CHAPTER TEN
GROWING KUAI BRANDS
• Just as Taobao has Tao brands, Kuaishou is also growing Kuai brands.
• This chapter provides two case examples: the first is ClIiCK bee venom toothpaste, which became hot-selling thanks to the promotional efforts of a company. The second is the “Call of Spring” brand, which became hot-selling thanks to the promotional efforts of its owner, a livestreamer called “77 Sister Ying.”
CLIICK: HOW A BRAND OF BEE VENOM TOOTHPASTE BECAME HOT-SELLING
Key Points
• The underlying logic of the rise of Kuai brands is a change in the main consumers. As new notions of consumption emerge, people born in the ’90s and ’00s pay greater attention to price-performance.
• By leveraging highly efficient channels such as livestreams and short videos, a group of people who have high-quality goods but no more opportunities in traditional e-commerce ecosystems and the WeChat Business ecosystem have found new opportunities.
• A hot-selling product is a prerequisite for building a brand. However, to become a true brand, a brand must be rolled out on all channels to leverage the supply chain.
In 2020, ClIiCK Toothpaste was awarded the champion toothpaste product for monthly sales on the Kuaishou platform. Previously, this product was unable to get sales going in traditional channels; it was only on Kuaishou that it surged in popularity. Chen Rihe, founder of ClIiCK bee venom toothpaste, has worked hard in the industry for many years. He specializes in research on bee venom products and recipes, laying a high-quality foundation for his products.
An important driver of ClIiCK Toothpaste’s popularity is a company called “Mockuai.” It is located in Hangzhou and was established in 2015.
To find out how ClIiCK Toothpaste seized the opportunities in the era of livestreaming and became a successful example of a Kuai brand, let’s see what Chen Rihe, founder of ClIiCK Toothpaste, and Xiaofei (Wang Yulin), founder of Mockuai, have to say.
◎ The following is an account by Chen Rihe, founder of ClIiCK Toothpaste and chairman of Rihetang Medical Technology Co., Ltd.
The Birth and Growth of “Bee Venom Toothpaste”
I worked in marketing for the Kao Corporation, Bawang International Group, and 999 Group, in that order, and later on, I set up my own cosmetics factory. However, I lost a lot of money because I did not understand technology. In 2008, I founded Rihetang, and in 2016, I began to combine the concept of “bee venom” with toothpaste. I have studied bee venom for a decade or so and have also worked on the ClIiCK brand for 10 years now. Bee venom is a type of traditional Chinese medicine (TCM), and so bee venom toothpaste is an example of the modernization and “productization” of TCM.
Our bee venom products also include facial cream, shower gel, plasters, and so on, for a total of about 10 products. We have been selling bee venom plasters for many years through professional channels of beauty and healthcare, and they enjoy an excellent rep. On Kuaishou, we mainly sell products such as toothpaste, shower gel, and soap.
In China, there is a very well-known TCM toothpaste brand—Yunnan Baiyao Toothpaste. It was the inspiration for my research and development of bee venom toothpaste. In accordance with my long-term tracking and study of Yunnan Baiyao Toothpaste, I positioned bee venom toothpaste as an all-in- one type of toothpaste. In particular, it has an obvious effect on stomatitis; my assessment was that there was a market demand for this.
In 2017, we set the price of our toothpaste at 38 yuan per tube on traditional e-commerce channels, which is not much different from the price of Yunnan Baiyao Toothpaste. In the first year, we sold approximately 100,000 tubes; we had failed to open the market, causing several million tubes of toothpaste to pile up in the warehouse. It was at this time when we decided to reduce the price. After reducing the price to 10 yuan or so per tube, we were able to sell several hundred thousand tubes in one year.
In June or July 2019, we reached an agreement for collaboration with Mockuai. Based on their understanding of our product, Mockuai positioned us as “the glory of domestic products” and reckoned that we could not compete with the big toothpaste brands such as Yunnan Baiyao Toothpaste at a high price point, and thus suggested selling our product at a low price point of 8 yuan per tube. Low-priced functional toothpaste products are usually sold at around 11 yuan per tube, and so by setting our price at 8 yuan per tube, we would not have any competitors in this field.
