Influencers ignite online consumer goods frenzy

As the holder of the Guinness record for "the most lipstick applications to models in 30 seconds, the 29-year-old Austin Li Jiaqi, made himself known as the "Lipstick King" - an icon of livestream e-commerce in mainland China.

Li became a household name after showcasing his influence on Taobao Live, with groundbreaking sales of 15,000 lipsticks in just five minutes. He also collaborated with Alibaba's (9988) Jack Ma Yun to livestream to entertain, during the Singles' Day Sales in 2018, and of course, he completely outplayed the tech tycoon.

Two years later, he alone generated sales of 21.9 billion yuan (HK$26.2 billion) on Taobao Live, the second among all livestreamers on the platform, data from iiMedia show.

The unprecedented success of Li not only brought him a projected worth of US$15 billion (HK$116.5 billion) by 2023, according to Times Magazine, but also unleashed the potential of Meione, the Shanghai-based influencer agency behind the man, to prepare for an initial public offering.

Bloomberg reported that Meione was looking to hire a chief financial officer ahead of a possible IPO in the United States. Another agency Qianxun, the incubator of mainland's number one influencer Viya backed by Jack Ma's Yunfeng Capital, was also planning to list overseas.

From lipsticks to rockets, everything can be sold on the livestream ecommerce, and can be sold out rapidly.

Viya, the Taobao top livestream seller, is known for selling out a Kuaizhou-1A rocket launch service - which can customize the rocket's appearance, and command the launch in person at the spaceport - by the state-owned China Aerospace Science and Industry Corporation, for around 40 million yuan (HK$48 million), and attracted over 800 potential buyers.

Data from iiMedia shed light on the explosive growth of sales of livestream e-commerce in the mainland. From only 19 billion yuan in 2017 to a fifty-fold increase of 961 billion yuan last year, the market is still expanding with expected sales of 1.2 trillion yuan (HK$1.44 trillion) this year.

The two influencers, incubated on Taobao Live, have contributed over 53 billion yuan sales to the platform in 2020, which is exceeding the annual sales of the majority of mainland listed companies, according to Choice, a financial data platform under East Money.

Meione, the managing company of Li, wants to duplicate another success of Li by also separating his assistant, Fu Peng, to be another influencer targeting other social media platforms. Fu's first live broadcast had 4 million views and sales volume was 3.69 million yuan, way behind Li.

Focusing more on the beauty aspect, the development of Li has also driven up Chinese cosmetics, including brands like Florasis and Perfect Diary, and has changed the marketing pattern of the cosmetics industry.

Back in early 2019, Florasis was only one of the small domestic beauty brands on Tmall - another e-commerce platform for big-name brands. However, after its loose powder landed in Li's Taobao live in March that year, Florasis' sales have surged and became the number one in gross merchandise volume (GMV) among domestic beauty brands, with 235 million yuan, on Tmall's June 18 sales (the largest mid-year shopping promotion in China by transaction volume) in 2020. The transformation happened in 16 months.

Li has been a key part of the ultra-high growth of Florasis.

In 2020, more than 30 percent of Florasis' customer inflow was based on Li's livestream on Taobao and TikTok. Especially on the Singles' Day and June 18 Sales, the GMV contributed by Li's live broadcast accounted for more than 60 percent of Florasis' total GMV.

The cooperation between those cosmetic brands and Lipstick King is unique from the common promotion model, in which, Li has even got involved in the production of such cosmetics.

Before manufacturing a new product, Li also participates in the design process. The samples can only be produced after Li's approval. When a product is about to go on sale, Li will preview it in the live broadcast room.

Besides his involvement in product development, Li would share some stories in his live broadcast, or publish some behind-the-scenes clips on his TikTok or Weibo account. When the product is launched, Li's followers are also granted discounts and extra giveaways.

Over-reliance on promotions by influencers was also seen as the products recommended by Li can achieve monthly sales of 200,000 units at most. But for those that were not presented in the livestream, their monthly sales units were only about 1,000.

The success of Li has been extended to his dog, Never, which has also been split into separate intellectual property and became another influencer.

Perfect Diary, the cosmetic brand, has got Li's dog printed on an eyeshadow palette. The crossover has also achieved huge success. CBNData, a commercial data platform under Yicai, showed that 160,000 of the palettes sold out in one second in pre-sales, and the frenzy has also driven up monthly sales to 450,000 units.

Li's dog also first participated in the June 18 Sales last year and contributed over 30 million yuan sales, beating 90 percent of the Taobao livestreamers.

International brands also followed in the steps of their counterparts in the mainland. Ranging from the US electric car maker Tesla, to consumer goods producer Procter & Gamble, has banked on Viya to introduce them to the mainland market.

On the other hand, more brands have been training their sales staff to livestream since 2020 as the pandemic spread in the mainland. Ninety percent of the biggest brands had the so-called "brand-run livestreams" on Tmall, the Taobao-run news platform Tao Ranking reported last year.

Overseas cosmetics brands are deemed to be the biggest winners of the competition in the mainland e-market. In the June 18 Shopping Festival this year, L'Oreal, Estee Lauder and Lancome were the top three in terms of total sales.