---
title: "FMCG Manufacturers: When the Live-Streaming Tide Goes Out, You Can See Who's Swimming Naked..."
description: "Live-streaming e-commerce is undoubtedly the hottest trend of 2020, while the street-stall economy is only temporary. 2019 was hailed as the first year of live-streaming, and the pandemic in 2020 further fueled its growth. From celebrities and influencers to sales associates and CEOs, everyone is rushing to set up their phones and enter the live-streaming era. Taobao, Douyin, and Kuaishou have taken the lead, becoming the big three, while JD.com and Pinduoduo are also joining the fray."
author: "阿图"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2020-06-15"
language: "en"
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---

# FMCG Manufacturers: When the Live-Streaming Tide Goes Out, You Can See Who's Swimming Naked...

> Live-streaming e-commerce is undoubtedly the hottest trend of 2020, while the street-stall economy is only temporary. 2019 was hailed as the first year of live-streaming, and the pandemic in 2020 further fueled its growth. From celebrities and influencers to sales associates and CEOs, everyone is rushing to set up their phones and enter the live-streaming era. Taobao, Douyin, and Kuaishou have taken the lead, becoming the big three, while JD.com and Pinduoduo are also joining the fray.

**The hottest trend of 2020 is undoubtedly live-streaming e-commerce; the street-stall economy is only temporary, and I won't accept arguments otherwise.**
2019 was hailed as the first year of live-streaming, and live-streaming e-commerce began to give consumers a taste of good quality at low prices. The pandemic in 2020 added fuel to the fire.
From celebrities and influencers to sales associates in shopping malls, from CEOs to ordinary employees, everyone is rushing to set up their phones and enter the live-streaming era. **Taobao, Douyin, and Kuaishou have taken the lead, seizing the opportunity and becoming the current big three of live-streaming; JD.com and Pinduoduo are not far behind and have also joined the battle.** Countless brands are busy selecting platforms and top influencers, lining up with their numbers to go live, hoping to achieve soaring sales and滚滚财源 through live-streaming.
But can live-streaming really give brands everything they want? How should brands view and utilize live-streaming to achieve their business goals?
**-01- Why are consumers addicted to live-stream shopping?**
Speaking of live-streaming, it's not a new concept. As an interactive media format, live-streaming has existed for years. But only **when live-streaming entered the e-commerce stage did it trigger nationwide interaction and truly achieve 'breaking the circle.'**
E-commerce live-streaming began in 2016, initially as a module incubated by Taobao to create content-driven e-commerce operations, hoping users would open Taobao during leisure time to capture more of their time share. With the rise of top Taobao live-streamers like Viya and Li Jiaqi, live-streaming带货 gave Taobao a new growth point.
Live-streaming involves four parties: **the platform, the streamer, the brand, and the consumer.** **The success of live-streaming is based on balancing the interests of all four: streamers pamper fans, brands gain volume, users get benefits, and platforms monetize, achieving sales growth.**
**For users, live-streaming brings satisfaction in the shopping experience.**
**First: Low prices and limited quantities.** For users, low prices are an eternal weapon. This is also a key benefit emphasized in e-commerce live-streaming, especially as a foundation for top influencers' personas. By constantly squeezing brands to secure price advantages for users, they repeatedly trigger buying frenzies.
**Low prices in live-streaming often correspond to limited quantities.** Leveraging users' loss aversion, the stimulation of limited quantities, combined with descriptions of price discounts, reduces users' thinking time—grab it first, talk later. It's no exaggeration to say that live-streaming is like an adrenaline shot, making consumers excited and impulsive, leading to impulse purchases.
**Second: Scene stimulation.** Watching e-commerce live-streams is thrilling, involving multiple stimuli—audio, visual, and psychological—reflected in product displays, interactions, and flash sales.
Products in live-streams are often those with a concept or fun factor. Their advantages, combined with the streamer's explanations, demonstrations, and answers to user questions, allow for a 360-degree presentation. This is especially effective for complex or DIY products like self-heating food and cosmetics, showcasing them better, and the viewing process itself is exciting.
