[vc_row][vc_column width=”1/4″][vc_column_text][/vc_column_text][/vc_column][vc_column width=”1/2″][vc_column_text]By now, most of us have heard about live online shopping and in China it has really taken off, continue to read this article below, that we have chosen for you, and you will learn at what scale. NXT is all about the Future of Commerce and live online shopping seems to be what the future holds. This article was originally published on Bloomberg Businessweek.
A millionaire at 34 and bigger than “Sunday Night Football,” China’s star saleswoman Viya rules a $60 billion world of live online shopping.
Huang Wei can sell anything.
For instance: In April, Huang—known professionally as Viya—sold a rocket launch for around 40 million yuan ($5.6 million). The live, online shopping extravaganza the 34-year-old hosts most nights for her fans across China is part variety show, part infomercial, part group chat. Last month, she hit a record-high audience of more than 37 million—more than the “Game of Thrones” finale, the Oscars or “Sunday Night Football.”
Each night, Viya’s audience places orders worth millions of dollars—typically for cosmetics, appliances, prepared foods or clothing, but she’s also moved houses and cars. On Singles Day, China’s biggest shopping event of the year, she did more than 3 billion yuan in sales. The spread of coronavirus, which put most Chinese people under stay-at-home orders, doubled her viewership.
In a world where we all shop almost exclusively from our couches, Viya is one vision of our collective future. Livestream shopping is a natural confluence of several current tech trends—streaming, influencers, social, commerce—and offers companies a new path to consumers’ hearts and wallets. Tesla, Procter & Gamble and supermodel-turned-beauty-entrepreneur Miranda Kerr, among others, have turned to Viya to introduce them to the Chinese market. The queen of China’s $60 billion ecosystem of live online shopping, Viya earned an estimated 30 million yuan in 2018, according to the most recent figures from Chinese e-commerce giant Alibaba.
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None of this bodes well for brick-and-mortar retail, already hobbled by online alternatives. The coronavirus pandemic—and the ensuing economic downturn—have dropped sales and foot traffic off a cliff. Offline, non-grocery retail is expected to drop 20% this year, according to Forrester Research. J.C. Penney, J. Crew and Pier One Imports have already filed for bankruptcy protection. And with no vaccine in sight, does trying on clothes or testing lipstick at a cosmetics counter still have any of its pre-pandemic appeal?
“I position myself as someone who helps the customer make a decision—I need to think about their needs,” said Viya, late one May night. She wore casual black pants and a white T-shirt with a Yankees baseball cap and long silver earrings, all items which had been for sale during that night’s show. She dresses casually on purpose, she says, to create intimacy with viewers who are most likely home winding down.
“Specifically, my ambition is to offer everything my fans might need,” she said. “Doorbells, carpets, toothbrushes, furniture, mattresses, everything.”
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“E-commerce livestreaming,” as it’s lovingly called by analysts, will already feel familiar to many in America and elsewhere; the latest stage in an evolution from infomercial pioneer Ron “But wait, there’s more” Popeil, the Home Shopping Network, Oprah’s Book Club, and Kim Kardashian. Amazon’s been experimenting with the concept for more than a year, most recently teaming up with “Project Runway” stars Heidi Klum and Tim Gunn for a spin-off and retail tie-in that will make the show’s winning designs immediately available to buy. Facebook has been trying to get users to shop on its platform for years; in May, it announced a partnership with Shopify to help integrate buying there and on Instagram.
“Influencers, livestreaming, smart phones, social—those things are universal,” said Benedict Evans, an independent analyst who’s covered technology from Silicon Valley and London for 20 years. “It’s hard to predict in advance, but I struggle to say that influencers selling stuff online wouldn’t work outside of China.”
Nowhere is the potential of livestreaming more apparent than China, where the boom suggests livestream shopping can become a deeply embedded habit for consumers and an important tool for retailers. Western technology isn’t quite there yet, with its bramble of offline stores, online markets, social media recommendations, payment processors and third-party portals. Alibaba’s technology, on the other hand, allows the audience to watch a live stream, chat with other viewers, and select and pay for a product—all at the same time. There’s no friction between entertainment and buying, which is the whole point.
“I can’t miss Viya’s shows,” said Linda Qu, a 30-year-old tech worker in Hangzhou. After she puts her four-year-old son to bed, Qu lets Viya’s livestream run on her smartphone while she’s doing yoga or watching TV on the couch. Nearly every show, she clicks to buy. The FOMO keeps her coming back: “What if there’s something nice and I didn’t get it? What a loss.”
