Q&A: Gushcloud's Althea Lim

Q: How has COVID-19 impacted media and marketing?

A: A lot of brands have withheld spending on awareness marketing. Instead, they’re looking toward the live commerce and social commerce channels that are really performing, and entertainment is playing a bigger role in that. I think that awareness spending will come back, but this year, they’re still being cautious. The role of a CMO has become very tough in today’s world. A lot of CMOs spend money on awareness but not many of them know how to spend on performance. That means they now have to start understanding audience data. It’s more of an analytics position now, rather than being about gut feel.

Q: How has public behavior changed?

A: People are spending a lot more time on mobile and there has been a spike in shopping on social media channels, which gives brands an idea of how to target audiences. People who are watching Facebook live commerce sessions are typically older, 35 and above. Instagram is a lot younger, 18 to 40. Before COVID-19, people didn’t have as much time for live commerce – now they have the time. Strangely, people are listening to less music. Fewer people are traveling, and they have more time for movies. They’re not on public transport or going for as many walks. I think that’s a temporary change, but we’re not sure.

Q: What do investors in this space need to know?

A: The unit economics that investors should be looking at in live commerce are GMV [gross merchandise value] per session, the take rate of converting viewers into buyers, and the average basket size. If they’re looking at platforms, that’s a very dangerous game in my opinion. We have two to five apps reaching out to us every day asking us if we could put our talent on their platforms. But which one is going to succeed against the Chinese companies that are already dominant? There are going to be a lot of SaaS [software-as-a-service] tools for live commerce too, but investors will have to ask what’s so special about them that they can’t be disrupted by the social media and e-commerce platforms.

Q: How has media investment been impacted by the blurring of entertainment and commerce?

A: Investors need to look at the number of fans because this entire genre of live commerce will be driven by either the platforms or the talent. It will never be driven by the products. If the talent is really entertaining, you buy something useless, and you still come back next week, watch it again and love it and buy something else. All e-commerce platforms will want to move into as much entertainment as possible because the customers are not as cost sensitive. Amazon e-commerce customers, for example, stop calculating unit economics when it comes to paying for Amazon Prime.

Q: What does this mean in terms of influencer strategies?

A: It’s very exciting because it creates a whole new generation of jobs. In the past, you could win on Instagram if you were a beautiful model, but now you must have talent, and you need to be able to speak, engage, and sell. Influencers are taking on products and becoming distributors. They used to just provide a link, but now they’re actively creating content and becoming the store themselves. The scalability makes sense; an influencer would rather sell a product and make a 20% commission than be paid $2,000 to do a couple of social postings.

Q: How is Gushcloud responding?

A: We’ve been signing a lot more sales-driven influencers and started producing more YouTube content. We’ve also seen that gaming is at an all-time high, so we now have a gaming roster, which we never had before 2020. That includes entire teams in Singapore and Japan. We entered China in late 2019, and during 2020 we brought in some accounts there. We’re focusing on co-creating cross-border content and commerce in China with four platforms – Bilibili, Weibo, Xiaohongshu, and Douyin. The West is still the future of brands, intellectual property, and content, but the future of technology and how technology effects consumers belongs to China.

Q: What has been your impression of working with these platforms?

A: They’re more cooperative and they behave like ecosystems in themselves. They’re very hungry to have their audiences stay with them, so they will do anything they can to be able to license or have creative content on the platform. They move a lot faster than platforms outside of China, and they’re also more collaborative in partnership terms. If we bring them a channel, they will assess it, decide what will work in China, and they’ll put marketing dollars behind it, while we handle everything else. They really understand the data of their audiences, and that’s why they know how to pick.

Q: Where is this leadership taking the industry?

A: China is going to double down on live commerce without a doubt, and Chinese brands are also going to start exporting more aggressively. Short-form creative content will do well globally. The TikTok model is here to stay, and it’s going to be more celebrity-driven. One thing that hasn’t hit shores outside of China yet is the rise of leadership coaching, where personalities – who are not famous people – give 15-second tips on things like how to meditate, what to do before a meeting, or they explain the meaning of famous quotes in their own words.

Q: What do you see on the broader horizon?

A: One thing that has not really taken off in China or anywhere is virtual influencers. There are some examples that are successful, like Lil Miquela, but I don’t think anyone has really cracked that model yet. We’re also seeing a rise in financial YouTubers, who are sharing their knowledge about stocks and really moving the market. That’s going to be a trend for the next few years, but there’s no regulation, so we’re not sure. For us, the key question is what kind of content can live on multiple platforms on a global scale? Luxury is one. That kind of content can live for a very long time across cultures and languages.

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• Topics
• Southeast Asia
• Greater China
• Media
• Technology
• Singapore
• TMT