**The streamer's explanations and interactions are also crucial.** Streamers need to translate product features into scene-stimulating language and create a sense of immersion for users. Li Jiaqi secured his position as the 'Lipstick King' through vivid descriptions of lipsticks. Here are some of his phrases:
> "Apply it and you'll look like a noble lady" "When you want to slay the crowd, put on shade 307 and go out" "A thin layer gives you youthful vitality" "Oh, so shiny! A five-carat mouth!" "The color is so fresh, so cherry itself, so it's a color that men will eat up"...
These verbal stimuli awaken users' aspirations for a better future, and low prices convert that aspiration into purchasing power.
**Third: Convenience.** Shopping is tiring, especially for women. If someone can offer you cheap, abundant, big-brand, and trustworthy products, why not follow them? Previously, users had to search for products, compare brands, read reviews, and make judgments; now, they just follow the streamer and place orders, no more comparing prices across hundreds of stores, saving a lot of hassle.
**Fourth: Surprises.** Actually, the above three points fall under surprises. Additionally, with more celebrities and famous figures joining, live-streaming has become more entertaining. We see our favorite stars not only selling products but also telling jokes, performing crosstalk, and eating, all while we buy cheap goods and enjoy a talk show—what a great deal!
It can be said that for users, live-streaming is like a feast, a series of addictive surprises. Once you enter the live-streaming world, your wallet is left behind—no wonder.
**-02- Live-streaming is a game among brands, streamers, and platforms**
If users' addiction to live-stream shopping is the ultimate result, then the operations based on brands, streamers, and platforms are the underlying driving force. The three parties each gain their desired benefits and collectively press the accelerator on live-streaming.
**1. For merchants, live-streaming is like a three-dimensional product show**
Live-streaming can push products to millions of users in a short time, vividly displaying packaging, usage methods, and the process from raw materials to use, at lower cost and with more comprehensive introduction than advertising.
As the party providing benefits in this game, brands exchange a portion of profit margins for brand exposure or sales boosts.
For many brands, new products often lack opportunities for both exposure and trial. Previously, methods like one-yuan purchases or product reviews allowed users to try products, but these had limitations: low user numbers and cumbersome processes. **For novel products or new brands, live-streaming can achieve precise brand exposure in a short time, enabling a cold start for new product launches, gaining product fans and driving sales.**
**The price concessions in live-streaming also stimulate sales.** A single live-stream can generate thousands or even hundreds of thousands of orders, allowing products to reach more people quickly, boosting sales, and helping brands clear inventory or meet performance targets.
**2. For streamers, live-streaming is a means of private domain traffic**
**The fundamental logic of live-streaming is the operation of the streamer's private domain traffic.** Previously, brands also chose KOLs on Weibo, WeChat, Xiaohongshu, and Bilibili for brand promotion and new product launches. KOLs mainly served for information dissemination, without direct interaction or performance assessment. But in live-streaming, KOLs transition from pure brand promotion to integrating brand and performance, potentially becoming key sales channels.
**The surface of live-streaming success is low prices, but the core is the commercialization of the streamer's charisma.** Take Li Jiaqi, for example: he has rich beauty knowledge, can explain product features well, and understands consumer psychology deeply. Whether through language or emotional appeal, he achieves excellent results.
The streamer's main job is to use their expertise to secure good deals for users, convey product features and brand information. At the same time, a streamer's live time is limited, so they need to maximize profits within that time. This requires expanding their fan base and improving conversion rates. These actions are based on cooperating with more quality brands and securing lower prices. In other words, it's more about squeezing brand profits to gain price advantages and fan loyalty.
The streamer-led operations team controls brand and product selection, striving to continuously stimulate users with low prices, scene stimulation, convenience, and fun surprises to retain users and monetize.
**3. For platforms, live-streaming is a monetization tool**
**Whether it's e-commerce platforms like Taobao and JD.com or entertainment platforms like Douyin and Kuaishou, monetization is an inevitable end for platforms.** Especially for non-e-commerce platforms, early on they sacrifice revenue to accumulate user base; once the user base reaches a certain scale, mining user value becomes crucial. These platforms cultivate top KOL accounts in various niches, like food or beauty, laying the foundation for future monetization.
Currently, live-streaming is still in a competitive phase, with platforms vying for the top spot. So, platforms are still in the process of expanding the market and cultivating influencers. Luo Yonghao's 60 million signing fee shows Douyin's ambition in live-streaming e-commerce.
