. For brands, it has never been clearer that livestreaming is an unavoidable part of doing business in one of the world’s most digitally advanced markets. Last year marked the arrival of China’s livestreaming trend for many because, “if not now, when?” Louis Vuitton held its first-ever livestreaming session on Little Red Book, a popular Chinese social lifestyle platform. Net-a-Porter sold luxury bags by teaming up with A-list influencer Mr. Bags on Alibaba’s Taobao Live platform and livestreamed exclusive timepieces from Watches & Wonders Geneva, the top luxury watch tradeshow. The Kering-owned brand Bottega Veneta went even a step further by collaborating with super-host Austin Li on a sales-oriented livestream that sold out a record of 230 Mini Pouch bags (1910 each) in 10 seconds. The astronomical sales figures from China’s livestreaming economy could easily tempt brands to see the digital medium as the magic formula. But despite headlines, quick sellouts, and brands like Bottega Veneta making bold moves in this space, luxury’s story with livestreaming is still at the beginning. And simply making livestreams a part of a brand’s digital marketing strategy doesn’t guarantee success. To transform this industry buzzword into a sustainable practice, brands must be aware of livestreaming's current limitations before jumping into the trend. First, being underprepared and failing to meet a Chinese audience’s high expectation of luxury-worthy livestreams could backfire on a brand's reputation. Based on the industry’s early experiments, a lack of livestream preparation seems to be a common Western luxury problem. Louis Vuitton’s Little Red Book livestream debut drew numerous “looks cheap” comments because its background setting and production style felt no different than other Taobao rooms selling fast fashion at heavy discounts. In January this year, Dior’s livestream talk after its Spring 2021 Couture show did improve on background quality, but the audience lamented the talk's “boring” conversations, suggesting that brands are still far from understanding the necessary nuances of this digital medium. Outside of China, brands tend to oversimplify livestreaming as a sales-only medium and underestimate its production value. Livestreaming’s association with mass-market categories has also repelled image-obsessed luxury brands from seeing it as a proper branding vehicle. In the West, livestreaming sales on social media are largely seen as a one-shot shopping experience, not a celebrated lifestyle. Yet in China, especially with millennials and Gen Zers, consumers are accustomed to seeing professional, well-executed, and well-paced livestreams as part of their daily content routine. Nicola Antonelli, CMO of the luxury retailer Luisa Via Roma (“LVR” below), said that the industry often oversimplifies livestreaming as a tech challenge while ignoring its overall operational complexities. He told Jing Daily that “it is not just a matter of technology, but a matter of a mix of things. I would say that it is like a TV series or show. To produce it, you have to take care of every single detail: people, lights, makeup, settings, price, and many other things. It is mandatory to have a structured project.” Xiao Xue, the ex-chief editor of Elle China and one of the country’s most powerful voices in fashion, said she was overwhelmed by the amount of prep work before going on a 15-minute livestream show organized by Ferragamo. Co-hosted by livestream superstar Austin Li, the show focused on telling the Maison's brand history and the story of its iconic Museum bags. “Despite over two decades of working in fashion media, I found myself ill-prepared and completely new to the livestream challenge,” said Xiao Xue in her WeChat newsletter. Before the show, she watched Austin Li’s livestream every night for two weeks to familiarize herself with the language rhythm, and she edited the scripts over five times with the brand’s team. Yet, the show did not disappoint. In 15 minutes, the show reached seven million views at its peak and sold out 200 Museum bags worth 2,640 each. Next, the absence of a livestreaming culture inside luxury houses poses another obstacle for brands using the medium. Zoe Zhang, the co-founder of the NYC-based livestream commerce consultancy ANDLUXE, said a big challenge facing luxury brands is their reliance on outsourcing when operating in this fluid, digital space. “Brands really should build their own livestreaming capabilities, which means building an internal livestream team, collecting best livestreaming practices, and focusing on engaging content creation program,” said Zhao. Most brand players now rely on outside marketing agencies to work with influencers and super hosts, and this distance with the end consumers often leads to brand disconnect. “Owning the livestream in-house would let brands build a direct relationship with customers, ensure that stories are told the right way, and reduce dependency on influencers,” Zhao suggested. To China’s increasingly digital consumers, there is no doubt that a livestreaming formula works. But to get it right, brands must make breakthroughs in their people, logistics, and market environment to ensure traffic, service, and quality conversion. The real progress happens when brands stop framing livestreams as a tech-only issue and start seeing it as an integrated part of today’s hyper-connected world.

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The Limits of Luxury Livestreaming