China role model? Video streaming in online retail

During the lockdown of public life under COVID-19, Chinese retailers were also forced to come up with new ideas. Live video streaming was one of these. And the genre is seeing its own stars emerging.

It is not just social shopping that is hugely important in China. Consumers also enjoy watching live broadcasts of product presentations. For this reason, live streams are a mainstay of the Alibaba platform during the major “Singles’ Day” event.

Home shopping TV on your smartphone

Selling products using moving images is not new. The home shopping channel, QVC, was launched in the US back in 1986. Live streams are attracting more and more viewers around the world. It is a development that even Amazon has not been able to ignore, with the online retailer now broadcasting shopping shows online (“Amazon Live”).

The programming is entertaining for viewers, who can also immediately purchase products they find interesting. This seamless shopping experience undoubtedly contributes to the success of the format. There is probably nowhere else in the world where shopping via live stream is as successful and established as it is in China.

A live-streaming millionaire

A 34-year-old woman who goes by the name Viya is the uncrowned star of the industry. There seems to be nothing that she cannot sell. And her viewer numbers can rival major sporting events or the Oscars award ceremony. Over 30 million people watch when Viya presents and talks about cosmetics, fashion or household appliances. As the star of the industry, she is said to have earned an equivalent of more then 4 million Swiss francs in 2018. Viya is the darling of the Qianxun platform that was founded three years ago and which is part of a flourishing industry best described as “live commerce”.

These kinds of streams can easily be embedded into shopping platforms such as those from Alibaba. It is estimated that there are now over 200 live-streaming platforms in China. They focus on all kinds of target groups and markets.

Boost from the pandemic

Even before the outbreak of the pandemic and the associated lockdown, watching live streams was a major recreational pastime for Chinese consumers. 560 million Chinese, over 60 percent of the country’s online population, regularly watch live streams.. This makes the PRC the biggest streaming market in the world.

As in other countries, public life came to a halt in China during the pandemic. Streaming operators have recorded further strong growth as a result. Retailers that had to close their shops were able to use live streaming to continue to sell products and to stay in contact with customers.

A well-known example is the InTime department store chain, in which the Alibaba group has a majority stake, that mainly sells luxury cosmetics and fashion brands. During the lockdown, the company’s customer advisors began a special type of working from home. Using smartphone cameras, they talked up products from the range as if they were still in the physical shop. And they had considerable success with this method. The experiment, called “contactless shopping” by the chain, reportedly generated over CHF 10,000 in revenue per hour and salesperson. Consumers sitting at home under lockdown clearly snapped up the offers. And because the approach worked so well, live streaming remains on offer for customers even after phyiscal stores have re-opened.

Experiments in Europe

Obviously the market for video streaming in Germany and Switzerland will never be able to compete with China, given the population differential alone. But retailers here faced the same problems during the lockdown as in China. What is the best way to reach customers who have to stay at home? Even smaller companies applied a great deal of creativity and innovation to develop video offerings virtually overnight. In Germany, a tile retailer from the Franconia region created headlines when it started offering advice to customers by video chat. The bag retailer, Freitag, offers virtual visits to its stores to allow customers to purchase tailor-made bags in consultation with a salesperson. Meanwhile, the bicycle retailer, Rose Bikes, is live streaming on Instagram to generate sales.

Live commerce is still in its very early stages in Germany and Switzerland and is not much more than a dot on the online retail landscape. But the Chinese examples show what potential the format offers. The technical investments for live streaming are very affordable. This means there is nothing stopping you from already experimenting with these kinds of formats.