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Read the following news item. Incorporate your own experience of purchasing via livestream sales, and analyze how online influencers play a part in swaying consumers’ decision-making, using the knowledge learned in this chapter.
In traditional commerce, businesses keenly peddle their merchandise, highlighting features, functionalities and alluring price tags. In short, all eyes are on the products,and the relationship between customers and merchants is as simple as transactional. However, enriching media forms from short videos to livestreaming are rewriting the retail playbook in China. Merchants are elbowing their way to capture people’s significantly shortened attention span,and that’s when emotional connection kicks in.
“We are witnessing a shift from rack-based shopping to discovery-based shopping, and eventually to trust-based shopping,” said Jason Yu, general manager of consultancy Kantar Worldpanel China. “I choose to buy something not necessarily because of the products per se, but because of the person selling it.”
This retail “new normal” can be traced back to the early days of livestreaming, a real-time interaction between customers and store owners materialized by technological readiness, that is, smartphones and high-speed internet connections.
For long, livestreaming has remained an obscure practice, which found popularity only in the realm of online gaming. But when Taobao, China’s top e-commerce site, introduced the function five years ago, it took off and turned into something of a must for businesses aspiring for a younger generation of consumers. It is believed that new media forms as such stand to offer sellers and influencers a more personal, straightforward way to engage with their audiences.
“I think it comes down to the available supply and the shopping habits of Chinese consumers today.” said Zhao Lidong, who oversees product development and content commercialization at Taobao Live. “In China, people are used to consuming hours of content on their smartphones. They embrace innovative tools.”
Today, the platform has groomed a handful of influencers, or better known as “hosts” in the online shopping lexicon. Many admit to buying for the sake of supporting, their beloved characters. “Since the height of the COVID-19, I’ve formed a habit of watching livestreaming session every night and see what I can buy,” said Liu Min, a sophomore student in Shanghais, who has spent over 10,000 yuan ($1,553) through livestreaming since last year. “Of course, the deals are good. But the host is more like a big sister, taking care of our daily needs. I don’t even bother to go to the supermarket.”
The model is now embraced by a growing number of players, who adapt to, and make variations on this influencer-driven shopping in a bid to keep abreast of varying consumer interests.
As the livestreaming industry proliferates, brands can no longer solely rely on key opinion leaders —KOLs or Wang Hong—to market their projects, due to costs and quality control issues. Instead, they employ key opinion consumers—KOCs—who specialize in product reviews for a smaller patch of followers. “KOCs make eminent sense to retailers due to their higher perceived reliability and trustworthiness,” said Jennifer Ye, partner and China consumer markets leader at consultancy PwC. “To appeal to younger consumers in China, it is critical for brands to find KOCs that embody the right brand values, and who can reliably connect with target audiences through user-generated content,” said Ye,citing the example of Chanel partnering with a local media company to establish a network of microinfluencers.
Peng Jingxuan, 26, who is doing her second master’s degree in France, unexpectedly developed a cult following after posting her videos playing guzheng, a traditional Chinese musical instrument, on Bilibili, China’s top video portal and community for notably the Generation Z population. During her performance, she dressed up in traditional Chinese costumes and wore makeup in ancient Chinese style. With a fan base of 1.5 million and many of her videos played more than 1 million times each,brands spanning cosmetics to snacking utilize her services. “Because my videos are essentially promoting the rising China cultural tide, I’d favor brands whose brand-positioning aligns with my online persona, namely an advocate of Chinese culture,” Peng said of her rationale in choosing merchants to collaborate with. For instance, high-flying snacking brand Three Squirrels and Synear Foods are among the labels that insert their commercials into Peng’s videos.
“The key learning from the trend of Guo Chao, or the rising Chinese cultural tide, is that to be culturally relevant, brands need to understand and respond to their audience in a way they can relate to,”said Ye.