Billionaire Guo Discovers the Retail Power of Live StreamingBloombergOpinion
(Bloomberg) -- In a rare public appearance last week, Fosun Group founder and billionaire Guo Guangchang teamed up with one of China’s biggest online marketing celebrities to tout luxury resort packages and masks from French fashion label Lanvin.
For the 53-year-old tycoon, the live-streaming act was part of a plan to tap a surge in e-commerce as the coronavirus pandemic locked down many parts of the world, and social distancing drove consumers to the virtual world. In China, retail sales at stores plunged 16% in the first four months of the year, while purchases online grew about 2%, according to official data.
“Measures like live-streaming will definitely become an important platform for communicating with customers in the future,” Guo said in an interview. Developing the group’s live-streaming capability is “an important part of Fosun’s overall strategic focus and transformation,” he said.
As the contagion gives a boost to online shopping, live-streamed commerce has been gaining popularity in China with Tesla car dealerships to air-conditioner makers such as Gree Electric Appliances Inc. Many firms are stepping up their presence on platforms such as Kuaishou, Weibo and Douyin -- TikTok’s Chinese twin -- for internet marketing in the post-virus world and to even close sales.
Shanghai-based Fosun is increasing investments in tools such as live-streaming, Guo said Tuesday. The conglomerate, whose businesses span retail, finance, tourism and health care, will also collaborate with popular e-commerce and social media platforms such as Alibaba Group Holding Ltd.’s Taobao, Tencent Holdings Ltd.’s WeChat and ByteDance Ltd.’s Douyin, he said.
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Founded in 1992, Fosun is one of the last remaining acquisitive Chinese groups that spent billions of dollars to snap up assets abroad. It operates businesses in markets from China to Europe, U.S. and emerging markets in Asia, South America and Africa, including French fashion house Jeanne Lanvin SA and resort chain Club Med SA.
The pandemic has hit the group’s retail and tourism businesses in particular. Unit Fosun Tourism Group called the coronavirus outbreak “the biggest Black Swan event” that will dent earnings, adding it was delaying capital spending on some of its resorts.
Fosun staff and live-streaming partners have made nearly 300 live broadcasts this year, generating 100 million yuan ($14 million) in revenue. They made 190 live broadcasts all of last year, the company said, but declined to disclose last year’s live-streaming related revenue.
Guo -- whose net worth is $4.2 billion, according to the Bloomberg Billionaires Index -- first participated in a live-streaming session on April 1 following the annual earnings call for flagship Fosun International Ltd. He sold a $4,050 Lanvin bag during his five-minute appearance on that show, which attracted more than 14,000 viewers.
But on May 15, Guo’s managed to lure 19 million views, thanks to Viya, who has over 22 million followers on Taobao. She shot to the international stage last year after streaming with Kim Kardashian on Tmall to promote the U.S. reality television star’s beauty line. Ranked by Alibaba as Taobao’s No. 1 live-streamer, Viya even sold a rocket launch service last month for 40 million yuan.
During the appearance with Viya, Guo demonstrated tai chi, an ancient Chinese martial art, and gave away gifts including stays at the plush Atlantis Sanya resort in Hainan, health management plans and fashionable masks. The show, where Viya also sold other Fosun products, generated 62 million yuan in sales, an eight-fold growth from a similar show last year, according to the conglomerate.
The promotion is part of the annual “515 Fosun Family Day Festival,” one of the group’s largest sales events that ends next month. The two-month festival this year has generated over 1.5 billion yuan in overall sales as of May 17, including over 500 million yuan in online sales, the group said.
While the pandemic has generated a lot of buzz about live-streaming commerce in China, it is unclear if it will maintain momentum once the world moves on from the health crisis. The phenomenon also comes with a rising number of complaints over the quality of products sold through live broadcasts and the demand for after-sales service.
Fosun plans to train more live-streamers within the group besides working with influencers like Viya, Guo said, adding sales representatives at Fosun’s brands such as Lanvin have been hosting live-streaming shows. Offline sales channels will however remain crucial to the group, Guo said.
Live-streaming marketing and sales “will become a normal practice for us,” Guo said.
©2020 Bloomberg L.P.