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April 3, 2020

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Failed tech entrepreneur tries his hand as an online sales celebrity

Luo Yonghao, a former entrepreneur turned online celebrity and influencer, did not expect his live streaming sales debut to spark so much debate about the future of e-commerce and digital lifestyles in China.

“I am still a beginner here and I am learning,” Luo said in his online broadcast.

The former English teacher who created the Smartisan smartphone brand is still an influencer despite being heavily in debt because of Smartisan’s failure.

Luo, previously banned by a court from plane and high-speed rail travel over Smartisan’s difficulties, has turned to promoting products through live streaming.

Broadcasters cash in by taking commissions. Such online celebrities and influencers, or wanghong, have millions of fans, creating stars such as Li Jiaqi, the “Lipstick King.”

Luo and his team sold products worth 110 million yuan (US$15.7 million) during a three-hour live-stream on Wednesday night.

The products included pens, HD projectors, robot cleaners, chocolate, ice cream and even lobsters.

The broadcast attracted 48 million viewers, a record in its category, the global video app TikTok platform said yesterday.

E-commerce has gained ground after the outbreak of the novel coronavirus.

“Luo’s debut has had an impact in the category beyond sales and viewing figures,” said industry observer Zi Chao.

“With his celebrity, Luo has brought the new method of sales into the mainstream. Now more brands want to try and more consumers want to buy.”

As a newcomer, Luo’s sales figures still lag behind the most successful online sales broadcasters, Li Jiaqi and Wei Ya, a young female wanghong.

But Luo offers a wide variety of products beyond the traditional categories of beauty products and food.

He also offers high-end products.

These include a home theater projector costing almost 5,000 yuan.

Mio, a Shanghai-based website editor, registered for TikTok on Wednesday especially to watch Luo’s broadcast.

TikTok had over 400 million users in China as of January.

Many brand owners tried to obtain a slot on Luo’s debut to cash in on his celebrity and TikTok’s market reach. Even with limited sales, they can gain exposure and advertising value, analysts said.

Roborock, which produces a robot cleaner priced at 2,599 yuan and which debuted on Shanghai’s STAR Market recently, was one of those brands.

Luo and his team earned about 30 million yuan on the night in commissions, analysts estimate.

Luo would not comment. But wanghong normally earn commissions of 30 percent of total sales.

Even before Luo’s entry into the sector, live stream sales had become a new frontline for the giants. They have created a new source of online traffic and trade.

Now, the COVID-19 outbreak has increased online buying.

Alibaba’s Taobao, Tencent-backed Kuaishou and ByteDance’s TikTok have been testing the streaming water.

During the Singles Day online shopping festival in November, companies used online influencers to promote their products.

For many brands, live streaming has become their No. 1 marketing channel, rather than an optional extra.

Broadly, the new sales method may have stabilized consumption when the COVID-19 outbreak curtailed traditional offline promotion events and forced consumers to stay at home.

Even carmakers Land Rover and Cadillac were testing the waters in March.

The number of online viewers on their broadcasts on TikTok hit 158,000, and drew more than 58,000 comments.

But even Luo, an opinion leader with experience in teaching, debating and speaking at press events, can make mistakes.

During the broadcast, Luo seemed unfamiliar with some products and gave a projector the wrong brand name.

“I am sorry for the mistakes I made today,” he said. “Hope to see you all next time,” Luo said at the end of his broadcast.


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