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Livestreaming: A Strategic Turn for Luxury Brands in China
While the rise of livestreaming in the United States and Europe is notable, it is in China where this phenomenon, already well-established, has reached remarkable maturity. Its immense potential for direct selling offers significant opportunities for the luxury industry, provided that they can maintain their high-end image.
In China, livestreaming has long surpassed entertainment to become an essential pillar of e-commerce, redefining the fashion and luxury industry. Brands such as Moncler, Louis Vuitton, Bottega Veneta, Ferragamo, and Piaget have explored this channel to capture the attention of the Chinese market. While some have been crowned with success, others have faced challenges. "Livestreaming has existed and been developed for many years in China, well before the Covid-19 pandemic. It's no longer a trendy topic; it has been adopted by the Chinese market for a long time by now," asserts Oscar Sand, General Manager of L'Atelier Peony by OSCAR, an expert in luxury marketing and specialist in the Chinese market. According to her, it can represent a double-edged sword for luxury brands that do not master its subtleties.
The Era of Livestreaming in China
Even before the Covid-19 pandemic, livestreaming in China had already gained significant momentum. This popularity exploded during the lockdown period, when the population, forced to stay at home, turned to the internet and social networks for social interaction and shopping. Livestreaming naturally followed this movement. Platforms such as Tencent Video, iQiyi, and Youku emerged, collectively capturing 79% of the online video market share in 2019, while Douyin (Chinese TikTok) and Kuaishou dominated the short video segment with 54.4% of the shares. These platforms offer foreign brands unique opportunities to connect with Chinese consumers through captivating and interactive video content, providing authentic online shopping experiences and word-of-mouth marketing opportunities through shareable content.
According to a report by KPMG and Alibaba, the livestreaming e-commerce market in China reached 433.8 billion yuan in 2019, recording an annual growth of 210%. In 2020, the market crossed the threshold of 1 trillion yuan, about 154 billion U.S. dollars (source China Banking News). More than 926 million people in China consumed online video content, and the paid online video sector was estimated to be nearly 100 billion RMB (about 15.6 billion U.S. dollars) by 2022. With 617 million users of livestreaming services and over 130 million livestreaming host accounts in 2020 (source XinHua net), the sector has become an indispensable channel for online communication and sales, offering a wide range of possibilities for digital marketing strategies.
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