Livestreaming gets a boost amid epidemic

The past month has seen a torrent of companies jumping on the livestreaming bandwagon. In early February, livestreaming sessions had increased by 110 percent compared to the same period last year on Taobao Live, the livestreaming arm of Alibaba Group's e-commerce site.

The number of newly opened online broadcast platforms also doubled, the company said, as it rolled out incentives such as temporary fee reductions and exemptions for merchants to sign up for livestreaming services.

As public facilities continue to resume operations after an extended holiday break, physical stores remain largely shuttered to prevent further spread of the virus.

More time is needed to bring economic activity and production levels back to normal, according to a recent study by Bain& Co. Half of surveyed consumer brands said they managed to meet less than half of their preset business goals in the still-unfinished first quarter, indicating a short-term blow to business.

"Marketing campaigns have become more flexible and inexorably shifted online, with timely adjustments on content and marketing methods made based on the outbreak," said Derek Deng, a global partner at Bain.

Established companies are avidly embracing livestreaming as a new growth tool. Yue Sai, a cosmetic brand under L'Oreal Group, debuted its official channel on Douyin in February, inviting trainers and beauty advisers to impart skin care and makeup-related information online.

"We've included trending topics like tips for applying foundation, keeping skin radiant and makeup techniques when we have to wear surgical masks," said Yuan Minghui, the brand's training manager.

For sectors temporarily affected by the epidemic, some are using livestreaming as a turnaround strategy. Shanghai-based cosmetics brand Forest Cabin temporarily closed about half of its 337 stores across China due to the virus.

It then banked on livestreaming to revive business, training its 1,600 shop attendants how to host livestreaming content, according to chairman Sun Laichun. Sun even joined in a two-hour session during a Valentine's Day promotion.

That session alone helped secure 400,000 yuan ($57,700) in sales. Consequently, the percentage of the firm's online sales skyrocketed from a quarter to 90 percent of overall revenue, he said.

Merchandise not traditionally sold online has also jumped on the virtual sales bandwagon. These include Volvo vehicles, which kicked off a livestreaming show featuring its XC40 model on Feb 14.

"The trial endeavor is intended to target young people who pursue fashion and safety in vehicles, but are unable to have a touch-and-feel experience via physical stores due to the sudden outbreak," the company said in a statement to China Daily.

The online broadcast via its Tmall official store has greatly boosted online orders for all Volvo models, with the XC40 accounting for half of all sales, the company said, without disclosing precise figures.

The broadcast also expanded online traffic of its official Tmall store by 30 percent. "It aligns with the consistent exploration and innovation in marketing that we've always pursued," the company said.

Kang from Joyoung also agreed that livestreaming has gone beyond pure sales to now be an effective tool of engagement. Livestreaming has in essence been a business routine for the company, long before the epidemic.

"Apart from advertising for our products, we also fine-tuned our content according to current affairs, such as sharing menus that are conducive to immunity enhancement," said Kang. "It's a natural opportunity to truly bond with our followers."

However, not everyone agrees that brands have become fully prepared to dive into livestreaming.

"From a marketing point of view, I haven't seen many outstanding campaigns during this special period of time. It's more like an expedient to handle the ongoing crisis," said Coolio Yang, former CEO of social media agency Kantar Media CIC in China.

Before embarking on livestreaming, companies must think through the following issues－logistical capabilities amid order surges, impacts on margins due to slashed prices and the ability to distinguish between "random buyers" and the brands' "target audience", Yang said.

"For instance, if you offer too deep a discount during current livestreaming sessions, merchants will probably face customer backlashes during year-end shopping festivals, requiring the same low prices, and that's potentially a drag on profitability," Yang added.

"It requires a more concerted strategy, taking everything from public relations, brand building and broader business goals and operations into account," he said. "Otherwise livestreaming won't benefit either the consumers or companies in the long run."