Sales Associate Live Streaming Has Become A Must-Have For Brands In China

China’s live selling industry was able to get to where it is today thanks to one company and two people - Alibaba and its most famous live streamers Austin Li and Viya. With nearly 40 million followers on Taobao Live (Alibaba’s live streaming platform) each, Austin and Viya are household names in China known for their ability to sell tens-of-thousands of products in seconds.

It would be safe to bet that a majority of top international consumer goods brands operating in China have worked with either Austin or Viya over the past two years. Yet while the two of them can drive awareness and get a brand’s products into the hands of millions of consumers, working with top livestreamers such as them comes at a hefty price - one that many brands can only afford once or twice a year during major shopping holidays or product launches.

Because of this, along with financial pressures from the pandemic, in early 2020 brands started switching their focus to brand-run live streams (referred to in Chinese as pinpai zibo 品牌自播), training their own sales associates to stream on behalf of the brand.

During last year’s 6.18 shopping festival, around 40% of live streams on Taobao Live were hosted by brands, and by the 11.11 Singles Day Shopping Festival several months later, this number grew to around 70-80%.

Tao Ranking (淘榜单), an Alibaba-run media platform reporting on live streaming news, wrote that in 2020, 90% of the biggest brands on Tmall had run their own live streams. And a report from Weimob and Equal Ocean estimates that currently, on any given day, 70% of the live streams on Taobao Live are brand-run.

And its not just the number of brands trying out self-run live streams that is growing, but the sales as well. Alibaba just shared that during this year’s 6.18 shopping festival, GMV from merchant-run sessions increased over 100% year-over-year.

The Benefits

There are a lot of upsides to brand-run streams. For example, brands can hold them on a daily basis across multiple platforms for little to no cost. Top Chinese cosmetics brand Perfect Diary does just this. Nearly every day you can find Perfect Diary sales associates streaming on Taobao Live, WeChat, Xiaohongshu, and Douyin (TikTok).

By running their own streams, brands have more control over the content and product pricing as influencer collaborations usually require brands to offer hefty discounts. It also gives brands increased ownership over the traffic and the viewer data, as well as an opportunity to develop relationships with customers and gain direct feedback.

Luxury high-end fashion designer Diane Von Furstenberg (DVF) has been broadcasting on Taobao Live since early 2020 and now sees live streaming as a key component of its China strategy.

“Our Tmall livestream increases our GMV incredibly. It also serves as a two-way communication opportunity to hear suggestions and areas of interest from our customers,” shared Gabby Hirata, President of DVF. “We send key department leads into the livestream, from our merchandising lead to the chief product officer. Not only does that make our audience feel so special and included, it also helps our decision makers form better product assortments based on direct and immediate feedback from our customers.”

Another benefit to brands running their own show is avoiding fraudulent streamers. Top-tier streamers are under intense scrutiny from the platforms and tend to provide credible and reliable results. But once brands leave the top tier and begin collaborating with mid-tier live streamers, they are immediately exposed to greater risk.

During last year’s e-commerce live streaming boom, thousands of people rushed to become live streamers, hoping to make it big. However, the intense competition has left the industry riddled with fraud, with some influencer agencies routinely hiring click farms to artificially inflate their stars’ sales and viewing figures. The agencies will also purchase products, making it appear that the influencer drove sales, only to immediately return the products the following day.

Obstacles and Downsides

Of course, by running their own live streams, brands may not get the flashy, brag-worthy viewer numbers and sales stats that they can get from the influencer streams, but when done on a regular basis, brand-run streams can still have a significant impact.

Since 2019, Chinese high-end department store Intime has trained its sales associates to livestream. This came in handy in early 2020 when its stores were shut down due to the pandemic. During that time, Intime had over 5,000 sales associates live streaming, with an average of 200 live stream sessions per day. According to the company, in one live streaming session, the average sales associate could sell the equivalent of one week’s worth of offline sales.

Yet that initial investment in training sales associates can also be a deterrent. But it may not be as hard as brands expect.

Hirata shared that it hasn’t been a problem for DVF, “It is not difficult to train our top sales associates because they are so used to speaking with customers. In China where e-commerce and live streaming are so common, our sales associates are already very familiar with the medium and how it works. And our stores are so beautiful that it is naturally easy to set up a live streaming space inside.”

Brands are Using a Mixed Approach

Is the rise of brand-run live streaming a bad sign for influencers? Far from it. It’s not a win-lose situation. Many brands are doing both types of streaming.