That’s the clincher for companies desperate to impress China’s growing middle class, customers who have learned the hard way to be suspicious of counterfeits and knock-offs. China powered one-third of global consumption growth from 2010 to 2017, according to a report from McKinsey Global Institute, and that role is set to continue as the economy paces the pandemic recovery. And over the next 10 years, the growth in Chinese consumption is expected to equal that of the U.S. and Western Europe combined.
Customers used to move slowly down the path from awareness to interest to purchase to—ideally—loyalty, said Helen Lu, spokesperson for the Greater China division of Procter & Gamble. “Working with the top livestreamers like Viya, the process gets much shorter,” she said.
Most nights, Viya streams from a small studio in her headquarters, a 10-story warehouse in the Chinese tech hub of Hangzhou. The show is only a sliver of a 500-person enterprise called Qianxun Group; it includes talent management for dozens of livestreamers, volume retail and supply chain management. Future plans include consulting and ad agency-type work for brands that want access to their audience, plus multimedia. The company plans to raise money from investors this month, take on a strategic partner by the end of the year and, by 2025 at the latest, list shares.
“This year is the turning point for this industry—I said so even before the coronavirus pandemic,” said Qianxun’s Chief Executive Officer Alves Huang, better known as Aoli. He’s Viya’s stepbrother; her husband is the company chairman. “But the pandemic has pushed many offline retailers online, and with many well-known people getting into the game, there’s huge attention from everywhere.”
His office is on the fourth floor, next to the meeting room where Viya and her team sift through products. The studios are on the fifth floor, but the latest innovation—what can only be described as a private department store—is on the second and third floors. The footprint is more than 10,000 square meters, or about 1.5 soccer fields, with every display vying for attention from the livestreamers in Qianxun’s stable and beyond.
Food and home goods are in one massive section, followed by clothes and accessories, separated by category: sunglasses, fashion bags, pearl accessories, sneakers, pajamas, jeans, lingerie, and so on. There’s a showcase for Korean products and another for Australia and New Zealand, with more to come. With bright, soft lights everywhere, streamers can go live from the aisles if they want to.
Viya has enough star power to summon whatever she wants from companies eager to be featured on her show. The showroom serves a whole community of livestreamers, including the 40 or so under the company’s management—within three years, they’ll have 100, CEO Huang says. They all need a steady influx of products to feature, in part to prove they can drive sales. Brands pay for prominent placement on the Qianxun shelves, just like they do in offline stores.
Viya’s team likes to say she’s successful because she’s picky on behalf of her customers. Once a day, her teams present their top picks. One recent evening, a few dozen employees were packed into a conference room at 1 a.m., eager to see what their colleagues would put forth—and to hear Viya’s verdict.
An electric shaver was deemed too noisy, a sugar candy too sweet, a silicon Peppa Pig ice tray a possible copyright violation. She’s also sensitive to price. “There’s no way they sell this for 399 and want us to sell it for 389,” she says, holding a Zippo-style butane lighter. “Go bargain for below 300.”
Good stuff at low prices isn’t enough to break through in China’s crowded marketplace, let alone get rich. Viya’s show is a master class in salesmanship, said Andy Yap, a social psychologist at INSEAD business school in Singapore. She’s personable and appears genuine without trying too hard.
But then, she’s been doing this a long time. Born into a family of retailers in Anhui province, Viya opened her first store in Beijing with her then-boyfriend, now-husband Dong Haifeng, when she was 18. He ran the inventory and back-end. Viya modeled and sold the apparel.
She craved a bigger stage and, in 2005, won the “Super Idol” TV reality contest in Anhui. For a while she fronted a pop group. In the end, her home was in retail. She and Dong opened stores in the central Chinese province of Xian, but by 2012, they’d moved their entire business online. When Taobao launched its livestreaming initiative in 2016, Viya was one of its first recruits.
A blend of performance and sales, livestreaming suits Viya. When her show traveled to Wuhan this spring to promote products from the virus-torn city, she dug into local delicacies like crayfish and duck neck with relish. She raved about the flavor while answering real-time viewer questions, like whether delivery is free to far-west cities or how spicy a given snack was.
And, of course, everything is available at a deep discount, as long as it lasts. The link to buy a product isn’t released until after Viya’s done pitching and counts down: “5, 4, 3, 2, 1.” If a particularly popular deal runs out, she sometimes pleads with her off-camera producers on behalf of her audience to release more. It’s an honest question—the team is keeping track of inventory and sales in real-time—and a heck of a tactic.
