US or China: Who Does Beauty Livestreaming Better?

9 Min Read |

If you thought livestreaming was just the online version of TV shopping channels like QVC, you’d be wrong. Because livestreaming is an interactive, two-way experience, and those who buy beauty products off the back of livestream events are not merely passive consumers. This distinction has been embraced — with great success — by beauty brands in China, but the US has yet to pick up on the potential of livestreaming in the same way.

The popularity of this form of consumer connection and conversion in China holds interesting clues for the rest of the world, and beauty brands in the US and elsewhere could learn invaluable strategies by studying the East Asian livestreaming trend.

How brands in China get a lot out of livestreaming ecommerce

If we pay attention to that key difference between TV shopping and livestreaming — that livestreaming is a two-way street, while TV shopping is not — then we’re well on the way to understanding why livestreaming can be of deep value to a beauty brand. When you launch a livestream event, you’re not just selling to consumers who’ve tuned in to buy; you’re connecting with existing and potential customers who are ready to forge a more authentic, even emotional relationship with your brand. They’re there to listen, watch, learn about products, discover more about a brand’s ethos, ask questions, and share their own experiences and stories and desires. Done well, a livestream can inspire an audience to give to it as much as they take from it.

This year, livestreaming has taken off in China more than ever before, and the growth of livestream ecommerce across industries is huge. Predictions by iResearch suggest that China will have 524 million livestream users by the end of 2020, and the value of the livestreaming ecommerce industry hit RMB 433.8 billion in 2019 — a figure that’s expected to double this year. Those numbers may be huge, but livestreaming only took up 1.1% of the country’s total ecommerce in 2019, which means there’s even bigger scope for growth.

Market size aside, it’s important to remember that livestreaming is about more than sales. That deeper value lies in brand education and connection, which are the elements which will lead to long-term consumer loyalty and retention — converting more sales over time, rather than focusing (as TV shopping channels do) on converting sales during and immediately after the each streaming event.

A report in July 2020 by Ruder Finn and Consumer Search Group predicted that average beauty spending in China will rise to RMB 11,355 per person over the next year. This goes hand in hand with an increase in live and video content; on TikTok, for example, beauty content grew by 228% in 2019. Cofounder of marketing agency Walk the Chat, Jenny Chen, said that a growing number of brands that have traditionally sold in department stores in China are “becoming online livestreaming sellers.”

Chinese beauty brands have been inspired by staggeringly successful livestreamers like Austin Li, who have proven, without a doubt, that connecting with consumers in this way can convert sales. Li began his career at L’Oréal as a beauty counter consultant in a small town. But simultaneously, he was sharing his own content and live video online. Today he’s known as the ‘lipstick king’ and in 2019 he made over US $145 through a single livestream on Alibaba’s livestreaming platform, Taobao — selling 15,000 lipsticks in only five minutes, along with other products. That particular livestream drew an audience of 36 million people.

Li’s likable personality is said to be at the heart of his success — and forging genuine connections with their audiences is how beauty brands in China are doing it, too.

Livestreaming in lockdown

The Covid-19 lockdown pushed more brands to expand their capacity for online connection, and drove an increase in livestreaming. As consumers were shut out of physical stores, they turned to the virtual world to seek out other routes to a positive shopping experience; and beauty retailers of all sizes in China began to offer livestream events.

Skincare brand Forest Cabin trained hundreds of its shop staff in the art of livestreaming, providing skincare tips to viewers while allowing them to click and buy products during the live. The brand benefitted from a 20% increase in sales in the first month. Market intelligence firm iiMedia Research expects overall livestreaming revenue to double this year, reaching US $135 billion.

Consumers are tentatively returning to brick-and-mortar stores. But the success of livestreaming in lockdown has boosted the trend, proving how successful it can be — so brands are keeping their focus. And in the US, as the pandemic situation continues to be uncertain, a growing number of consumers remain wary of going into busy shops and getting on public transport, so beauty brands could do well if they learn from China’s success, adapt the traditional American TV shopping formula, and turn their attention to livestream opportunities.

The challenges of livestreaming in the US

Livestreaming certainly exists in the US, and is growing in popularity — but there may be a few reasons why it hasn’t taken off in such a big way yet.

Clinique hosted a livestream on its website and mobile app in June, featuring Game of Thrones star Emilia Clarke. Clarke shared skincare and makeup tips, and the products she used were purchasable on screen during the event. Estée Lauder, La Mer and Bobbi Brown have all hosted similar livestream events on their own sites over the last six months, all with shopping functionality built in so that viewers could buy without having to click away from the video. That function is the norm on Chinese livestreaming platforms, and LatentView Analytics notes that around 100,000 brands have now used shoppable livestreaming in China. But still not so in the US, as setting up an ecommerce stream on a third party platform is more difficult — Instagram, for example, doesn’t allow in-stream shopping as of yet.

Amazon Live has launched a dedicated shoppable livestream service in the US, which could be a significant factor in the growth of this kind of ecommerce across the states. But having platforms available isn’t the only factor involved in whether or not the trend will take off; consumer culture and attitudes, as well as the right kind of content, are at the heart of how well any new sales route works.

Mark Yuan and Zoe Zhang of New York consultancy firm And Luxe say that although a functional platform is essential, livestreamers have to ensure that their content ticks the right boxes for their audience. Product discovery is just one element; while entertainment, exclusivity, and providing a good deal via the event are also really important. Yuan and Zhang do predict that shopping directly via livestream will become more popular as 5G makes mobile internet services more efficient, and augmented reality technology becomes more readily available on the go.

In other words, the tech is nearly there — so in terms of functionality, this could be the time for livestreaming to take off for beauty brands in the US. For that to happen, however, culture and content has to support the growth, because logistics alone are not enough. American brands could help to drive the popularity of livestream ecommerce but focusing on more partnerships with popular influencers and celebrities, as Clinique has started to do. But those that do must be careful to maintain a reasonable level of control over both commission rates and content; as Josh Gardner of Chinese data analytics firm Kung Fu Data told Business of Fashion, “One of the other things I recommend brands do is to negotiate performance-based agreements with no minimums, if you can. If there’s no minimum fee and it’s purely sales commission based, you just need to control the assets and what the host says, the way they talk about you.”

There’s a lot of room for the US to grow if it can take China’s lead

Livestreaming ecommerce could open up a lucrative new market in the US. It’s not uncommon in recent years for American consumer trends to follow in the footsteps of East Asia, and the popularity of this conversion technique in China offers valuable insight to US brands. There are signs that big incumbents in the states are preparing for a boom in shoppable livestreaming — Walmart, for example, joined the fray of companies interested in buying out TikTok, teaming up with Microsoft in August 2020 to bid for the livestreaming social media app.

For beauty brands dipping their toes into the livestreaming pool, it would be wise to look at China first. Not just to see what works well, but also to predict the downsides of livestream events and partnerships — so they can begin their livestream strategy with a clear idea of what works, what doesn’t, and how best to connect with consumers and create sustainable sales and retention.