Craft Focus - June/July 2020 (Issue 79)

78 ROAD TO RECOVERY As China starts to recover from the COVID-19 pandemic, Elena Gatti, managing director of Azoya EU, looks at the measures taken by Chinese retailers to survive the crisis, and how Western shops could follow suit After nearly two months of anti-coronavirus lockdown measures in China, the general situation is finally getting back to normal. Restaurants, bars, and retail stores alike are opening up again and people are going back to work. Yet for a time many offline retailers thought they were done for. Some of them resorted to new tactics to keep their businesses alive, such as livestreaming and private WeChat groups. We take a look at how China’s digital ecosystem enabled retailers to survive during this difficult period, and what Western retail players can do to learn from them. One of the most visible trends we saw was the development of livestreaming e-commerce, in which hosts and influencers host live, interactive video sessions ranging from 1-3 hours long to present and discuss products to their respective audiences. Such sessions typically take place on Taobao, China’s eBay-like C2C marketplace platform with >600 million users. On Singles Day 2019, merchants drove 20 billion RMB in sales through Taobao Livestreaming, and even Kim Kardashian launched a livestreaming session to promote her KKW Beauty perfume line, selling out 15,000 bottles. During these sessions, the host will introduce the brand, and will often incorporate a raffle or sweepstakes game to keep people entertained. Then, he/she may go on to discuss individual products, usually trying them on and showing them off to the viewers through different angles. At any time during the session, users can click a small link to make a purchase, which is enabled through a pop-up order window and Alipay, Alibaba’s mobile payments platform. Additionally, the video sessions are interactive, in that each session resembles a virtual chat room; any participant can type comments and ask the host to try on different products or ask questions about fit, colour, size, etc. Such livestreaming sessions give the viewer a better sense of what the product looks and feels like in real life, and do a good job at converting viewers into paying customers. The conversion rates are generally higher, though there is the added cost of paying livestreaming hosts and influencers. Go live During the coronavirus period, fashion brands across the board turned to livestreaming to make up for the shortfall in offline retail sales. Dior and Chanel have livestreamed fashion shows and used celebrity ambassadors to promote them on WeChat and Weibo, China’s popular social media platforms. IKEA launched a livestreaming video session to promote its new Tmall flagship store, the first time IKEA has partnered with an e-commerce platform in its history. But what’s more is the expansion of livestreaming to new verticals; while 2019 was a landmark year for livestreaming e-commerce, it had been largely limited to beauty and apparel items on Taobao. During the coronavirus crisis, we’ve seen car repair shops, farmers, catering companies, real estate agents, and more turn to livestreaming to appeal to customers and drive sales. In February, over 5,000 real estate agents from 100 Chinese cities used Taobao Live to show apartments to buyers. Aside from Taobao/Alibaba, competitors such as JD.com , social commerce platform Xiaohongshu, and China’s ubiquitous super- app WeChat all adopted livestreaming functions over the last year, giving small merchants more options to hawk their wares. With everyone being stuck at home over the last two months or so, the coronavirus crisis has given livestreaming e-commerce a chance to cement the habit in everyone’s minds. Livestreaming e-commerce is now possible on Amazon Live, with Amazon employing its own livestreaming hosts to present items ranging from beauty & cosmetics to apparel. Perhaps it will become more popular over time in Western countries as lockdown measures around the world are enacted by governments to keep the coronavirus from spreading.