MERCHANTS GAIN DIRECT SALES PATH ON FIREWORK
Video commerce solution from US company allows mainland retailers to sell goods overseas outside the ‘walled gardens’ of the big tech firms
While the mainland’s massive short-video and live-streaming sector continues to expand, its e-commerce merchants are in need of a boost to directly sell their goods to overseas consumers, according to Hong Kong-born serial entrepreneur Jerry Luk Ting-kwan.
Luk, co-founder and president of live-streaming commerce and digital transformation platform operator Firework, made this assessment in a recent discussion in Shenzhen with mainland retailers as they looked to expand overseas outside big tech firms’ “walled gardens” – the large, closed online ecosystems typified by the likes of Amazon.com and Facebook.
“We see a challenge with the Chinese DTC [direct-tocustomer] retailers,” Luk, who has lived and worked in the United States for 24 years, told the Post on Thursday. “They don’t really quite understand the US or Western consumer markets.
“Live-stream shopping in China is very influencer-driven. People watch live streams because they trust the influencer, whereas in the US, it’s still brand-focused. The relationship is between the brand and the customer, not an influencer.”
California-based Firework, which set up its Hong Kong office this year, is now bringing its solution to mainland merchants to transform their websites into social and storytelling hubs, so they can build deeper, long-term relationships with customers.
Firework’s flagship video commerce solution provides each merchant with a virtual showroom, which can operate in real time or pre-record campaigns to serve consumers in different time zones. When a retailer is not online, a virtual artificial intelligence-powered shopping assistant can answer questions via a FaceTime-like conversation.
Similar to Alibaba Group Holding’s Taobao Live on the mainland, the Firework platform displays products in video format with a host who describes the product and answers questions. Alibaba owns the Post.
Luk said the brands he worked with prioritised “authenticity, personalisation and emotional connection” with customers.
The emergence of technology providers like Firework coincides with a growing DTC trend in cross-border e-commerce, in which merchants build their own websites rather than rely on large third-party platforms to sell overseas, according to a report by GoodsFox, a global marketing data analytics platform.
“Chinese sellers are moving from focusing on cost advantage to prioritising brand value and user experience,” the report said.
The report cited a survey that found 87 per cent of cross-border e-commerce merchant respondents chose independent website channels as their primary platform. About 76 per cent preferred business-to-consumer platforms, while 51 per cent opted for social media e-commerce platforms such as TikTok Shop.
One major factor for merchants to set up an independent website was to build brand value and improve shopping experience, while mitigating compliance risks and avoiding restrictions associated with thirdparty platforms, the report said.
Chinese sellers are moving … to prioritising brand value and user experience REPORT BY GOODSFOX
Many cross-border e-commerce merchants have typically sold goods overseas via platforms like Amazon, eBay and, more recently, discount e-commerce giant PDD Holdings’ Temu.
“We expect a decent portion of our revenue will come from the Greater China region in the next few years,” Luk said.
China’s cross-border e-commerce exports in 2023 grew by 19.6 per cent year on year to 1.83 trillion yuan (HK$1.98 trillion), according to customs data. This is expected to reach 2.66 trillion yuan in 2025, according to data from iiMedia Research.
There were 31,500 crossborder e-commerce enterprises operating on the mainland as of July 2023, with exports amounting to 1.55 trillion yuan in 2022.
China’s major e-commerce platforms were already ramping up overseas expansion, Kenneth Fong, head of China internet research at UBS, said in January.