Sharing: how did Befriends MCN achieve US$4.8b sales

Befriends (交个朋友), one of the largest live commerce MCNs in China, has seen its cumulative sales through its live channel surpasse CNY 35 billion (US$4.8 billion).

Befriends started from smartphones to e-cigarettes before moving into the live streaming business – with a lot of controversies in the beginning. 

We had captured The founder, Luo Yonghao (罗永浩)  and his partner Zhu Xiaomu (朱萧木) doing their first live streaming on Momentum Works’s TLD blog back in 2020 here! 

(Zhu Xiaomu, founder and CEO of Flow e-cigarette, Former Vice President of Product at Smartisan Technology (the company founded by Luo Yonghao), and Co-host of the Befriends Live Streaming Room, where Luo Yonghao is the main host.)

Zhu recently shared his perspectives in a talk aptly titled: “Your Life is a Live Broadcast, you can leave temporarily, but you can never stop the Live Streaming” (“人生就是一场直播，可以暂时离开，但不能停播“).  We found his sharing candid, and insightful for anyone who is in the live commerce ecosystem. 

Here is an excerpt from that sharing (Tweaked to add more context for non-Chinese readers): 

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Live commerce isn’t just a passing trend; it’s the future

Who is especially suited for live streaming? People who are poor, in debt, those with a “gleam” in their eyes – they are perfect for becoming hosts. That was my situation then. I felt live streaming was a path worth fighting for. At that time, I felt it could save our company, so I started the first live stream with Luo.

(In early 2020, Flow faced issues with poor sales due to changing regulations and other reasons, leading to a disruption in its cash flow. It was reported that the company delayed salary payments for two months, conducted “violent” layoffs, and owed money to multiple parties.)

Our first live broadcast on Douyin, a record-setting event that was incredibly “exaggerated.” … During that first live stream, there was a crazy surge in traffic, and that night we sold over a hundred million in GMV. 

We had 3 million online viewers for that session, now we barely reach ten or twenty thousand. Normally, having over 3,000 viewers is considered a top host, having 10,000 viewers makes you a star.

Looking back now, all that traffic and sales, what was the success formula? In reality – It was an “accident.” We prepared for the first live broadcast for about a month or two, memorizing every word, reviewing each product over and over. At that time, our live streaming was very “naive,” we just got up with a plastic sign board, then talked awkwardly. We gradually improved over time.

We can’t rest on our laurels in live commerce; Douyin is always changing, and everyone has a chance. Initially having 3 million viewers and now only 10k or 20k is normal. Because at the time, we were a topic or controversial figure in a topic or controversial domain, so everyone came to watch.

But that also marked the beginning of the entire Douyin live-streaming e-commerce scene. More and more hosts came in, more and more traffic flowed in, more and more manufacturers joined, and then gradually differentiated, with competition becoming increasingly fierce.

Douyin is also constantly changing, continually adding new features and new rules, and we are continuously subjected to various kinds of ‘punishments.’ This is a process of gradual regularization. You may be an internet celebrity or a big shot, but if your product isn’t good enough, your operations aren’t good enough, or your user experience isn’t good enough, then it’s not going to work.

We think Douyin is particularly good because it doesn’t focus on how much traffic you have, but on whether you can do the job well. So, we have also been evolving.

We believe that live streaming is not just a passing trend; it is the trend.

The shirt, pants, shoes, and socks I’m wearing right now, I bought them all in my live stream. Every time I go home, the food my mom makes, the shampoo, the hand soap, they are all purchased from our live stream.

Live commerce is not only user-friendly for young people but also for the elderly. From observing my parents, I noticed they struggled with traditional ecommerce, needing to type and collect coupons. But live commerce is simple, an especially easy place for the elderly to shop.

I highly recommend that everyone go home and set up an account for their parents. In the evenings, besides watching TV dramas, they can also watch live streams. When they see something presented by the hosts that they like, they can just click and buy it, and the goods will arrive at their home the next day or the day after. This is very suitable for middle-aged and elderly people.

The Most Important Word (in Live Streaming) 

The live commerce industry is extremely competitive, and if we don’t perform well, we’ll fall behind.

Thus, we’ve done many things, such as using cosplay to attract traffic and selling a variety of products; we’ve increased the frequency and duration of our streams. Now, at any time you check, Befriends’ live streaming room is active, which is quite astonishing.

We’ve also started specialised live streaming rooms. I myself have started up anew with a Befriends Beverages and Food live streaming room, broadcasting every Monday to Wednesday from 7 PM until late at night. This is a specialised segment focusing solely on beverages and food. What is the deepest personal insight I’ve gained from live streaming for so long?

This business involves a lot of high-tech elements and various traffic-generating tactics. It is a highly technical and trendy industry. But there is one word that always prevails, one word that is the most important: Trust.

When we started live streaming, sometimes we accidentally quoted a price too low, then we compensated for it, sometimes in the hundreds of thousands or even millions. The most substantial compensation was over a million (RMB). These actions established a foundation of trust. Up to now, many in ecommerce envy Luo because even when he is not in the live stream room, the sales are still very good, and that is the power of trust.

Don’t just look at the huge waves on Douyin, where someone might suddenly sell a billion in one live session. If trust is not well established, one might slowly fade into oblivion. But as long as you maintain trust, you can continue to thrive.” 

 On April 23rd at 5 PM, Befriends will start their first broadcast on a brand new platform – WeChat. 

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Befriends MCN is one of the companies that we will meet in the upcoming Momentum Works Immersion: Live Commerce Hangzhou in May 2024. In addition to Befriends, participants will meet other key players in various parts of China’s live commerce ecosystem and gain insights into strategies that can be applied back to their businesses.  

If you want to find out more about the company or get an agenda for our programme, drop us a note in the google form, and we will be in touch.