I had previously assessed that if our product was able to sell well at a low price point and benefit the common folk, it would not be a bad positioning either. Hence, I agreed to hold a trial promotion on the Mockuai platform. To my surprise, one million tubes were sold in the first month, and this increased to several million tubes in some of the following months. From September 2019 to the autumn of 2020, sales were very stable—a total of 10 to 20 million tubes were sold on channels such as Kuaishou and Tmall, ranking among the top few toothpaste products in domestic sales.
The Key Factor for a Product to Remain Hot-selling Is Ultra-high Price-performance
We objectively assessed that our toothpaste product was indeed built up on the Kuaishou platform, with the promotions carried out by Internet celebrities during the early days playing a huge role. As bee venom is something very conceptualized and rarely understood, we had to engage eloquent speakers to introduce and demonstrate it in order for it to become understood and gain the trust of consumers.
At first, Mockuai recommended our bee venom toothpaste to several Kuaishou livestreamers with fairly high follower counts. After they generated good sales and spread its influence, a few other Kuaishou livestreamers began selling it as well. Had there not been so many Kuaishou livestreamers promoting it and generating a surge in sales during the early days, it would not have enjoyed continuous development later on. After bee venom toothpaste became highly popular on Kuaishou, we gradually expanded to other platforms.
As sales increased, the production layout of our factories also changed. Rather than putting all production in the same basket, we now have two factories supplying goods. In this way, I can balance out any disturbances and control risks. From my experiences and lessons learned, I know that there would be a huge problem if we have only one factory supplying goods and it is unable to manufacture enough goods at a critical point in time.
Based on my analysis, Internet celebrity products can develop continuously and steadily if they can reach the later stages. The key factor remains an ultra-high price-performance; at this price point, it is very difficult to buy this kind of functional toothpaste.
We are the pioneers of bee venom toothpaste in China. Sixty or 70 years ago, a type of bee venom toothpaste had appeared in Italy, but it was only made as a concept and was not actually sold. Today, our toothpaste product has many effects, such as anti-inflammation, painkilling, stop-bleeding, oral ulcer-healing, breath-freshening, and sensitive-teeth prevention. It took us 20 months to create its recipe. One of its flavorings was specially researched and developed for our bee venom toothpaste by the engineers of a Swiss company. It was custom-made to be combined with the TCM extracts that we produced ourselves. It can keep one feeling refreshed for several hours; consumers would feel a highly obvious feeling on their very first use.
Its effects cannot be the least bit fake because the assessment is not done by ourselves. As of today, our toothpaste has received several million reviews on various platforms, with a positive review rate of 97 percent or higher, which is impressive enough. After working on it for more than a year, we came to the understanding that the product is the most important of all; if a product that is good and cheap meets the right opportunity, it would probably sell like hotcakes.
I believe that the concept of bee venom has a huge effect because it is very novel. There are also a few small aspects, such as the packaging design, where we are unconventional. At first, people felt that the packaging of our toothpaste looked like that for shoe polish. Many of my friends in the industry told me that my toothpaste would either sell out or be a complete flop. However, I persisted with this style, and in consideration of subsequent development, I applied for the protection of the related patents and copyrights.
Besides, toothpaste has to be used throughout the year, regardless of the season. On top of that, the teeth-brushing habits of Chinese citizens have improved a lot over the years; even people in remote regions have gradually grown used to brushing their teeth twice a day. And with the popularization of the Internet, everyone’s health notions and lifestyles are improving, while their consumption habits have already changed tremendously.
As an accidental factor, the coronavirus pandemic in 2020 stimulated online sales greatly. During the pandemic, most offline stores could not open for business, and thus sales could not be made through traditional channels. Conversely, the problem of opening for business does not exist for online channels; livestream e-commerce was instead presented with new opportunities. It was from December 2019 to the pandemic period that our sales volume surged.
Success consists of many comprehensive factors. This is generally what I have surmised: Firstly, the core factors are definitely product efficacy and ultra-high price-performance. Secondly, the promotional role played by livestreamers on the Kuaishou platform is also very crucial. Thirdly, periodic factors; mainly because of the pandemic, online spending has increased. Nowadays, the repurchase rate of our toothpaste is as high as 20 percent to 30 percent, which is considered very high even among the top-tier toothpaste brands in China.
