Why open a store? Chinese merchants go livestreaming instead

HONG KONG (AP) — At the height of China’s coronavirus outbreak, the skincare-products maker Forest Cabin closed more than half of its 300 stores across the nation as shoppers stayed home. With sales plunging, founder Sun Laichun decided it was time to reach his customers more directly.

“We knew it was time for us to focus on an online strategy to survive,” Sun said. But the company didn’t launch an online ad blitz or announce big giveaways. Instead, it trained hundreds of its salespeople to begin hosting live video streams where viewers could get skincare tips and buy products without ever cutting away from the online patter. Within just a month, Sun said, Forest Cabin’s February sales were up by 20% compared to a year earlier, despite a plunge in store sales.

These days, shoppers are making their way back to once deserted malls and shops as China emerges from its long winter of coronavirus shutdowns. But so many of the region's retailers ended up embracing livestreaming that they've kicked off a new boom in Chinese “shoppertainment” that lets retailers interact with distant customers in real time.

Some of China’s largest e-commerce companies are betting big on livestreaming. Alibaba’s Taobao Live platform saw more than a sevenfold increase in first-time business customers in February, while Pinduoduo’s livestreaming sessions grew fivefold from February to March. Overall, livestreaming e-commerce revenue will likely double this year to 961 billion yuan ($136 billion), according to Chinese market intelligence firm iiMedia Research.

Livestreaming has also created a profitable new niche for existing livestream stars who are now reaping hefty commissions as their shows draw millions of viewers. The trend might even suggest alternatives for battered retailers in the U.S. and Europe as those regions...