Livestreaming becoming a necessity for many retailers

Selling via online interactions seen as way out of contagion-battered economy

Livestreaming, an increasingly popular tool in China's digital marketing landscape, is quickly turning from novelty to necessity.

With COVID-19 wreaking havoc on physical commerce across the country, livestreaming is starting to propel more enterprising undertakings that are perceived by industry players as a way out of the contagion-battered economy.

Taking off in 2016, livestreaming loosely refers to the practice wherein online influencers market brands and sell products by introducing their merits through video conversations over the internet.

This interactive approach to entice shoppers is growing in popularity thanks to a mixture of factors including the near-ubiquity of smartphones, speedy internet connections and a growing penchant among younger consumers to socialize virtually.

While the growth of digital marketing budgets in China will likely slow because of downward growth pressure, social media marketing will remain a hot sector this year with online influencers taking center stage in the thriving social media scene, according to the China Digital Marketing Trends 2020 report.

"Among the majority of the companies we've spoken to, digital marketing budgets account for somewhere between 30 percent and 60 percent of entire marketing expenditures, which represents a considerable proportion," said Maggie Wang, president of AdMaster, a data marketing technology firm.

At the same time, average growth in social media budgets is projected to hit 15 percent, with online influencers at the forefront of the phenomenon.

"Using top-tier influencers such as Li Jiaqi or Viya Huang for brand endorsements will continue to be the trend in 2020. But it's not necessarily true that the current popular key opinion leaders will prevail, as Chinese internet users are generally accustomed to changes," Wang said.

Meanwhile, the phenomenon is rewriting the marketing playbook for brands, propelling them to make personnel changes, diversify resources and adjust assessments for key performance indicators.

Brands are also waking up to the fact that they need to have a firm grip on their own traffic to turn clicks into cash. More marketing dollars will likely flow into so-called private online domains such as indigenous online stores and virtual followers' clubs.

For example, a livestreaming matrix is taking shape at L'Oreal Paris, one of the best-selling beauty brands in China, where the function is effectively embedded in the brand's daily marketing routine.

"We normally run several sessions per day, whether conducted in offline stores or via e-commerce channels," said Zong Guoning, L'Oreal Paris China Brand general manager.

Livestreaming at L'Oreal Group was initially the brainchild of the cosmetics giant to turn its beauty advisors into online celebrities in 2016, Zong said, adding that the duo soon added new touch points for consumers at a time when digital channels faced bottlenecks in attracting new customers and expanding revenue.

The beauty adviser to online influencer metamorphosis nurtured the likes of Li Jiaqi, then a fledging but promising beauty adviser at the company. His remarkable selling skills have earned him the fame of being "the best lipstick seller in the country".

L'Oreal Paris' livestreaming team is comprised of three parts: top-tier KOLs, dedicated, full-time hosts cultivated by the brand and staff members on marketing and sales teams who take turns stepping into the virtual showroom camera frame.

Chinese electronic appliances maker Joyoung is adopting a similar approach. Since last year, livestreaming has become an integral part of digital marketing and a mandatory task for all marketing personnel at Joyoung, according to marketing director Xu Nan.

"It means a compulsory eight hours' livestreaming per month is assigned to each employee in the marketing section," Xu said.