“Live Commerce: the Next Big Thing in Europe” is an online event looking into the latest trends in live commerce in China and its recent developments in Europe. In view of the webinar – scheduled for 27 October – Claudia Vernotti, Director of ChinaEU, spoke with Leah Wang, Chief Marketing Officer of China’s digital native new retail company Xinxuan Group about the current Double Eleven shopping festival, the appeal of live commerce among Chinese online shopping users, Xinxuan’s supply chain ecosystem and the company’s plans to work with more European players.
Claudia: Leah, the Double 11 festival, China’s biggest annual online shopping spree, is currently under way. Last year, Xinxuan Group’s CEO Xin Youzhi – also known as Xinba on social media – said that a single night’s live broadcast was the equivalent to a year’s sales at a large shopping mall. What are your expectations for this year’s event?
Leah: Double 11 is for us one of the busiest periods of the year. Between October 20th and November 11th, we are planning to host nearly 100 live broadcasts, with thousands of products selected from a broad range of categories including beauty care products and digital home appliances. In the 2019 edition, Xinxuan’s founder Xin Youzhi made more than 400 million yuan (around 54 million EUR) in sales in only day’s shopping event. Last year, we hit a shipping record of nearly 23 million packages during the Double 11; on average, the number of our daily shipments is 800,000! Dandan, one of our top KOLs on Kuaishou, ranked China’s Top 4 KOLs with a yearly sales record of 8 billion yuan in 2020, right after renowned Li Jiaqi, Viya and Xin Youzhi. In fact, Dandan has already sold products to the tune of 900 million yuan (121 million EUR) on the opening day of this year’s festival. She achieved all this only after two years of training and live sales practice at Xinxuan.
Claudia: Where did the idea to set up Xinxuan come from and what is it about your company that distinguishes it from other digital retail companies?
Leah: Xinxuan Group was founded in 2017 and the original idea came from Xinba’s successful sales of ‘M password’ in the early stage of live commerce. In August 2018, he kicked off his first one-hour live broadcast in which he sold 120,000 yuan (15,700 EUR) of the main product line of ‘M password. He then understood that to achieve long-term development in the live commerce industry, it was necessary to build a strong supply chain system.
Today, we have an integrated and embedded supply chain which is at the core of our business model. We have four subsidiaries, each in charge of different segments of the business of Xinxuan: product selection and control, business cooperation, training and management of KOLs and incubation of Xinxuan’s self-created brands. The Group has integrated the resources of more than 3,000 high-standard factories and used the C2M (consumer-to-manufacturer) model to arrange production. We cooperate with factories to customize and develop new products tailored to the consumer’s needs.
So far, Xinxuan has worked with over 5000 Chinese and international brands and incubated 11 influencers who each recorded sales of more than RMB 100 million (over 13 million EUR) per live session.
Claudia: Why is Live Commerce so popular in China? What is it that shoppers and consumers like about it so much?
Leah: What consumers really like about live commerce is that they can watch live shows and get the same experience of going physically to a shopping mall. During the live shows (or streams), they get to watch hosts display products online in real time and can interact with the hosts and ask questions about certain products they like. It’s this fusion of online shopping and live, interactive entertainment which shoppers enjoy most. Thanks to the popularity of e-payment systems and the full penetration and coverage of 4G networks and the large-scale commercial use of 5G technology in China, shoppers in China can enjoy a smooth live shopping experience, wherever they are at any time.
Added to this is the fact that China has a huge consumer market, and users have become accustomed to the habit of online shopping. Moreover, short videos are very popular in China, which has further accelerated the trend of live commerce. As of December 2020, the number of short video users in China was 873 million, an increase of 225 million from the end of 2018.
Claudia: Do you have any ambitions to expand into the European market?
Leah: In the future, we hope to work with more European brands to help them increase their brand awareness and sales via live commerce in China. At the same time, we believe that we can bring new value in the European e-commerce market by helping local streamers improve their performance and build trust-based relationships with their viewers. For instance, we are considering to set up an academy together with local partners to offer specialized trainings in a systematic way and adapting to the shopping habits of local consumers, which cannot be compared to those of Chinese livestreaming users.