China Consumer, Talking Point

Reach for the stars

Streaming celebrities help Alibaba set another Singles’ Day record


The princess of sales: popular KOL influencer Viya live-streams with her guest, Taiwanese actress Dee Hsu

China’s princess of livestreaming is called Viya. Real name Huang Wei, she goes into overdrive during the run-up to Singles’ Day. Starting her broadcasts in the early afternoon, she pitches her wares until well past midnight, selling everything from duck neck (a popular snack) to hand towels.

In a pre-sale event held just before this year’s Singles’ Day (which takes place each year on November 11) Viya had a special guest. Kim Kardashian, dialling in from California, loomed up on a large screen behind the online influencer to promote her new fragrance, which she was launching on Tmall Global for the first time. “What’s the inspiration for your perfume?” Viya asked, twirling a lip-shaped perfume bottle. Afterwards she gave the product details and price, and counted down: “5, 4, 3, 2, 1”. All 15,000 bottles of the fragrance were sold within minutes. “Kim, you really need to give us more stock,” she joked.

So Singles’ Day was another sales spectacular?

It was a case of another year, another record – with Alibaba selling goods worth Rmb268 billion ($38.4 billion), compared with last year’s Rmb214 billion.

Despite the increase, Alibaba founder Jack Ma said that sales were below his expectations. “There are multiple reasons, one of them is that the weather is too hot. Clothes sell better when it’s cold. Another reason is that it’s a Monday,” he lamented on a clip that has widely circulated on social media.

He also had a suggestion for how the government could keep the sales flowing across future Singles’ Days: by giving people a half-day off work.

In fact, the sales numbers for the shopping fiesta – also known as Double 11 – have taken on almost totemic importance. Tmall, one of Alibaba’s shopping platforms is even taking legal action against people who claim that the figures are fudged, according to a post on its official weibo account.

Critics point out that there is little correlation between results on the day itself and Alibaba’s annual revenues or profits, and that the company no longer pays much attention to gross merchandise value (the metric that it uses to account for Singles’ Day sales) in its quarterly financials.

Tim Culpan, a columnist on Bloomberg, even says that the yearly brouhaha is doing Alibaba a disservice because it wants to be seen as more than an e-commerce company, with commercial clout in areas such as cloud computing, digital media and entertainment, and local retail services.

All the same, there was more reason to trumpet the numbers in the same week that Alibaba started the roadshow for its secondary listing in Hong Kong this month.

The spike in sales will allay some of the fears about a slowdown in China’s consumer spending, helping Alibaba get closer to the fuller end of its target fundraising of $15 billion.

And livestreaming was a major part of its success?

We first mentioned the livestreaming phenomenon in issue 448 and Alibaba says more than half the merchants on Tmall used such KOLs to sell products during the annual extravaganza. “The power and importance of internet celebrities are really getting stronger and stronger,” Chris Tung, Alibaba’s chief marketing officer, told the Wall Street Journal. “They are trusted and loved by millions, sometimes tens of millions, of fans.”

Livestreaming has become fiercely popular because it combines entertainment and online shopping. Influencers show off products, carry out demonstrations and answer questions. They also create a sense of urgency with exclusive discounts that disappear by the end of the broadcast.

To drum up interest for Singles’ Day, Alibaba tapped Viya and Li Jiaqi, another popular influencer, to host pre-sale livestreams on Taobao Live from late October, during which they offered cut-price deals on a slew of products. Li and Viya are both said to have done Rmb1 billion ($154 million) worth of business on the first day of the pre-sale. Some of the major consumer brands also had a field day.

Beauty giant Estée Lauder reportedly sold Rmb500 million ($70.7 million) worth of products within the first 25 minutes of its pre-sale period, more than its full-day sales during the main Singles’ Day event last year.

So, who is Li Jiaqi?

With his over-the-top catchphrases like “Oh My God” and “Buy it!” Li is the most followed influencer in China’s beauty industry. He made his start on livestreaming by trying on different lipsticks and telling his legions of fans which shades were the most flattering.

During the pre-sale period to Singles’ Day, Li sold out his entire 410,000 units of Estée Lauder’s Advanced Night eye cream (price: Rmb444.8), making it available under a buy-one-get-one-free deal.

