Success in the Chinese market is rarely the result of a uni-directional strategy; it requires a more complex approach that takes in multiple platforms and strategies.

To help businesses build a presence and loyalty in the Chinese market, Dana Goldburd from Up2China has outlined what businesses need to know about the most common digital marketing methods. By highlighting the advantages and challenges of various marketing approaches, companies can navigate the complexities of China’s dynamic market landscape with greater clarity and informed decision-making.

Live streaming

The gold-paved streets of China’s live streaming landscape have attracted many brands, keen to get a slice of a market valued in the trillions of RMB. For millions of Chinese consumers, live streams are a major part of the e-commerce experience, watched as much for entertainment as they are for commerce.

Pros: No marketing method enables real-time engagement with an audience quite like live streaming. Via a well-known host or an in-house presenter, brands can answer audience questions and get feedback in real-time. This makes it great for brands that need to provide product education – for example, a nutritional supplement or a professional haircare product – enabling them to explain key benefits and functions.

Cons: A successful live stream is often dependent on the popularity and skill of the host, and the best hosts come at a high price. There is also a complicated regulatory landscape to navigate, as well as the threat of technical challenges or disruptions.

Key opinion leaders

China is a global leader in influencer marketing, with the market for key opinion leaders (KOLs) – the more common term for influencers in the Chinese context – reaching RMB 340 billion (£37.7 billion) in 2021.

Pros: An endorsement from the right KOL instantly adds credibility to your brand. Chinese consumers trust KOL recommendations and use them to decide what to buy, ranking the opinions of KOLs almost as highly as recommendations from family and friends when it comes to making purchasing decisions.

Cons: As with live streaming, working with major KOLs is very costly and may be out of reach for smaller brands. Moreover, some Chinese consumers are starting to have doubts about the authenticity of KOL recommendations. For companies, there is a risk that promotions with a KOL who promotes a lot of different brands comes off as inauthentic.

Key opinion consumers

In response to the cons of KOLs, many brands are instead choosing to work with key opinion consumers (KOCs) – basically micro-influencers with a much smaller but much more engaged audience base.

Pros: As the name suggests, consumers turn to KOCs for trusted opinions on products and brands and working with the right one can give you access to a highly engaged community of potential brand loyalists. Since they have fewer followers, campaigns with KOCs are also typically less expensive than KOLs.

Cons: There are many creators who could qualify as KOCs, so identifying the right one for your brand can be challenging. Since they have limited influence on a broader scale, KOC collaborations are better considered as one part of a broader marketing strategy.

Official social media channels

Wherever they are in the world, businesses need to have a strong social media presence. In China, consumers expect to be able to use social media – especially the biggest platforms like WeChat and Weibo – to find out key information about businesses.

Pros: A strong social media presence gives you control over your brand’s content and tone of voice. It allows you to engage with your audience and build a community of people who resonate with your content and tone. Moreover, detailed metrics about followers can be used to inform other marketing strategies.

Cons: Social media visibility is at the mercy of the algorithm, which can make growth seem slow, especially if you are a new business just starting out. Businesses must also consider the risk of social media crises, as negative opinion spreads very quickly on Chinese social platforms.

For more insights from CBBC Member Up2China, join CBBC’s upcoming Consumer Masterclass on ‘Navigating the Chinese Market: Strategies for Success’ on 25 April. Click here to register.

This article is based on an infographic created by Up2China. Click here to view the original infographic.

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The value of China’s live-streamed e-commerce (aka live commerce) market reached RMB 2.27 trillion in 2021, and some estimates suggest that it could reach a value of RMB 4.9 trillion (US$704 billion) by the end of 2023. Douyin alone saw 1.5 trillion RMB in GMV from live streams in 2022, becoming China’s largest live streaming platform. For millions of Chinese consumers, live streams are a major part of the e-commerce experience, watched as much for entertainment as they are for convenience.

By contrast, live streaming brought in sales of about US$11 billion in the US in 2021, with the main players including Amazon, Meta, Twitch, and YouTube (which has partnered with Shopify for its live commerce initiatives). While live streaming has made a big impact in industries such as gaming and e-sports, viewership numbers have failed to translate into sales, and major platforms have seen limited success with live commerce initiatives. Meta pulled the plug on live shopping on Facebook in late 2022, and even TikTok has reportedly scaled back the development of TikTok Shop in Europe (although TikTok has denied these reports).

The reason why China and the West have taken such different paths when it comes to live commerce can be attributed to three main factors: the e-commerce ecosystem, consumer habits and influencer mindsets.

