Livestream Warfare: Snapshot of the Battlefield

Livestream Warfare: Snapshot of the Battlefield

While there’s no doubt about Alibaba’s lead position in overall ecommerce… the future of livestream commerce isn’t as certain.

That’s because people follow people in China and KOLs are at the heart of livestream commerce.

Livestream has merged the battlefield for ecommerce and entertainment. Every ecommerce platform has adopted livestreaming and content platforms are all building up ecommerce capabilities.

If you look at the livestream commerce landscape… you can categorize the platforms based on 2 criteria:

  1. Purchase intent
  2. Type of livestream (KOL content vs Branded content/infomercial)

Within this mix, people on traditional ecommerce platforms like Taobao & JD have high intent of purchase. Their livestreams are very brand-driven as the platform itself is structured to help sell products. At the core of the platform, Taobao is still a product centric platform even though its content has become super rich over the years.

On the other hand, video platforms like Douyin & Kuaishou are centered around content. The livestreams are completely KOL-driven. By nature, these streams are not necessarily geared to sell. Naturally, it has lower conversion rates but it has still proven to be super effective for selling in some categories.

Do you know who started livestream ecommerce? It wasn’t Taobao. 

It was Mogujie, an ecommerce platform specializing in fashion. It’s the only one where livestream is the main source of income: 50% of total GMV.

Mogujie’s community started off purely with content for consumers. Since the beginning, the platform empowered KOLs to provide fashion services to its viewers, essentially becoming like personal stylists and image consultants. This created a strong community so livestream ecommerce became an immediate success.

Its strength is also its weakness as an ecommerce platform. It is extremely focused on women’s fashion so expanding beyond that is almost impossible.

Similarly, Xiaohongshu is also a content-centric ecommerce platform driven by KOLs. People go there to see genuine thoughts on new and unique brands and products.

The problem here is that when people expect genuine content from streamers, selling too much can backfire. The viewers aren’t stupid. They can smell brand-sponsored content from a mile away and too much of it will undermine trust in the KOL. That’s why some streamers on Xiaohongshu do much better monetizing through ads rather than products.

In the end… trust is the prerequisite before a purchase. KOLs build that trust by continuously producing valuable content. Livestream has paved way for a consumer journey completely different from traditional ecommerce.

Mogujie and Xiaohongshu may have users with high purchase intent but they cannot match the traffic of Taobao or Douyin.

In the coming years it’s worth looking out to see how the roles of content driven platforms and product driven platforms change.

Do you think a single platform other than Taobao can dominate the livestream commerce landscape?

When Foreign Brands Enter Taobao, They Always Make THIS Mistake

When Foreign Brands Enter Taobao, They Always Make THIS Mistake

I cannot stress this enough… doing business in #China is NOT THE SAME as doing business in the #West. Taobao is NOT Amazon.

When #foreign brands first enter China #ecommerce, they often use actual product or model names in their #product titles.

At first it looks absolutely fine… this is how they’ve done things for years in the West, right?

WRONG!

Often, they don’t realize their #mistake until it is much too late…. after they’ve lost all of their #traffic to competitors’ stores.

Unlike #Amazon, where product titles are short and limited to key attributes, product titles on #Taobao are long, and include #keywords that are #trending within the category.

Constantly #analyzing search trends and #optimizing product titles accordingly is EXTREMELY important.

Check out the #graphic for an example showing how different the titles are displayed when searching the keyword “Nike.”

Don’t fall prey to this #costly mistake… ditch the Amazon way.

If you want a chance at #success in China, take the time to do your #research and #adapt your #strategies to what WORKS in China.

#ChinaBusiness #ChinaEcommerce #InternationalBusiness #ChinaLaunch #Tmall #Alibaba #LearnFromYourMistakes #MarketEntry #SEO #Brands

Livestream Warfare: Douyin Strikes First (Part 1)

Livestream Warfare: Douyin Strikes First (Part 1)

There are ONLY 1.4 billion people in #China and the battle for their screentime is heating up. #Livestream today isn’t just about driving engagement or #sales. It’s used to wage war.

The fight is on in the arena of livestream #commerce. Who will be the winner that comes out on top?

#Douyin unleashed a first strike. They officially announced that 3rd party platform links will be #banned starting October.

