AliExpress seeks ‘Lipstick King’ to replicate live store in Brazil

Bloomberg Línea — China fever, live commerce has been taking off in Brazilian online retail in recent years. Companies such as Magazine Luiza (MGLU3), Mercado Livre (MELI), Via (VIIA3) and Americanas (AMER3) have already tested this sales model based on live streaming over the Internet. In life, salespeople promote products, answer consumer questions, and sell at the same time.

AliExpress, the marketplace arm of China’s Alibaba Group ( BABA ), is a global giant that has bet on live commerce. The model is now at the heart of a strategy to gain market share in Brazil and compete with rivals such as Singapore’s Shopee and Mercado Livre.

The company is testing daily broadcasts – from Monday to Friday – on its app and on Instagram as a strategy to increase sales in Brazil, Briza Bueno, director of AliExpress in Brazil, said in an interview with Bloomberg line.

“Looking at the market as a whole and what has already become in China, we see a great opportunity to bring this front to Brazil. When a person enters live commerce, it’s much easier to be able to take her from quickly learning about that product to making a purchase,” said the CEO. According to her, Brazil is among the five largest AliExpress markets in the world.

Closing a sale through live commerce is faster because of the manager. Although not yet as common in Brazil, live shopping is such a big business in China that it has spawned celebrities such as the “Lipstick King” (see below), known for his daily broadcasts on the Taobao app.

It may seem unusual, but the lipstick king broadcasts Li Jianqi became so famous in the country that it has amassed more than 150 million followers on its platforms. According to an estimate by McKinsey consulting firm, the total sales volume achieved through direct commerce in China reached 171 billion US dollars last year.

The numbers confirm the success of this model in China: the lipstick king has already managed to sell 15,000 lipsticks in five minutes during the broadcast. His popularity forced him Jack Ma, the billionaire co-founder of Alibaba, challenged Li to a lipstick sales competition as part of the 2018 Global Shopping Festival in Shanghai. At that time, Ma sold 10 lipsticks. Li sold a thousand.

But in Latin America the reality is different and the company wants to expand this new way of online shopping in the market.

In Brazil, AliExpress Live is held at the end of the day, and is presented by influencers such as Instagrammers Marcos Matos and Chris Castro. AliExpress says its products are offered with discounts and special conditions if purchased during the broadcast.

“We are conducting several product and assortment tests to understand what works and what is the best format in Brazil. A lot of these trends that we see overseas and, mainly, in China, because it’s a more developed market in e-commerce, we need to understand how to adapt to the local consumer,” said Bueno. “There’s a lot of testing and learning to understand how these innovations manage to develop here.”

Bueno said he was in China live trade it is predicted to represent 20% of all Chinese e-commerce by the end of the year. She said she believes the initiative can work in Brazil because it is a country that is highly engaged on social media and receptive influencers”.

fierce competition

Alibaba, which launched AliExpress in 2010 as an international shopping platform, has been riding the wave of offering cheaper products to Brazilians since arriving in the country in 2012.

But as competition in the e-commerce market crossed oceans, AliExpress faced stiff competition from Amazon ( AMZN ) and traderbrand of the group sea (SE), Singapore, is funded by the Chinese tech giant tencentmain rival alibaba.

Once China’s largest company, Alibaba has seen its market value plummet due to tighter government regulations, prompting the group to revitalize its overseas strategy.

Along with AliExpress, Lazada is considered one of the most successful market initiatives outside of China, to the extent that it recently announced an expansion into Europe.

Shopee, which has invested heavily in Latin America over the past two years, has taken a step back from the region, saying it will focus only on Brazil, which is the best-performing market. June report of E-commerce sectors in Brazilcreated by the Conversion agency, points out that out of the ten largest companies in the online trade market in Brazil, three are Asian: Shopee, AliExpress and Shein.

Taking app access into account, Shopee came out on top with more than 125 million visits in May, 40.8% more than Mercado Livre, which had just over 74 million visitors in the same month.

AliExpress had 24 million visits, the same number as Amazon.

However, the number of hits does not necessarily translate into higher ticket sales and purchases, which are fundamental metrics for e-commerce growth and profitability.

Macroeconomic wind

In the first half, Alibaba cut about 13,500 jobs globally, keeping a total of 245,000, reflecting moves by technology companies to curb spending amid volatile macroeconomic conditions with rising inflation and interest rates, higher supply costs and political tensions. In Brazil, however, Briza Bueno said there were no layoffs. The company has an office in São Paulo.

“This impact of high interest rates happened globally and it ended up reducing people’s purchasing power,” said the director of AliExpress in Brazil. “But one of our big differences is that we are directly connected to the factories and we have a lot less intermediaries. We managed to make products more accessible at a time when people are looking for cheaper solutions.”

The company aims to become a platform for merchants from all over the world to sell locally and globally. But the number of foreign sellers is still much higher than the number of Brazilian sellers on the platform.

“We have been doing international business for 12 years, and we have been working with local sellers for about a year. Opening locations is still very new in our history,” Bueno explained.

No wonder, AliExpress has recently made an effort to bring official stores to the market. “We created a simpler ordering system. It was an incentive for sellers locations. We made several investments in local sellers to start selling more within the platform,” said Bueno. The company may charge 5% to 8% from local sellers on the platform.

For international purchases, AliExpress has eight charter flights to Brazil per week. From the moment of purchase to the arrival of the product at the airport in São Paulo, the deadline is seven days. After that, the package is distributed through a carrier partner or the post office.

More than Black Friday, AliExpress is betting its chips on 11/11, the so-called “Singles’ Day,” China’s biggest shopping day.

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