Livestreaming in China is growing fast and has a fundamental impact on a brand’s market share, according to data analytics business Yimian.
Writing in The WARC Guide to E-commerce and the Future of Effectiveness, Yimian executives Rong Zhang, Edison Wang, Tina Luo and Leo Huang explain that the biggest impact of livestreaming is on Gross Merchandise Value (GMV): it is capturing a disproportionate amount of sales compared to other sales mediums, they report.
Figures from Weiboyi, which provides marketing services on social media platforms, suggest that the total GMV generated by livestreaming on China’s top three top platforms (Taobao, TikTok and Kwai) has grown from RMB100 billion in 2018 to RMB400 billion in 2019, will double to RMB800 billion this year and hit RMB1.1 trillion in 2021.
“Based on the levels of activity we see among China brands and more progressive Western brands like Mondelez, we believe these estimates are, perhaps, understating the rate of growth,” the authors say.
And when Yimian (a sister company of WARC) undertook a product-level market share analysis in May 2020, it found that livestreaming had a dramatic impact on a brand’s market share.
To take three examples:
• Livestream-promoted products represented 7% of total SKUs in personal care/health/massage categories but claimed 84% of total GMV.
• In nutrition supplements, livestream-promoted products were 20% of total SKUs and 76% of total GMV.
• In beauty and cosmetics, livestream-promoted products were 33% of total SKUs and 92% of total GMV.
“Livestreaming e-commerce is an unstoppable trend in China’s consumer goods industry,” the authors say. “It’s turning the entire country into a market where ‘face-to-text’ interactions happen at an unprecedented scale.”
And they add that brands should consider leveraging livestreaming not as a short-term sales booster but as a long-term avenue to remove barriers between brands and consumers.
For more details, read Explainer: 12 facts about livestreaming e-commerce in China.
The WARC Guide to E-commerce and the Future of Effectiveness highlights five key themes, including the rise of shoppable formats and the associated dangers of short-termism (non-subscribers can download a sample report here.)
To complement the guide, there’s more coming from WARC during September:
• A series of free-to-join related webinars from September 3rd: WARC Talks 360 – Your guide to e-commerce and the future of effectiveness.
• A C-suite masterclass video series: early September 2020
• WARC Global Advertising Trends - data on e-commerce: mid-September 2020
Before then you can also catch up with WARC’s Effectiveness in the age of e-commerce keynote session, first screened at Cannes Lions Live.
Sourced from WARC