Tmall, a business-to-customer online retail company spun off from Alibaba's Taobao, launched its Singles' Day Shopping Festival Oct. 21.
Taobao said its top livestreaming anchors, also known as key opinion leaders, Li Jiaqi and Wei Ya together brought in nearly 7 billion yuan ($1.05 billion) in the one-day promotion.
Extending The Shopping Frenzy
"Singles' Day" in China is Nov. 11 and was started in the 1990s as an alternative to Valentine's Day for the growing number of unmarried youth. Instead of buying gifts for a partner, in the recent decade, it became a one-day shopping frenzy for consumerism.
The array of e-commerce platforms, including JD.com and Tmall, have battled fiercely and the express delivery industry becomes overloaded with the delivery demand it creates. Last year Alibaba reported raking in $38.4 billion in 24 hours on Singles' Day.
This year Tmall started digging deeper for those consumer purchases and promoted a pre-sale shopping model. Consumers could make a down-payment Oct. 21 with the balance due Nov. 1, 2, 3 or 11. This stretches the one-day Singles' Day Shopping Festival to five days.
When the presale Oct. 21 kicked off at midnight, about 162 million accumulative viewers watched Li's livestream, while 148 million users' eyes were glued to Wei Ya's video stream, according to statistics on the Taobao livestreaming app.
As the "bullet-curtain," an onscreen scrawl of user comments, featured messages about being tired and wanting to sleep, Li offered up a lucky draw of three Hermes bags to hold his waning viewership.
Streaming Profits
During the Singles' Day Shopping Festival in 2019, 41.33 million users watched livestreaming sales on the Taobao app, a rise of 130.5% year-on-year. Taobao's transactions hit nearly 20 billion yuan. More than ten livestreaming anchors saw 1 billion yuan in sales, according to a report by QuestMobile.
This means the business has been exponentially developing this year, with nearly 7 times more viewers tuning in a single day.
It is said the commission bar for Li and Wei Ya's livestreaming sales is 15% to 20%. For lesser-known brands, these KOLs garner up to a 40% slice of the sales.
Based on 3.327 billion yuan in sales from nearly 120 brands on the 21st, analysts estimate Li's income could be as high as 600 million to 1 billion yuan.
Known as the "King of Lipstick" in China, Li started Taobao's livestream services in 2017 and made internet fame by once selling 15,000 lipsticks in just five minutes. He made it onto the Hurun China Under 30s To Watch 2019 list.
Many netizens complained that brands prefer to pay KOLs such high rates to push their brand rather than give real discounts to consumers.
Tapping The New Economy
As of the first quarter of 2020, livestreaming e-commerce has become a new growth point for various brands, more than half of domestic brand merchants have achieved new growth through livestreaming channels, according to TOChina.
Up to 1,000 multichannel network institutes, in cooperation with brand merchants, are on Taobao livestreaming platform.
Before the livestreaming boom, Taobao retailers used to call consumers formally "dear" - "qin ai de" in Chinese. The word has become popular in daily use. However, last year Taobao KOLs have shifted to using the Chinese pet name "baobao" ("babe") to their online consumers, according to the company's livestreaming business report.
Meanwhile, the company said Taobao livestreaming users' purchases increased by 190% compared with a year ago. Livestreaming e-commerce has opened a new door to "new economy," said Jiang Fan, the president of Taobao and Tmall.
As part of the efforts, Taobao's e-commerce division claimed the company will invest up to 50 billion yuan worth of resources in 2021 to boost middle-and lower-level livestreaming anchors' revenues. It is aimed to bring 10,000 yuan monthly income to more than 100,000 anchors.
Ten percent of China's livestreaming anchors are reportedly located in the city of Hangzhou where Alibaba's headquarters are situated.