China’s e-commerce ecosystem was ready to integrate live commerce

“China largely skipped the desktop internet generation and went straight into a mobile focused internet economy, with apps being at the core of communication and e-commerce,” explains Jimmy Robinson, director of PingPong Digital.

“The e-commerce landscape in China is largely based on platforms rather than individual onsite e-commerce,” he goes on to say, which has made it easier for platforms to quickly integrate new features such as live commerce.

Taobao Live, for example, is seamlessly integrated into the Taobao app, which is, in turn, linked directly to Alipay, meaning that consumers can purchase directly from live streams in just a few clicks.

By contrast, in Western markets, a much higher percentage of purchases take place on sites or apps owned directly by brands or retailers. This means that apps like Instagram and TikTok are used for discovery, not purchase, with customers then going to other sites to shop around for the best possible prices.

Entertainment and education vs speed and convenience

Consumers in China and the West approach e-commerce – and thus live commerce – in different ways.

Chinese consumers value the educational value of live streams and make purchases based on the live stream host’s demonstration (think “lipstick king” Li Jiaqi comparing two different shades of red lipstick).

“During live streams the host has a clear opportunity to provide brand and product education, explaining how products work and their key benefits and functions. Consumers value the chance to see products in action and trust recommendations from live streamers,” says Ryan Molloy, CEO of Redfern Digital.

On the other hand, consumers in the West generally don’t need to be sold to; they’re shopping online with a purchase already in mind. As a result, speed and convenience are key, and e-commerce websites often prioritise presenting the bare minimum of information as efficiently as possible.

Robinson also points out that multiple scandals have caused Chinese consumers to lose trust in big platforms, while influencers are perceived as more trustworthy and authentic. This has led to a rise in influencer-driven sales and the explosion of live stream commerce in China, “as it allows netizens to have authentic engagement with influencers and get their product questions answered from a source they trust.”

“Another key thing that makes live streaming in China unique from similar practices, such as TV shopping, is its role in socialising and entertainment,” says Qing Na from Dao Insights. As social anxiety has become more commonplace among China’s younger generations, digital spaces have grown into places where they can find comfort in communicating with strangers. “Live streaming allows for direct interaction with the host, and sometimes even celebrities. Such immediate interaction not only helps brands build consumer trust and intimate relationships with their target audience, but also enables a more playful and participatory online shopping experience, thereby fuelling consumer enthusiasm and further spurring consumption,” Na adds.

Can influencers make the shift to live streaming?

The role of hosts in the success of live commerce cannot be understated. In China, many of the best-known hosts became famous for live streaming rather than transitioning from another genre of influencing, as live commerce streams require a fairly specific set of skills – more akin to a salesperson than an Instagram content creator.

Moreover, many hosts are signed with a multi-channel network, a type of video production agency that helps them create high-quality, super-shoppable content and liaise with platforms.

Western influencers are less likely to want to sign up with an agency (although they do exist in the UK) as the independent influencer model works so well. Many of the most successful influencers in the UK and US built their following organically by posting authentic content, then transitioned to sponsored content that chimes with their brand only once they were established. Conversely, in China, people usually expect influencers to have a commercial component.

How should brands approach live commerce in China?

The lukewarm reception to live commerce in the West is yet another reminder of just how different Chinese preferences, culture and retail structures are from those in the West. So how should brands targeting the Chinese market adjust their mindset?

As with most aspects of digital marketing in China, any conversation about live commerce has to start with clarifying brand position and key messaging. As PingPong Digital’s Frank Ye emphasises, “It’s likely that a brand will resonate with a Chinese audience very differently than in its home market. Therefore, the first step is to have a properly localised brand strategy and corresponding key message, then choose the right channels that can optimise both branded communication and conversion.” (For example, if your Taobao is your key sales channel, then there is no need to set up live-stream channels on JD.com).

Sandra Weiss, media executive at RedFern Digital, also cautions that although live streams have a clear educational component and people do use them to discover new brands, “live streaming is most successful when brands already have some recognition in market.” Brands just entering the market may be tempted to shell out huge fees to work with larger live stream hosts, but even their endorsement may not be enough when there is a lack of brand recognition and trust. Instead, brands can consider working with micro-influencers (known as KOCs in China) on platforms like Xiaohongshu and Douyin or even creating their own channel hosted by knowledgable in-house staff.