The Brand-Driven Modernization of Traditional Chinese Medicine
Leveraging the power of platforms and organizations and prioritizing sales volume are the principles of a new brand model. Nowadays, we have a tight-knit collaboration with Mockuai; our product development and various promotional events are all carried out in accordance with their suggestions. At present, the goal that we and Mockuai have set is to hit 50 million tubes in annual sales. Meanwhile, they also hope that we would carry out product upgrading and develop a few new types of bee venom toothpaste and children’s toothpaste to suit the needs of different consumer groups.
For a brand to truly develop and achieve a certain scale and popularity, it cannot rely on a single platform. Instead, it should seek to build up its product line on all platforms, including a comprehensive online and offline layout. At the moment, we are still not so well-rounded; our sales volume on Kuaishou accounts for 60 percent to 70 percent of our overall sales volume, and we have not touched on many other channels. In the future, we hope to engage spokespersons— possibly from among the top livestreamers on various platforms—to help us establish ourselves on multiple platforms. At the same time, offline promotions are also included in our development plan.
For now, what we can do is to make full use of “Internet Plus,” especially the trend that is livestream e-commerce. Otherwise, we would not be able to develop as quickly as expected. We have established an Internet company, with a team specially in charge of livestreaming, to study the operations of various platforms. I am deeply confident that, sooner and later, ClIiCK bee venom toothpaste will secure a place in China’s market for TCM toothpaste, becoming a functional toothpaste product that is loved by and affordable for the common folk.
Of course, my long-term goals are not just limited to ClIiCK Toothpaste. I also want to create a big platform for TCM and industrialize the good things from our traditions, or in other words, to modernize TCM. At present, bee venom has not been truly industrialized; its future prospects are still wide open.
It is necessary for a human to have some dreams; what if they actually come true?
◎ The following is an account by Xiaofei (Wang Yulin), founder and CEO of Mockuai.
There are a few stories to tell when talking about how we built up ClIiCK bee venom toothpaste.
Mockuai has a specialized department for brand incubation, in which personnel have mostly been involved in products for many years. After going all over China in search of products that have the potential to become hot- selling, they eventually found Mr. Chen Rihe, who has been doing R&D throughout his career, in Guangzhou. A type of toothpaste that he researched and developed is notable for its painkilling and anti-inflammatory properties, its bee venom content, and the refreshing feeling it gives after being used for brushing teeth.
Back then, he was facing difficulties with sales of this product. He had 800,000 tubes in stock and wanted to sell them via WeChat Business, but eventually found himself unable to do so. We took a look at a few samples and felt that the product was pretty amazing, and thus we began to promote it on Kuaishou. In no time, it began to sell like hotcakes. In 2020, tens of millions of tubes were sold across several major platforms.
This type of toothpaste has several characteristics. Firstly, it is really good to use; many large factories have tried to reverse-engineer its formula but none of them have managed to replicate its feeling. Secondly, its packaging looks neat. The brand has been around for many years but had simply failed to take off.
Our strategy at that time was to first engage a few of the top livestreamers to try it out and only begin promoting it if they were impressed by it. Later, we also engaged with small and medium-sized livestreamers. After understanding and trying the product, they quickly decided to sell it together. In addition, there were a few other livestreamers who began promoting it after having a positive experience of using it themselves. At this time, it seemed to Kuaishou’s users that everyone was using ClIiCK Toothpaste.
While we were working on ClIiCK Toothpaste, we realized that after the product made progress on Kuaishou, its sales volume in its Taobao flagship store and many other channels also picked up. Moreover, most of these sales had spilled over from Kuaishou. For example, many people have bought ClIiCK Toothpaste on Kuaishou, but when they wanted to buy it a second time, they searched for it on Taobao. As the search volume increased, the Taobao store received more orders. There are also some people who first saw the product on Kuaishou and then saw it again in other online communities. Upon realizing that it was a hot-selling product, they rushed to buy it. By encountering this kind of information on multiple occasions in multiple channels, consumers would build up brand awareness.
