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China’s thriving livestream sector—and how small retailers can use the format

Fashion boutiques, winemakers and galerists are among the German brands promoting their goods on Instagram Live

As retailers around the world have been forced to close their shops in the wake of the corona crisis, many have turned to digital in a last-ditch effort to maintain their livelihoods, launching online shops and home-delivery services on the quick. But what about those shop owners whose core products requires extensive explanation or are dependent on impulse buys? In China, department stores have transformed into teleshopping outlets with employees starring as livestreamers tasked to generate sales. Could such a tactic work elsewhere? OMR took a closer look at the fledgling format’s potential and how it’s being implemented in our home market of Germany.

In late January, China went into full lockdown. It was the first country to cordon off cities, close schools, issue strict curfews and shutter all non-essential shops, i.e everything save grocers and pharmacists. For Chinese department store chain InTime, late January also saw the company’s salesmen and women transfer to a special kind of home office. With stores in 27 locations, primarily in the affluent East, InTime is similar to Galeria Karstadt in Germany or Macy’s in the US with a decidedly younger target group. InTime specializes in the sales of high-end cosmetics and fashion brands.

Sales agents transform into teleshopping influencers

InTime saleswoman on Taobao Live (Screenshot: Fung Business Intelligence)

With every InTime store closed, the sales agents were sent home—but not to ride out the quarantine in idle pursuits. They were tasked to continue selling goods from their livingrooms. To broadcast on their phones for several hours at a time, just as if they were speaking to prospective clients in the store. The thought being that clients receive better advice from and are inspired more by an actual person than by static product images in an online shop.

Digital teleshopping is big business in Chinese eCommerce. For about a year and a half now, Chinese influencers, people with selling skills, shop owners, pharmacists, beekeepers, anglers, fruit farmers and tea pickers talk up their wares in short clips recorded with their phones, preferrably live, to be able to quickly respond to questions posed by clients in the public chat.

Five billion dollars in revenue with livestreams in China

For China’s millenials and gen Z, it’s become tradition to unwind at night by flipping through the teleshopping apps instead of turning on the TV. Some streamers, like Viya or lipstick salesman Austin Li, have used their shows as springboards to become bonafide stars with millions of followers and to sell thousands of product units per minute. According to estimates, livestream-generated revenue on a total of 200 different platforms with over 200 million viewers eclipsed USD 5 billion in 2019 in China.

Corona is forcing more stationary retailers in China into livestreaming than ever. InTimes biggest advantage over the competition: Since 2017 it’s been majority-owned by Chinese digital behemoth Alibaba, which operates, among many, many other entities, Taobao, China’s largest online marketplace. With Taobao Live the platform already has a livestream format at its disposal. To push InTime’s products, Alibaba not only supported its subsidiary’s livestreaming effort with knowhow and technical infrastructure, but also with its massive marketing arm and gobs of traffic by placing the InTime stream on the homepage of Taobao Live.

5-figure revenue in 60 minutes

It did not take long for the department store group to register fantastic results from its pandemic experiment, which it dubbed “contactless sales.” They reported that their saleswomen and men were able to reach as many clients in a 3-hour online streaming session as they would have in 6 months in the actual store. Through mid-February, the InTime sales staff had streamed for a total of 10,000 minutes and reached over 100,000 viewers, who were on the lookout for entertainment while under quarantine. The best sellers sold goods worth over 100,000 renminbi (12,800 euro) in a 1-hour streaming session according to a very informative report made by Hong Kong economic services group Fung Business Intelligence. Now InTime sellers broadcast more than 200 streams a day.

InTime is by no means the only Chinese retailer to get in on the livestreaming act during the corona lockdown: Cosmetics brand Forest Cabin trained 1600 people on its sales staff to become livestreamers after being forced to close half of its 337 shops. According to an official Alibaba blog, the company’s founder reached 60,000 viewers during a 2-hour stream on Taobao Live and generated 400,000 renminbi (51,400 euro) in revenue.

In the Western world, culture is the livestream content du jour

Other merchants use other livestream platforms: A Hong Kong real estate company helped merchants in its shopping centers in Changzhou and Nanjing with livestream shows on Douyin, the Chinese sister app of Tiktok. According to Fung BI, the first livestream had more than 52,000 views and generated 80,000 renminbi (10,200 euro) in revenue, the second more than 220,000 views and 750,000 renminbi (96,000 euro) in revenue.

Is possible to achieve such figures in the West using the biggest platforms here, like Facebook, Instagram or Youtube? Everyone of them has their own livestream function. Since the corona crisis has reached the West, they have seen an increase in use, primarily for cultural events: musicians in concert, authors giving readings and actors and theaters performing plays. In Germany, there is a twitter account named “Streamkultur” that provides information on the daily schedule.

