COVID-19 SPECIAL

Livestream sales set for larger role in China after pandemic

Surge in users of once-niche sales channel as stores close, people stay home due to Covid-19

The first shoots of the Chinese mahogany tree, or xiangchun, look just like red spinach, but are crisp and have an earthy, onion-like aroma.

They are a springtime delicacy in northern China - so when entrepreneur Xu Zewei heard that hundreds of kilograms of the prized seasonal vegetable would go to waste because of Covid-19, he sprang into action.

The 37-year-old went on livestreaming platform Kuaishou earlier this month to hawk the vegetable, grown by farmers in the Dazhuangke township on the outskirts of Beijing.

He sold out the town's xiangchun - all 564kg worth - just 10 minutes into an hour-long broadcast that was watched by 81,000 people, at prices similar to those last spring.

Mr Xu is among a growing number of Chinese - from rural farmers to brand-name retailers to even Communist Party officials - who have turned to livestreaming platforms in the past months as bricks-and-mortar stores were closed and people stayed at home because of Covid-19.

They hawk everything from oranges to lipstick on their shows, which can draw hundreds of thousands of viewers and generate millions of yuan in sales.

Experts say livestreaming - once a niche sales channel - will become a larger part of the consumer market in China's post-Covid-19 new normal.

Commerce Ministry figures show there were some four million livestreaming e-commerce broadcasts in the first quarter of this year.

Mr Xu, who runs data service firm 91TechGroup, puts his success down to working with Kuaishou, which helped promote the broadcast on its platform.

During the show, he took viewers through the nutritional qualities of xiangchun and showed how it could be prepared - stir-fried with eggs, eaten with tofu, or battered and then deep-fried until it resembles crispy whitebait.

"The results were quite good, but it's very tiring - you have to think of all the different ways to promote your product," Mr Xu told The Sunday Times.

He got to helping the farmers in Dazhuangke because he runs a "red tourism" site there popular with people who visit places of historical significance to communism in China.

 COURTESY OF XU ZEWEI
Entrepreneur Xu Zewei doing a livestream broadcast earlier this month to help farmers from a township on the outskirts of Beijing sell their produce. PHOTO: COURTESY OF XU ZEWEI

But the site was closed because of the coronavirus outbreak, leaving farmers in the area, who depend on the tens of thousands of visitors who come each year to sell their produce to, without any customers.

"Xiangchun is something that you can't keep, you have to eat or sell it soon after you harvest. That's why I thought of selling it using livestreaming," Mr Xu said.

The number of users of livestreaming services in China has been rising steadily in the last five years, according to Chinese market intelligence firm iiMedia Research.

It grew to 504 million last year, increasing by 10.6 per cent from the year before. This figure is expected to rise to 526 million this year.

Experts say Covid-19 has accelerated the increase. Apart from Kuaishou, other livestreaming platforms include Douyin, JD Live and Taobao Live.

Mr Zhang Guowei, head of livestreaming business of e-commerce platform JD.com, said he has seen sales generated from livestreaming grow to about a tenth of all e-commerce sales.

  • 4m 

    Number of livestreaming e-commerce broadcasts in China in the first quarter of this year. 

    504m 

    Number of users of livestreaming services in China last year. This figure is expected to rise to 526 million this year. 

"The epidemic is devastating bricks-and-mortar stores, but it also brings opportunities... We have seen an increasing number of brands doing livestreaming on JD this year, especially the big ones," he said.

Livestreaming has also proven to be a boon for rural farmers, helping to connect them to urban consumers amid disruption caused by Covid-19, said Taobao's senior director of e-commerce content Yu Feng.

Alibaba, which owns Taobao, has an ongoing initiative that aims to teach 200,000 farmers to sell their products on Taobao Live. The goal is to drive sales of up to 15 billion yuan (S$3 billion), he said.

OPPORTUNITY IN CRISIS

The epidemic is devastating bricks-and-mortar stores, but it also brings opportunities... We have seen an increasing number of brands doing livestreaming on JD this year, especially the big ones.

MR ZHANG GUOWEI, head of livestreaming business of e-commerce platform JD.com, on how the coronavirus outbreak has helped livestreaming to grow.

Ms Kitty Fok, managing director of research firm IDC China, said livestreaming will become a fixture of e-commerce in the post-pandemic landscape.

"Consumers now want a contactless experience because of the pandemic, and with livestreaming you also get that interactive experience... e-commerce is not going to go back to what it was before," she said.

A version of this article appeared in the print edition of The Sunday Times on May 24, 2020, with the headline 'Livestream sales set for larger role in China after pandemic'. Print Edition | Subscribe