Audi dealer in Beijing
In China, business is increasingly shifting to the Internet.
Beijing Wang Qi would never have imagined that he would one day be a moderator. Because, as the 29-year-old says of himself, he was actually a “normal car salesman” who started working in a FAW Volkswagen car shop in Baoding in northern China a year ago. But since February, Wang has stood in front of a cell phone camera every afternoon for at least two hours and speaks to around 1200 viewers of his live stream.
“I tell something about the models in the store, how you can change the cleaning fluid for the windshields, or how to start the car, even if the battery in the electronic key is empty. Of course, he always wears a face mask. This is not just what management wants. “If I didn’t wear it, the audience would be confused,” he explains.
The corona crisis is not yet outstanding in China either. When the epidemic raged in China in February, almost the entire country’s economy came to a standstill. Shops were closed and the streets were practically empty. The car industry also suffered severe slumps: according to the Chinese Car Association, fell in February the number of new cars sold by 80 percent compared to the previous year.
But while everyone had to sit at home, the boom in another industry was emerging: virtual shopping via live stream and short videos. Basically, that’s nothing new, reports Michael Mayer, China sales director at Volkswagen. Even before the virus, many Chinese customers were already getting information online and then processing the purchase in the store.
But with the corona crisis has accelerated a trend around commercial live streaming, the value of which the financial services company Zhongtai Securities put in China in 2019 at 56 billion euros.
While live streaming is mostly common in the gaming and entertainment industry in Europe and North America, market research firm iiMedia estimates that more than half a billion people in China watched amateurs video their daily lives for others. Half of them are particularly interested in shopping channels. 40 percent of them in turn had already bought goods in the first half of 2019 that were offered via live streaming.
50,000 car sellers attend digital course
And platforms such as Kuaishou and Douyin, Bytedance’s Chinese counterpart to the international version of the short video app TikTok, where live videos can also be offered in addition to short videos, experienced a boom during the forced quarantine. According to the consulting firm Questmobile, its user base increased by 35 percent to 574 million during the Chinese New Year. While users only spent an average of 78 minutes a day on the apps in 2019, this year it was 105 minutes.
During the extended Chinese New Year holidays alone, when most of the Chinese stayed at home due to corona, Alibaba’s live streaming platform was able to attract more than 43 percent new viewers. In early April, Chinese internet star Luo Yonghao sold goods worth a total of 14 million euros within a three-hour live stream.
Tried by the trend too VW to benefit. In mid-February, the company offered its car sellers together with the “Taobao University” of the e-commerce giant Alibaba a course to improve sales with social media. VW sales manager Mayer was surprised by the enthusiasm of the sellers. Almost everyone was ready to try it out. Around 50,000 car sellers from all over China took part in the eight-hour course.
Seller Wang also sat in front of his computer every evening and trained step by step to become an Internet star. How do you plan the shoot? What is important when filming? How do you design the videos?
Turn viewers into paying customers
After a discussion with colleagues, Wang’s store decided to focus on videos with advice. “Anyone who makes funny videos gets more viewers, but they don’t want to buy cars,” he explains. In market research, Mayer explains, VW found that viewers in particular asked for details about the product, had technical details explained, and wanted to compare different versions of the same model. In addition, you can address and inform a wider and younger audience on social media such as Kuaishou and Douyin.
But the biggest challenge is to turn viewers into paying customers. The platforms try to make the shopping experience as easy as possible by going to the product page of the goods on Taobao or JD.com link, but at the latest when making the transfer, consumers reach the upper limit of 10,000 renminbi, i.e. the equivalent of just under 1,300 euros, per transaction.
To remedy this, VW offers loan contracts online. As soon as the connection to the partner bank had been established via the platforms, the creditworthiness of the customer could be queried and payment initiated. Of course, no digital offer can replace real experience, says Mayer. “In the end, the customers want to feel and smell the car.” Of course, you can also book test drives online – the number of users is also increasing significantly. It also helped that the customers were able to receive digital advice. The so-called conversion rate is currently very high, says Mayer. This means the relationship between visitors who visit a car shop and then actually buy a car. “Many customers who come to us have already seen our livestreams and short videos,” says Wang, who giggles shyly when he talks about his female fans who are now faithfully following him on his livestream.
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