How Long Is the Path from a Hot-selling Product to a Brand?
A hot-selling product is a prerequisite for building a brand. Aside from large sales volumes, a brand also needs to have high repurchase rates, low costs of purchase decision-making, and high conversion rates.
Chen was always quite a capable person. His product was very well done and simply lacked channels. By leveraging highly efficient channels such as livestreams and short videos to integrate several elements, a foundation was laid for the birth of this brand.
We have discovered that, on Kuaishou, businesses can not only sell branded goods but also build Kuai brands with high efficiency. When businesses have established themselves on a platform, they would attract and unearth a new batch of supply resources. These businesses might have no opportunities left in traditional e-commerce ecosystems and the WeChat Business ecosystem, but because their products are good in quality, they would gain new opportunities as soon as they find new channels.
Kuai brands are just like Tao brands, except that they were incubated in Kuaishou’s ecosystem.
At present, there are still not many Kuai brands on Kuaishou, but there are many opportunities for such brands to develop. Their underlying logic lies in the consumer groups; having become the main consumers, the ’90s-born and ’00s-born generations are neither familiar with nor mindful of the earlier brands, but instead pay greater attention to price-performance and other new ideas.
As a service provider with close ties to Kuaishou, Mockuai is familiar with Kuaishou’s ecosystem and maintains excellent relations with the top livestreamers. Hence, we can engage these livestreamers when we want to promote a certain product. On top of that, Mockuai provides services to a few small and medium-sized livestreamers and can give priority to them when finding livestreamers to promote a certain brand.
Previously, we wanted to do “C2 Internet celebrity 2M”—in other words, to collect the demands and data of the consumer end via Internet celebrities, summarize them, and then reform the upstream production. In this way, the efficiency might be higher. However, we later discovered that this path is relatively difficult to take at the moment. It is not easy for a livestreamer to create their own brands because the volume is too small to support the bargaining space of the factory. Besides, if a livestreamer creates their own brands, it is unlikely that other livestreamers would help them promote their goods.
A true brand requires a very large scale in order to leverage the supply chain to create better quality and charge higher prices. Moreover, it must be rolled out on all channels; in addition to Kuaishou, it must also be sold on Taobao and JD.
Another method is co-branding between a livestreamer and a brand. For example, Longrich Toothpaste and a certain livestreamer have jointly launched a series that can be considered dual-branded. Longrich is a widely recognized brand, while the livestreamer provides further endorsement. I feel that there are also opportunities for such promotions.
CALL OF SPRING: THE VERTICAL-CATEGORY CULTIVATION OF YIWU LIVESTREAMER “77 SISTER YING”
Key Points
• On the second anniversary of her debut on Kuaishou, “77 Sister Ying” livestreamed for nearly 16 hours and generated more than 37 million yuan in sales.
• Rejecting various temptations to generate surges in orders, Sister Ying persisted in working on the vertical cosmetics category, and eventually took the lead among Yiwu’s numerous
• livestreamers.
• By building “Call of Spring” as a Kuai brand, the price per customer is set relatively high and a price war is avoided. Attention is placed on the effects of its products.
September 7, 2020, was the second anniversary of “77 Sister Ying’s” debut on Kuaishou. That day, she livestreamed for nearly 16 hours on Kuaishou, generating more than 37 million yuan in sales.
Sister Ying and her husband built up their Kuaishou business in Yiwu and are part of a batch of people who started doing livestream e-commerce on Kuaishou fairly early on. Like many of their peers in the industry, they focused on vertical categories and persisted in creating a brand, beginning version 2.0 of “Yiwu e-commerce.”
◎ The following is an account by Liu Yan, husband of “77 Sister Ying” and founder of the company.
I was born in northeast China and moved to Qingdao, Shandong Province, when I was in my teens. After learning martial arts for a few years at Shaolin Temple, I opened a gym in Qingdao but achieved nothing in those three years aside from marrying Sister Ying. Her full name is Xu Xiaoying, and she is from Weifang, Shandong Province.
