“Live-stream shopping in China is very influencer-driven. People watch live streams because they trust the influencer,” he said. “Whereas in the US, it’s still brand-focused. The relationship is between the brand and the customer, not an influencer.”
Unlike mainland China’s influencer-driven live-streaming e-commerce segment, the direct relationship between brands and consumers remains strong in markets like the United States, according to Firework. Photo: Shutterstock
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 South China Morning Post.
Luk pointed out that the brands he works with prioritise “authenticity, personalisation and emotional connection” with customers, especially when their average order value is worth more than US$50.
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 DTC independent brand report by GoodsFox, a global marketing data analytics platform.
Firework’s platform provides merchants with a virtual showroom, which they can operate in real time or pre-record campaigns, supported by an artificial intelligence-powered assistant to answer shoppers’ questions online. Photo: Firework
“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 respondent cross-border e-commerce merchants chose independent website channels as their primary platform. About 76 per cent of those surveyed preferred a business-to-consumer platform, while 51 per cent opted for a social media e-commerce platform like TikTok Shop.
One major factor for merchants to set up an independent website is to build brand value and improve shopping experience, while mitigating compliance risks and various restrictions associated with third-party platforms, according to the report.
Many cross-border e-commerce merchants have typically relied on selling their goods overseas via platforms like Amazon, eBay and more recently, discount e-commerce giant PDD Holdings’ Temu.
Firework co-founder and president Jerry Luk Ting-kwan speaks at an event held in Tokyo in August 2022. Photo: Firework
“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 19.6 per cent year on year 1.83 trillion yuan (US$252.9 billion), according to China customs data. That figure is expected to reach 2.66 trillion yuan in 2025, according to data from iiMedia Research.
There were 31,500 cross-border 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, facing intense domestic competition and weak domestic spending, are already ramping up overseas expansion, according to Kenneth Fong, head of China internet research at UBS, said in a briefing in Hong Kong in January.
Established in 2017, Firework has doubled its efforts to expand in large markets like mainland China and India after it closed a US$150 million Series B funding round in May 2022 led by SoftBank Vision Fund 2, a venture capital fund founded in 2019 by Japanese conglomerate SoftBank Group Corp. Firework has raised more than US$235 million in capital to date.
“What we are seeing is that the Greater China region is creating a lot of high-quality products. These are very competitive in overseas markets and get a lot of traction,” Luk said. “We’re betting on the future of the Chinese supply chain, which I believe is the best in the world.”
