E-commerce giant Alibaba grooms rising stars as small pool of top influencers proves risky
- Alibaba is highlighting up-and-coming live streamers, as its reliance on a few super influencers has left it vulnerable to reputational risks
- While Austin Li Jiaqi remains Alibaba’s top influencer, the company has yet to publish any Singles’ Day-related sales data about the star
Li’s presales session on Monday attracted at least 10 million viewers online – the maximum number that can be displayed on Taobao Live, Alibaba’s live-streaming channel. Most products immediately sold out as soon as they became available for purchase.
Some local news outlets reported that Li, who sold over 10 billion yuan (US$1.4 billion) worth of goods in a similar session last year, managed a turnover of 21.5 billion yuan on Monday – nearly 60 per cent of the total revenue of China’s top retailer Suning.com in the first half of 2022 – setting a record for the industry.
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Jack Ma goes head to head with employees for Alibaba’s Singles’ Day
Alibaba, which owns the South China Morning Post, did not immediately respond to a request for comment, while Chinese media cited Li’s agency saying that the reported figure is untrue, without elaborating on whether the true number is lower or higher.
Li and now-disgraced influencer Huang Wei, better known as Viya, were once the poster children for Alibaba’s online retail empire. Their ability to draw hundreds of millions of viewers to their live streams and sell billions of goods in just hours helped Alibaba solidify its place as China’s dominant e-commerce player.
“Taobao Live was a bit lifeless when the top two live-streamers Li Jiaqi and Viya were absent,” Zhang Yi, chief executive of research firm iiMeida, said. “Top live-streamers indeed can generate huge traffic for e-commerce platforms.”
But Alibaba’s reliance on a small number of super influencers to boost its sales has also made it vulnerable to reputational risks.
Li, who earned the nickname “lipstick king” for his ability to sell huge amounts of cosmetics, survived the tax crackdown but vanished online after a live-streaming session in early June.
Alibaba is trying to highlight new influencers on its platforms. The company, which has yet to publish any Singles’ Day-related sales data about Li so far this year, instead touted a 684 per cent surge in presales generated by “new live-streaming hosts” in the first four hours of the shopping festival, compared with last year.
The Hangzhou-based giant also underscored the presence of over 500,000 new hosts on Taobao Live over the past year, including a few key influencers who used to stream exclusively on competing platforms such as Douyin, the Chinese version of TikTok owned by ByteDance.
“We’ve seen the views, fans and turnover numbers of mid-level live streamers grow rapidly this year,” Cheng Daofang, head of Taobao Live, said in a statement.
Alibaba has a reason to diversify its influencer pool, according to Ralph Wu, associate partner in the retail and consumer products practice at consulting firm Bain & Company.
“The more popular the top live-streamer is, the lower the profit margin for the brands. This is not the situation the brand is expecting,” Wu said. Therefore, as top influencers become more powerful, brands and platforms may be shifting their strategy to support “popular influencers who have not reached top-tier”, he said.
Live streamers are also evaluating their own risks when they decide whether to join a show, because a session’s success depends not only on the host’s professional skills, but also the marketing costs, according to Huang Cancan, a Shanghai-based host.
“Douyin has a lot of traffic … but the cost of buying traffic there is also relatively expensive,” Huang said, adding that it is easy to lose money if sales were not enough to cover the costs.