After we got married, we could no longer ask our families for money, and so we became street vendors together with a few friends. We set up stalls from Qingdao to Yangzhou, covering the entirety of Jiangsu Province at different points in time. Later on, it became a saying that you have to go to Yiwu if you want to ship goods throughout China. So, in December 2013, we packed our bags and went moneyless to Yiwu, where we stayed in Beixiazhu Village.
Influenced by Yan Bo, we began doing Kuaishou. Back then, he was the first person from Beixiazhu Village to do Kuaishou. After learning from him for some time, Sister Ying conducted her first Kuaishou livestream on September 7, 2018. (For Yan Bo’s case example, refer to The Power of Being Seen—What Is Kuaishou, published by Kuaishou Research Institute.)
Initially, like many of Yiwu’s livestreamers, Sister Ying mainly sold clothing and general merchandise instead of focusing on cosmetics. At that time, she felt that cosmetic products could neither be seen nor touched because they were applied on the face, and thus she was afraid that people would be distrustful of using them.
After a few months of livestreaming, we could no longer generate sales for general merchandise, while our clothing was also a little out of season, causing our business to wane. And when the return rates for leggings and cashmere coats rose to 30–35 percent, we decided to give cosmetics a try. We quickly realized that our loyal followers could accept cosmetic products, and the return rate was only 8–10 percent. Sister Ying had been exposed to the cosmetics industry early on and had also worked in supply chains, and so we crossed over to cosmetics at the end of 2018. This category can increase in output value and would definitely be much stronger than general merchandise when done right.
The Origins of Kuai Brand “Call of Spring”
Every platform can produce a few good brands. For example, HSTYLE is a Tao brand, while ClIiCK Toothpaste is a Kuai brand. On the Kuaishou platform, our “Call of Spring” can also be considered a Kuai brand today.
There are currently three factories that serve as OEMs for us, and they are mainly situated in Baiyun District, Guangzhou. Before we turned to livestreaming, we already had close-knit collaborations with these factories. In the past, they mainly supplied goods to beauty parlors and other such channels and did not have their own trademarks and brands. The inspiration that doing livestream e-commerce has given us is that we must create a brand of our own. Our collaborating factories mainly manufacture products for beauty parlors. In the cosmetics industry, the beauty parlor line of products requires more specialized knowledge and more effective products as compared to the daily chemical line of products. The formulae for products in the beauty parlor line vary according to the customers, whereas the formulae for products in the daily chemical line are universal—the same shampoo can become any brand depending on its label, and thus can be mass-produced.
Therefore, the quality of the beauty parlor line of products is generally higher than that of the daily chemical line of products. For example, the content of active ingredients must be high because beauty parlors have a need to ensure that customers can see the post-usage effects. If you buy a bottle of facial cream or water cream in a supermarket and the effects are poor, you would stop using it at worst. However, this is not the case for beauty parlors; to attract customers to sign up as members, they must first gain people’s approval by choosing products that have obvious effects, such as making one’s complexion ruddy and glossy or improving one’s outward elegance. If there are no effects after one or two months, a beauty parlor would not be able to keep operating.
For the quality of our products to be good, the costs cannot possibly be too low, and thus we are unable to fight a price war with other livestreamers; all we can do is to let the effects of our products speak for themselves, hence the need to build up our brand. During an event held on September 7, 2020, the average price per customer was only 401 yuan, yet it was very well- received by users and thus we made more than 37 million yuan in revenue that day. For this event, we also invited people such as the general counsel and the chief production engineer of “Call of Spring’s” R&D team to promote the products together.
Why Persist in Working on Vertical Categories and Brands
There are money-making opportunities to be found in every category; having decided to work on cosmetic products, we dropped all other categories. What we have figured out over so many years of ups and downs in this industry is that a livestreamer must persist in working on vertical categories. This sense of direction comes from practical experience rather than profound ideology. To do something, you must be focused and not all over the shop, otherwise, your followers would end up not knowing what you are actually good at.
