Since 2016 livestreaming and short video have become important new media platforms in China. The international growth of Chinese-owned short-video app, TikTok, has generated fears in the United States that its data policies and censorship constitute a national security threat.
ADN’s Predictions
The domestic popularity of these new media will continue to grow over the next 2-3 years, but its continued growth beyond that will depend on platforms’ ability to innovate according to developing consumer tastes and their ability to ensure that content stays on the right side of China’s ever changing censorship environment.
Overseas growth of TikTok will continue, but the regulatory backlash the company is facing in the US and perhaps other countries as well if the firm is shown to have misused users’ data.
What Happened?
Apps for filming and sharing livestreams and short videos have become wildly popular in China since 2016. An estimated 430 million people watched a livestream in 2019, while short-video apps were viewed by over 400 million people daily by January 2020, up 60% year-on-year.
Most livestream content is related to people’s daily lives, travelling and food. Short videos do this too, but since most platforms limit clips to under one minute, there is a focus on funny and cute content. Any user can upload content, but the most viewed content is from ‘key opinion leaders’ (KOLs), who are commonly referred to as ‘influencers’ in the West.
KOLs take a professional approach to their social media work, which is often a full-time job, and often work alongside a production team to create engaging content. Popular live-streamers can be signed to a particular platform for a fixed salary plus commissions. These commissions can either come in the form of ‘virtual gifts’ (money) from viewers, which are split between the host and the platform, or from brand who pay the KOL to promote their products, again revenues usually split with the platform
Commercial reach
Brands have been tapping into the large reach of KOLs and signing lucrative deals with those who can deliver sales. For example, prominent KOL, Li Jiaqi, reviews lipsticks and reportedly earned around RMB 10 million ($1.4 million dollars) in 2019 from promoting beauty brands. On the 2018 ‘Singles Day’ shopping festival he sold 15,000 lipsticks in five minutes.
For short-video platforms, advertising revenues are predicted to reach 6.5 billion dollars in 2023, up from 2.1 billion in 2018, according to a report by Forrester Research. Some platforms allow users to link their videos to their own e-commerce sites.
Grassroots fame
It is not only celebrities and the ‘young and beautiful’ who have found fame and sometimes fortune in the new media.
Farmers use these platforms to sell produce directly to consumers in cities who feel that buying direct can verify the safety and quality of the products. Kuaishou, an app that provides both livestream and short video, estimates that over 1 million rural users have used its app to sell local products, earning a combined total of RMB 19 billion in 2018.
Many rural residents have also gained an online following through recording and sharing their day-to-day lives. The ebb and flow of rural life delivered by an engaging personality can be appealing to young Chinese urbanites with no direct experience of that lifestyle.
Roots of popularity
Both livestreaming and short video have been designed with mobile devices in mind. All videos are viewed vertically, which suits the 99.1% of China’s 854 million internet users using their mobile to go online.
Livestreaming provides an authentic and informal experience with plenty of scope for audience interaction. Commercially, the format allows products to be demonstrated and fans of particular KOLs tend to trust their reviews.
Short video lends itself more to direct advertising due to the amount of screen time it is soaking up and the fact that paid adverts will automatically stream and only last a short period of time. It’s estimated that short videos take up 11.5% of Chinese people’s internet usage time as of June 2019.
Information control
The volume of content and along with the fact that anyone can produce it creates various issues for China’s censors.
The job of frontline censorship falls on the shoulders of the platforms themselves.
Since the 2017 Cybersecurity Law, various supplementary rules and guidelines have been issued by different ministries. The most recent rules issued by the Cyberspace Administration of China take effect in March. They include a new requirement that the use of algorithms should be in accordance with existing laws, making it explicit that these algorithms do not form some special category to which current rules don’t apply.
It is unlikely that these platforms could have grown so large within China’s regulatory framework without the existence of artificial intelligence (AI) algorithms to catch offending material. However, the monitoring process still requires a lot of manpower with these teams often being the largest within a tech company.
Most livestreams broadcast on a slight delay in order to catch offending material and if, for example, a protest incident were to break out, companies have the ability to block their app’s usage within a set radius of the area.
The world of livestreaming and short videos are constantly evolving, but should definitely be considered as an important part of any brand’s marketing strategy in China. ADN works with brands and platforms to produce compelling content aimed at these mediums. Get in touch if you would like to find out more.