Livestreaming is primarily a form of communication
Livestreaming takes a number of different forms with a variety of content. Fundamentally though it’s about gameplay or performance.
The performance side incorporates social media influencers that showcase their lives through live video, communicating in a more immediate way with their followers. This occurs on many social apps such as YY and Weibo.
It is this trend for influencers sharing video that has bled into commerce, with fashion brands sponsoring so-called KOLs (key opinion leaders). Big players like Alibaba and JD.com have created their own livestreaming functionality, in order to use this trend to push ecommerce sales.
Though this vertical integration is more and more visible, livestreaming is still ultimately about communication. Nowhere is this more evident than on the Momo app. Momo is a social dating app which has seen livestreaming become its biggest revenue stream since its introduction as recently as late 2015. This revenue is partly down to virtual gifts that viewers can give to streamers. This virtual gift-giving is a central element to livestream viewing.
The Momo app
Almost half of China’s internet users have tried it
Nearly half (47.1%) of China’s internet users, which total 344m, had watched a livestream by the end of 2016, according to the CNNIC.
However, as you might expect, the trend is all about young people. There are plenty of varying figures to support this claim. A May 2016 report from Tencent MyApp Big Data, for example, stated that 83.1% of livestream viewers are under the age of 30, and that users under the age of 20 account for as much as 42.7%.
Traditionally, viewers have been male, with female content creators stereotypically conforming (even using plastic surgery) to a particular ideal of female beauty, but who are criticized by others in society for being seemingly vapid and over-sexualized (more on that below).
Viewership is changing though, becoming more balanced, with an increasing proportion of female viewers. This is evidenced by the aforementioned Tencent study which states that female users made up 33.2% of livestreaming viewers, and a study by iResearch suggesting female viewership is up from 31% to 36% over the course of 2016.
The increased female viewership is a part of the livestream trend going more mainstream, with a wider range of content, and plenty focused on topics such as fasion and cosmetics.
The revenue generation from livestreaming is considerable
In 2016 livestreaming produced revenues of more than 30 billion yuan ($4.3 billion) according to Chinese Renaissance Securities and reported by Reuters. This figure is to increase by more than 300% by 2020. YY, one of the top livestreaming platforms made $88.2m in profit in Q1 2016.
A chart in Mary Meeker’s 2017 internet trends presentation shows the per hour monetisation of livestreaming (including subs, advertising and paid downloads) beats other media such as online gaming, TV and music.
The punchy per-hour revenue rate combined with the aforementioned rise in number of people livestreaming means that the medium is second only to online gaming in overall revenue, when compared with other online pursuits (see chart below). Again this data comes from KPCB and Mary Meeker.
Increasingly, it is the KOLs in fashion that are proving most profitable to marketers, given their ability to increase the sales of products for big brands and big ecommerce players.
KOLs or Wanghong?
We touched earlier on the controversial nature of a stereotypical female livestreamer.
Internet celebrities, often called Wanghong in China, can be seen in the context of a growing consumer society and one in which traditional views on morality are being challenged.
Whilst many livestreamers are analogous to Western influencers, there is also a more provocative type of Wanghong which the Chinese Ministry of Culture is attempting to crack down on, by prohibiting various acts (such as violence or, bizarrely, seductively eating a banana).
This style of performance livestreaming has to some extent led those in media and advertising to adopt the term KOL instead, free from any potentially controversial connotations.
The number of these, predominantly female, KOLs is astonishing, and shows both how big a country China is, as well as how quickly such culture has developed. Miranda Tan, CEO of influencer big data company Robin8, tells Mumbrella, there are 10,000 KOLs with more than 10m subscribers.
There are more than a million KOLs in a long-tail of influencers with more than 10,000 subscribers.
Brands are getting stuck in
69% of global beauty brands have used a livestreaming platform in China, according to research by L2. 49% of beauty brands have done so via Tmall and 35% with Taobao.
It’s not just about beauty though, with a survey conducted by Admaster suggested 37% of advertisers in China would consider working with celebrities or livestreaming hosts in 2017.
Brand broadcasting can be more along the lines of TV shopping, with higher production values and many staff involved. Such streams may not be consigned to one streaming app, and so brands will be working with audiences on multiple platforms.
Here are some of the 2016 brand livestreaming campaigns I could find:
Maybelline sold 10,000 lipsticks in two hours through its livestreaming with Angelababy on Meipai.
Mondelez and agency Carat worked with popular singers to launch its double chocolate Oreo. Da Zhangwei had to sing Oreo’s ingredient list to the tune of a love song whilst the biscuits were pushed into his mouth. The show was aired on Alibaba’s platforms (Taobao, Tmall, Youku Tudou, Laiwang) and got 4.5m live views.
Adidas worked with a graffiti artist on its ZX Flux livestream. The viewers were able to influence the artist’s designs. Watch it here.
Changdi, electric oven manufacturer, ran a weekly series of livestreams with a KOL, focusing on easy recipes such as cookies. Viewer numbers exceeded 300,000 according to daxue consulting.
Chong, an upmarket clothing brand, worked with writer and food KOL WenYi, answering questions from fans in a more conventional influencer-style promotional livestream. Revenue reached ¥5m the day after broadcast.
Hilton worked with KOLs and their families staying at Hilton Hotels during the National Holiday. This campaign differed because each location and hotel managed its own KOLs and content. More from Jing Daily.
There are numerous livestreaming platforms
Here’s a rundown of some of the most notable livestreaming platforms (there are more than 30 in total).
- Youku Tudou – owned by Alibaba and very much like China’s YouTube.
- WeChat – the multifunctional messaging app includes livestream functionality.
- YY Live – the earliest and largest livestreaming community on PC used YY, but the platform has fallen behind as other tech companies have invested in mobile.
- Inke Live – popular mobile app that includes broadcaster tools such as a ‘beautycam’ which smoothes skin and a sound equaliser.
- Weibo – the equivalent of Twitter. Has seen an upturn in its fortunes thanks to livestreaming. More MAUs and 200m livestreams between April and June 2016 alone.
- Huajiao Live – app which saw impressive user growth in 2016 and is becoming more central to social networking in China.
- Momo – the social dating app mentioned previously, livestreaming is becoming an important revenue channel.
- 6Rooms (6.cn) – possibly the first service to offer livestreaming back in 2008.
- Meipai – a free app that became very popular, very quickly in 2015, thanks to a growth hack (share the app to unlock features) and a large number of special effects to make anyone a ‘producer’.
- Bigo – made in Singapore and big in South East Asia. An app where participation (including gifting) rewards viewers and streamers with points which help them to promote their own content.
The Inke app
Alibaba is serious about livestreaming
Taobao has its own livestream channel, Taobao Live, which according to Alibaba sees a conversion rate of 32% i.e. 32 items added to cart for every one hundred views.
Alibaba has also been investing in other companies such as Weibo (31.5%) and Youku Tudou (which it owns), and this helps to bring popular KOLs across to Taobao. Products will be promoted with clickable links during livestreams on a variety of topics.
This live video is important in the context of rapidly growing numbers of mobile shoppers (around 500m on Taobao) who each engage multiple times a day with the Taobao app for an average of around half an hour. Livestreaming is just one part of a strategy to make shopping more sticky and deliver the same addictive hit as social media.
Interestingly, as reported in Forbes, Alibaba invested $46m in 2016 in a company called Ruhan whuch incubates KOLs, teaching them how to blog and interact with fans.