Should Luxury Brands Be Excited About China's Live-Streaming Frenzy?

    There's no doubt plenty of live-streaming platforms and viewers to choose from, but the flourishing industry doesn't come without its own challenges.
    Bulgari's brand ambassador Kris Wu showed viewers the brand's new watches during a live streaming event on Yizhibo last month.
    Yiling PanAuthor
      Published   in Technology

    The live-streaming industry's explosion in China has shown the world just how keen Chinese consumers are about broadcasting their daily life on social media. Official statistics from the China Internet Information Center indicate that the number of live-streaming viewers had reached 325 million by the end of June 2016 and the majority of them are young—facts that have significant implications for luxury brands in China targeting the country’s emerging wealthy, millennial consumers. While brands have many reasons to be optimistic about this new tool for reaching shoppers, live-streaming's widespread reach in China means navigating it the smart way isn't always easy.

    Huge viewership numbers seemingly point to a promising path for luxury brands to win over more customers. However,

    exaggerating the number of views is a common practice#

    among China’s various live streaming platforms, as exposed by some well-known online hosts and Chinese media outlets. In 2015, state-run newspaper People’s Daily criticized one live-streaming show on Douyu, a major service provider, for claiming a broadcast exceeded 1.3 billion online viewers, which is almost equivalent to the total population in China. During that same year, a popular live-streaming host said publicly that the platform he worked for constantly faked viewership numbers in order to attract investment.

    Live streaming hosts can purchase viewers on Taobao at a very low price.
    Live streaming hosts can purchase viewers on Taobao at a very low price.

    Faking viewership is not difficult to do. There are numerous third-party tech companies that provide services to live-streaming hosts to add to their popularity, similar to the way in which Instagram and Weibo bloggers can buy followers. Taobao is one site that hosts shops that sell packages to people who want to ensure the popularity of their live-streaming sessions. The above image shows that by paying 1 RMB, the buyer can get 100 viewers. According to Chinese media reports, this grey market is quickly growing to meet increasing demand.

    Luxury brands in China should also keep in mind that the majority of live streaming viewers

    do not necessarily align with their target market#

    . Though there are many different types of people who watch live streams, a general perception is that people who like it most are either diaosi, which is slang for “loser”, or tuhao, a term used to describe the "tacky," nouveau riche, who are often associated with a penchant for live-gaming.

    The connotation of the diaosi concept has expanded in recent years to include people with a bad taste in fashion, but that didn't stop Swiss watchmaker Jaeger LeCoultre from working with a live streaming KOL who was associated with attracting a diaosi audience. The brand's collaboration with Papi Jiang drew criticism because although a well-known internet celebrity, Papi was allegedly too “low brow” and too “mass market” for the high-end brand. But those who praised the partnership said Papi was influential enough to send a branding message to an emerging group of young consumers with a disposable income.

    Some consumers feel that live-streaming overall

    damages the sense of exclusivity that luxury brands are known to offer#

    . Jun Li, a 28-year-old financial analyst at a foreign investment bank in Beijing who follows luxury brands and buys their goods regularly, said he wants to feel like luxury brands are doing something special just for him. “Live streaming has no borders—anyone can watch a live stream as long as they have internet," he said.

    Live-streaming platforms may not excite affluent Chinese proportionally to the way it's stirring up the general population just yet, but the key to luxury brands being successful with this crowd lies in the ability to create well-designed, tailored, and exclusive content. For example, when Tory Burch live-streamed its New York Fashion Week runway show on its official WeChat account to followers in China, data analysis conducted by Curiosity China indicated that the initiative greatly enhanced article readership for pieces posted on the same day. This suggests that live-streaming, when executed with consideration, can be an efficient way to engage with and retain attention from fans.

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