Asia has some of the biggest and fastest-growing economies in the world today, and examining the trends in these markets is extremely important in understanding the way business will evolve around the world. Whether you’re looking for that breakout business idea or expanding your market share for your existing business, it’s important to keep abreast of the trends in Asia.
Live Shopping
Live shopping is one of the fastest-growing industries in the online shopping niche today. If you are familiar with home channel shopping programs that were popular in the last two decades of the 20th century, you probably have a good idea of what live shopping is.
Instead of showing on television and waiting for viewers to call in to place an order, live shopping is a next-generation variant done online, with retailers streaming video to their followers in real time. Streamers were a huge growth area in the earlier part of the 2010, and eCommerce companies were quick to notice and take advantage of this new medium. In the West, Facebook Live sales are a big upcoming trend, but in Asia it’s already a booming industry.
Chinese consumers in particular have been very receptive to this new format. With the growth of the Chinese middle class and rising purchasing power, the Chinese spend more money on this new platform than any other. A 2017 report from Kleiner Perkins, a venture capital firm, shows that livestreaming is by far the most profitable marketing channel in China, overtaking online gaming by more than twice the amount of revenue. Television, online video, music and radio are dwarfed in comparison.
There are two key factors contributing to the success of live shopping in China. The first is the rise of convenient mobile solutions to make online payments like Alipay, Alibaba and WeChat Pay. Without a powerful payment solution to power it, live shopping would never have taken off. The other important factor is the involvement of Chinese celebrities in driving engagement and interest in the platform. We’ll discuss this more later, but live shopping has been embraced by the Chinese mainstream media as a legitimate career.
The biggest player in this new movement is the Chinese multinational technology conglomerate, Tencent. Tencent is the owner of WeChat, whose payment solution works elegantly into the live shopping experience. The company has invested a large amount of capital ($294 million) into its livestreaming platform Now Live. Other big players include Huya, and Huajiao, who are also investing in their own livestreaming platforms. Huya is investing $75 million while Huajiao has put in $45 million. The last big player is Alibaba, which we’ll discuss later.
The Rise of Key Opinion Leaders (KOLs)
Earlier we mentioned the involvement of Chinese celebrities in livestreaming. Big celebrities like Fan Bingbing actively promote many brands through live video sales, and this is where the biggest attention is. However, the celebrity livestreaming landscape in China is actually comprised of three different layers. They are:
- Big celebrities
- Wang Hong (??)
- Micro-Influencers
These three layers of people driving the Chinese mindshare are called Key Opinion Leaders (KOL).
You are probably familiar with a lot of the big celebrities in the industry like Fan Bingbing, and they can make anywhere from 5 million to 10 million RMB for their talent fee in these promotions.
Next are the wang hong or “internet celebrities.” While not as well-known as the big celebrities, wang hong are young, attractive hosts on streaming media who have acquired a cult following and are often experts in their own fields and niches. These include professional gamers, entertainment content creators, and beauty or fashion bloggers. They own their own channel for streaming with a big following, and can make up to 1 million RMB a year for their endorsements.
The final segment which reaches the very grassroots of the market are the micro-influencers. Micro-influencers are not as popular and have around a few thousand to tens of thousands of followers each, but they are legion; it’s estimated that China has about a million micro-influencers active on the net, reaching entire groups and niches of people who might be difficult to target directly with the bigger and more expensive KOLs. These influencers interact with their followers and fans on a more personal level, and build much closer relationships. This is the true value of this group of KOLs.
Altogether, these opinion leaders generated 21 billion RMB in 2016, according to market research company iResearch.
Seeing the potential, China’s entrepreneurs have realized the value of creating KOLs wholesale. The Hifan Multi-Channel Network in Guangzhou is a factory in its own right: one that churns out KOL celebrities to promote further live shopping. This company has managed to create about 100 livestreaming celebrities from scratch. These KOLs earn on average from 20,000 to 40,000 RMB a month, but their careers tend to be short-lived and peak in their 20’s for a few years before they are replaced by the next generation of KOLs.
It’s an extremely-demanding industry, but many KOLs relish the opportunity to gain fame and make a name for themselves before they move on to better things.
Alibaba’s TaoBao Live Marketplace
The last big player in this revolution, the Alibaba Group headed by Jack Ma is probably the most important piece of the live shopping puzzle. Alibaba controls the Taobao Live marketplace, which is the platform of choice for most retail livestreams. Taobao and Tmall generate more transaction volume than the entire US online retail industry, reaching a record $17.7 billion in 2017. Products from Taobao have made their way onto various online marketplaces like Lazada, Shopee and even Amazon.
Taobao moves about 320,000 items for every 1 million stream views. During the peak season and on the biggest shopping holidays, Taobao can have as many as 3 billion stream views. That’s a staggering amount of volume moved, at a very high conversion rate. This makes the TaoBao Live marketplace one of the most important markets in Asia today.
Taobao maintains a strong lineup by working with companies like ShopShops, which connect the Chinese viewers to the global market. Retail stores in the US can actually use ShopShops’ internet streaming service to connect to Chinese consumers and tap into a whole new market. It’s a big opportunity to reach one of the largest growing markets in the world today.
Where is this all headed?
Right now, it’s anybody’s guess where the live shopping industry is headed. One thing’s for sure, it’s the biggest trend in Asia today, and it’s still growing. As more and more retailers understand the business of engaging customers online and providing them value, the global marketplace will evolve further. Businesses all need to take note if they want to ride this gigantic wave into the next decade.
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