Chinese e-commerce giant JD.com has reinvented clubbing for the coronavirus lockdown, live streaming it to people’s living rooms and delivering them alcohol from their favourite brands.
China has recently lifted its lockdown but the success of the project is leading JD.com to continue the streams until at least May. The Drum spoke to JD.com, who also shared some thoughts from two fo the brands involved in the project - Budweiser and Remy Cointreau, to find out about how it worked and whether live-streamed clubbing will become a new opportunity for brands.
According to JD.com, it realised very quickly how impacted liquor brands would be by the lockdown because the category relies on offline interactions.
Jack Chen, general manager of the Liquors Business, JD.com FMCG, says, “Covid-19 has forced people to stay at home and as a result, they haven’t been able out for entertainment. We wanted to use JD’s live stream platform to do some innovative live shows to bring more fun to customers who come to JD to shop during this time. Consumption of liquor relies heavily on offline scenarios, such as gift-giving, friends gathering, and bars and clubs. Since all of these scenarios were impacted during the epidemic, we wanted to create an online scenario to encourage customers to shop for liquor. We saw that some famous night clubs in China started to do online clubbing through live streaming, and thought we could combine e-commerce and live stream clubbing to benefit both customers and brands.”
A spokesperson for Remy Cointreau told JD.com that it took lessons from the SARS outbreak, which accelerated the adoption of e-commerce in China and showed that new behaviours created during these times would stick around after.
“The outbreak of SARS in 2003 triggered the first breaking point of e-commerce in China. This time, the Covid-19 has worse effects and stronger infectivity than SARS, which forced almost all cities in China to shut down the on-trade business, resulting in a business switch from offline to online. This trend has not only affected first-tier cities, but also the countryside. Under such circumstances, all Chinese consumers further adapt the habit of shopping online and will not travel abroad for the coming months, which leads to the rise of home consumption, local consumption as well as the consumption of Chinese products. We as spirits enterprise should also cater to the market demands by using new models,” says Remy Cointreau’s spokesperson.
Moving clubbing online to a live stream is not a new phenomenon, and many clubs and entertainment organisations are doing the same across the world. However, the link JD.com was able to make with the alcohol brands and e-commerce was the deciding factor for some of the brands.
Bruce Gao, head of Budweiser China digital commerce, China, says, “We were inspired by the ‘e-clubbing’ event hosted by famous nightclubs. And happy to join such events host by JD, which we can see it’s welcomed by the consumer. We believe it has brought a sense of refreshment and entertaining to the consuming occasions.”
The idea of live streaming is also not new for JD.com, which has used this technology across a range of sectors.
Expanding on this, JD.com’s Chen, says, “JD has used live streaming in multiple businesses to improve sales and bring customers a better shopping experience during the epidemic. For example, we have hosted live streams for agricultural products, home appliances, fashion products, etc. JD Health also hosted live streams to invite experts to share Covid-19 related knowledge with the public. With Covid-19, the fashion shows are affected for the time being. On March 19th, JD Live brought a fashion show for Ports online through live streaming. Unlike offline fashion shows, which only selected guests can join, all customers can join the live stream and interact with celebrities and fashion editors on fashion trends. The 9-hour live stream is the biggest live stream show that Ports has ever hosted.”
Prior to the virus outbreak, using this technology was the norm for verticals, with fashion being a prime example as many major brands have turned to live streaming to expand the reach of their shows. However, it hadn’t been a natural fit for liquor brands. Chen says the epidemic has shown brands how important it is to build online channels and conduct digital transformation but it has also meant more investment from technology firms like JD.com to fulfil the demand.
“More and more brands are putting more resources online and using digital tools to improve marketing results and customer management. During the epidemic, JD partnered with famous Chinese baijiu brand Wuliangye on a digital supply chain initiative. The program uses JD’s nationwide logistics network to provide last-mile delivery service to the brands’ offline stores and customers, building a smart, efficient and digital supply chain for Wuliangye,” says Chen.
For Remy Cointreau, the inevitability of needing to be more digital was clear before the epidemic, but the help from digital platforms has been necessary as sales were instantly impacted by the closures of the bars and clubs.
“There’s no doubt that tech and e-commerce companies are of great help. After all, becoming more digital is an inevitable trend despite the epidemic. Firstly, new technology provides us with new digital services and functions like flash, live streaming and etc. Meanwhile, they provide a platform with big traffic especially JD.com, one of the leading e-commerce platforms in China. Hence, we can communicate easily and quickly with a lot of people. Moreover, with their huge database, they can help us to target the right consumers who will be interested in our products,” Remy Cointreau told JD.com.
The result of the activity was positive, with both brands tracking improvements to sales compared to the instant decline in sales that came from the closure of its on-trade sales.
Budweiser’s Gao, says, “To us, Budweiser China, the ‘e-clubbing’ campaign directly brought traffic and gross merchandising value (GMV) growth to our e-commerce store. At the same time, we believe this new marketing format will be beneficial to brand favorability. Live-streaming is a new promotion format of e-commerce, and we believe this is a good opportunity and create new consumption scenarios. New technologies and e-commerce are changing the purchasing habits of Chinese consumers. We are also taking actions like integrating O2O channels, product innovation, to improve consumer experience and seize the business opportunity from e-commerce.”
According to JD.com, the activity has generated significant interest from brands. Chen explains that while the first live stream brought together multiple liquor brands, the demand soon came for more bespoke shows for single brands.
A secondary benefit to running clubbing via a live stream is that the comments and engagement about the brands can be seen and collated, creating an opportunity for live feedback around products and marketing.
“In addition to Budweiser, Rémy Martin, Carlsberg and Pernod Ricard who joined early on, almost all liquor brands on JD will join the program, including RIO, Chivas and more. Now we have scheduled shows until May. The results of the shows are continuing to improve since we started the program this February. In some shows, sales of the products can increase two or three times comparing to the same period of the day before, when there was no live stream. With JD live clubbing, there is no limit and about 100 times as many people as fit in an ordinary club each time," explains Chen.
"We also leveraged lots of resources to support the promotion of the live show, such as providing more exposure in the JD app and doing promotions through non-JD channels such as Weibo. In addition to sales increases, the live stream can also help increase customer loyalty for JD and the brands. During live stream shows, customers can interact with hosts and have the chance to learn more about the brands’ stories and product characteristics."
It is not certain what consumer behaviours from the epidemic will survive a return to normal life, but with China being a useful proxy for the rest of the world, live streaming and commerce combined have shown to be a powerful tool to engage consumers. However, brands need to be ready digitally to be quick enough to try these executions or find partners that can move the digital transformation journey along faster.