Fun-filled e-commerce boosts consumption

Time: 2019-10-28
Summary: Short video platforms, online hosts mesmerize hundreds of millions of consumers

On Nov 6, 2018, Chen Weijie, 30, an online celebrity based in Meizhou village, Guangdong province, South China, sold 160 million yuan ($22.6 million) worth of products during an eight-hour live-streaming session on Kuaishou, a short video platform. The marathon online sale was almost nonstop, except for short breaks to drink water or answer calls of nature.

Welcome to China's online world of short videos that is fast morphing into content-driven e-commerce. Here, people such as Chen sell 30,000 toothpastes within one minute, or nearly 100,000 pieces of thermal underwear in about 10 minutes, or 10,000 Xiaomi smartphones during a live-streaming session.

Chen's sales revenue reached 50 million yuan within three hours. More than 10 million netizens visited Chen's Taobao store in two hours.

Chen, whose Kuaishou handle is "sandage" (or a practitioner of sanda, a Chinese version of kickboxing), shot to fame after uploading many funny short videos complete with music, stickers and animation on to Kuaishou. Such shorts earned him 45 million fans online.

Stated differently, Chen commands the attention of 45 million pairs of consumer eyeballs. And where minds are focused, advertisements and product endorsements can't be far away.

China now boasts an army of online hosts such as Chen who first attain popularity by hosting short videos, and then convert that fame into a sales machine, to peddle a variety of products.

Like Chen, Chinese actress Liu Yan has tasted success as an online host. On June 30, in a three-hour livestreaming session on Kuaishou, she sold more than 15 million yuan worth of products like toothpaste, masks, facial cleansers, vacuum cleaners and juicers.

In just five minutes, Liu attracted over 1 million netizens to her flash e-sale. Some of them bought 25,000 bottles of shampoo within two minutes. And minutes into the livestreaming session, about 1.3 million consumers joined Liu's Kuaishou account to follow the proceedings.

Liu posted her first short video on Kuaishou in June 2017. So far, she has published 24 videos, which portray her daily work and life scenes.

Hosts such as Chen and Liu are the backbone of China's content-driven e-commerce, which is a growing trend as more and more manufacturers choose short video apps like Kuaishou and Douyin to promote their products. Chinese short video platforms are doubling down on e-commerce features in the hope of monetizing their user bases.

Kuaishou has cooperated with third-party e-commerce platforms such as Taobao and Tmall (both of which are run by Alibaba Group Holding Ltd), mobile e-commerce platform Youzan, which is backed by Tencent Holdings Ltd, JD and online discounter Pinduoduo Inc.

It lets sellers demonstrate their products via a channel called Kuaishou Small Store. When other users want to buy products they see on the store, they will be directed to the third-party e-commerce sites and the transaction will be completed there. The links to products are added during the live-streaming sessions.

Su Hua, founder and CEO of Kuaishou, said e-commerce is an important link in the company's monetization strategy.

Kuaishou is aiming to achieve 300 million total daily active users on its platform by 2020, with the sales revenue from advertisements reaching 15 billion yuan, up 50 percent compared with the same period last year, said Yan Qiang, vice-president of Kuaishou's business platform.

Kuaishou had more than 200 million daily active users and over 400 million monthly active users, with more than 200 million content creators recording and sharing their videos on the platform last year, according to the company.

Kuaishou's archrival Douyin, developed by Beijing Bytedance Technology Co Ltd, has also rolled out a shopping cart feature. It has tapped e-commerce by allowing vendors such as Xiaomi Corp and e-tailer JD to roll out mini-programs on its platform.

The transactions could be completed without the need to leave the app for visiting sellers' online platform. By giving users a more direct way to search for and buy products, Douyin has put itself in closer competition with social e-commerce apps like Pinduoduo.

Douyin said in January that the app's number of daily active users reached 250 million, while its monthly active users had surpassed 500 million. Some 60 percent of Douyin users are women, and about 70 percent of them reside in China's top-tier cities.

Zhang Nan, president of Douyin, estimated that the total daily active users on short video platforms will reach 1 billion in 2020.

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