Welcome to East West Hurricane! 🌪
We update you on the most essential news from Asia in tech, media, and business—the things you need to know that you probably haven’t heard in Western media.
Follow us on Twitter and Instagram! ⚡️
Livestreaming E-Commerce in a Post-Covid World 🤳
There has been a lot of hype around e-commerce livestreaming in China. Since around 2017, people have been using live video apps to directly sell products. The most successful livestreaming influencers or Key Opinion Leaders (KOLs) are perceived as genuine and have built a trusted relationship with their fanbase. The closest thing resembling this in the West is TV infomercials or QVC; but in China, social media platforms like Taobao, Douyin, and Kuaishou allow users to buy products directly in-app during a livestream.
But Covid has triggered a dramatic mass adoption of livestreaming. The Chinese livestreaming industry is now expected to reach $129 Billion by the end of the year (double the amount from 2019); demand for livestreaming hosts has gone up 50% over the last six months; and 62% of the total Chinese internet population is expected to participate in livestreams in 2020. CEOs of several major companies in China have started using livestreaming as a tool to sell products and services. Government agencies have provided subsidies to livestreamers to encourage the local economy, including direct endorsements from President Xi Jingping.
And with this growth, the products sold on livestreams now encompass peaches from rural farmers to real estate from major urban developers to $5.6 Million rocket launch services from famous influencers. I’ve been a huge fan of livestreaming for a while, and you may have seen me writing about this in previous updates or my other newsletter Venn Diagrams. We’re going to see more and more Asian influence in our business, tech, media, and culture (TikTok is a good example of this), and I think e-commerce livestreaming could be the next big marketing channel for your brand.
A Chinese Liquor Brand Bigger than Coca-Cola 🍶
Moutai is China’s most popular alcoholic beverage, a liquor brand named after the town of Moutai, in Guizhou province. Kweichow Moutai, the company that produces the drink, is now larger than Disney, Coca-Cola, and Verizon. With a market cap of $260 Billion, it’s also bigger than the biggest alcohol brands like Diageo, Heineken, SAB Miller, and AB InBev. While many stocks have taken a hit because of the coronavirus, Moutai is an interesting exception that sheds insight on China’s consumer market.
The type of liquor of Moutai is called baijiu, which is a harsh, strong liquor that I have personally had the pleasure of tasting—it’s closely tied to Chinese culture. 95% of Moutai’s sales are from the domestic Chinese market and as China’s economy looks like it’s recovering from the coronavirus at some degree more quickly than the rest of the world, many people have been investing in Moutai as a bellwether for economic recovery. At the same time, major Western alcohol brands are dealing with the lockdown of bars, restaurants, and venues.
China is the world’s biggest consumer population and one of the fastest growing. In terms of practical application, that means a huge ‘domestic’ brand in China can have orders of magnitude more sales than a well known international brand. If you are an Italian shampoo company, an American clothing company, a Brazilian drinks company; from a numbers perspective—your biggest potential customer base is China.
Snapchat Announces Singapore Office 👻
Snap Inc., the official name of the parent company that created Snapchat, has announced that they will be opening up a Singapore office later this year. The person leading the office is Anubhav Nayyar, the former head of Asia-Pacific for messaging app Viber. This signals the increased importance of the Asian market, and perhaps a strategic move considering challenges from the coronavirus.
This really marks a shift in Snap’s Asia strategy. Just a few years ago, a lot of press was criticising Snap for not focusing on Asia early enough. At the same time, Snap has previously faced fierce competition from local Asian apps, including Korean clone Snow. And there has always been a classic chicken or egg problem of whether a Western tech company should invest in Asia to increase its user base, or wait until the user base reaches a certain size before deciding to invest. There must be something new that triggered the Snap leadership to think that now is the right time. We can also look to the fact that Asia is becoming an even more attractive growth market for everyone. For example, Disney+ is already moving quickly to open up a Singapore office this year.
Update #15 - Livestreaming, Liquor, and Snapchat Singapore