Retail goes live(stream)

WHEN the pandemic left getai singer Wang Lei jobless last year, he unearthed a gold mine on social media. Armed with a colourful personality and expletive-laden humour, the 59-year-old discovered that he could hawk just about anything over Facebook Live: durians, crab meat and even Mercedes-Benz cars.

"I was unemployed when the circuit breaker started; there was no more getai and filming had stopped. At first, I just chatted and sang over livestream. My friend, who is a fisherman, saw it and suggested, why don't you sell something over livestream? I started with selling fish, and now, many well-known Singapore brands have come to work with me," he tells The Business Times in Mandarin.

One of these brands is local dealership CarTimes Group, which engaged Mr Wang and local filmmaker Jack Neo for a promotion involving two models: the everyday Toyota Sienta Hybrid and the higher-tier Mercedes-Benz GLC300. Through a three-hour livestream session with the stars, CarTimes received enquiries from over 30 interested parties and subsequently closed six deals.

"We were actually very surprised that we were able to generate any sales at all through livestreaming, as we felt that with cars being such a big-ticket item, people might not be so receptive towards just buying through Facebook Live," says Benjamin Loo, CarTimes' head of operations.

The unexpected success enjoyed by Mr Wang and CarTimes is not just any Internet fad, but part of a larger trend taking the retail world by storm: livestream e-commerce. This technology is set to make e-commerce even more sticky with consumers, accelerating the disruption of traditional retail.

Over in China, the market for livestream e-commerce is expected to have hit 1.05 trillion yuan (S$214 billion) in 2020, according to an October report by KPMG and AliResearch. They predict that the market will near-double to 2 trillion yuan in 2021, with a penetration rate of 14.3 per cent.

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The hype is spilling over into South-east Asia. According to a poll by AI startup iKala, consumers in Vietnam and the Philippines frequently shopped via livestream sales in the first half of 2020, with a median of about three days between purchases. This figure stood at 3.9 days for Thai consumers and 5.6 days for those in Singapore.

Likewise, media monitoring firm Meltwater found that online news and social media conversations around livestreams and the gamification of online shopping in South-east Asia rose by over 22 times in 2020, as compared to the previous year.

Most of these conversations happened after Covid-19 lockdowns went into effect, which "likely spurred people to explore new kinds of online shopping experiences", says Mimrah Mahmood, senior director and partner at Meltwater.

"With a growing youth population and one of the fastest-growing smartphone penetration rates in the world, South-east Asia presents a prime opportunity for retailers to tap on livestream," says Mr Mahmood.

The opportunity is so attractive that media maven Mr Neo, who is behind the Ah Boys to Men franchise, has jumped on board. As the chief executive of Asia Momentum Media (AMM), a firm specialising in Over The Top media, he plans to focus more on livestreaming as a core business direction.

"Many good (livestream) sellers are in China; they can sell more expensive items such as houses and cars. I feel that this is an upcoming trend. Singaporeans may not feel it yet, (but) more and more people are doing it gradually," Mr Neo tells BT.

"Perhaps a lot of people are still trying to figure out the livestream market, but I feel that this is a technology we need to master quickly."

The 'live' factor

A big reason for the popularity of livestream e-commerce is that it injects an element of trust previously lacking in the online shopping experience. Many sellers who have been breakout hits are able to project authenticity, such as "S-hook lady" Lerine Yeo, who went viral for her ability to hardsell the simple S-hook.

Similarly, one has to look no further than the Facebook pages of Lian Huat Seafood and Lian Huat Marketplace to see the appeal of livestream. The wholesaler's daily streams often feature Lian Huat's 37-year-old managing director Max Kee, who has captured many hearts with his animated speech and candour.

Mr Kee was a relatively early entrant into livestream e-commerce, having dabbled in the medium back in late 2018. He was inspired by his younger brother, who succeeded with livestream sales of seafood in Malaysia.

Speaking to BT in rapid-fire Mandarin at his warehouse, Mr Kee expounds on the benefits of going live. He picks up a bottle of soya milk from a table of food samples.

