From Douyin to Taobao, everyone is getting in on the live streaming market in China. But which is the best Chinese live streaming platform to promote your business? And should you still be working with KOLs? RED Unit investigates
Live streaming first became a buzzword in China around 2015-2016. During its initial growth period, this new form of social media saw only 300 million active users – a number which has now doubled to over 600 million, with a service sector of over 47,000 multi-channel networks there to service its ever-growing needs.
In recent years, live streaming has become an increasingly popular way to drive sales and conversion for brands. Companies that get it right can benefit greatly from the fast-paced live streaming content ecosystem – as well as China’s ever-growing influencer culture – to engage with consumers in a more authentic way.
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In the early days of live streaming, using influencers was seen as a way for brands to promote products and drive traffic to e-commerce platforms where they could further cultivate and sell products to consumers.
However, the unprecedented consumer demand for live streaming has led to a much more integrated approach, with mainstream e-commerce platforms opening live streaming channels or social media platforms embedding e-commerce into their offer. The trend has seen particular growth around platforms driven by user-generated video content.
What kind of customers watch live streams and what are they looking for?
In 2021, 60% of the users of internet live streaming were 27-39 years old and had a relatively even gender balance (47.1% male; 52.9% female). The three key factors that motivate purchase are products on promotion matching consumer needs (63.2%), strong discounts (61.7%) and a charming and persuasive host (56.9%).
What are the key live streaming platforms in China?
There are six categories of live streaming in Chinese digital marketing: e-commerce, gaming, entertainment, sports, B2B and finance/economics. Brands focusing on the B2C market can primarily focus on live streaming e-commerce, which can generally be divided into two types of platforms: social media e-commerce (e.g., Douyin, KuaiShou and Xiaohongshu/RED), and e-commerce with embedded content and social functions (e.g., Taobao, JD.com and Pinduoduo).
Douyin, Kuaishou and Taobao are the three leading platforms with strong propositions that drive most of the attention in the market and will, therefore, be beneficial to British businesses.
Douyin: The young, impactful platform
Key demographics: Sister app to TikTok, Douyin is a global and vibrant user generated content (UGC) platform with solid growth in follower numbers and young user demographics; people born between 1980 and 1995 form the majority of users. Most users are based in Tier 3 cities in China, but Douyin also shows fast growth in Tier1, new Tier 1 and Tier 4 cities.
Proposition: Douyin is focused on shared interest, presenting top traffic and volume on content but at a lower repurchase rate. The platform sells a mix of products of different qualities and price points, and demonstrates a strong trend of bringing the newest products to the market.
Customer behaviours: 380 million daily active users with an average of 102 minutes of screen time.
Gross merchandise value: RMB 500 Billion (2020)
Kuaishou: The communal, local experience
Key demographics: Kuaishou has a solid user base in Tier 3-5 cities with a majority female user base aged 31-40. The customers are ‘lower end’ compared to the other two platforms.
Proposition: Kuaishou is focused on building trust and customer relationships, demonstrating diverse and robust traffic and a higher repurchase rate. Mixed quality clothes and bags are the mainstay on Kuaishou.
Customer behaviours: 220 million daily active users with an average of 103 minutes of screen time.
Gross merchandise value: RMB 381 Billion (2020)
Taobao: More options for brand-driven live streaming
Key demographics: Taobao is the largest e-commerce platform in China, with a robust supply chain and a diverse range of products. Taobao has the top end of customers compared to the other two platforms, and demonstrates a substantial user base among customers born between 1980 and 1990, as well as Gen Z consumers.
Proposition: Taobao is focused on exploration, presenting official online stores selling everything from female fashion to electronics to food and drink. Put simply, if you can imagine it, you can find it on Taobao.
Customer behaviours: Taobao’s key channel has 340 million daily active users with an average of 23 mins of screen time. The video content channel has 3.34 million daily active users with an average of 52 minutes’ screen time.
Gross merchandise value: RMB 400 Billion (2020)
How do you choose a host for live streaming events?
Over the past few years, concerns about the authenticity and quality of live streaming have been growing due to bad shopping experiences, low-quality products and the tax avoidance scandals that have tainted famous live streaming hosts. The market is demanding change.
New trends are now emerging: 79.3% of customers are more likely to open a live streaming channel hosted by a brand itself, with 58.1% of customers enjoying live streams led by trusted public figures in conjunction with brands.
79.3% of customers are more likely to open a live streaming channel hosted by a brand itself, with 58.1% of customers enjoying live streams led by trusted public figures in conjunction with brands.
The age of brand-led live streaming is here, where customers request a higher quality of content with a trustworthy voice and genuine high-quality products. This change requires companies to switch their mindset from expecting fast turnover to investing in long-term influence through live streaming channels.
Despite increased brand-driven investment in live streaming, word of mouth is still one of the strongest factors that influence consumer decision making. KOLs (key opinion leaders) and KOCs (key opinion customers) that present a down-to-earth tone of voice are still great mediums to connect brands with customers. Choosing the right figure is becoming extremely crucial since authenticity is critical in creating consumer advocacy.
The other way to drive strong word of mouth referrals is to establish a community and encourage sharing between friends on social networks. A successful example of this is Pinduoduo, a low-price, group purchase e-commerce platform that leverages its partnership with Tencent to tap into the WeChat ecosystem, where a huge volume of friend-based conversations and group chats give it enormous sharing power that perfectly combines word of mouth with a genuine need for the item in question.
What’s next for the Chinese live streaming market?
For many in China, live streaming (and buying products direct from inside live streams) is a form of entertainment these days. The live streaming market in China has already passed its early stage and is moving into a phase of refinement and maturation, where competition becomes stronger and more creativity and investment are required to catch people’s attention. The age in which anyone could become a live stream host is no more, and the new growth point will be at a more corporate, brand-led approach, where customers can enjoy a better experience, better product quality and cutting-edge interaction driven by technology.
Add to the mix the development of 5G, augmented reality, virtual reality and the metaverse, and the future of live stream shopping will only become more dynamic and creative. Watch this space!
Call +44 (0)20 7802 2000 or email firstname.lastname@example.org now to find out how CBBC can further help you identify the best social media platform for your brand and target market in China.
Founded in 2016 in Edinburgh, RED Unit supports public sector organisations and private businesses to thrive in the Chinese market and the local market in the UK with cultural intelligence and a unique approach, combining innovative visions and a commercial mindset. It is an intercultural strategic and digital agency that brings creativity, quality and clarity to initiate sustainable growth for brands.