Why is live sales popular in China, but not hot in the US?

SCMP quoted analysts as saying that tech giants from Meta to ByteDance are facing challenges in disrupting the US livestream sales market, due to technology gaps and a lack of qualified people, influence on social networks (KOL) makes it difficult for companies to replicate the sales livestream model that is very popular in China.

The company Meta announced early last week that, starting March 16, users of its social media platform Instagram will no longer be able to tag products during a live broadcast. Meta’s Facebook platform also discontinued the sales livestream function from October last year.

With the trend of sales livestreams becoming popular in China, Instagram launched the sales livestream feature in August 2020. Another reason to enable this feature is the lockdown measures during the COVID-19 pandemic. With brick-and-mortar stores forced to close and consumers forced to stay at home, more and more people are starting to shop through online stores that have livestream sales.

According to SCMP, despite the efforts, the reaction of US consumers to shopping at online stores with live sales activities is still bleak compared to Chinese consumers. Nearly three-quarters of Chinese respondents in a survey in July 2022 said they had researched and purchased products through the sales livestream of online stores, while more than two/ 3 Americans said they had never watched a sales livestream.

Alessandro Bogliari, co-founder of the Miami-based Influencer Marketing Factory platform, says the difference is technical as well as behavioral.

Mr. Bogliari said: “There are many reasons for Chinese consumers to engage in in-person shopping, including more discounts during live sales activities, or fear of missing out on shopping opportunities. In contrast, most platforms in the US don’t promote sales livestreams strongly, and sellers don’t have enough appeal.”

According to SCMP, in China, sales livestreamers like Li Jiaqi, who is known as “No. 1 lipstick guy”, can sell tens of thousands of lipsticks in just 5 minutes. And major Chinese tech companies, including ByteDance, Alibaba, JD.com and Pinduoduo, are actively promoting sales on their platforms.

Another challenge for US companies is the technology gap in applications, Mr. Bogliari said.

Mr. Bogliari pointed out that Chinese consumers are used to using “super apps” that contain a wide range of functions, allowing users to quickly switch from the product demo view to the payment interface. But many social apps in the US are “not smooth enough with these processes” .

Can China’s sales livestream model be applied in the US?

Some people may think that just copying China’s sales livestream model can be successful, but according to the news site Baijiahao (China), the reality is not so simple. We can see the salesman “doing endlessly” in front of the screen, but this is only a small part of the sales livestream model. If you want to really do a good job with your live broadcast business, you also need to address the business logic behind it, which is the core issue.

China’s sales livestream model is mainly divided into three parts: goods, people, and places. First of all, the first part, the goods. The most important reason why sales livestream can be done smoothly is because of the product, without a good product, everything is just words.

China’s sales livestream has a lot to do with whether Chinese brands will accept such a sales model. These brands will not only find the top KOLs, but also have their own exclusive KOLs to conduct sales livestream activities. Brands like Proya and Huaxizi in China are taking livestreaming sales very seriously.

In contrast to China, offline retailing or via e-commerce sites in the US is very strong, so it is not easy to form a sales livestream model like in China.

Another very important reason why sales livestream activities are so popular in China is because the discount in these activities is very significant, which has generated a large number of immediate orders. . But there is no way for merchants in the US to offer such discounts, because the supply of goods in the US is simply not enough.