Amazon launches experiments with teleshopping stateside

But livestream shopping in the West is rare. While many platform have recently introduced Shoppable Ads, i.e. ads in which users can make purchases directly, no platform has yet to introduce a livestream format with a purchasing function.

The closest is, of course, Amazon, who launched Amazon Live in February 2019: the possibility to do teleshopping shows directly on the platform. However, “Amazon Live” is only for brands who sell on Amazon’s marketplace and for influencers who participate in Amazon’s influencer program and get a commission on every sale they generate. Local retailers are not permitted to sell their wares on the platform. As far as we can tell, Amazon Live is currently only available on the US version of Amazon.

German retailers get creative

In December 2018, Facebook began testing in Thailand where sellers could sell via livestreams on its marketplace. The feature has yet to be rolled out more broadly. Furthermore, Facebook’s marketplace is primarily directed at private users who sell amongst themselves.

Just because the majority of the Western platforms have no livestream sales functionality, is not keeping every retailer from experimenting with teleshopping formats. Since the corona lockdown went in to effect in Germany, many store owners have gotten creative quickly setting up Instagram accounts to sell their goods on. And if you look around a bit on the platform, you’ll find merchants using the livestream function, too.

More reach to be had

In Germany, creative Insta-Teleshopping pioneers include a range of fashion retailers: Boutique Noée in Frankfurt, Arnold Fashion in Ingolstadt and SPS from close to Cologne. But it’s not limited to fashion with stationery shop and childrens bookshop Karl Konerding , and a local optometrist also getting in on the act. Since Instagram Live still has not integrated a buying/selling function, most brands complete sales via telephone, WhatsApp, eMail or online shop; payment is made via Paypal or by invoice.

With respect to reach (and revenue), these first attempts at teleshopping probably by far cannot compete with the scale of their Chinese counterparts (as the comparatively low number of likes and comments indicate). There are a host of reasons for why that would be: On the one hand the functions to enable a seemless purchasing transaction via teleshopping are not there (yet?); on the other hand “digital teleshopping” has never found footing in Germany. A classic chicken and egg problem. Furthermore, many retailers have not been successful in their attempts to amass relevant digital reach or customer contact information (e.g. eMail addresses).

Cooking shows with ingredient packs

The most-promising instances in teleshopping supposedly are those by retailers who were previously active in digital circles and are able to mesh entertainment, information and shopping into their livestreams. Married couple Orhan and Orkide Tancgil, better known in Germany as the makers of “Koch Dich Türkisch” (Cook yourself Turkish) a small shop in Dusseldorf where cooking courses are held and cookbooks and ingredients are sold. Before corona, the pair was already extensively active on digital platforms, e.g. YouTube among others.

Since the shop had to close its doors and the couple were forced to cancel all of its cooking courses, they have taken to cooking regularly on Instagram, Facebook and Youtube. Across all platforms, the Tancgils generate views in the thousands and sell ingredient packs for the recipe in question via their pre-existing online shop.

Wine tasting on Facebook Live

Winemakers too are turning to livestreaming formats to promote their creations as the Frankfurt Allgemeine Zeitung (FAZ) daily recently reported (in German). Several winemakers sell sample packs through their online shops and then taste them in livestreams — for example, Michael Biewers Tawern-Fellerich from the upper Mosel. The video announcing Biewers live wine tasting on April 2 had over 3000 views before the event start.

Famous galerist Johann König takes to Instagram live every morning at 10 AM with his gallery account. Using the Instagram feature that allows you to stream together with another account, he is joined by another person from the industry, often other artists or the museum’s curator. When he streamed with Simon Maidment from National Gallery of Victoria in Melbourne, 165 viewers tuned in.

Showing and selling artwork on Instagram Live

Currently, König counts approx. 50,000 followers on Instagram, while his gallery has 158,000. In the livestreams, König or his guest typically present current works of art. Although König’s streams do not generate any revenue directly (the art scene figures to frown upon direct sales measures), he seems to attract the interest of many potential solvent art aficionados, who inquire as to the price privately.

In Hamburg, local publisher “Geheimtipp Hamburg” (Inside tip), started the digital tv station “One Hamburg” during the corona lockdown, launched the city’s first social TV program. “We want to give the people of the city the platform that was taken away from them and to bring the city together at least digitally,” says co-founder Jan Traupe. “One Hamburg” livestreams to Facebook, Instagram, YouTube, Twitter and Twitch. In addition to workouts, readings from diaries, live music and podcasts, there have also been two teleshopping sessions. In them, Flemming and Max, founders of Hamburg fashion brand Inferno Ragazzi, present untested products from Hamburg micro brands in front of the camera.

Further reading on this topic