In Yiwu, the livestreamers with hundreds of thousands of followers are often easily swayed; they would sell this one moment and sell that the next, depending on whatever is trending. If a livestreamer who originally sold bags is unable to make it on the Trending page after filming videos on bags for a month, then suddenly discovers that someone else has made it on to Trending by filming videos on fruits, he might be tempted to film videos on fruits, as well. What he does not know, however, is that that someone might have spent several months filming those videos before making it on to Trending. After realizing that it is also not easy to make it on to Trending by filming videos on fruits, he might then jump over to children’s clothing. All this teetering about puts the account at risk of becoming useless. This is because the bag videos attracted a couple of bag lovers and the fruit videos attracted a couple of fruit lovers, and so when he jumped over to children’s clothing, the followers accumulated from the previous two categories would no longer be relevant.
Following trends is simple; all you have to do is to copy what the people in front are doing. However, if you are working on vertical categories, there is no one to help you do research, and so you have to figure things out on your own. This is something very painstaking and endurance-testing; it has actually been very mentally tormenting on us to work on vertical categories.
Although Yiwu’s market for small goods has been very successful, few of the people who do livestream e-commerce here have persisted in working on vertical categories. This might have to do with the genes of this place: goods and people.
Firstly, the goods-centered mindset of Yiwu’s livestreamers is relatively acute, and thus they often neglect persona-building. Yiwu has far too many products; the back-end factories of every one of the more than 70,000 businesses here have many products. This overabundance of products makes it very difficult for businesses to focus on a particular category, but when their accounts are new, this makes it possible for them to quickly make it on to Trending.
Instead, were they to persist in working on vertical categories, it would usually take very long before they made it on to Trending.
Secondly, many of the livestreamers who have come to Yiwu to set up a business here had started out from the grassroots. Having been completely broke or even deeply in debt at first, they enjoy making quick money and chasing trends. They might have been convinced of the fine future prospects offered by vertical categories, yet if they do not make money for an entire month, they might not even be able to afford food. Hence, to make ends meet, they would rather follow trends and make it on to Trending first. If they fail to generate a surge in sales, they would be unable to afford their living expenses for the next month and thus would have to leave Yiwu.
It is very difficult to become a big livestreamer without working on vertical categories. Although everyone understands this principle, it is actually not easy to commit to. This might be because one’s economic conditions forbid it, or because one is unable to resist various temptations.
The Kuaishou platform is actually very suitable for steady, persistent, and tenacious people to work on brands. On Kuaishou, growth during the early days is often not very fast but absolutely steady. This is because Kuaishou values a livestreamer’s private domain traffic, which is a unique advantage of Kuaishou that provides a good opportunity to take root on Kuaishou and work toward brandification. It would not be worth it to instead lose one’s head just because other platforms provide traffic support and bring in new followers quickly.
In particular, after Kuaishou launched Store Access, public and private domains became interconnected. Thanks to Store Access, Sister Ying’s follower count increased rapidly—she had only three-million-odd followers in August 2020, but this increased to nearly eight million followers by November that year. Moreover, her followers are very high in stickiness. Our daily turnover is very consistent, albeit higher when we conduct events.
It would usually take a very long and painful period of time for a livestreamer to shift from a low price per customer to a high price per customer. This is because, over time, the spending power of one’s followers would be concentrated at a certain price point. Kuaishou seeks to help vertical-category livestreamers establish their brands, thereby setting benchmarks.
Sister Ying positions herself differently from other people; she only does her own brands, does not supply goods to other people, and does not sell other people’s goods. We mainly focus on the effects, the science, and the technology of our products. Nowadays, there is an intense price war in all categories and not just in the cosmetics industry. Going forward, we will persist in our own direction and quality, thereby ensuring that we would not get dragged into a price war.
The Chain of Livestreaming: From Factories in Guangzhou to Markets in Yiwu
These days, I basically spend half of every month in Guangzhou to expedite our goods and develop new products.
During the event held on September 7, 2020, there were many summer products on offer. After the event, new products had to be developed. Summer products tend to be more refreshing, whereas moisturizing products must be developed for autumn and winter because these seasons are windy, dusty, and dry-air.
After having discussions with my R&D engineers in Guangzhou, we established that they would adjust the formulae for new products according to my demands, create samples for me to test, and then finalize a product if testing is successful. Subsequently, manufacturing would begin after the boxes and bottles have been prepared. This is a set of routine procedures.
