China

The real star of China's New Year Gala: livestreaming ecommerce

China is leading the way on combining ecommerce with live video, and it's become a powerful economic tool for Beijing.

The real star of China's New Year Gala: livestreaming ecommerce

For any Chinese celebrity, an invitation to appear on the annual televised New Year's Gala is a sign of state approval. But this year, the event also blessed an entire new industry: livestreaming ecommerce.

In 2021, the star of the Gala — viewed by over a billion people each year — was 36-year-old Huang Wei, known as Viya by the millions of fans who tune in to her ecommerce livestreams every day. She's known as the livestream queen of China, and her selection signals that China is eager to showcase itself as the world leader in ecommerce tech while also using the influence of new stars like her to manage its own economy.

Livestreaming ecommerce took off in China in 2020, when the COVID-19 lockdown gave everyone more screen time while effectively forcing them to buy online. It's now on the edge of becoming a trillion-RMB business, equal to about $150 billion. It's fast become both an international poster child for Chinese technological innovation and a key policy tool for Beijing, helping juice domestic consumption and bring more money to China's farmers, who number around 550 million.

Top influencers in China can sell anything on livestreams. (Viya literally sold a rocket launch service last year.) But seemingly everyone has reserved some screen time for China's rural governments to advertise their local specialties — mostly food. Kuaishou, which completed a $5 billion IPO in Hong Kong earlier this month, claims to have helped 5 million sellers from China's poorest villages market nearly $3 billion worth of agriculture products in 2019.

China is leading the way by fusing social influence and selling; in the U.S., the two have yet to join. But now, ecommerce platforms are racing to catch up; Amazon Live was launched in late 2019, while Walmart tested the waters with a one-hour live shopping event on TikTok in December. Analysts say it's only a matter of time before livestreaming becomes a mainstream marketing tool outside of China too.

On Feb. 11, Chinese New Year's eve, Viya appeared in a sketch at the Gala, hosted by CCTV, China's powerful state broadcaster. Before that, she livestreamed for four hours from a CCTV studio. Renowned news anchors and celebrity guests shuffled in and out to help sell products ranging from snacks to red wine to luxury cosmetics to kitchen appliances. The products were heavily discounted, and many sold out within seconds. The show received over 20 million views on shopping platform Taobao.

Viya's Gala-themed livestream wasn't all that different from her usual fare, but she included more products offering "relief for farmers." These are usually specialty foods from rural localities, produced via public-private partnerships. Viya kicked off her Gala show selling a novel snack made with persimmons and walnuts, a specialty from Fuping, Shaanxi, a town of about 800,000 people in western China that also happened to be the birthplace of Xi Jinping's father.

Viya has long been a government favorite, particularly because she's dedicated dozens of shows to promoting local agricultural products. Those shows don't make much money for Viya or the platform that hosts her — she's claimed she takes no commission from sellers in these cases — but they help boost consumption for goods produced in China's poorest places. In June 2020, Viya undertook a nationwide tour where she "discovered and recommended" local produce. Everywhere she went, she was accompanied by provincial party officials, local government representatives and ordinary farmers, who sometimes become livestream influencers themselves.

It's all part of the Communist Party's plan. The CCP said its major goal for 2020 was to "eradicate extreme poverty" in China, which means no one has an annual income less than about $600 and every village has access to basic infrastructure. On Dec. 3, the state said it had met the target — conveniently in time for the CCP's 100th anniversary.

Like every other new technology that rose to popularity in China — even those with enthusiastic state backing — livestream ecommerce still needs to survive intensifying regulatory scrutiny. In November 2020, the National Radio and Television Administration announced it would tighten regulation, increasing the number of staff censors employed by platforms to one per 50 livestream channels. The administration was clear it wants livestreaming to serve state ends like poverty alleviation and "industrial upgrading."

As long as influencers like Viya can maintain the balancing act between private gain and the government's aspirations, livestreaming ecommerce is here to stay. Expect to see more shopping livestreams like the one on New Year's Eve, where it's hard to distinguish commercial events from Party diktat. This might be the first time a Taobao influencer stood on the stage of China's New Year Gala, but it's probably not the last.

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