Max Bissell, vice president at Bissell Homecare, an American vacuum cleaner and floor care products company, shared how the brand’s China team has been leveraging live streaming. “We first tried live streaming for the 11.11 shopping festival in 2019. It hadn’t been on our radar but after Tmall suggested it, we decided to give it a try and it was moderately successful. However, working with the large influencers was expensive. Since then, the team in China has been refining the model, occasionally using large influencers for the big shopping holidays such as 6.18 and 11.11, and then more frequently working with KOCs, (micro influencers) to host streams for our brand.”

Bissell shared that since 2019, live streaming has become an important part of their business model. As a company, they are very focused on performance marketing and live streaming has been delivering a high return on investment, becoming very powerful for driving traffic and views to the brand’s Tmall flagship store.

“Our products have a lot of functionality and are a bit of an investment. Live streaming is a great way to demonstrate how to use our products and their capabilities, and help customers find the right product for them.”

DVF also follows a similar pattern when it comes to brand-run streams and working with influencers. “The benefit of our own livestream is the deep knowledge our employees provide enables easy decision-making for our customers. The top live streamers we partner with have the clear benefit of expanding and acquiring new customers for DVF. Therefore we do both depending on different purposes and occasions,” said Hirata.

Key Channels

Since it first launched in 2016, Alibaba’s Taobao Live platform has always been the leader in China’s live commerce industry. Its direct integration with Tmall makes streaming on the platform a must-do for any brand looking to drive traffic to its Tmall Flagship store.

But it's not the only place you can find brands running live streams. As mentioned above, many brands are taking to multiple platforms to live stream. Outside of Taobao Live, they are primarily turning to WeChat and Douyin (the Chinese version of TikTok). Some are also hosting streams on social media platform Xiaohongshu, although this channel has somewhat fizzled out for live streaming after a short burst of popularity last year.

WeChat has become a key live streaming channel for brands that run private chat groups on the platform. Operating hundreds of private WeChat groups (each with up to 500 members) has become a common marketing tactic for brands in China and is referred to as private traffic. It is essentially the equivalent of building an email list in the West, allowing brands to develop a direct connection with customers. Brands can share links to their live streams in these groups and immediately drive thousands of viewers who also happen to be loyal fans of the brand.

Because these are high quality viewers that are primed to buy, conversion rates tend to be higher. Cosmetics brand Perfect Diary previously reported that the conversion rate on WeChat live streaming was 2-3 times higher than brand-run streams on other platforms.

WeChat also allows users to subscribe to notifications for live streams from a specific brand’s account. For example, I get notified every time Estee Lauder starts broadcasting, which is typically 3-4 times a week.

Over the past year, short video app Douyin has become another go-to platform for brand live streams. During last year’s Singles Day shopping festival, Douyin pulled in $2.8 billion USD in sales, with the vast majority driven by live streaming.

While much of that was from influencer-led streams, brand streaming has become increasingly prevalent on the platform, particularly after Douyin launched its brand store feature last summer.

Starting in September 2020, top Chinese fast fashion brand Peacebird started holding daily brand-run live streams for 18 hours each day, from morning until night. Over the five months from September through the end of January 2021, the brand’s Douyin live streaming GMV increased on average 78% every month, eventually breaking 1 billion RMB or $156 million USD in GMV in a single month. Their record for a single live stream session was 28 million RMB or $4.3 million USD in sales.  

Influencer Lives Streaming, then Brand Live Streaming - What’s Next?

Things change rapidly in China. New marketing methods and sales channels tend to surge in popularity and then quickly plateau. Some become ingrained in the marketing playbook while others fade away.

As last year’s massive hype around e-commerce live streaming dies down in China, is it still worthwhile for brands to be investing in this medium?

Yes. While it may be less buzzworthy, live shopping isn’t going anywhere. Platforms are still heavily investing in it and, for a large portion of consumers, shopping via live streaming has already become a habit. Brands should continue developing their live streaming capabilities while also experimenting with new channels.

“The current strategy is working well, but things change quickly in China,'' said Bissell. “We want to be a beta-tester, trying things out as they become available and seeing what works for us. This is important in order for us to stay relevant in the market.”

Hirata shared her perspective, “We see live streaming as a valuable channel to stay. Furthermore, we believe that the future of e-commerce must be multidimensional and interactive, all with the purpose of allowing our customers to consume our content and understand our products easier, better, and on mobile devices. That applies to not just our China strategy but our overall global priority. We plan to increase the interaction on dvf.com for our global audience and convert our Flagship in NYC into a virtual experience center for our global customers.”

Bissell echoed this sentiment, “As live commerce is becoming more prevalent in the West, we are taking a look at best practices from our experience in China and considering how we might apply those learnings here.”