3,2,1! Go Live… and Shop

From gaming operators to SMEs, local firms try to explore as many means as possible to cater products and services for Mainland Chinese consumers — and the latest approach is streaming e-commerce

– RMB2 trillion
Value of live selling market in Mainland China in 2021

“23rd September, what to do? Join the live streaming party [of] Sands [in] Macau… Hey, James! Amazing discounts and privileges! Are you ready?” Wilfred Wong, president of Sands China Ltd, tried to enunciate these words mixed with Chinese and English slangs with swag. 

This is a short video undertaken by the local gaming operator and Chinese multinational travel platform Trip.com last September for a live streaming session to promote and sell the services and tourism products offered by Sands China, just prior to the nationwide resumption of Individual Visit Scheme (IVS) visas for Mainland Chinese to the city after months of suspension due to the COVID-19 pandemic. 

While this practice has caught quite a few here by surprise and stirred discussions online, it has been commonplace across the border in recent years, as live streaming has been exploited by various industries from tourism to retail and luxury goods as a new avenue to reach their target audiences. With the ongoing coronavirus pandemic, which has persistently interrupted travels in most places across the world, Macau companies are also trying to jump on the bandwagon to win the hearts of mainland consumers.

Broadcasting video content in real-time, live streaming once only focused on video gaming and entertainment — this is still true for many western countries — but the element of e-commerce has gradually been incorporated into streaming sessions in Mainland China, with the rise of live streaming e-commerce — or also known as live selling — dating back to 2016, according to Xinhua, Chinese state-run news agency. Live  streaming represents a new way for firms and merchants to raise brand exposure and move their inventory, with over 900 million of the population in the mainland having access to the Internet.

How lucrative does this segment represent? A popular mainland Chinese influencer could sell 15,000 lipsticks in just five minutes of streaming on e-commerce platforms, or the appearance of Cantonese pop and movie legend Andy Lau Tak Wah in one of such sessions in recent times led to the sales of 200,000 film tickets within 30 seconds. 

According to a report published lately by Ali Research, the research arm of Chinese e-commerce giant Alibaba Group, and multinational accounting and consultancy unit KPMG, the turnover in the live streaming e-commerce market in the mainland was expected to hit RMB1.05 trillion in 2020, representing a surge of over 140 percent from just RMB433.8 billion in 2019 and RMB19 billion three year earlier. The value of the sector is expected to double from last year to approximately RMB2 trillion this year, accounting for 14.3 percent of the total e-commerce transactions in the mainland, the report said. Live selling only represented about 4.1 percent and 8.6 percent of the total e-commerce transactions in 2019 and 2020 respectively, it added.

“Live streaming e-commerce is an increasingly important avenue for events and brands that target the mass audience,” says Alan Ho Hoi Meng, president of the Macau Convention and Exhibition Association

MICE online

Then there’s no wonder why Macau companies are eager to explore this segment, especially since last year when the local tourism crumpled over the COVID-19 pandemic. Besides Sands China, other gaming operators, such as MGM China Holdings Ltd and Wynn Macau Ltd, have also collaborated with some Mainland Chinese live streamers, as well as mainland e-commerce and streaming platforms, namely, Trip.com, Douyin, and Alibaba-linked affiliates like “Fliggy” and Taobao, for live selling. According to Trip.com, the platform did another streaming session with Sands China in December on the heels of the success of the first one in September, attracting the views of over 5.46 million. 

One of the up-and-coming industries here that is reliant on the influx of travellers, the MICE (meetings, incentives, conferencing and exhibitions) sector, also ventured online when the tourist tally last year plunged 85 percent year-on-year to just 5.92 million. Alan Ho Hoi Meng, who chairs the Macau Convention and Exhibition Association, says it’s a global trend for the sector to adopt a mix of online and offline approaches in light of the coronavirus outbreak. “Live streaming e-commerce is an increasingly important avenue for events and brands that target the mass audience,” the association president notes. For instance, the Macau Industrial Products Show, the Macau-Guangzhou Products Fair, and the Macau International Trade & Investment Fair (MIF) held in the past year have invited local and mainland influencers to promote Macau brands and products through live videos online.

“Live selling is a plus for the MICE sector — it allows more buyers in the Guangdong-Hong Kong-Macau Greater Area and beyond to know more about and have access to made in Macau products,” he adds.

