The rapid development of live commerce in Southeast Asia has disrupted the ecommerce status quo in the region. So it is not surprising that many in the ecosystem, including enablers, MCNs,  brands and investors , have been asking us: 

“How do we get involved in live commerce?” ” how shall we do it effectively and profitably?” “What exactly is the formula for success in these areas?” “Shall we pivot our strategy?” “How soon will AI, especially digital humans, disrupt the sector?” 

With these questions, Momentum Works organised our Open Enrolment Live Commerce Immersion to Shenzhen &  Guangzhou, China for 21 business leaders & decision makers from across the ecosystem in Southeast Asia in March. 

In 3 days, we had 10+ visits and sharings, 3 focused sessions, and 3 networking events with founders, CEOs and experts in digital humans (AI), MCN management, technologies, brand building and cross border ecommerce.

The interactions were lively, and intensive. Many questions were asked especially during the sessions with MCNs and AI/digital human companies. Some highlights of the Live Commerce immersion here:  

  1. Digital humans are already widely adopted in live commerce 

Whether digital humans (virtual hosts) would be the future (and if so, how that future would look like)  was a question that most participants had before the immersion. 

It turned out that all the MCNs we visited are already using digital humans extensively – to extend the hours, (drastically) improve cost efficiency, and also to allow top hosts to appear in multiple streams simultaneously. “We have to do it because it really cuts the costs by a lot, and every competitor of ours is doing it,” said one MCN founder who hosted us. 

At Tabcut and Laipic, two leading companies in digital human creation, a lot of questions were asked by the participants – from technological capabilities to operational details and existing case studies with some top brands.

  1. To win in a crowded market, you need the right strategy and positioning 

One of the most impactful sharings on day 3 was from Kaifei Yao, an ecommerce growth expert. He analysed to our audiences exactly how Pinduoduo took off in a market already dominated by Alibaba. It was not only focused execution, but more critically to find a starting strategic position where it is very difficult for incumbents to attack (without hurting themselves). Pinduoduo succeeded and now it is replicating the strategy in Temu – in a positioning that Amazon finds it difficult to attack. 

The top MCNs who hosted us also shared something similar. One MCN founder told us: “To enter this new category, I studied a lot of data to know for certain that it would grow. Also, I analysed more than 50 existing and potential competitors to know exactly why they could not do a better job than I do.”

These are useful lessons as many of our participants are actively thinking about strategically what they should do next to capture the growth in the live commerce ecosystem. 

  1. “Top hosts are created by luck. A successful MCN depends on data & SOPs”   

Sunchain MCN, a top Douyin MCN with more than 80 live studios, opened up three of their studios to our participants. In two of them active live sessions were happening, with well scripted story lines and a full team of operators in addition to the hosts. 

In the ensuing discussion, our participants asked  co-founder Lin Ganyi how exactly Sunchain could manage so many studios while ensuring proper ROI. Mr Lin’s response was that while top hosts are a matter of luck, a successful MCN depends on data and SOPs to ensure that most of its hosts and studios achieve above average performance consistently.

United Media, another MCN we visited that achieved CNY 10b (US$1.4b) GMV in the jewellery category last year, shared something similar. To be consistent in performance across multiple hosts and teams, data and SOPs are the key. Founder Leo Li shared some of the granularity of data he used to make decisions as well as some of the SOPs he had created and evolved for the team. 

As we start to dip our toes into the Live Commerce industry, insights, thoughts and genuine sharings from the pioneers remind us that we are not alone, and there’s many opportunities to work together and minimise the involution (内卷）. 

  1. Every Chinese player is expanding to Southeast Asia, and looking for partners 

Yes, without exception, every single Chinese AI/digital human company, MCN and brand expressed desire to expand into the Southeast Asia market. 

To give a few examples: Tabcut has recently set up an office in Singapore; Befriends MCN has launched operations in Indonesia and Thailand; Ding Ding Lan Ren Cai founders will embark on a study tour in Q2; while BigSeller’s 5th country office in Southeast Asia is currently being renovated. 

During sharings and interactions, most of these founders told our participants that they were looking for partners. As head of international of one top MCN at the networking said: “Our brand partners are pushing us to expand – but we do not have the talent and mental bandwidth to  build/manage teams in all six countries in Southeast Asia. We need partners.” 

We are glad that a few partnership discussions are already taking place between our Southeast Asian participants and Chinese hosting companies. Momentum Works team is in place to bridge the context gaps. 

  1. “Come to Hangzhou for your next immersion” 

Interestingly, amongst the guests who came to share and interact with the participants,  12 actually flew 2 hours from Hangzhou and Shanghai to be with us in Guangzhou & Shenzhen.  “You should also visit us in Hangzhou,” many said to us. 

Hangzhou, where Alibaba is based, has an impressive but differentiated ecosystem, compared to that of Southern China (Guangzhou/Shenzhen). In addition to Befriends who joined us for the March immersion, Hangzhou is also home to other top MCNs such as Wuyou, with the top MCNs is a whole ecosystem of content creators, scriptors, video editors, supply chain professionals and technology experts. 

Momentum Works will host our next Live Commerce Immersion, scheduled for 28-30 May, in Hangzhou. You will expect an equally meaningful set of visits, sharings and networking with expert practitioners and potential partners. You can find out more about the upcoming immersion and register here. 

We will also be sharing more detailed learnings from our March Immersion on TheLowDown, stay tuned!

 

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Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at [email protected].