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When social and commerce merge

In March, the China Connect conference dedicated to Chinese digital trends was holding its 7th edition in Paris. The motto of this edition was « Crack the codes » i.e how to uncover the dynamics of a specific, fast moving market which is in many ways leading the West when it comes to digital habits and models.

The explosion of Live Streaming

A key trend this year is the growth of mobile live streaming… maybe later than in Western countries but much faster and stronger! This new form of entertainment has found a place in people’s daily life, especially among the younger generation, and in the strategies of brands of all sectors. Its development is different from what can be seen in Europe and the US thanks to..

  • its scale: 200+ mobile applications such as Ingkee, Huajiao or Douyu which have been downloaded over 50 million times each, and a total of over 350 million regular users of live streaming platforms to date
  • its interactive dimension: live streams are not simple videos that one watches, most of the times they consist in interactive cessions during which fans formulate questions, express demands, interact with the person in the video and offer virtual gifts
  • its monetization: via paid virtual gifts – from a few cents for a hug or flowers to a few hundred dollars for a sports car or a yacht – thousands of streamers earn a very decent revenue while platforms such as Huajiao collect 30% over each transaction

Check out this demo by WSJ

KOLs: a whole new media

The KOL phenomenon – key opinion leaders – already very strong in China has amplified with the development of live streaming. Made of famous or less known celebrities (such as Melilim Fu who participated in the conference with her orange hair and outfit) as well as average individuals with a small audience of loyal followers, the crowd of KOLs is now considered as a media of itself and an essential touchpoint for brands wishing to develop their visibility and engagement with consumers, especially in industries with a strong affinity dimension such as luxury, cosmetics and automotive.

Brands’ campaigns play on the various levels of the KOL pyramid (a few celebrities on top, many influencers on the base) to develop strategies that mix prestige or impact actions with proximity.

The specificity of the KOL media resides in the fact that it appropriates the discourse of brands. Some refer to it as UGC 2.0: creating brand contents for which celebrities and influencers become the main channel.

The convergence of social and commerce

As previously mentioned on this blog site, WeChat, the social network and service platform used by over 700 million Chinese, has taken the world leadership in terms of social commerce e.g integrating purchase opportunities within conversations.

By combining online payment solutions like AliPay and WeChat payment with live streaming platform, China is amplifying the convergence between commerce and social. With the « click to buy » function, the subscriber to a live stream can in a single click purchase the garment worn by the person (KOL) in a video or the product or service he/she is talking about. In a country where 9 out of 10 people online access internet on mobile this generates a lot of spontaneous purchases. For brands, developing affinity, federating communities generates naturally sales. And they cash in!

Once more, China demonstrates its strong ability to innovate and take the lead, not exactly in the development of new technologies but rather in their usage and monetization.

Article written by Christophe Jourdain initially published in Siècle Digital