A child watches a livestreamer selling local products in Beichuan County, southwest China’s Sichuan Province, Nov. 14, 2020. (Xinhua/Jiang Hongjing)

Govt’s help

Chinese state-owned firm in Macau, Nam Kwong (Group) Co Ltd, actively advocates this new shopping practice, as officials in the territory pledge for the city’s further integration with the nation’s development. With a business empire stretching from event organising and travel to public utilities to transportation, Nam Kwong partnered with Guangdong-based Gree Electric Appliances Inc — the world’s largest residential air-conditioner manufacturer and one of the Fortune 500 firms — to organise a live selling session in Macau last October. Dong Mingzhu, the chairperson of the Guangdong firm who is also known as “Queen of Live Streaming E-Commerce” in the mainland media, hosted a four-hour live show, resulting in the sales of over RMB900 million of food products and other services and products related to the territory.  

As the local development of e-commerce, particularly cross-border e-commerce, is still in the beginning stage, Nam Kwong notes it plans to organise more live shows for sales in the future to “help local SMEs explore new business models and new strategies”, acknowledging, though, more time is needed for “consumers and merchants here to be used to” live streaming e-commerce. 

And this initiative is supercharged by the local government by assisting Macau SMEs to get on board. Besides the Macau Government Tourism Office (MGTO) partnering with Fliggy and Trip.com last year giving out discounts and vouchers, as well as hosting live sessions, to entice the mainlanders to the city, the Macau Economic Bureau supported the so-called “100 Shops of Macau” campaign that was launched in December by Alibaba, in which the e-commerce giant promotes and sell products from Macau companies on its platform Taobao through live streaming. 

“The Economic Bureau… encourages SMEs to use live streaming e-commerce as a brand new retail model to promote quality products from Macau on e-commerce platforms… so that more mainland Chinese consumers could buy Macau products in a more diversified and efficient way,” the bureau noted in a statement about the “100 Shops of Macau” campaign. “Through the application of e-commerce, quality Macau products could enter the enormous mainland market, while this could help create a cross-border e-commerce ecosystem in Macau.”

“The Economic Bureau… encourages SMEs to use live streaming e-commerce… to promote quality products from Macau on e-commerce platforms… so that more mainland Chinese consumers could buy Macau products in a more diversified and efficient way,” the bureau remarks

Training for streamers

In light of the arrival of this trend in the city, a number of interested parties founded an association last September — Macau Live — to help promote this new practice among local merchants and residents. The group is working with Alibaba to launch a recruitment and training scheme for residents to be live streamers in the first quarter of this year, says Jose C. Rodrigues, a local veteran emcee who heads the group. “We hope to nurture a group of people that will have live shows regularly on the platform [like Taobao],” he says. “There is no age limit for streamers — they could be young people, the elderly, or even housewives — as long as they are interested in [this field] and have potential.”

As the pandemic forced the cancellation of many events and activities last year, meaning almost no job opportunities for emcees, Mr. Rodrigues has devoted his time to this new retail model after joining some local live streaming sessions last year. Macau Live now has an office in Zhongshan of the nearby Guangdong province, where Mr. Rodrigues and his other partners will undertake several live shows a week on Taobao to promote and sell products from food souvenirs to cultural creative goods from Macau brands and companies.

“Live streaming e-commerce is not simply about having streamers talk and promote the brands and products, but it is a complex cross-border e-commerce process involving stock inventory, logistics, and other steps,” the Macau Live director says. Local companies now only need to supply products to the headquarter of the association in Zhongshan, which will handle the remaining procedures from streaming on Taobao to transporting the products to consumers after they have placed the order. “It will, of course, be more convenient for merchants to send us their products should these be made in the mainland,” he says. “But even if their goods are produced locally, they could seek help from government departments, which are very willing to help smoothen this cross-border logistic process.”

‘Macau’ appeal

One of the challenges for local SMEs to catch on this trend is their productivity. “Should we help merchants, let’s say, sell 1,000 products through live streaming, are they able to keep up their supply consistently for the demand?” Mr. Rodrigues questions. “That’s what SMEs should think about and improve as this new initiative is developing here.” 

Most of the merchants Macau Live has contacted so far are willing to give this initiative a shot. “The pandemic has definitely sped up the city’s process towards live streaming e-commerce and the digital economy… as local businesses are looking for new ways to reach [customers] due to the travel restrictions and lockdown measures,” the group director explains.

Only starting regular live stream sessions on Taobao in January, Mr. Rodrigues acknowledges they are still improving and adjusting themselves in a bid to catch the attention of mainland consumers amid zillions of live streams and products in the market. “Our advantage is that we come from Macau — [mainland consumers] are still interested to know more about Macau [and its products],” he says. “We should seize the time when Macau still has this appeal to develop live selling.”