With the rise of the live streaming industry in China, many manufacturers have decided to increase their products’ sales performance by advertising them through the popularity of key opinion leaders (KOLs) and superstars, such is the case of trending muscle relaxing guns (MRG).
What is muscle relaxing gun (MRG)?
Originated in the US, MRG was designed to help athletes and grinders massage muscles after intensive periods of workouts. Before it becomes popular among Chinese consumers, peoples’ incentives to purchase this product reside in raising workout quality and following their idol athletes.
After being imported into China, MRG has been given attentive “packaging” in functions. Manufacturers have claimed MRG to have beneficial effects on relieving back ache after sitting up for a long time in the office, making it white-collar-friendly, and on massaging the elders’ waists and backs, making it old-people-friendly. It is nonetheless a huge success for manufacturers to widen the scope of target customers. According to Tmall´s sales data, the MRG market has reached a total sales volume of nearly 0.4 million SKUs in April 2020, while its size was merely 0.08 million SKUs in June 2019.
What causes MRG to have such a great popularity among Chinese customers?
The answer lies in the live streaming industry. YUNMAI’s MRG, ever since it was listed on Taobao in Nov. 2019, has received mediocre repercussions due to the fierce competition in the MRG market. For example, the price range of MRG presents a great disparity: the cheapest priced at 95 RMB, while Hyperlce, the first and the most expensive manufacturer, priced at 3420 RMB. The huge price gap does represent a difference in product’s quality, as the more expensive ones usually do better in decreasing noises. However, as a mid-range priced player, YUNMAI barely has any further distinctive selling points other than what similar products already offer. It is the showcase of Luoyonghao’s live streaming that raised YUNMAI MRG’s popularity out of the blue.
On April 10, 2020, during Luoyonghao’s two and a half hours’ live streaming session, he explained the concept and importance of relaxing fascia to the human body, and he demonstrated how to use YUNMAI’s MRG on himself to online viewers. Although this recommendation lasts only four minutes and twenty-six seconds, the sales volume of YUNMAI’s MRG surged to 5446 SKUs after the live streaming ended, amounting to a total sales value of nearly 4.9 million RMB (Taobao statistics). This dramatic increase in sales volume takes up nearly one third of its total sales volume up to date (May 22nd, 2020), not to mention the further consumptions that were brought up by its increasing popularity after the live streaming.
Why does MRG have a great sales performance?
The success of advertising YUNMAI’s MRG through live streaming is not accidental. The reasons for its success are three-folded.
Firstly, viewing the sports equipment industry as a whole, MRG stands out to other similar muscle-massaging products, such as foam shaft, because it does not require any pre-set up of yoga mat and does not incur any pains. Feedbacks from many consumers reflect that MRG are more convenient and comfortable to use than other sports supplements (CBN data).
Secondly, MRG came out right when the Chinese people started to pursue better physical health. According to Alibaba’s sports-related consumption report, online consumption of exercising devices increases at an average annual rate of 35.7%, and more than 80 % of the young people nowadays incorporate exercise into their intense work schedule. As an intriguing massaging device that based itself on pro-exercising care, MRG aligns itself perfectly in accordance with the general public’s pursuit for work-exercise balance, making it an ideal companion for the increasingly sports-loving public.
Last but not least, by witnessing KOLs’ first-hand experience through live streaming, online viewers are very likely to be swayed by their descriptions and purchase the products impulsively. According to a poll conducted on 6000 online consumers by Chinese Consumers Association, 35.1% of them claimed to buy the products because of KOL’s skillful and detailed demonstration, being the second most important factor in making purchasing decisions, right after the product’s pricing.
But why on earth would KOL’s recommendation become so effective? The answer requires us to explore the consumer’s incentives more deeply. According to a poll from Chinese Consumer Association, “getting to know about a product’s details” is the top factor that prompts consumers to watch live streaming, which is listed by nearly 50% of all respondents. KOLs, on the live streaming platform, use an interactive approach to tell jokes about products and share with consumers their first-hand experience of using them, which allows consumers to learn about products in ways that they can’t from the product page on online stores. In other words, live streaming introduces products in a more interesting way. In addition, to make live streaming more like a “show” and gain popularity, most KOLs would negotiate with manufacturers to offer discount prices to stream viewers. It has become an unspoken rule that products introduced on live streaming platforms usually come with a discounted price, which serves as another impetus for customers to purchase them through live streaming platforms.
Is live streaming the key to advertise anything?
Although live streaming seems like a perfect approach for advertising and boosting products’ sales performance, its power is still limited in some ways. The first hardship is policy restriction. For example, Pingduoduo, which also provides a live streaming platform, has prohibited the advertisement of products such as cutlery, OTC medicine, and baby products.
Beside restricted items, not all products recommended by KOLs would receive such successful repercussions as MRG does. According to CBN’s research on streaming business, the products introduced by KOLs are usually within clothes, food & beverages, and personal care industries. These types of products generally have low per-unit price and high repurchase rate; while products like furniture appliances achieved low sales volume after being advertised online.
For instance, GREE, one of the biggest appliance’s manufacturers in China, gained more than 4 million viewers during its first live streaming on April 23rd, but it achieved a total sales value of merely 0.2 million Yuan. Unlike fast-moving consumer products, during this live streaming session, GREE features on recommending big appliances like air conditioners and refrigerators, which has low replacement rate and high per-unit price. These characteristics hinder consumers from making impulsive purchasing decisions. In addition, while KOLs rely on providing discounted prices for their viewers, big appliances manufacturers typically are not able to offer the same promotion because their profit rates are already low, with 5% on average. According to CBN’s analysis on the house appliance industry, only four companies have a profit rate of more than 10%. Therefore, appliances manufacturers will barely earn any profits if they offer discount prices, which discourages consumption.
Therefore, the characteristics of products matter in achieving maximum effects of advertisement through live streaming.
What kinds of products are more suitable for live streaming?
- Products that have a high repurchase rate and low per unit price, such as clothes, food & beverages, and skin-care products.
- Products that are in accordance with the general public’s consumption trend and lifestyle.
- Products that have a profit rate enough to offer customers discounts as purchasing incentives.
Key success factors of live streaming
- “Getting to know about a product’s details” is the top factor that prompts consumers to watch online-streaming.
- Live streaming introduces products in a more interesting way.
- Live streaming products are usually bundled with discounts.
- Last but not least, choose the right live streaming anchor is key to success.