Just as clothing has different designs for spring and autumn, cosmetic products come in two different styles—refreshing and moisturizing—for different seasons. Our factories, which specialize in customized products, can carry out production in accordance with our clients’ demands.
Taobao and Tmall are e-commerce businesses, and so are livestreaming platforms. However, there is a huge disparity among different platforms; they are different in nature, different in terms of the age groups and levels of spending power that each brand corresponds to, and different in terms of the notions of consumption among urban and rural dwellers. Brands are likewise; although the products of a domestic brand and several products of “Call of Spring” are manufactured in the same factory, the same products get vastly different sales volumes in different channels. The products that this domestic brand sells well in other channels would not necessarily sell well on a livestream channel. At times, they are unable to sell the products that we are able to sell well.
Moreover, different livestreamers face different follower groups. The color cosmetics of Sister Ying and another livestreamer are manufactured in the same factory, yet our color cosmetics do not sell as well as those of the other livestreamer. This is because Sister Ying’s followers are mainly above 30 years old, whereas those of the other livestreamer are mainly below 25 years old. Young women have a higher usage of color cosmetics, whereas older women have a greater need for systemic skincare, such as wrinkle-treating or anti-aging products.
Sister Ying speaks in a soft yet enchanting voice—every word she speaks would imprint itself on your heart. This characteristic has to do with the characteristics of our products; because our products have a high price per customer, the livestreamer must be a bit more detailed in explaining their features, ingredients, and benefits to justify their high price. For such products, passionate speeches would be futile; they are not like shopping mall promotions where passionate speeches are delivered to get everyone to think that they would lose out if they do not snap up the products quickly. This kind of atmosphere-setting method is useless for us; we have to use data rather than rely on emotions to prove that our products are good.
Our goods are shipped from Guangzhou and Yiwu. Between them, we ship relatively more goods from Yiwu because we get more timely information when we ship goods ourselves. In Guangzhou, we ship goods using a cloud warehouse—because it belongs to a third party, we have to send and receive the relevant shipment information to and from them, thereby reducing the shipment speed. And when errors occur, verification is difficult due to their huge shipment volume. Moreover, the cloud warehouse only earns a small fee yet will incur high costs if they have to expend manpower on tracking, hence coordination is limited. Instead, when we do our own shipment, we would get it done right even if it means losing money, otherwise our rating and our followers’ experience would be affected—no matter the costs, we must get our aftersales done well. Nevertheless, cloud warehouses also have their advantages; they can ship a lot of goods within a short amount of time, and so when our shipment volume is large, they can reduce the pressure on us and increase our shipment speed.
Since our factories are in Guangzhou, why did we choose to remain in Yiwu? This is mainly because we started out in Yiwu and it has been seven years now, hence our friends and circles are all here. Were we to relocate and spend another seven years building up a relationship circle, there would be hidden costs required. That is why we will not relocate so readily.
Furthermore, there are special advantages to being in Yiwu and having the backing of such a huge and active market for small goods. Although Guangzhou has a strong supply chain system, a well-developed manufacturing industry, and superior prices of goods, it is slower than Yiwu in terms of information awareness. Yiwu’s advantages are that its markets are extremely sensitive and the transmission of information is extremely fast—it is usually first to know about the latest business model or strategy.
To give an example, in March and April 2019, we brought a group of livestreamers to Guangzhou by coach to film video clips. Many factories forbade us from filming their interiors—only the most daring or forward-looking factory owners knew that this was free advertising for them. When we visited Guangzhou again in April and May 2020, many factories prepared banners in advance and displayed the message “Welcome, XX’s livestreaming team from Yiwu” on an electronic screen. Factories in Guangzhou were a little slower to get started on livestreaming, albeit they are gradually changing and becoming more and more aware of Kuaishou.
In addition, from a business perspective, we have made money in Yiwu and so it might very well be our “auspicious land” and the place that is suitable for us— that is why we have chosen to remain in Yiwu.
The authors of this text are Kuaishou Research Institute senior researcher Li Zhao and research assistant Cai Yuhui.