Finally, pricing should be a key consideration. “Despite rising income and increased demand for premium products, China largely remains a discount culture,” says Weiss. “It is generally suggested that livestreams should provide the lowest pricing of the product across any sales channels within the last 30 days. Brands need to consider this when coming up with their promotional and discounting calendar for the year.” This may also mean that live commerce isn’t an ideal strategy for luxury brands.

China Consumer 2023

This article was produced as part of a series for China Consumer 2023.

Learn more about CBBC’s flagship consumer event of 2023 here.

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Live streaming has become an essential way to create buzz and drive sales for companies operating in China across a wide range of industries. Companies that get it right can benefit greatly from the fast-paced live streaming content ecosystem to engage with consumers in an authentic way on the most popular platforms that they are using every day.

In the early days of live streaming, using influencers was seen as a way for brands to promote products and drive traffic to e-commerce platforms where they could further cultivate and sell products to consumers.

However, the unprecedented consumer demand for live streaming has led to a much more integrated approach, with mainstream e-commerce platforms opening live streaming channels or social media platforms embedding e-commerce into their offer. The trend has seen particular growth around platforms driven by user-generated video content, such as Douyin (the Chinese version of TikTok).

What are the new rules and regulations for live streaming?

With the increased use of live streaming, there has also been an increase in concern for the misuse of the new format, especially since live streams are not a permanent form of content. Examples of these concerns include vulgar or illegal content, fraudulent activity, and misrepresentation of products or services sold through live streaming, which could include false promotions and poor quality of products.

On 22 July 2022, the National Radio and Television Administration and the Ministry of Culture and Tourism jointly published a new 18-point guideline (which can be read in full in Chinese here) for the live streaming industry, which lists 31 banned behaviours and sets expected standards of quality and content for both live stream hosts and platforms. Notably, the guidelines also apply to virtual and AI-powered live stream hosts.

Banned content/behaviours include:

• Publishing content that subverts state power, weakens, distorts or denies the leadership of the Communist Party of China or “denigrates the fine cultural traditions of the nation”
• Using deep fake technology to forge or alter the image of party leaders, heroes and martyrs or historical party events
• Fabricating and spreading false information about a range of topics, including natural disasters and the Covid-19 pandemic, or deliberately hyping up public opinion “hot spots”
• Sexually suggestive clothing, makeup, language or behaviour
• Excessive food consumption or waste, such as so-called ‘mukbang’ videos
• Showing off extravagant lifestyles, such as displaying large amounts of luxury bags, jewellery or cash

The guidelines also state that influencers who live stream on technical or professional subjects such as law, finance and education are required to hold relevant qualifications, presumably university-level degrees or similar.

The guidelines are an extension of a similar previous Code of Conduct for Online Live Marketing released by the China Advertising Association (CAA), a non-profit organization that represents the Chinese advertising industry and promotes best practice, on 1 July 2020.

There has been an increased push to regulate the live streaming industry since a number of scandals featuring high-profile live streaming hosts in 2021. Popular host Viya (real name Huang Wei) was fined a record RMB 1.3 billion (£165.7 million) for tax evasion by the authorities in e-commerce hub Hangzhou in December 2021. Indeed, Article 11 of the new guidelines states that hosts should “truthfully declare their income and fulfil their tax obligations in accordance with the law.”

While the new regulations seem strict and there is a lot of scrutiny on live streaming activity in China, they are unlikely to impact the popularity of live streamed e-commerce. Conversely, it may become even become more popular due to the additional trust that viewers will have for the information about the products and services they are being sold.

Call +44 (0)20 7802 2000 or email enquiries@cbbc.org now to find out how CBBC can further help you identify the best live streaming e-commerce platform for your brand and target market in China.

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In mid-2021, China’s private education sector – particularly after-school tutoring – took a blow from the government’s ‘double reduction’ policy, which aims to reduce the intense stress levels among the school student population by introducing tough new controls for extra-curricular activities and cutting down on homework.

However, the sector may finally be seeing the light at the end of the tunnel thanks to an unlikely saviour: live streaming. Former extra-curricular tutoring service unicorn New Oriental – which posted losses of $876 million (£719.1 million) and laid off 60,000 staff after the private education crackdown – has been the first of its kind to create new momentum with live streaming.

Former English teachers at New Oriental have now been able to return to the “classroom” online via the company’s new live streaming channel on the Chinese TikTok Douyin, Dongfang Zhenxuan (or Oriental Select), established by Yu Minhong, founder of the English-teaching organisation.