"Today if you make a print advertisement, people may see it, but they may not necessarily buy the product. With livestream, you can really emphasise that this soya milk is not too sweet; it's really good to drink."

He adds with dramatic flourish: "Wah ni he liao, hui fei, fei, fei (once you drink, you will fly)."

Compared to brick-and-mortar sales, livestream also comes with lower marketing costs. Mr Kee estimates that his net profit margin from livestream sales is about 8 per cent. Given the wider reach of social media, tapping on livestream then becomes a no-brainer.

"With the traditional way, you just sit at the counter and customers come to you. But using the phone, I can have 1,000 people looking at me," he muses.

"Livestream fills the gap between e-commerce and direct selling," agrees Tan Yilin, owner of online business Za Huo Dian, which sells home storage and organisation products. Ms Tan has experimented with a few livestream sales.

"Products with more complicated functions are better explained and demonstrated by a person, rather than text and images or videos online. This is because livestream is two-way, meaning a seller can instantly answer questions that viewers ask."

Like Mr Kee and Ms Tan, Manisha Seewal, chief marketing officer of Carro, attests to the attractiveness of livestream sales.

The used car platform experimented with the technique last November, teaming up with influencer firm Gushcloud to sell cars over livestream. Carro successfully sold a Toyota Wish through the session.

"The energy and being able to connect with the community is what sets (livestream e-commerce) apart from all the other channels, like Facebook and Google ads. We know that not everyone is going to buy a car (online), but we can also educate them about our products and services," she says.

"When people buy cars, they take recommendations from family and friends; the word-of-mouth effect is strong. Livestream as a platform offers great word-of-mouth."

More than meets the eye

While livestream sellers may make their craft look effortless, the endeavour is anything but. One of the most challenging aspects lies in finding talent with quick comebacks to even quirky requests.

As Mr Wang muses: "Answering questions from online viewers, such as how many feet a prawn has, and whether the fish is male or female, is a challenge."

With such a tall order, the talent pool of livestream sellers is limited. Finding the right people is one of the biggest challenges of this new trend, agrees a spokesperson for 17LIVE, which operates live-selling app HandsUP in Taiwan and Japan.

"Sales is a key skill, (with the) need to show personal characteristics and charming talk. It's necessary to invest much time to develop potential livestreamers who can quickly attract people to purchase," she says.

The other key difficulty is in logistics. While it is easy to hawk thousands of goods in a matter of hours through livestream, "you have to ensure the backend can keep up with front sales", Mr Kee notes. His team has to monitor inventory closely to avoid the dreaded "freezer burst" scenario of excess stock, he says.

The complexity of delivering fresh goods also means working a grueling schedule, often into the wee hours of the morning. Even a small hiccup, such as a wrong order by a customer, can be costly with fresh seafood.

The talent and logistics hurdles may have stood in the way of greater adoption of livestream sales in South-east Asia thus far. But some firms are beginning to innovate solutions.

Content creator SGAG, for instance, has found a business opportunity in filling the talent gap. This week, SGAG announced that it has entered into a livestream partnership with Lazada, in a new initiative called "KTHXBUY" - a play on SGAG's "KTHXBYE" catchphrase.

"There is a lot of potential in this space that we are really excited to tap on, because we are in the business of creating entertainment, and that's a large part of what livestream e-commerce is about," says Chua Yuxuan, head of e-commerce and partnerships at SGAG.

"A lot of our videos thus far have been pre-recorded, edited and scheduled online for passive consumption… I think that going forward, it'll be very interesting for us to push the boundaries on how to bring that level of entertainment to a live audience."

The logistics challenges of livestream sales are harder to solve, but industrial landlord LHN Group is looking into the matter.

Last year, LHN ran a survey among users of its Work+Store storage facilities, and found that many were engaging in livestream selling as part of their e-commerce businesses. This has created a demand for facilities such as a shared photography studio and last-mile logistics.

LHN has been rethinking how to design its spaces to cater to these needs, its general manager Danny Wong told BT. For a start, it plans to implement more basic infrastructure for those engaging in livestream sales, such as packing and repacking facilities and robotics-enabled warehousing for users with small quantities of inventory.

