Douyin live-streaming generates lots of buzz lately:
- Luo Yonghao, the tech KOL & ex-founder of Smartisan smartphone, sold 168 million RMB during his 1st campaign
- Celebrity Li Xiaolu sold 35 million RMB in her 1st campaign
- Chairwomen of Glee, a large electronic brand, sold 232K RMB
Is Douyin live-streaming the next channel to spend your marketing budget? Or is it too good to be true?
To find out, we analyzed live-streaming campaigns made by the following KOLs to understand the suitable price point, discount amount, and ROI.
- A top Key Opinion Leader (KOL)
- A top-selling celebrity
- A top-selling brand official account
- A campaign by a smaller KOL (~200k followers)
A top Douyin Live-streaming KOL – Grandma Wang in High Heels
- Top 0.01% KOL on Douyin
- Average video views: 26 million
- Douyin follower: 14 million
- Regular campaign CPM (cost per 1,000 impressions): 19.5 RMB
- Video engagement rate: 4.09%
- Douyin ID: wnn111111
- Latest live-streaming sales: 5.4 million RMB in 7.5 hours
- Charge for Douyin video ads with e-commerce link: 350k RMB/video
- Charge for Douyin live streaming: 100k RMB + 30% commission
- 85% of her followers are women, and 31% of the followers are below 18 years old
Grandma Wang is a fashionable 78-year-old who wears heavy makeup and formal dresses to inspire young women with her personal stories.
A typical video starts with Grandma Wang telling a story. This video got 2.6 million likes on Douyin.
As one of the top Douyin influencers, she charges 350k RMB per video ads and makes around 2.1 million RMB per month just from Douyin ads.
Live-streaming analysis of Grandma Wang
The live-stream happened in April 2020. Wang sold 5.4 million RMB from a total of 18 products.
Around 40% of the products Grandma Wang promoted were in the skincare & cosmetics categories. 35% of products were snacks and packaged food.
The average product listing price was 150 RMB. Products priced between 50 RMB and 100 RMB were the best selling item.
The top-selling product was a 50 RMB facial mask and a pack of 98 RMB bird nests. Both products generated around 650k RMB of live-streaming sales. A neck massage machine priced at 499 RMB only recorded 209k RMB in sales.
Based on Grandma Wang’s campaign charge for 100k RMB fixed fee plus 30% commission, we calculated the ROI of each product. The average ROI is around 150%. Products priced at 100 RMB scored around 190% ROI. while some of the products above 200 RMB have less than 100% ROI.
Unlike the WeChat KOL campaign that could bring followers, marketing effect and sales, top Douyin KOLs like Grandma Wang usually have a very limited branding effect. Thus brands should only participate in live-streaming campaigns if sales could cover all costs.
If we take the 50 RMB facial mask as an example, the brand had to pay 298k RMB for the fixed fee and commission, 45% of total sales revenue. This means such a campaign only makes financial sense if the product margin is above 55%!
Luckily low-price supplements and facial masks usually have a higher repurchasing rate. Thus working with KOLs to expand to a new consumer market might make sense.
Brands with products above 200 RMB should be very careful when considering Douyin live-streaming.
A Douyin Live-streaming with Top Celebrity Li Xiaolu
- One of the top 3 celebrities on Douyin
- Douyin followers: 108 million
- Latest live-streaming sales: 43.5 million RMB in 4.5 hours
- Live-streaming charges: 100k +30%/25% commission
- Douyin ID: yanyuanlixiaolu
Li Xiaolu is a famous actress in movies and TV shows. She hosted her 1st Douyin live-streaming and successfully sold 43.5 million RMB worth of products. The average product price was 296 RMB.
Even though a celebrity hosted the live stream, the lower priced items still sold better. For example, a 99 RMB facial mask and 195 RMB facial serum both recorded over 6.6 million sales. 1,799 RMB baby seats only generated 109k RMB in sales.
An outliner is KANS skincare set that generated 7.7 million RMB sales as the top-selling item. The set is priced at 699 RMB, a 44% discount from the regular sales price.
Li charges 100k RMB plus a 25%-30% commission to host this live-streaming. The average ROI (return on investment) is 230%. Popular products such as 49 RMB Colorkey lip gloss got a 309% ROI. She was able to sell 86.4k of Colorkey lip glosses, each lip gloss was sold for 49 RMB (discounted from 69 RMB).
