In traditional commerce, businesses and consumers focus on the products and the shop is just a go-between. Today, some merchants prefer a decoupling from the products they sell and a focus on imparting experiences. Liu, 35, is a vlogger on Douyin, China’s leading short video app, where he shares life lessons through a series of two-minute video clips to the younger generation, or the “between 18 and 28 years old”. But he has an ambitious plan: when the current 30,000 followers grow to a size of 50,000 and beyond, Liu will consider introducing necklaces, earrings and other jewelry items featuring Chinese characteristics that he designs, manufactures (in partnership with an original equipment manufacturer) and sells. “Of course, I”ll do that in a very subtle way at the beginning, such as by wearing them as I record the videos but without elaborating,” said Liu, a former marketer working for several Chinese internet companies. “Perhaps, the followers will notice and they may ask questions about the accessories.” Liu’s choice of “detour” shows a new way of doing business: selling your persona before selling your brand.
Enriching media forms from short videos to live-streaming are rewriting the retail playbook in China. Merchants are elbowing their way to capture people’s significantly shortened attention span, and that’s when emotional connection kicks in. “We are witnessing a shift from rack-based shopping to discovery-based shopping, and eventually to trust-based shopping,” said Jason Yu, General Manager of consultancy Kantar Worldpanel China. “I choose to buy something not necessarily because of the products per se, but because of the person selling it.” This retail “new normal” can be traced back to the early days of live-streaming, a real-time interaction between customers and store owners, facilitated by smartphones and high-speed internet connections.
When Taobao, China’s top e-commerce site, introduced live-streaming five years ago, it took off and turned into something of a must for businesses aspiring to reach a younger generation of consumers. Taobao Live is the brainchild of Zhao Lidong, who oversees product development and content commercialization at Taobao Live. She believes new media forms will offer sellers and influencers a more personal, straightforward way to engage with their audiences. “I think it comes down to the available supply and the shopping habits of Chinese consumers today,” she told Alizila, Alibaba’s news site. “In China, people are used to consuming hours of content on their smartphones. They embrace innovative tools.”
Today, the platform has groomed a handful of influencers, better known as “hosts” in the online shopping lexicon, including household names Austin Li and Viya. Many admit to buying for the sake of supporting their beloved hosts. “Since the height of the Covid-19 pandemic, I’ve formed a habit of watching Viya’s live-streaming session every night and see what I can buy,” said Liu Min, a sophomore student in Shanghai who has spent over CNY10,000 through live-streaming since last year. “Of course, her deals are good. But she’s more like a big sister, taking care of our daily needs.” The model is now embraced by a growing number of players, who adapt to, and make variations on this influencer-driven shopping in a bid to keep abreast of varying consumer interests. Short-video site Douyin is seen by many industry observers as giving mature e-commerce players a run for their money. By ramping up its e-commerce initiatives since last year, Douyin’s gross merchandise volume (GMV) topped USD77 billion in 2020, more than three times that of 2019.
In March, the company unveiled flagship stores for brands, on top of its existing Douyin stores, where anyone, notably influencers, can apply and multiple brands can be sold. On Douyin's platform, key opinion leaders (KOLs) appearing in tens of thousands of live-streaming sessions, turn into perhaps the most persuasive salespeople. China’s live-streaming e-commerce market reached CNY961 billion in 2020, a jump of 121.5% from the previous year, according to iiMedia Research. The sector is on a steady upward trajectory to reach CNY1.2 billion this year.
Traditional e-commerce sites and apps like Taobao are scrambling to catch up. The Taobao Live button now has a prominent place on the front page of the app, making it much more accessible to users. During the November 11 shopping festival, 1,000 items in eight categories will be promoted by influencers through short videos, live-streaming, and other integrated marketing campaigns, said Cheng Daofang, who leads the Taobao Live unit. He expected these short videos to be viewed 2 billion times.
Besides the KOLs, there are now key opinion consumers (KOCs) who specialize in product reviews for a smaller group of followers. “KOCs make eminent sense to retailers due to their higher perceived reliability and trustworthiness,” said Jennifer Ye, Partner and China consumer markets leader at consultancy PwC. “To appeal to younger consumers in China, it is critical for brands to find KOCs that embody the right brand values, and who can reliably connect with target audiences through user-generated content,” said Ye, citing the example of Chanel partnering with a local media company to establish a network of micro-influencers, the China Daily reports.