Mr Wong says: "We have seen how business has evolved from traditional to online, and the importance of livestreaming to these smaller e-commerce businesses. It's important that we continue to develop our (storage) spaces as well to meet these needs, providing additional value to our tenants and helping them keep costs down."

Hype or here to stay?

All the excitement around livestream e-commerce naturally raises the question: Is this just pandemic-fuelled Internet hype? Is it actually worth investing so much resources into something that may fade away with Covid-19?

Industry players who spoke to BT are confident that livestream e-commerce in South-east Asia is only set to grow from here.

One such player is e-commerce firm Lazada. LazLive, the in-app feature of Lazada optimised for livestream sales, has seen a boom in activity amid the pandemic. The overall gross merchandise value (GMV) generated by LazLive jumped 17 times year-on-year in June 2020, said Lazada's chief product officer Raymond Yang.

This growth has continued even as Covid-19 restrictions ease, Mr Yang highlights. In November, the number of LazLive viewers in Singapore was almost double that of June, signalling sustained engagement.

The top categories of products on LazLive in Singapore have been health and beauty, electronics and fashion. "However, as more consumers become used to making online purchases, the popularity of categories have diversified. Lazada has witnessed livestreams for food products, groceries, and general merchandise gain momentum in the region," Mr Yang says.

Lazada is also expanding to sellers in more remote areas. Mr Yang cites how the platform enabled Ngoc Ha, a teacher-turned-livestream seller in Vietnam, to live-sell leather shoes sourced from local villages.

Like Lazada, e-commerce platform Shopee is bullish on livestream sales. The pandemic similarly brought a surge of activity to its in-app feature Shopee Live, with the total hours of livestreams watched more than quadrupling between January and October 2020.

"Across the region, during the peak sales season in November and December 2020, the number of sellers and brands livestreaming on Shopee Live tripled. They also streamed six times more often, compared to the same period in 2019," said Shopee Singapore's head of marketing, Tiger Wang.

Other digital firms are also looking to cash in on the growth potential of livestream e-commerce in this region.

For instance, Hong Kong-based e-commerce enabler Shopline wants to help localise livestream e-commerce for the fragmented South-east Asian market, says its general manager Jeff Lim. Shopline is backed by Joyy, the owner of livestreaming service Bigo.

"For example, in Singapore, consumers prefer a self-checkout process, while in Vietnam, it is the complete opposite, they actually prefer an assisted checkout. There is no one-size-fits-all solution in South-east Asia," he says.

Social media giant Twitter is also active in this space. Arvinder Gujral, managing director for Twitter in South-east Asia, says: "Recognising the consumption habits of consumers, we work with premium video content collaborators and brands to bring hundreds of hours of livestream to people on Twitter.

He adds: "It is clear that the rule book has changed. As both circumstances and customers themselves evolve, we need to be wherever our customers are at."

Experts are slightly more cautious on their outlook. South-east Asia will be a challenging market, but there is plenty of potential, says Joongshik Wang, EY-Parthenon Asean leader.

"It's a very fragmented market with different cultures. While in China there can be one KOL (Key Opinion Leader) with a billion subscribers, in this region, there are no KOLs in live commerce (with that scale). The key factor is will there be a KOL platform created in this region? Depending on that driver, live commerce may grow exponentially in this region," he says.

Mr Mahmood of Meltwater believes that the trend may be slow to pick up, but steady once it does. "Livestream selling offers real-time interaction and an immersive shopping experience, which checks the right boxes. Although it may take some time before the format becomes as mainstream in South-east Asia as it is in China, we can certainly say that the region holds great promise for this," he says.

For his part, "fish-selling bro" Mr Wang is all geared up to expand his reign on social media. He believes that livestream selling is set to continue even past the pandemic-fuelled hype, for at least the next three years.

Asked about the benefits of livestream e-commerce, he delivers a clear-cut answer: "Zhuan qian la! (Make money)."

With translation assistance from Vivien Ang