Viya, China’s top livestreaming influencer, vanished from cyberspace after receiving a $210m fine for tax evasion.

If you subscribe to a service from a link on this page, Reeves and Sons Limited may earn a commission. See our ethics statement.

On December 20, 2021, the State Tax Bureau of China announced that Viya would be fined $ 210 million(¥1.34 billion) for tax evasion. This is the highest fine levied on an individual in the country's history. Later on the same day, all of her online accounts, as her business platforms, were closed down in accordance with the authorities' stipulations.

The 36-year-old Viya, China's top livestream seller, has broken many sales records since her first appearance, in 2016, on Taobao Live(an Alibaba-owned live-streaming channel). According to Alibaba Group, Viya’s gross merchandise volume (GMV) in the presales day for Double 11, the most extensive online shopping festival in China, reached $ 134 million (¥ 8.53 billion), hitting the number two spot for GMV last year. In 2020, she was selected as Fortune China Most Influential Businesswoman, and Forbes China Up-and-Coming Businesswoman in 2021.

(credit:baike.baidu.com)

According to her autobiography, Viya started her online business on Taobao in 2012, selling garments with her husband. Because of her outstanding sales performance, she was invited to the new Taobao livestream program in 2016. Thanks to the massive traffic on Taobao and her customer-centred sales approach, she has become a top influencer, selling food, fashion and beauty products, and even farm produce and real estate. As Taobao’s former chairman, Jiang Fan, has stated, Viya’s example proves that Livestream shopping is the next mainstream business model.

(update: moved the last paragraph to here)

Keeping pace with such rapid market increases, the authorities have begun introducing new laws and regulations to monitor this new market. In 2020, the China Advertising Association announced its Code of Conduct for Livestream Marketing, setting new norms for brands, merchants, live-streamers, and live-streams agencies and users. In September 2021, the State Tax Bureau of China claimed that penalty reliefs would be available if live-streamers voluntarily reported and corrected their tax issues by the end of the year. Xinhua News stated that thousands of live-stream influencers voluntarily paid overdue taxes after this announcement. Viya's record-breaking fine is considered a significant warning for those who do not comply with the law.

What is livestream shopping?

Livestream shopping is a new commercial service which uses livestream technology to display products, interact with consumers, and sell products directly through internet platforms. (update:new) Through live interaction with livestreamers, it provides an improved experience compared to making shopping decisions from only product descriptions, photos, and videos.

The three most significant features of livestream shopping

Fewer limitations:

  • With internet technology, anything can be livestreamed
  • Anyone can start or watch a livestream
  • Participation in a livestream can take place anywhere.

Trust-building: Livestream shopping anchors are like guides in a physical store; they give professional advice on how well a product functions and share their own experience of using it. Standing from consumers' points of view, they build honest relationships with customers in the process.

The ultimate shopping experience: In traditional ecommerce, consumers cannot see or try out a product – whereas, with livestream shopping, anchors display all product details in real time. Consumers can therefore decide whether to make a purchase based on what they see in the livestream. With its two-way engagement in real time, this approach provides a more comprehensive experience.

A quick guide to livestream shopping in China

How big is livestream shopping in China? As iResearch indicated in its China Livestream Industry Report 2021, the whole market was worth ¥1.2 trillion ($189 billion) in 2020. Livestreaming’s rate of penetration of total retail sales was 3.2% for consumer goods and 10.6% for online shopping. Moreover, China's livestream users reached 617 million at the end of 2020: 62.4% of the country’s total internet users. The report also shows that there was a 360.8% increase in new, registered livestream firms between 2019 and 2020.

Given this intensive competition, a unique ecosystem with a high level of diversity has emerged.

Source from KPMG

On the basis of Taobao Live Annual Report 2021, KOL (key opinion leader) and brand are the primary channels of livestream shopping. Head KOLs at the top of the pyramid produce up to 60% of the retail sales within this business model; their celebrity-level traffic boosts a higher conversion rate. Brands therefore collaborate with head KOLs to promote new products and create brand awareness. This increases the market share throughout the rest of the pyramid, building traffic-driving products with higher discounts with the second- layer KOLs, and allocating profit products to the KOLs at the bottom. Alibaba Group has also indicated that food, home textiles, and women’s fashion and beauty were the top sellers onTaobao’s livestream.

What to know before joining this trillion yuan market

Where to deploy your livestream eCommerce business

There are three types of media venue for livestream ecommerce in China:

The livestream section of a traditional ecommerce website

Taobao

JD

Pinduoduo

Suning

This type of platform can achieve the most impressive sales performance because it has the greatest resource for products and merchants; offers well-developed ecommerce services; and maintains a complete policy system for protecting both consumers and merchants’ rights.

Content-curation-transformed livestream networks

Kuaishou (video-based)

TikTok (video-based)

Little Red Book (Pinterest-liked)

Bilibili (video-based)

These networks are the base for key opinion leaders (KOLs), and generate massive traffic. KOL collaboration is one of the most prevalent emerging marketing forms currently in the Chinese market. KOLs are not only influencers and celebrities; they also have expert knowledge on specific subjects. As trust is the core value in KOLs’ relationships with their followers, they play an essential secondary role in customers' decisions, outside of brand and the product itself.

Social media sites

Weibo (Twitter-liked)

WeChat (multi-purpose instant messaging, social media, and mobile payment)

The substantial advantages of social interaction create coverage of a broad range of users. These platforms can give practical commercial value to the private traffic of their vast user base.

How to start in livestream ecommerce

Sell on livestream influencers’ platforms

If you have the budget and want to hand it to the professionals, the easiest way is to find a livestream agency to collaborate with. Here are two of the biggest in China:

Meione

If you're familiar with livestream shopping, you will likely know the number one livestream seller: Li Jiaqi. He sold $1.68 billion (¥10.65 billion) in the presale of Double 11, 2021, ranking in the number one spot, above Viya. Meione is the team behind him, the most influential streamer in the Chinese ecommerce market. The company provides livestream influencer cooperation, branding, advertising, and PR events.

Goumee

Named Taobao Live Top Livestream Service Provider, it has also been designated as the livestream agency for international brands like Victoria's Secret, Skechers, Dyson, and Lancôme.

Sell on your platform

Alternatively, you can begin by making a plan for building your livestream space on one of the platforms above.

Before starting, ask yourself:

How should I position the brand and what is my sales strategy?

What devices do I need for my livestream?

How should I design the physical space?

How do I display my products?

Who should be the anchor?

What is the rundown of the livestream?

 

Jolene

I'm Jolene Shi, a marketing and event professional with six years of experience helping international brands from fashion to home-living carry out marketing activities in the Chinese market. By writing trends of ecommerce in China and sharing insights about the market, I want to create a channel for Chinese and western entrepreneurs to connect and find collaboration opportunities.

Comments 0 Responses

Leave a Reply

Your email address will not be published.

Rating *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

start shop and start online store