Teaching, which switches between English and Chinese, has been adapted for the hyper-commercialised live streaming world, with the lecturers-turned-live streamers promoting products ranging from books to steaks while blending the commercial activity with educational presentation by talking about philosophy and poetry. This unusual approach to bilingual live streaming soon set the channel apart from existing live streamers, amassing over one million followers in just one day and knocking out a sales increase of RMB 17.8 million (£2.18 million) in just three days.

New Oriental’s resurgence not only marks a successful transformation for the company itself, but also signals hope for other private education institutions in China. When it launched last December in its original format, the Douyin video channel was deemed to be a “last resort” for the company, and the teaching team didn’t see huge progress. For example, a total of 26 live streaming events generated sales of RMB 4.5 million (£551, 792), which is an average of RMB 175,000 (£21,474) per session. For comparison, major live streamers can sell hundreds of millions of RMB of goods during a single live stream. But the turning point came on 9 June when the English experts “accidentally” combined English teaching with selling products.

Many China commentators believe that the key to New Oriental’s success is that they figured out a consumption scenario that is well-suited to the products they are promoting. They promote a wide range of products at “down to earth” prices, a shift from the early days of the channel when they were promoting expensive steaks that were dubbed the “Hermès of agricultural goods.” While continuing its focus on farm-fresh products (a smart strategy that aligns with the Chinese government’s current focus on rural development), the channel now also covers books and snacks, which has broadened the scope of the English-language topics the team can talk about while also creating more avenues for income.

What started as an experiment has born fruit, with the channel seeing consumers who are interested in learning English rushing to join New Oriental to follow their updates. This has resulted in a closer relationship between the channel and its followers, encouraging sales through authenticity and trust. As Dongfang Zhenxuan continues to make a splash in the digital space, New Oriental has decided to strike while the iron is hot, with a new live streaming arm launching another six subsidiaries dedicated to specific categories from cultural and creative products to electronics. This furthers the synergy of the former after-school education service provider and the e-commerce sector.

New Oriental’s journey has the potential to open new doors for China’s struggling private education sector. By identifying products that are compatible with their expertise, tutoring service providers may be able to capitalise on China’s live streaming phenomenon while continuing to deliver educational value in a more playful and engaging way.

Call +44 (0)20 7802 2000 or email enquiries@cbbc.org now to find out how CBBC can further help you identify the best e-commerce platform for your brand and target market in China.

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Live streaming first became a buzzword in China around 2015-2016. During its initial growth period, this new form of social media saw only 300 million active users – a number which has now doubled to over 600 million, with a service sector of over 47,000 multi-channel networks there to service its ever-growing needs.

In recent years, live streaming has become an increasingly popular way to drive sales and conversion for brands. Companies that get it right can benefit greatly from the fast-paced live streaming content ecosystem – as well as China’s ever-growing influencer culture – to engage with consumers in a more authentic way.

In the early days of live streaming, using influencers was seen as a way for brands to promote products and drive traffic to e-commerce platforms where they could further cultivate and sell products to consumers.

However, the unprecedented consumer demand for live streaming has led to a much more integrated approach, with mainstream e-commerce platforms opening live streaming channels or social media platforms embedding e-commerce into their offer. The trend has seen particular growth around platforms driven by user-generated video content.

What kind of customers watch live streams and what are they looking for?

In 2021, 60% of the users of internet live streaming were 27-39 years old and had a relatively even gender balance (47.1% male; 52.9% female). The three key factors that motivate purchase are products on promotion matching consumer needs (63.2%), strong discounts (61.7%) and a charming and persuasive host (56.9%).

What are the key live streaming platforms in China?

There are six categories of live streaming in Chinese digital marketing: e-commerce, gaming, entertainment, sports, B2B and finance/economics. Brands focusing on the B2C market can primarily focus on live streaming e-commerce, which can generally be divided into two types of platforms: social media e-commerce (e.g., Douyin, KuaiShou and Xiaohongshu/RED), and e-commerce with embedded content and social functions (e.g., Taobao, JD.com and Pinduoduo).

Douyin, Kuaishou and Taobao are the three leading platforms with strong propositions that drive most of the attention in the market and will, therefore, be beneficial to British businesses.

Herborist, a premium skincare brand inspired by traditional Chinese medicine, streaming on Douyin

Douyin: The young, impactful platform

Key demographics: Sister app to TikTok, Douyin is a global and vibrant user generated content (UGC) platform with solid growth in follower numbers and young user demographics; people born between 1980 and 1995 form the majority of users. Most users are based in Tier 3 cities in China, but Douyin also shows fast growth in Tier1, new Tier 1 and Tier 4 cities.

