When scrolling through an ecommerce platform, a question popped up so what is ecommerce? Is it just a platform to sell online? Or is it more than that? To answer these questions, recently I had a chat with one of our interns who had experienced China’s live commerce. She shared with me her experience and told me how big China’s live commerce is. Well, I simply put it as a whole new world.
Starting from selling 100,000 pieces of lipstick in just a few minutes (in the past it took at least a month for retailers to sell this much), 30,000 aircon in just 2 hours, thousands of apartments, and even a ROCKET, that’s how dope China’s live commerce could be.
She also shared the Lipstick King (Austin Li) who got me hooked on to dig more information. I found a quote from him that captures my attention because what he said is true. In one of his interviews, he shared his reason for doing online sales, he said:
After looking through China’s live commerce, I couldn’t agree more with him. The revenue they’re able to bring which used to take months now can be achieved within a few hours. Seeing these sellers go live with all the well-prepared narratives, sets, and crew behind the scene, makes me understand why people are watching these live streamers perform.
To top that, even though I didn’t fully understand what these streamers are saying, just by looking at the product demonstration and using the catchy phrases makes me feel like I got the complete experience like buying in an offline store. (Imagine that it’s not just me who feel that way, I shared it with another 1k-1mil people).
Due to my curious nature, I try to find out more about why these Chinese sellers are able to sell professionally through live steam. Long story short, I found out that most of these sellers are related to various MCN. While MCN is considered a failure in the US, the MCN ecosystem is somehow able to thrive in China. Why are these Chinese MCN able to make it work?
A simple explanation, the MCN companies are like a training company where they seek sellers and they build these sellers from 0. Just like KPOP idols, MCN companies will train sellers to talk, perform in front of the camera, and finally, makeover. MCN companies also manage all things related to promotion, starting from the brands, the platforms, up to the fan base, or here we can call it loyal customers.
Context: MCN or Multi-Channel Network is an organization that works with KOLs (Key Opinion Leaders) to offer assistance in multiple areas such as product, programming, funding, cross-promotion, partner management, digital rights management, monetization/sales, and/or audience development in exchange for a percentage of the ad revenue from the channel
The live commerce in Southeast Asia
Seeing what China’s live commerce can do, I reflected a lot on the live commerce situation in Southeast Asia. Yes it may have become the talk of the town in Southeast Asia especially after the pandemic restrictions. However, even though live commerce is growing, when compared to China’s it’s still nothing.
The main thing that I observe is that in a live stream, it’s rare for sellers to reach up to 300 customers. Many are ranging around 100-200 customers and the content that I saw in Indonesia, many of these sellers use it to sell second-hand or to give promotions and giveaways. Meanwhile in Singapore most of the sellers aren’t local people, they usually either from mainland China or Thailand.
Some of these sellers also didn’t use the ecommerce platform. They choose to use social media such as Facebook live, Instagram live, and YouTube live. Only some in Singapore that we can find, watch the live commerce from Chinese platforms (Taobao live, Kuaishow, etc.).
What happened? A few comparisons that our team found between the live commerce in China, Indonesia, and Singapore.
So… Will live commerce survive in SEA?
From the above comparison, we can conclude that even though Singapore is in a more advanced stage compared to Indonesia. If this continues, live commerce for sure won’t survive with the half-heartedly sellers. But on the other hand, it’s fair for us to say that SEA live commerce is still in its early stage.
The comparisons above can be a powerful tool for platforms to educate sellers in SEA, to spice up the competitions and bring champions is the key. Because once a champion is able to show and turn the way live commerce works in SEA, others will start to follow. Then a new competition kicks in that can offer more specialized players that could bring in more value and effectiveness to the ecosystem.
We always believe that in the future live commerce will work but the million-dollar question is “Who will figure out the secret formula?”
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]