Challenges abound
However, the road to internet stardom can be bumpy. Like many other businesses, gaining an initial advantage is crucial to success, with latecomers likely to find it harder to make an impression.
For example, China's top 50 influencers generated a combined 12.35 billion yuan ($1.77 billion) in merchandise sales in May, with Viya Huang and Li Jiaqi－the top two players－claiming about one-third of the total, according to a joint report from the consultancies WeMedia and Phoenix Entertainment.
Pei, from Sinolink Securities, said less than 10 percent of merchandise is promoted by professional livestreamers, but they have contributed to more than 50 percent of sales.
Lena Fang, a dealer representing a group of overseas niche cosmetics brands, decided to avoid working with online celebrities after carefully doing the math.
"Taking into account the one-off payment for an endorsement, plus the discounts we offer to attract customers, for each facial cream I sell through a leading KOL, I stand to lose in the region of 80 yuan to 100 yuan," she said.
To avoid working with less-talented KOLs, marketers need to find out if influencers are as popular as they claim, Fang added.
"It's not unusual for half the products purchased via livestreaming sessions to be returned later," she said."This is due to many of the 'consumers' essentially being paid viewers."
According to market experts, negative customer experience and a bad return on investment can affect the livestreaming industry's long-term growth.
Derek Deng, a partner at United States management consultancy Bain &Co, warned that livestreaming could "overheat". Being involved in the business does not necessarily guarantee success, and a livestream channel could fail due to a lack of good operating practices, he said.
"As this is a relatively new market for customers, merchants should manage it properly and comprehensively, just as they do with other businesses," Deng said. "As brands digitize their business, they should also design, decide and deliver accordingly."
Yi, the trainer, said that in the final analysis livestreaming is a combination of techniques and improvisation.
"Even if people improve their sales ability to become top influencers, they still need the right temperament and charisma," he added.