Proposition: Douyin is focused on shared interest, presenting top traffic and volume on content but at a lower repurchase rate. The platform sells a mix of products of different qualities and price points, and demonstrates a strong trend of bringing the newest products to the market.

Customer behaviours: 380 million daily active users with an average of 102 minutes of screen time.

Gross merchandise value: RMB 500 Billion (2020)

Famous pop star Jay Chou (second left) live streaming on Kuaishou

Kuaishou: The communal, local experience

Key demographics: Kuaishou has a solid user base in Tier 3-5 cities with a majority female user base aged 31-40. The customers are ‘lower end’ compared to the other two platforms.

Proposition: Kuaishou is focused on building trust and customer relationships, demonstrating diverse and robust traffic and a higher repurchase rate. Mixed quality clothes and bags are the mainstay on Kuaishou.

Customer behaviours: 220 million daily active users with an average of 103 minutes of screen time.

Gross merchandise value: RMB 381 Billion (2020)

One of beauty influencer Li Jiaqi’s live streams on Taobao

Taobao: More options for brand-driven live streaming

Key demographics: Taobao is the largest e-commerce platform in China, with a robust supply chain and a diverse range of products. Taobao has the top end of customers compared to the other two platforms, and demonstrates a substantial user base among customers born between 1980 and 1990, as well as Gen Z consumers.

Proposition: Taobao is focused on exploration, presenting official online stores selling everything from female fashion to electronics to food and drink. Put simply, if you can imagine it, you can find it on Taobao.

Customer behaviours: Taobao’s key channel has 340 million daily active users with an average of 23 mins of screen time. The video content channel has 3.34 million daily active users with an average of 52 minutes’ screen time.

Gross merchandise value: RMB 400 Billion (2020)

How do you choose a host for live streaming events?

Over the past few years, concerns about the authenticity and quality of live streaming have been growing due to bad shopping experiences, low-quality products and the tax avoidance scandals that have tainted famous live streaming hosts. The market is demanding change.

New trends are now emerging: 79.3% of customers are more likely to open a live streaming channel hosted by a brand itself, with 58.1% of customers enjoying live streams led by trusted public figures in conjunction with brands.

79.3% of customers are more likely to open a live streaming channel hosted by a brand itself, with 58.1% of customers enjoying live streams led by trusted public figures in conjunction with brands.

The age of brand-led live streaming is here, where customers request a higher quality of content with a trustworthy voice and genuine high-quality products. This change requires companies to switch their mindset from expecting fast turnover to investing in long-term influence through live streaming channels.

Despite increased brand-driven investment in live streaming, word of mouth is still one of the strongest factors that influence consumer decision making. KOLs (key opinion leaders) and KOCs (key opinion customers) that present a down-to-earth tone of voice are still great mediums to connect brands with customers. Choosing the right figure is becoming extremely crucial since authenticity is critical in creating consumer advocacy.

The other way to drive strong word of mouth referrals is to establish a community and encourage sharing between friends on social networks. A successful example of this is Pinduoduo, a low-price, group purchase e-commerce platform that leverages its partnership with Tencent to tap into the WeChat ecosystem, where a huge volume of friend-based conversations and group chats give it enormous sharing power that perfectly combines word of mouth with a genuine need for the item in question.

What’s next for the Chinese live streaming market?

For many in China, live streaming (and buying products direct from inside live streams) is a form of entertainment these days. The live streaming market in China has already passed its early stage and is moving into a phase of refinement and maturation, where competition becomes stronger and more creativity and investment are required to catch people’s attention. The age in which anyone could become a live stream host is no more, and the new growth point will be at a more corporate, brand-led approach, where customers can enjoy a better experience, better product quality and cutting-edge interaction driven by technology.

Add to the mix the development of 5G, augmented reality, virtual reality and the metaverse, and the future of live stream shopping will only become more dynamic and creative. Watch this space!

Call +44 (0)20 7802 2000 or email enquiries@cbbc.org now to find out how CBBC can further help you identify the best social media platform for your brand and target market in China. 

Founded in 2016 in Edinburgh, RED Unit supports public sector organisations and private businesses to thrive in the Chinese market and the local market in the UK with cultural intelligence and a unique approach, combining innovative visions and a commercial mindset. It is an intercultural strategic and digital agency that brings creativity, quality and clarity to initiate sustainable growth for brands.

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This infographic was created based on insights from China sales and marketing agency 86 Connects.

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