As TikTok Shop grows aggressively in Southeast Asia, live commerce is increasingly becoming an integral component of the ecommerce landscape in the region. We have covered the topic extensively in Live Commerce in Southeast Asia & The TikTok Shop Playbook reports. 

Many of you have asked – how exactly is the ecosystem like in China, beyond all the drama we read about the top influencer “Lipstick King” Li Jiaqi? What can ecosystem stakeholders in Southeast Asia really learn from China?

In a recent immersion programme for a major client, we visited a top tier MCN (Multi-channel network) in Guangzhou with an estimated annual sales of CNY2 billion (US$282 million). The founder kindly showed us around with his team. 

Why focus on live commerce and MCNs in China?

MCNs are agencies that sign livestreaming hosts (KOLs or influencers) and operate live stream sessions through various platforms. As live streaming requires specific skills of content creation, curation and operations, many brands and manufacturers work with MCNs on live. 

During this year’s 11.11 shopping festival, top 20 live hosts on Douyin achieved a total GMV of CNY5.65 billion (US$800 million). Large MCNs support these hosts with equipment, supply chain and advanced data insights. 

Some interesting observations from our visit: 

1. While you might only see two individuals during a live session, there might be >20 people working behind the scenes.

The founder told us that there are also people working on sourcing (brands and products), pricing, and logistics (orders need to be shipped out). So it is a team effort.

2. Content and story writing are sophisticated:

The following photo shows a session we visited which formed a part of a mini fictional series of a young couple from dating to engagement to marriage. Product placements are embedded into the story with the above mentioned team helping facilitate the sales.

The owner told us that often simply telling viewers about the products is not good enough – they want to see how products are placed in ‘real’ use cases. “It is now an essential ability for MCNs to create complex scripts”.

3. MCNs are developing cross border strategies

The MCN we visited has recently acquired a cross border logistics company. “Why would we do that?” the founder says. “The thousands of brands and merchants we are working with ALL want to sell to markets outside China”.

How about the different markets, consumer tastes/preferences, localisation requirements and challenges? “We are keen to work with partners to figure that out, but we will figure that out,” he says.

4. Fengshui is important

The MCN we visited took an entire … old building which used to be a production facility. We asked the owner whether it was because of the (cheaper) rent compared to a modern office building. He laughed – “that was surely a big consideration, but not the only one”.

It turned out that Fengshui was a big consideration as well. The factory which used to occupy this building made a very good profit. “Literally they were ‘cargoing’ cash in”.

No wonder he could achieve US$280 million sales. 

Upcoming Immersion Trip – register your interest now!

We have received a few inquiries from the community (MCNs, investors in southeast Asia) wanting to explore the ecommerce live commerce and MCNs in China – we are working out an immersion trip/expedition in Q1 2024. You can find out more about the immersion here.

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].