“The perception of scarcity is a powerful psychological tool to get people to act fast, which leads to impulse buying,” said INSEAD’s Yap. “In a livestream, it’s even more intense because the time is shorter and there are a lot of other viewers who may be potential buyers. People feel more urgency.”
Alibaba’s technology, meanwhile, makes buying really easy. Viewers need a log-in to watch on Taobao, the company’s online marketplace, which means their shipping address and payment information are already stored. Viya uses the platform’s lottery feature for giveaways throughout the show, and that gets the audience engaged and primed to click. When a shopper chooses a product, the broadcast window gets smaller but never disappears. The transaction ends and the window grows again. There’s Viya, still talking, hyping the next deal.
Whether livestream shopping will catch on outside of China seems to depend in part on the ability of companies like Amazon and Facebook to integrate their entertainment offerings with shopping and payments. As of now, you might learn about a product on Instagram, but you can’t buy it there, points out Evans. Meanwhile Amazon has the opposite problem: It’s great at selling things, but only if you already know what you want.
In China, users spend a lot more time inside what are known as “superapps.” Alibaba in particular is ubiquitous: its infrastructure powers shopping sites Taobao and Tmall; the banking and credit affiliates Ant Financial, Alipay and Sesame Credit; the logistics arm Cainiao that handles shipping and returns.
“You have to have an environment to cultivate a habit,” Viya said. “For example, in order to create trust between us and our customers, which is the most important thing, the customers should have solid trust in Taobao. They know they won’t buy fake goods from the platform, they trust the logistics system to guarantee the freshness of whatever food they order, and they trust the services. That’s the prerequisite.”
Outside China, more graceful retail technology does seem to be on the horizon. Facebook’s partnership with Shopify moves Instagram one baby step further along. Livestream gamers who get cash tips from fans get part of the way there. Gambling companies are working in a similar vein, developing real-time online sports-betting platforms to run alongside live events. Alibaba is building its stable of western influencers, and TikTok parent ByteDance debuted its own high-profile Chinese shopping show in April.
Procter & Gamble, which spends more money on advertising than any other global company, is certainly intrigued. When executives from other parts of the world come to China, company spokesperson Lu makes sure they get an introduction to livestreaming.
“It’s become indispensable for us to give them a half hour or more to experience livestreaming, not just watching but broadcasting on their own,” said Lu. “We give them a little training, teach them how to count down like Viya.” P&G also hosts its own live shopping channels in China, and while their reach doesn’t match Viya’s, it foreshadows the tension between consumer companies with products to sell, the influencers who gather an audience and the platforms that execute the transactions.
To bolster their own credibility, livestreamers demand deep discounts and generous add-ons from the brands they work with. And the long-term effects of a successful promotion can be modest. Less than 10% of customers through livestreams become repeat buyers, compared with 40% of the customers who come directly through Tmall, said Roger Huang, China CEO for Saville & Quinn, a U.K. skincare company. “It’s just one wave, and then it’s over. They’re Viya’s fans and they follow her call,” he said. “Livestreaming is very effective, but we can’t get addicted.”
For her part, Viya’s power is built on popularity, and she and her team nurture the audience accordingly. If a viewer complains about a product in the online chat that runs alongside the livestream, Viya will notice and, often, rectify the situation. Her fans call her Dora-Viya, an homage to the time-traveling, wish-fulfilling anime hero Doraemon.
During the worst weeks of the coronavirus outbreak, Viya promised her fans she would visit the Yellow Crane Tower in Wuhan. At the end of April, shortly after the city re-opened, Team Viya drove 11 hours to the 2,000-year-old landmark. “Let’s help Hubei together,” she said, on video filmed in front of the tower. Then she offered the ubiquitous phrase of encouragement: “Jiayou!” (“Cheer up!”)
Before Viya’s show came online that night, the footage rolled as part of a looped video tribute to Wuhan’s revitalization. By the time she appeared in the same yellow suit and fat white sneakers she’d worn in the video—there were more than 160,000 people logged in and waiting. She greeted them like long-lost friends. “Hello! Hello,” she said, as she does in every broadcast. “I am here! I am here! I am here! I am here!” .
This article was originally published on Bloomberg Businessweek – Jinshan Hong, Chunying Zhang, Allen Wan, and Janet Paskin
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