His following has also grown tremendously. He now boasts 12 million followers on Taobao Live compared with just over a million a year ago.

That kind of popularity takes him past Viya, who boasts over 10.7 million followers on the livestreaming platform. Who scores the biggest bargains has become the major focus of competition between the two influencers. It is no secret that in addition to competing for viewers – audience sizes dictate how much they make from advertisers – Li and Viya battle head-to-head to negotiate the best deals for their platforms too. Low prices are the key means to building an engaged audience that keeps coming back. Some netizens even go as far as to compare the rivalry of the two to that of Cristiano Ronaldo and Lionel Messi in football.

“One time Li Jiaqi found out that the price points for one of the products he was promoting were higher than Viya, and he was livid. Since then, both teams have worked overtime to make sure that the two influencers don’t sell duplicate products. After all, for these Taobao livestreamers, price is their biggest competitive advantage,” Ciwei Gongshe, a news portal, wrote.

Is there anything they can’t sell?

Given his fiercely loyal fan base, Li pitches more than beauty products (in a recent broadcast, he was selling toilet bowl cleaner, followed by skincare masks). Earlier this month, Li was tapped to demonstrate how to use a non-stick frying pan. In a clip that has gone viral, Li tries to fry an egg but embarrassingly it gets firmly stuck to the pan in question.

Li later admitted that he didn’t follow the instructions closely enough after taking the pan out of the packaging, adding that he tried frying an egg again after the livestreaming debacle took place and it came out perfectly cooked.

“It is impossible for Li Jiaqi to vet every product he sells. Over time, problems about a product’s quality – like that of the non-stick pan – may arise. However, if such incidents happen more frequently, it could have a fatal impact on the influencer’s credibility,” warned Entertainment Industry, a showbiz portal.

“A beauty influencer selling a non-stick pan, that is obviously too big a stretch. That is no longer within Li Jiaqi’s professional scope. But Li and his team, under pressure to perform, reached out to grab something that is not their own and got slapped as a result. They should never forget that we should stick to what we know,” TMTPost warned. “Not only did Li fail to make the sales the manufacturer wanted, the company’s brand is forever tainted.”

Are the brands also to blame?

Clearly, consumer brands should do their own due diligence before spening on livestreams. “Brands that want to work with influencers to sell goods must consider two aspects: the first is whether the product fits the target audience; secondly, whether the influencer knows how to sell the product. If the brands just want to chase traffic – thinking that influencers can sell anything – they will be disappointed to find that no one is omnipotent,” commented 36kr, a news and data provider.

Nevertheless, some brands complain about the pressure to promote themselves on livestreams. “Sometimes, Alibaba comes to us saying they want to review our promotional strategy in two days. Of course, we would ask for more time. But Alibaba say, don’t worry we have all your data and we know the best way to promote your products on the platform,” one senior advertising manager told WiC in an interview. “In the end, they hand us their proposal, telling us exactly which influencer to hire to promote each product and how low we have to go in our price points. As we have no time to prepare, we usually just go along with their proposal. So if you ask why we hire a certain influencer to promote our product and how steep the discount is, my answer is, we don’t know, we do as we are told,” she said helplessly.

Are the e-commerce giants getting more reliant on livestreaming?

Picking up on the potential profit, Alibaba rivals and Tencent-backed Pinduoduo doubled down on livestreaming to drive sales around Singles’ Day. Short video apps like Douyin (known as TikTok outside China) and Kuaishou have expanded into e-commerce so that shoppers can watch and shop at the same time as well, says Entertainment Unicorn.

“We haven’t fully explored the potential of livestreaming. Whether it is e-commerce platforms, livestreaming hosts or big brands, we all have a lot more work to do,” Zhao Yuanyuan, head of Taobao Live, the Alibaba streaming unit, told Entrepreneur magazine.

But as influencers become a more integral part of the sales drive, there are calls for more oversight. In fact, after Li’s cookware debacle, the media regulator announced that it was strengthening its supervision of livestreamers who advertise commercial goods. It said it wanted to ensure that the influencers are advertising quality products and that their content “guides viewers toward correct values”.

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