© Reuters. FILE PHOTO: Durex, a model of Reckitt Benckiser Group PLC, is seen on show in a retailer in Manhattan, New York Metropolis, U.S., March 24, 2022. REUTERS/Andrew Kelly/File Picture
By Richa Naidu and Casey Corridor
LONDON/SHANGHAI (Reuters) – Durex-owner Reckitt is hoping that Chinese language shoppers’ penchant for livestream purchasing can even lengthen to purchases of condoms, however the firm should toe a “delicate line” because it seems to be to develop its slice of the $5-billion-plus condom market.
The hype round livestreaming, which has grow to be a significant driving power of an e-commerce growth that has been sweeping China because the starting of the COVID-19 pandemic, may assist the British shopper items group in its quest to drive progress on the planet’s second-biggest economic system.
Livestreaming generated gross sales of $238 billion in 2022 in China. That’s estimated to rise to over $300 billion by 2025, based on analysis agency eMarketer.
Reckitt has already tasted success liveselling family merchandise in China, however condoms may show a more durable promote as Chinese language regulators intently monitor sex-related content material on-line – with out all the time clearly spelling out what precisely crosses the road.
“There is no such thing as a clear definition of what vulgar content material is – that is as much as the regulator to resolve and the system is sort of socially conservative,” stated Kendra Schaefer, head of tech coverage at China-focused analysis agency Trivium.
“So how do you speak about sexual well being with out tripping the ‘vulgar’ subject? It is a delicate line to stroll.”
The upside for Reckitt, nonetheless, is compelling given the multi-billion greenback measurement of the marketplace for condoms. The China Enterprise Analysis Institute has tipped China’s condom gross sales will hit $5.2 billion in 2024, with market chief Durex boasting a 40% market share as of 2020, based on Daxue Consulting.
On Wednesday, Reckitt reported a 1.2% year-on-year decline in fourth-quarter like-for-like internet income, and a 7% slide in general internet income to three.56 billion kilos ($4.51 billion). The corporate does not disclose its China gross sales figures.
Arjun Purkayastha, who leads Reckitt’s enterprise in Larger China, stated livestreaming is a major progress driver for the agency, accounting for a “near double-digit” portion of gross sales within the nation for Reckitt merchandise – together with Dettol sprays and Strepsils throat lozenges.
“Persons are not used to seeing condoms on livestreaming but,” Purkayastha stated. Reckitt started livestreaming “selective” Durex merchandise over the summer season on Douyin, the native model of TikTok, with a watch to scaling up in future.
“Intimate wellness normally takes a short time to construct up acceptance as a result of typically there are fears of complaints or different issues… Initially, with Durex, most platforms had been like ‘whoa, maintain on’ however I feel now they’re opening up far more,” he added.
‘CLASSY’ MARKETING
Purkayastha stated Reckitt’s livestreaming channels in China differ from the Instagram-led mannequin widespread within the West that includes paid influencers who’ve used merchandise themselves and advocate them personally. As an alternative, workers in studios or different areas like factories describe product origins, sharing info and pitching them to consumers.
“It is only a matter of time that we study to do it in a cultured method with out offending anybody” in China, Purkayastha added.
The shift in China’s media consumption habits towards livestreaming and quick video make it an important channel, even for condoms, stated Yaling Jiang, founding father of analysis and technique consultancy ApertureChina.
“Chinese language folks can simply get sick and bored with a model. I feel Durex understands this…It is good to see them attempting new issues,” she stated.
If there’s anybody who could make livestream condom gross sales work, Daxue’s Suheng Wu says, it would simply be Durex, which has a decades-long historical past within the Chinese language market punctuated by intelligent advertising campaigns and comparatively few missteps.
That is largely attributable to a historical past of skillfully skirting the boundaries of China’s socially conservative media panorama, attracting thousands and thousands of followers on social media platforms corresponding to Weibo (NASDAQ:) and Douyin within the course of.
Its campaigns, corresponding to final 12 months’s Chinese language New 12 months Durex mahjong present set which changed conventional tile names with intelligent options brushed with innuendo, or a Durex model of tetris on tremendous app WeChat, typically go viral.
However the intrinsic discomfort with sexual content material will stay an issue in some contexts, Wu, 24, stated.
“If I used to be watching Douyin and a condom livestream got here on, I might be curious to see what it says,” he added. “But when I used to be within the room with my mother and father, I might swipe away so quick!”
Livestreaming in China has helped increase spending partially as a result of it typically provides deep discounting and low costs, however an rising variety of manufacturers, together with Reckitt, now say they’re making the shift to much less discounting.
“There’s loads of motive to be optimistic,” Purkayastha stated of the China market. “This speak of deflationary setting and all these items, we do not actually determine with it – I feel it is large headline information. However the actuality on the bottom is it is virtually enterprise as typical.”
($1 = 0.7904 kilos)