Prior to this, streamers and creators could sell products by embedding #marketplace links. Now they’ll have to do so using the Douyin’s native #ecommerce store.

There’s only one explanation behind this sudden move. They’re going after #Taobao. That’s because most of Douyin’s sales are happening through Taobao links. #Bytedance (Douyin’s parent company) wants that piece of the pie.

This move is #shocking because it’s incredibly premature. Douyin’s native store is far from ready.

#Livestreaming (and short #videos) has become an economy of its own and today #Alibaba is still the king of this hill. #TaobaoLive did 250 billion RMB (U$36 billion) in 2019 and is on track to hit double that amount by the end of 2020. #Kuaishou is well on its way to 250 billion RMB this year and Douyin is going for 200 billion RMB.

#ChinaBusiness

Do sales forecasts even matter?

Do sales forecasts even matter?

Tmall is NOT an ATM machine and opening a store on #Tmall does NOT guarantee your success in #China.

While we can’t #guarantee results, we do take #responsibility for our clients’ #results and do our best to provide them with accurate #sales projections along the way.

We provide #forecasts that are based on hard #data during the pitch process, before store launch, every quarter, and at the start of each year.

And there’s a reason why these #updates are so frequent.
Sales #projections aren’t set in stone. As situations arise and things #change (something that seems like a constant in China) the numbers have to be updated accordingly.

For example, after launching “Brand A” in China they encountered:

– Trademark issues causing severe traffic loss
– Limited #marketing support from the brand
– No new products to launch, serious quality issues with existing products
– Fierce #competition within their category
– Not to mention… COVID-19

The result? We had to lower their sales #expectations. They weren’t happy…and are still insisting on meeting the initial targets.

Anyone have a magic wand I can borrow?

#TMallPartner #Alibaba #ChinaBusiness #InternationalBusiness #SalesProjections #SalesForecast #SalesForecasting

So you think you’re ready for a Tmall launch?

So you think you’re ready for a Tmall launch?

It seems like almost every day I hear from brands who claim they’re ready for a #Tmall launch. BUT most are dead #WRONG.

Here are the 4 most common #misconceptions brands have when it comes to entering #China #ecommerce:

1) “I want to launch my brand on Tmall in one to two months.”
It takes AT LEAST 3 months from store application, to store set-up, to soft #launch. Do you have a clear product/pricing #strategy for Tmall? Do you have your product listings ready? A marketing #budget? Inventory? Most importantly… do you have your documents ready for Tmall?

2) “We have all the #documents ready for Tmall.”
99% of the time, the documents are INCOMPLETE (or do not comply with Tmall’s requirements.) Trust me, none of our #clients have ever had a PERFECT document set from day one.

3) “In our #Global Digital Asset Management System you’ll find all the assets for store setup.”
Most of the time, these #assets are not Tmall-friendly. The sheer volume of images, videos, etc. required for a single Tmall #productpage is astounding!

4) “Our brand is global #1 in the category. We will see huge #success if we enter Tmall.”
There are NO guarantees. Your brand may be huge #globally but unknown to #Chinese consumers, or there may be countless #counterfeits already saturating the market.

Chinese consumers are smart shoppers…

When considering a #purchase they research, reach out to their networks, read reviews, and aren’t afraid to #negotiate for a better price or free gift with purchase.

For foreign brands entering #China for the first time, this can take some getting used to. BUT it is well worth it. #Chinese consumers are some of the best in the world.

Recently however, I’ve noticed that these #clever consumers are “saving” their purchases for large events (think #SinglesDay, or 6.18.)

It’s not that their #spending is down… we are seeing record #sales across most of the #stores we manage. They’re just being more #strategic with their purchasing decisions.

The big #discount events are now creating sales vacuum, significantly decreasing the sales in the periods OUTSIDE of the #events.

They are sucking the life out of everything around them.

Chinese #consumers know what they want to buy. They’ll simply bookmark it and wait until they can get it at the best price, often during the mega sales events like 11.11 when #retailers offer deep #discounts.

In one category we operate in, sales were down 40% in the first week of July following 6.18. That’s a HUGE shift compared to our normal projections (and a trend that I expect to hold come November.)

#ChinaBusiness