It's clear that top live-streaming KOLs still hold significant power. Platforms are willing to provide technical and traffic support to KOLs. Top streamers have more initiative in live-streaming activities, can sign exclusive agreements with merchants, require merchants to promise the lowest prices for a certain period, and choose which brands to cooperate with. Brands are often in a passive position. It can be said that the current boom in live-streaming is the result of brands conceding some profits.
But as the live-streaming market matures, platforms will need to expand influence, weaken the dominance of top streamers, and intervene more in live-streaming development.
Take Taobao Live as an example: early traffic support allowed early streamers to reap benefits, incubating top streamers like Li Jiaqi and Viya. As top streamers become too concentrated, platforms need to build a more balanced live-streaming matrix. In 2020, Taobao adjusted its goal to cultivate more mid-tier streamers and MCN institutions. Platforms need to replicate more successful streamers. This will inevitably reshuffle streamer traffic and affect brands' future choices. **The low-price model may be broken, and specialization could become the new live-streaming model.**
**-03- Four paradoxes to see the true face of live-streaming**
During the growth phase, live-streaming offers high cost-performance and big-brand products, but as it matures, these advantages fade, and shortcomings are exposed.
**1. The low-price paradox**
**Users need low prices, streamers need to secure low prices, and brands must concede profits to offer low prices.**
If brands can sustain profits in live-streaming, product gross margins must be high enough to cover platform commissions, streamer commissions, and slot fees, leaving room for profit; otherwise, brands lose money.
If gross margins can't cover these costs, brands are selling at a loss for publicity. In such cases, users benefit, but brands must compensate losses elsewhere, possibly by lowering raw material quality or shipping mismatched products. This can lead to quality decline, loss of consumer trust, difficulty in repeat purchases, and even PR crises. Streamer credibility also suffers.
Even if gross margins cover expenses and leave profit, low prices for volume can disrupt consumers' price anchoring, leading to a 'no promotion, no purchase' situation. Constant discounts create perceptions of sluggish sales and cheapness, eroding brand value and pushing brands into a low-end crisis.
Therefore, streamers' claims of 'lowest price online' become marketing gimmicks rather than real savings. Unless brands treat live-streaming as one of their promotional channels, use exposure metrics as brand communication indicators, and control exposure to comprehensively assess ROI, sustained low-price campaigns are unsustainable.
**2. The live-streaming omnipotence paradox**
**When live-streaming becomes mainstream, it seems everything can be streamed.** From properties and rockets to snacks and tissues. In reality, a streamer's fan base determines the types of products they can sell, and some special categories are more about hype.
Take Viya's rocket sale: it was actually a pre-arranged deal, just going through the motions live, providing exposure and topic opportunities for the space industry. For Viya, it was a great story to cement her image as a seller of everything. Indeed, it trended on hot searches. Conversely, Li Xiang's case of selling zero mink coats despite an 800,000 yuan slot fee truly hurt the brand. So, **don't demonize the power of live-streaming.**
**Each streamer's fan base is limited.** Li Jiaqi and Viya primarily sell snacks, beauty products, and daily necessities—high-frequency, essential items. Without live-streaming e-commerce, consumers would still compare prices across platforms for the best deals; live-streaming just aggregates these discounts and releases them at set times.
Frankly, for established big brands, live-streaming's contribution to sales volume is limited and not their main battlefield; it's more of an exposure point for brand communication. These hard-to-get products are merely tools for streamers to build their influence.
**3. The instant hit product channel paradox**
**Brands, especially new brands or new products, treat live-streaming as a brand communication and customer acquisition platform.** Undeniably, top influencers like Li Jiaqi, Viya, and Luo Yonghao have tens of millions of followers, and one live-stream can bring tens of millions of targeted exposures. It seems like a good channel.
But in a live-stream, a single product gets 3-5 minutes of display, during which tens of thousands or even hundreds of thousands of orders can be placed. Users are mostly attracted by low prices or curiosity. The next step is converting these new users into loyal brand customers, requiring continuous brand operations. Collecting user feedback and improving products is crucial. If products have issues, the more popular the live-stream, the greater the product risk.
**4. The everyone-can-live-stream paradox**
Theoretically, anyone can live-stream if they have a phone and products. **But in reality, everyone knows live-streaming isn't a one-person achievement; it's the result of a team's efforts.**
Leveraging platform dividend periods, top streamers accumulate fan bases to monetize effectively. Even celebrities like Liu Tao and Chen He use their existing personal image resources to harvest fans. Moreover, their teams are excellent and competitive. Not everyone can secure low prices and big brands, or provide good after-sales service to give fans positive feedback.
