The Instability Of China’s Top Livestreamers Could Be A Blessing In Disguise

Over the last year, some of China’s most influential livestreamers went silent, only to reappear in recent months. But this might be a good thing for labels in the long run. 

On June 3, Austin Li, one of the biggest livestreamers in China — also known as the “Lipstick King” — was suddenly cut off after appearing to hold up a tank-shaped ice-cream dessert. Shortly after he would put it down to “technical difficulties.” But his followers suspected that it was the potential reference to the June 4 anniversary of Tiananmen Square that triggered government censors. The account then remained inactive with no posts, streams, or social media — until his very recent return.

And only at the end of last year, Viya, the “Livestreaming Queen,” was fined $210.16 million (1.34 billion RMB) for tax evasion. The famous Chinese influencer is accused of hiding her personal income and other financial cases between 2019 and 2020. Despite having over 18 million Weibo followers and more than 80 million Taobao followers, everything changed for the celeb: she is now banned from social media and e-commerce platforms.

Such scandals, among others, have had a long-lasting impact on both the KOL landscape and brands alike.

But there’s another side to this. In fact, the removal and unreliability of the most influential livestreamers might actually be a good thing for your label. That is, beyond the loss of consumer trust and market difficulties created.

Following these two incidents, this year’s 618 shopping festival sales dropped by 25 percent compared to 2021, when Viya and Austin Li generated impressive sales for the festival — accounting for $8.3 million (60 million RMB) and $7.6 million (55 million RMB), respectively. To avoid losses such as these, companies need to have a multi-tiered and multi-voiced strategy in place; they should diversify their portfolio in order to mitigate such unknown factors. Businesses will be forced to broaden their sources.

Another challenge when working with only select, top-tier names, is that firms have to guarantee that they are offering the best price possible, which essentially means discounting. In other words, this translates to houses having to reduce prices in the hope of acquiring new customers, resulting in a never-ending race to the bottom. Continue to read the full article here