AliExpress Aims to Replicate ‘Lipstick King’ Livestream E-Commerce Success in Brazil

The company is testing daily broadcasts with influencers as salespeople, with a strategy to expand in the Latin American country

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October 26, 2022 | 03:26 PM

Bloomberg Línea — AliExpress, the marketplace arm of Chinese e-commerce giant Alibaba, sees Brazil among its “top five markets” for its livestream commerce push in a bid to overtake rivals such as Shopee and MercadoLibre.

The company is testing daily broadcasts - from Monday to Friday - on its app and Instagram page as a strategy to expand sales in Brazil, Briza Bueno, director of AliExpress in Brazil, told Bloomberg Línea in ahn interview.

“Looking at the market as a whole, and what it has already become in China, we see a great opportunity to bring this front to Brazil. When a person enters live commerce, it is much easier for you to take them from a quick knowledge of that product to the purchase,” she said.

The path is faster because of the host. Although not yet so common in Brazil, live commerce in China is such a big business that it has created celebrities like ‘the lipstick king’, known for offering daily livestreams on the Taobao app.

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It may seem surprising, but lipstick king Li Jianqi’s rhetoric has engaged more than 150 million followers that he amasses on his platforms.

According to Rest of the World, the e-commerce industry per livestream in China has become a $100 billion business.

The numbers are impressive: the ‘lipstick king’ has sold 15,000 lipsticks in five minutes. The success prompted Jack Ma, the billionaire co-founder of Alibaba, to challenge Li to a lipstick-selling competition as part of the 2018 Global Shopping Festival in Shanghai. On the occasion, Ma sold 10 lipsticks, while Li sold 1,000.

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

In Brazil, livestreams are posted at the end of the day and are 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 livestream broadcasts.

“We are doing several tests concerning product and assortment to help us understand what works, what is the best format that works in Brazil. Because with many of these trends that we see abroad, and especially in China, because it is a more developed e-commerce market, we have to understand how to adapt them to the local consumer,” said Bueno.

“It is a lot of testing and learning to understand how these innovations can develop here,” she said.

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Bueno says that in China the live commerce market is projected to represent 20% of all Chinese e-commerce by the end of the year. She believes that the initiative can work in Brazil because it is a country “that is very engaged with social networks, and influenced by digital influencers”.

Alibaba, which launched AliExpress in 2010 as a platform for international shopping, has ridden the wave of offering cheaper products to Brazilians since it arrived in the country in 2012.

But as competition for the e-commerce market has gone overseas, Ali has experienced stiff competition from Amazon and Shopee, a brand belonging to Singapore’s Sea Group, funded by Chinese tech giant Tencent, Alibaba’s main rival.

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Once the largest company in China, Alibaba has seen its market value dented by regulations in China, which has pushed the group to revitalize its strategy abroad. Besides AliExpress, Lazada is considered one of the most successful market initiatives outside China, and recently announced a push into Europe.

Shopee, which has invested heavily in Latin America over the past two years, has retreated from the region, saying it will focus only on Brazil, which is the market in which the company has led. The June report on e-commerce sectors in Brazil produced by the Conversion agency, shows that of the 10 largest companies in the online shopping market in Brazil, three are Asian: Shopee, AliExpress, and Shein.

Taking into account access by applications, Shopee is in first place with more than 125 million accesses in May, 40.8% more than MercadoLibre, which had just over 74 million visitors in the same month.

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

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Macro headwind

In the first half of the year, Alibaba laid off nearly 10,000 employees, reflecting moves by technology companies to rein in spending as macroeconomic conditions were unstable by inflation, supply costs, and political tensions. In Brazil, however, Bueno said there were no layoffs. The company has an office in São Paulo.

“This impact of high interest rates happened globally and this ends up diminishing people’s purchasing power,” Bueno said. “But one of our big differentiators is being directly connected with factories and having far fewer intermediaries, so we can make the products much more accessible at this time as people are looking for cheaper solutions.”

The marketplace said it aims to become a platform for merchants from all parts of the world to sell locally and globally. But the foreign seller is still much bigger than the Brazilian sellers on the platform.

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“We have had the international operation for 12 years and the operation with local sellers for about a year, opening up to locals is still very new compared to our track record,” Bueno said.

AliExpress has made a recent effort to bring official shops to the marketplace and charge a simple fee for the Brazilian seller. “We made a simpler commissioning system, it was a very good incentive for local vendors. We have made several investments for the local vendor to sell more within the platform. Our commission is the most attractive in the market,” said Bueno. The company can charge local sellers from 5% to 8% on the platform.

For international purchases, AliExpress has eight chartered cargo flights to Brazil per week. From the time of purchase, until the product arrives at the airport in São Paulo, takes seven days. Then, the package is distributed by partner carriers or Correios, Brazil’s state-owned postal service.

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

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