Shopping with streaming celebrities tipped as new China trend

An online celebrity broadcasts shopping through her mobile phone at a shopping mall on June 24, 2016 in Hangzhou, Zhejiang province. [Photo/IC]

China's internet celebrities using live streaming to promote and advertise are estimated to create a market valued at 58 billion yuan ($8.7 billion) this year, according to a media-backed financial statistic center.

According to a report released by CBNData, Vine-like short videos or live streaming programs embedded on online shopping sites and hosted by internet celebrities, have attracted attention from customers and investors.

"This year's market potentials have even surpassed the country's booming box office sales generated last year," the report said. "Comparing with the self-employed content creators who make profits from online advertisements, e-commerce is one of the major platforms for further commercial development of the internet celebrities."

The report said social media platforms such as the Twitter-equivalent Sina Weibo or Youku Tudou, the Chinese version of YouTube, have collaborated with e-commerce platforms such as the Alibaba-backed taobao.com to establish a complete commercial closed-loop.

Taking female apparel as an example, the business ecosystem of online sales driven by internet celebrities is the same as the traditional fast fashion industry, including design, marketing and mass production.

The difference is the followers of internet celebrities will be generated as core consumption power and by interacting with the fans, the celebrities will hear the demands of their potential customers more quickly and more efficiently, and save the cost and time for marketing and advertizing.

According to the report, 90 percent of the customers of the internet celebrities' online stores are females, as the early promoting products are mainly focused on the apparel and cosmetics industries.

However, after the consumption trend expands into food, outdoor sports and computer peripherals, more male customers are expected to join the group.

"Sales of liquors, kitchen appliance and bicycle riding equipment increased decades or even hundreds of times than the previous year in 2015," the report said.

Lyu Ming, chief analyst of Guotai Junan Securities, said a clothing industry which embeds social e-commerce into its business will be the first sector that benefits from internet celebrities' economy, and the latter has created a market with a promising development potential.

Lyu pointed out that people born after the 1990s were different from previous consumers as their social relationship was built on the internet, based on interests and tastes, and compared with branding and advertising, the new consumers are keen on relying on the shopping suggestions from internet opinion leaders, which allows the internet celebrities to make profits through their social relationships with fans.

"Half of the revenue of last year's female apparel sold on Taobao, approcimately 150 billion yuan ($22.4 billion) is contributed by internet celebrities," Lyu said.

Moreover, the tourism industry has also benefited as more travel websites presented social interactive functions, relying on internet celebrities to stimulate click rates from their fans.

The report also revealed young generations aged between 23 to 28 years were the major customers, accounting for 49 percent of the entire group.

Geographically, Shanghai, Beijing and Hangzhou are the top three cities that reserved the largest number of streaming celebrity fans and potential buyers. Half of the products promoted by the celebrities have been purchased by people living in second tier cities, and provinces such as Sichuan and Hubei ranked at the top for the emerging idolaters.