Delonghi made around 99% ROI in this campaign. Meaning the sales revenue won’t cover the campaign cost. Maybe the long-term sales of capsules could help to make up for this loss? Or maybe having a celebrity recommending the brand for 10 minutes during a live-streaming could have some branding benefit?
Delonghi is not the only brand discounted heavily during this live-streaming. In fact, the average discount brands take is 40% off the original price. Brands even added another 10% time-limited coupon on average. Meaning brands gave a total of 50% discount on the original price to participate in this live-streaming.
Although the “original price” for many brands is just a figure. Some products are always on discount since Tmall is never short of the shopping holidays.
New brands need to take discounts into consideration when pricing for the Chinese market.
In Li’s campaign, 42% of the products being sold were cosmetics and skincare products. This is also the category with the highest average ROI of 288%. The average product cost in this category is 169 RMB.
The current 100k RMB KOL fee Li charges could increase as Li does more live-streaming. And the sales revenue will likely decrease since a 2nd-time live-streaming of a celebrity won’t make the headline.
Comparatively, Luo Yonghai, another celebrity, charges a fixed fee between 600k to 1.2 million RMB plus commission (according to iResearch) for introducing each brand. He sold a record-breaking 168 million RMB during the first live-streaming, but the sales number continues to drop. Without the PR effect, celebrities are just another Douyin KOL.
Typical Medium size KOL, Cai Zhenzhu
- Average video view: 130k
- Douyin follower: 260k
- Douyin ID: 2343937907
- Latest live-streaming sales: 20k RMB in 4 hours
- Regular campaign CPM (cost per 1,000 impression): 62.4 RMB
- Video post with e-commerce link: 5k-6k RMB per video
Cai is a fashion KOL focusing on providing tips for buying budget clothing for slightly plus-size women.
Cai Zhenzhu shares tips for how to dress well for plus-size women. This video got 117k likes on Douyin.
Cai introduced a total of 24 products, but only 5 of them recorded sales during her live-stream. All of the clothing pieces were below 100 RMB. She also sold 3 pairs of 179 RMB shoes, and a counterfeit Byfar bag at 109 RMB.
The CPM for this mid-size campaign is more than 3 times higher than for Grandma Wang’s campaign, and buyers seem to be even more price-sensitive than for more expensive campaigns.
This data gives us a few insights on KOL selection on Douyin:
- Because of the algorithmic nature of Douyin (which is heavily promoting the most successful videos) bigger KOLs bring better results. This is very different from the WeChat ecosystem, where working with mid-size influencers leads to the highest return on investment.
- Larger KOLs can sell more expensive items. Douyin is still in its early stage as an e-commerce promotion channel, and most items sold on the platform are extremely affordable. But large KOLs and celebrities are ahead of the curve and can generate sales for higher-priced items due to their broader influence.
Brand’s own official Douyin live-streaming
Very few brands are able to launch a big live-streaming sales on Douyin.
Gree, a large home electronic brand, hosted a Douyin live-streaming and sold 232k RMB of products. The average basket amount was 900 RMB, including the sale of 3 air filters worth 12,000 RMB.
This is a rare case of a successful campaign run by a brand. The company’s chairwoman, Dong Mingzhu, is one of the most famous Chinese entrepreneurs, hosted the live stream, which can explain part of its success.
In fact, given Dong’s reputation, 232k RMB in sales can come up as a disappointing figure.
VIP.com, one of the largest e-commerce platforms, was only able to sell 10k RMB of products during a 2.5 hours-long live-streaming session.
This reminds us once again that, unlike WeChat, Douyin and Little Red Book are not channels for brands to talk to customers directly. These new networks are dominated by influencers, and brands can only reach end customers by building relationships with KOLs.
WeChat started as a payment method to buy groceries, and users are now buying cars through influencers. In the same way, Douyin is likely to become an increasingly attractive sales channel as time goes by.
It is however still early stage: brands can leverage very large influencers in order to promote relatively inexpensive items. The heavy requirement for discounts on Douyin might also cheapen brands in the long run.
Customers don’t seem very interested in buying from brand accounts during a live-streaming. Focusing too much on Douyin live-streaming is a risky gamble but building Douyin account is a must for the long-run.