Live-streaming is like a group-buying platform, with streamers as human Juhuasuan sections. But the difference is that Juhuasuan can replicate product sales in bulk with unified management, while human group-buying has more personalized operations that are hard to manage uniformly. Also, a streamer's success is largely accidental and depends on talent. So, while platforms theoretically support more streamers, this private-domain-based model isn't conducive to large-scale replication.
Platforms can control streamer traffic, but Taobao can't control which brands participate. Platform promotion of live-streaming is more about managing streamers. As pressure on streamers increases, advantages in brand selection and pricing will weaken. If users find live-streams lack stimulation and motivation, they'll reduce dependence, just like leaving group-buying coupons.
**-04- Facing the live-streaming wave, should brands enter?**
From the analysis above, we can see that **the two most important functions of live-streaming are brand exposure and sales promotion.** Therefore, brands should fully leverage its advantages, avoid risks, and profit from live-streaming operations.
**1. Most importantly, convert external live-stream traffic**
The essence of live-streaming is showing users the product's appearance, core, and finished process in one go, with the streamer's descriptions, exclamations, and interactive Q&A to display it comprehensively. What users feel most directly and impulsively is seeing something different. That's why cosmetics, especially color cosmetics, are a huge part of live-streaming.
Food products like self-heating hotpot, which are fun and visually appealing, also suit live-streaming well. For generic products with little differentiation, live-streaming becomes a pure price war, which isn't good for product operations.
Use live-streaming as a means of brand or new product exposure, but ensure follow-up conversion of new users. For new users, focus on brand retention, repeat purchase conversion, collecting user opinions, and product iteration, fully utilizing the exposure and user contact from live-streaming.
**2. Decide whether to build your own brand streamer channel and private domain traffic**
Whether brands should become streamers themselves is debatable. Simply put, live-streaming is a new product display and coupon distribution platform. Brands doing their own live-streams is similar to brands heavily operating their own Weibo and WeChat accounts a couple of years ago. Done well, it can break out, but the probability is low, and it can easily become a self-congratulatory platform.
While company executives, spokespersons, and other relevant influencers can interact in the live room, in most cases, it's the brand's own people running it. Brands need to assess whether the ROI is appropriate.
If there's energy, attractive products, and highlights, brands can build their own live-streaming force alongside platform streamers. Engage employees at all levels to distribute benefits, interact with products, answer user questions, showcase new products, and drive sales, turning users into brand private domain traffic. The advantage of a brand's own live room is greater flexibility and control, but it should be done within capacity.
**3. Live-streaming is the icing on the cake, not a must**
As an emerging channel, live-streaming has become a key focus for many brands. But that doesn't mean other channels can be ignored. For FMCG, embracing new marketing methods is important, but building a stable, orderly offline channel is a long-term project.
The product price chain is crucial for brand sustainability, especially for brands with offline channels; it's a key baseline in negotiations between brands and distributors. Live-streaming mainly operates online, but if it ignores the offline price chain and undercuts prices, it can harm distributors. Distributors might even buy up goods online, preventing discounts from reaching consumers, making promotions useless for the brand.
**-05- Summary**
In recent years, we've seen too many trends: countless brands rush in, markets inflate rapidly, capital enters, bubbles expand, then burst, and are debunked. Facing live-streaming, we need to think calmly.
**Successful KOLs in live-streaming have low replicability.** Unlike chain stores that can open hundreds of branches, live-streaming often becomes a 'big store' model. Under sales pressure, a streamer may promote your brand today and your competitor's tomorrow. When the internet is flooded with 'Li Jiaqi's same style' and 'Xinba's picks,' the brand-building power of live-streaming becomes less persuasive.
**For users, when they can regularly buy discounted products from various live-streams, cheap products lose their appeal.** Users won't spend one or two hours inefficiently watching live-streams; they'll reduce viewing frequency, and the advantages of the live-streaming system will collapse.
There are only so many good products. When brands start to protect their reputation and stop using live-streaming to lower their standards, that's when the live-streaming tide recedes, and then it will be clear who's swimming naked.


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