Livestreaming craze in China: Brands ditch discounts for compelling content

Livestreaming in China is undergoing a transformation as big brands seek greater control over the process and move away from relying solely on massive discounts and celebrity hosts to attract viewers, Reuters reported. Apple recently joined China’s livestreaming frenzy, and despite not offering deep discounts or a celebrity host, the tech giant’s show garnered impressive engagement, with 1.3 million viewers and 300,000 likes within an hour. This shift in the livestreaming strategy highlights the growing importance of quality content and storytelling to resonate with consumers and drive return sales. As livestreaming continues to thrive in China, the industry’s resilience is evident, with sales generated through livestreaming projected to increase by 30 per cent this year, reaching $480 billion.

The Changing Landscape of Livestreaming

Livestreaming has experienced stellar growth, especially during the COVID-19 pandemic, leading to the employment of over 1.23 million livestream hosts by 2020. Initially, livestreaming in China relied heavily on massive discounts and prominent hosts like Li Jiaqi, known as the ‘lipstick brother’, who offered viewers the best discounts on Alibaba’s Tmall platform. However, brands are now moving away from this discount-focused strategy, turning their attention to building their own livestreaming channels and leveraging storytelling techniques.

The Shift to Content and Storytelling

Brands recognize that investing in content creation instead of simply offering discounts results in greater resonance with consumers and drives follow-up sales. Rather than paying hefty fees to celebrity hosts, brands are now collaborating with professional agencies to recruit and train livestreamers who align with their products and can authentically recommend them. This approach instills trust in consumers as they believe the hosts genuinely use and endorse the products, making the livestreaming experience more impactful.

Success Stories and Direct Communication

Livestreaming efforts have been successful for various brands, even those with higher price points that were initially deemed incompatible with bargain-heavy livestreaming. By utilizing livestream hosts recruited via agencies or smaller-scale influencers, brands have witnessed increased sales, even for full-priced products. Key to this success is the ability for audiences to directly communicate with hosts during livestreams, allowing immediate answers to questions about fit, color, and styling. This direct interaction enhances the consumer experience and builds trust between the brand and the audience.

Navigating Fragmentation and Regulatory Scrutiny

As livestreaming continues to evolve, brands must navigate the increasing fragmentation of platforms and hosts competing for viewers’ attention. Traditional sales platforms like Alibaba’s Tmall and face challenges from entertainment and information-led platforms such as Douyin and Xiaohongshu. Additionally, regulatory scrutiny has impacted the livestreaming landscape, temporarily suspending super hosts like Li Jiaqi and Viya due to tax scandals and controversial broadcasts. This highlights the risks associated with relying solely on a few hosts, emphasizing the importance of diversifying livestreaming strategies.

The Future of Livestreaming

Despite the challenges and changes in the livestreaming landscape, brands remain optimistic about the potential of livestreaming as a sales and communication tool. Building solid livestreaming channels and engaging content will be crucial for brands to leverage livestreaming and connect with their target audience effectively. While super hosts may have a wide reach, targeting specific audiences with smaller live streamers who can convert effectively is also gaining recognition.

(With Inputs from Reuters)

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