“It was very difficult to find clothes with this color,” she says as she stands next to a closet at her home in Kharkiv, Ukraine, holding a pair of lavender trousers. “This color is fashionable and very beautiful. As you can see, I like it very much.”
This is no idle chat between friends. Avalon is hard at work on a sales drive for a clothes merchant on AliExpress, the international retail arm of Chinese conglomerate Alibaba Group Holding. During the 90-minute streaming event, thousands of Russian-speaking shoppers flocked to her channel, chatting with her and viewing a host of products — the first of 25 such livestreamings within a few days as AliExpress kicked off its mid-year sales gala.
“I will probably be too busy to sleep,” Avalon told the Nikkei Asian Review.
The 37-year-old is part of Alibaba’s intention to recruit a vast multinational army of sales “influencers” — 1 million strong by 2023 — to further its global ambitions. The group has captivated Chinese consumers with a blend of online retail and social engagement — but now has to learn how to transfer that recipe and replicate its multibillion-dollar domestic success in a string of overseas markets that pose different challenges.
“It is a natural extension of [Alibaba’s] domestic strategy,” said Jeffrey Towson, a former professor of investment specializing in China tech at Peking University. For the Chinese online marketplace, which lacks natural strength in acquiring overseas buyers, Towson said the innovative way of shopping could give Alibaba the first-mover advantage and help create an opening in international markets.
So far, sales from Alibaba’s international commerce segment only account for a single-digit share of its total revenue, leaving it short of the goal set by founder Jack Ma of deriving half of its income from outside China by 2025.
Analysts attribute the lagging performance to lack of awareness of Alibaba’s brand as well as consumer concerns over product quality. But Alibaba believes influencers such as Avalon can help overcome those barriers, using a microphone and camera.
“Livestreaming-based ecommerce helps build trust,” said Yuan Yuan, head of operations for AliExpress. “When you watch a livestreaming, you can directly interact with the seller and gain a better understanding of the product,” she said.
Meanwhile, the marriage between streaming and ecommerce also helps win over younger Gen-Z shoppers, who are more likely to spend time scrolling streaming apps.
Selling via livestreaming is in its infancy in the West, but such a concept has long been proven in China. Last year, roughly 433.8 billion yuan ($61.3 billion) worth of products were sold via livestreaming in the country, according to Beijing-based consultancy iiMedia Research.
For many in China, influencers are friends that they have never met. As the online stars share their everyday lives on social media, they form an emotional bond with viewers. The trust gained allows influencers to have a say on Chinese consumers’ decision-making process, guiding them in what to purchase or where to travel.
Other Chinese companies such as JD.com and Pinduoduo are also embracing livestreaming to boost sales — but so far only Alibaba has tried the technique in international markets.
Meanwhile global tech firms are taking notes. Social media heavyweight Facebook has added online stores on its platform. E-commerce giant Amazon recently announced a partnership with fashion reality show “Project Runway,” enabling users to enjoy the show on its retail site while placing an order. But Alibaba believes it has the upper hand in spreading the practice on a global scale.
“We are standing on the shoulders of the Chinese internet sector,” Yuan said. Since almost all industries in China have embraced livestreaming, the extensive experience and expertise gained from the domestic market could point the way for influencers abroad, she said.
The company aims to convert 100,000 influencers into sales ambassadors this year, increasing to 1 million by 2023. To make that happen, it recently launched a platform connecting its merchants with influencers from social media such as YouTube and Instagram. AliExpress has also teamed up with local marketing agencies and pledged to share the secret of making a sale via livestreaming.
Barbara Soltysinska, a cofounder of Warsaw-based marketing agency indaHash, is among those who have tested the water. Impressed by the opportunities in the livestreaming industry in China, Soltysinska’s agency has partnered with AliExpress to host hundreds of live shows targeting European shoppers since late last year.
The Chinese e-commerce giant has provided free training to help influencers get on board. At least once a month, AliExpress executives run online workshops with Soltysinska’s team, reviewing livestreaming clips and giving feedback on how to improve. That, in turn, gives AliExpress more customers. During a two-day sales festival in November, the influencers helped acquire more than 2,000 new shoppers.
But it remains to be seen whether such a success story is an isolated case or the beginning of an emerging trend. Market observers say that, unlike China where 1.4 billion people speak the same language and share similar user behaviors, Europe — a priority for AliExpress — is a way more fragmented market with multiple languages and cultures, making it difficult to conquer.
“The [European] market is not educated to buy through livestreaming,” said Fabian Ouwehand, co-founder of Uplab, which works with influencers to run marketing campaigns in the Netherlands. “People here just watch livestreaming for fun. If you want to get livestreamers involved [with online sales], it is really tough,” he said.
While cost-conscious Chinese customers will happily sit through a 30-minute streaming to hunt for bargains, fewer Europeans would prioritize discounted products over their time, Ouwehand said.
Consumer preference is a potential barrier as “Chinese consumers and Korean consumers are crazy about livestreaming … but you could see markets that don’t like that,” Towson said.
In addition, “nobody spends as much time on their phone as Chinese and Asian consumers do, and other countries are less enthusiastic about adopting new things,” he said. “So the uptake would be much slower.”
Yuan of AliExpress admitted that it would take “at least two years” to educate overseas shoppers. But she is confident that the practice will eventually take off.
“Livestreaming ecommerce is similar to TV shopping shows,” she said, referring to a popular means of shopping with a decades-long history in Europe. In fact, livestreaming, according to Yuan, seems to be a better match for consumers who have grown up in a fragmented media landscape and demand a more interactive shopping experience.
In Russia, one of AliExpress’s targeted markets, 20-year-old marketing student Anna Akimova said she has never purchased from a livestreaming show but is eager to give it a go.
“Streaming would make such content more trustworthy,” she said. “If you demonstrate a product during a livestream and it breaks, there is nothing you can do about it. All the shortfalls are on display and that is more honest for the consumer.”
Avalon, the customer-turned-influencer for AliExpress in Ukraine, agrees. In fact, she believes the ability to show the product’s quality in front of the camera is the allure of livestreaming ecommerce.
Once, questioned by viewers about a Bluetooth speaker’s water resistance, she tested it on the spot by throwing the gadget into a bucket of water. On another occasion Avalon used a charging cable to pull a vehicle, demonstrating the cable maker’s claim that the product was strong enough to bear 100kg. (The cable did pass the 100kg test but failed to move the 1,000kg car.)
Those fun moments as well as real-time interaction have helped Avalon draw viewers, with half a million people watching her show on its best day. Some audiences even stayed to watch streaming of the same product again and again.
“People do not come to the streaming because they love shopping, but because they love interacting,” she said. “I think livestreaming is definitely becoming a modern way of shopping.”