Authors: Christine Yu, Giulia Lin
Five years ago, selling 100,000 pieces of lipsticks would have taken one month. Now, Li Jiaqi, the most famous KOL (Key Opinion Leader) in China, can do it in a few minutes by holding a live-streaming sale. Live-streaming e-commerce has become an extremely popular business model in China.
Live e-commerce began in 2009, but it was not until 2016 that it started its official development, when Taobao Live and JD Live were launched successfully. The pandemic has further accelerated its development and saved China’s retail industry.
It is more intuitive and realistic than graphics and short videos because viewers can interact with the KOL in real-time for a better shopping experience, and complete the transaction on their mobile phones.
Therefore, brands scramble for partnerships with the best KOLs in China and Li Jiaqi’s influence made Western celebrities seek to work with him. These include Kim Kardashian who managed to sell 15,000 bottles of her brand perfume in a live-stream sale during the last “Double 11”. Few people would associate a Chinese KOL and an American star, but Taobao did it and succeeded once again.
The mechanism is simple:
- KOLs give visibility to products through live streams, reaching millions of viewers and potential buyers, thus allowing brand promotion and product sales at the same time;
- On the other hand, merchants are willing to lower the price as costs for the advertising, so more people will watch KOLs’s live-stream and buy the products.
It’s a win-win cooperation. Of course, KOLs will always research, use and understand the products and their features before accepting collaborations.
According to the Ministry of Commerce, more than 10 million live streams were held nationwide in the first half of 2020, and nearly 50 billion people watched live streams.
The incredible potential of live e-commerce in China is not only the chance for normal people like Li Jiaqi to achieve success but also an opportunity for all brands to take the lead over competitors.