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The web stars economy: Open shop, live stream and earn millions

By Li Ruijia
0 Comment(s)Print E-mail China.org.cn, July 29, 2016
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How to make a million in a year? First, start a micro-blog, post catchy photos and get famous. Next, open an online shop. That is what Fei Bao is doing.

Fei Bao live-streams from her office to hype the launch of her clothes store on Taobao. 

One Sunday afternoon in May, Fei Bao live-streams from her office in downtown Beijing to hype the launch of her clothes store on Taobao, an online shopping website by Alibaba. Fei Bao is a PhD student at the University of International Business and Economics. Like many other up-and-coming web stars, Fei Bao built her fame on twitter-like Weibo and then was discovered by incubators. Now she stands at the forefront of one of China's most enterprising industries.

Sales from the Taobao's web star shops doubled from April 2015 to March 2016. According to a CBNData report, China's web star economy will be worth over US$8.7 billion in 2016, triple UNIQLO's 2015 sales in China.

Fei Bao's web stream lasted three hours. She changed clothes in a sample room, walked out, spun to offer a view of the clothes in front of the camera, and chatted for 15 minutes before putting on a new outfit. Over 30,000 people watched the stream.

It's Fei Bao's second experience with Taobao live streaming. "Compared with other live streaming services, what's great about this is the conversion rate. While live streaming on Taobao, you can send links. So even if you are just chatting away, about yourself, they'll ask you where you got your mascara."

"Taobao values web star shops now, because their sales volumes have become very significant. Some of those shops sell hundreds of millions of yuan a year. One million for a new release is only normal," said Fan Zi, who oversees operations at a web star incubator.

Running a shop on Taobao takes a whole team, hence the importance of web star incubators. They sign stars and hire designers, photographers, copy writers, and Weibo operations staff --- and take a cut of the profits. Most of them are in Hangzhou, China's e-commerce capital, and tier-1 cities like Beijing, Shanghai and Guangzhou.

Xu Zihan is a co-founder of Weidu, a web star incubator. Plans for Weidu began in mid 2015, and by early 2016 the business had already moved from Guangzhou to Beijing's most trendy area—Sanlitun. Her office window offers an extended view of Sanlitun's busy Gongti North Road, where traffic seems to jam 24 hours a day.

"I moved to Sanlitun about 6 months ago, but I haven't got a chance to walk around much. Too busy." She's busy finding web stars with potential. Weibo is the place to find them. "I don't look much at the number of followers. The numbers can be dodgy. You can buy zombie followers. I look at the interaction rate of their posts."

Interaction rate offers a peek into the account owner's "net instinct" and emotional intelligence, important for determining how popular a web star can be.

"We've had very pretty web stars, but they don't know how to communicate. Can't work with them," she said.

Weibo also launched a series of marketing tools for web stars recently, and the hottest stars spend hours each day interacting with their fans --- their core customers. They discuss details of upcoming products such as fabrics, colors, and collar styles. This increases fan engagement and informs market demand. An operations team tracks the backstage data of the star's Weibo account, and adjusts the contents of her posts accordingly. For them, the worst thing is losing followers.

"If the follower number drops, we'll talk to them. Zombie followers won't drop, so it's the real users that we're losing. Once they unfollow, they're never coming back. That's a major loss," Fan Zi said. "The more followers a web star has, the more discounts she'll get on those tools. And some tools are limited to web stars with one-million-plus followers only."

He hopes one of his web star's followers will exceed a million by the end of the year.

But while 2015 saw a boom of unchecked growth in the industry without many barriers and regulations at the platform level, according to Xu Zihan, that may well change. "2016 will be a year of reshuffles," she said.

 

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