The online operations might not be the most sophisticated—there are no real-time inventory updates or cutting-edge robot assistants available—but China’s fashion retail market is experiencing a new kind of development. Small retailers, hemmed in by the ramifications of COVID-19, have taken to livestreaming encounters with their founders, owners, or employees, who present and model available items and engage in friendly banter with viewers and customers.
These retailers often rely on the tools provided by social media sites such as WeChat, which is the most popular platform for users in China. By streaming through that platform, they can insert a purchase button within their streaming content, as well as see live responses by viewers. The result is a nearly in-person interaction. A good retailer can welcome good customers by name, highlight items that will fit a frequent buyer, or recommend a new accessory to go with an outfit that a viewer purchased the week before.
These developments even have created a new segment of social media influencers, called “stream queens.” These fashion mavens know how to model various pieces so that they look appealing, how to create entertaining content that engages viewers to remain with the stream, and then how to close the sale to interested virtual shoppers.
Many of the livestreams take place in evening or weekend hours, which is convenient for both shoppers and shopkeepers. That is, many people enjoy shopping online during leisure hours. For the retailers, it means that they can keep their physical stores open during regular business hours, then earn more sales after hours, without having to leave the store.
Some retailers thus report a complete reversal in the percentages of sales they earn online versus offline. For example, after the retailer Forest Cabin retrained its sales staff to present its cosmetics through livestreaming videos, it switched from earning an estimated 80 percent of its sales in stores to obtaining that same percentage of its current sales online. Aggregating across all the smaller retailers that maintain a presence on its site, Alibaba indicated that it processed $720 million in sales due to video streams on a single day.
Despite such diverse evidence of the popularity and rapid spread of this new sales channel, some observers predict that it might be unique to China, arguing that Chinese consumers enjoy shopping broadcasts more than U.S. shoppers. But as more and more people find out how enjoyable it can be to interact virtually but personally with stream queens, offering expert fashion insights and ready accessibility, the spread of this novel way to shop also might not be limited by national or cultural borders.
Discussion Questions:
- Do you anticipate that video streaming as a retail sales channel will spread internationally or remain a primarily Chinese consumer phenomenon? Why?
- Beyond fashion, what other sorts of retailers might benefit from this retail sales channel?
Source: Trefor Moss, “Live-Streaming Craze Turns into a Lifeline for China’s Stores,” The Wall Street Journal, July 9, 2020