Because the COVID-19 pandemic rages the world over and challenges the worldwide economic system, e-commerce livestreaming associated industries proceed to thrive in China.
Among the many corporations is Shang Jing (上镜), a Beijing-based startup that makes use of machine studying to standardize and make extra environment friendly the matchmaking course of between manufacturers and web celebrities (also called key opinion leaders or abbreviated as KOLs.) Eric Fu, the founding father of the corporate, stated at present, the platform has about 1,000 manufacturers and 3,000 registered KOLs.
Within the booming home social commerce livestreaming market, there are roughly 30 comparable platforms, however none work the identical as Shang Jing, which operates mechanically with none human labor.
Historically, the matchmaking takes place in WeChat teams the place a platform’s crew manually organizes manufacturers in a single group whereas posting manufacturers’ necessities within the different KOL group to complete the matchmaking. Nevertheless, it’s exhausting for a platform to scale up for the reason that entire course of consumes time, human labor and power whereas the data is normally typed into excel sheets.
Shang Jing upgraded the mannequin by means of using large information, which varieties a really clear and trustworthy image of what KOLs have achieved previously, together with their earlier transaction historical past and the sorts of merchandise they offered. Fu advised Pandaily that the method can be freed from authorized points, since Shang Jing makes use of third-party software programming interfaces (APIs), by means of which the corporate will get sources from e-commerce platforms and social media platforms, in addition to permission from the KOLs.
When it comes to the matchmaking course of, each manufacturers and KOLs can register on the platform at present on an invite-basis. For manufacturers, as soon as their product high quality is permitted by Shang Jing, they’re allowed to publish their necessities and product info on the APP. Primarily based on the information of KOLs, Shang Jing’s platform will mechanically advocate an applicable cohort of KOLs to manufacturers to allow them to ship out gives. For KOLs, which primarily belong to the middle-tier, appropriate job gives can be dispatched to them they usually can select to simply accept or refuse. As soon as a match is accomplished on the platform, every movie star will begin an automatic course of to finish their livestream-based transaction.
Nevertheless, that is removed from the primary motive why Eric Fu began the enterprise within the first place. As a Harvard alumni and a Chinese language American who grew up in New York Metropolis, he used to work as a lawyer on Wall Road and lived a content material life with an satisfying annual wage of greater than RMB 2 million. Nevertheless, he discovered the steady atmosphere considerably monotonous and determined to return again to China to begin afresh. Introduced up in a household that by no means acquired such an elite schooling as he had, Fu absolutely understands what it takes to begin an organization from scratch however he finally gave it a shot.
Fu recalled that his mom’s facet of the household has been working within the leisure trade and thru his observations of present enterprise in China, particularly the middle-tier of the market, he discovered the place he might slot in. If there’s a platform growing and stabilizing their earnings, they might be further prepared to attempt. And for manufacturers, Shang Jing’s algorithm helps them match with KOLs whose viewers have the acquisition energy and better conversion charge.
Fu additionally expressed his deep concern for the MCN-and-KOL trade. MCN, or multi-channel networks, are a sort of establishment working with content material creators to supply endorsement alternatives, social networks and promotional methods. “In the U.S., a talent agent charges about 10% of a KOL’s income per year but here [in China], it’s 70% on average. After all their work, the KOLs only puts 30% in their pockets and that’s before tax,” Fu defined. Therefore, when talking of the long run aim of the corporate, he stated he anticipated to reorganize the enterprise within the subsequent three years.
As an organization at present with a seed spherical of financing, Shang Jing primarily earnings from the pure fee system, which earns 5% of the gross sales income of a deal matched through the platform. The model additionally offers KOLs, on common, 15% to 20% of the general quantity. For some small-scaled and middle-sized MCNs, the platform serves as an ideal probability for them and their KOLs to make a revenue. Center-tier MCNs signed about 40 to 100 KOLs they usually couldn’t assure a steady earnings for the KOLs because of restricted sources from and connections with manufacturers. By accessing Shang Jing’s platform, their KOLs can scroll by means of extra appropriate job gives and MCNs nonetheless revenue based mostly on their contracts with the KOLs.
Since its institution in April 2019, Fu’s firm Shang Jing has been bestowed with a wide range of advantages and favored by an array of pleasant home insurance policies, which belong to a part of the Chinese language authorities’s plan to draw overseas skills to begin companies in China. Shang Jing’s workplace is situated in Beijing-based Haidian Pioneer Park, an entrepreneurship hub for abroad college students in China, the place Fu and his 13-person crew work in a shared working house rent-free. Varied tech and entrepreneurial competitions have additionally offered money advantages and home windows to speak with different startups in China. Fu listed the instance of OTEC International Innovation Week, an annual pageant bringing worldwide enterprise innovators collectively to showcase their achievements and trade concepts, and his crew gained a 10,000 yuan award this 12 months.
Though Shang Jing is progressing easily, Fu nonetheless shared a number of the challenges he encounters. As coding and algorithms are the core of a expertise firm, recruiting top-quality back-end engineers is at all times a precedence. Nevertheless, a startup can’t supply salaries much like tech giants like Alibaba, Tencent or ByteDance. The crew can also be seeking to improve its enterprise growth crew, which have already got extensive connections within the KOL trade in addition to a profound understanding of the Chinese language market.
For a startup firm like Shang Jing, the most important attraction to staff can be how a lot they’re valued and a shared dream, in line with Fu. He additionally talked about that for high-level skills, they don’t at all times see cash the identical means as recent college graduates as a result of they’ve been by means of phases in life and happiness for a few of them doesn’t essentially revolve round wealth.
“It’s not always about the money,” Fu stated. “It’s also about a sense of accomplishment and what one can do to change the industry and society for the better.”