This is the first article in a two-part series on the impact of China’s ban on private academic tutoring, which was announced one year ago, on July 24, 2021. You can read the second article in the series by clicking here.
ZHEJIANG, East China – Standing in some 10 square meter room crowded by piles of colorful scarves with logos that strikingly resemble Gucci and Louis Vuitton, Chen Huajing pitches one of them to viewers over 7,000 kilometers away in the UK via livestreaming on short video platform TikTok.
“You have a good taste … you deserve it!” she repeats in English.
The next day, she would turn to a bright room of a similar size, praising her live audience of primary school children in a similar tone: “I will give you a flower!”
“Commending others, even if they make just a little progress, is a skill engraved on my bones by tutoring,” the 25-year-old, who has been an English tutor for three years with the YES Tutoring Agency in Tonglu County, outside the city of Hangzhou, tells Sixth Tone.
Chen never planned on going into sales. She just wanted to be a teacher.
She says she planned on teaching from childhood, and realized her dream after graduating in 2018. But last year, regulators suddenly turned on the tutoring industry with a sweeping set of restrictions known as “double reduction.” These decimated the industry, forcing many companies out of business and cutting Chen’s monthly earnings by 2,000 yuan ($295).
YES is trying to build a new business with its roster of enthusiastic, positive English speakers: helping the social media giant ByteDance take China’s livestream shopping fad global through short video platform TikTok. Tech giants from Beijing to Seattle are counting on streamers like them to build what many believe will be the world’s next huge online market.
An English tutoring agency tries livestreaming to survive “double reduction.” By Chen Si/Sixth Tone
An English tutoring agency tries livestreaming to survive “double reduction.” By Chen Si/Sixth Tone
A fad made in China
While tutoring cratered, the livestreaming sales business was blasting off in China.
It’s a blend of the influencer economy, QVC-style shopping channel, and bargain hunting. The most famous livestreamers, like “livestream queen” Viya and “lipstick king” Li Jiaqi, became celebrities with followings of millions (both are currently offline after getting in trouble with authorities).
In the wake of the pandemic and lockdowns, the combination of home shopping, hours of content, and steep discounts won over hundreds of millions of Chinese consumers. McKinsey predicts the market will reach $423 billion in sales this year.
Those figures have both e-commerce and social media companies around the world salivating. Amazon, YouTube, Instagram, Facebook, Pinterest, and China’s Alibaba have all begun experiments with livestream shopping in the west. The U.S. livestreaming shopping market was expected to reach $11 billion by the end of last year.
But ByteDance, the parent company of TikTok, could be the natural leader of the pack. It’s already got a successful livestream marketplace on Douyin, TikTok’s Chinese sister app. And in TikTok, it has a global social media juggernaut with hundreds of millions of users.
Last year, TikTok opened the UK and Indonesian markets to Chinese cross-border merchants through its in-app “TikTok Shop.” The service was recently launched in Thailand, Malaysia, Vietnam, the Philippines, and Singapore.
TikTok plans to grow e-commerce gross merchandise volume (GMV) — an industry metric that measures the total value of goods sold — to $2 billion this year and $23 billion in 2023, Bloomberg reported, citing a person close to ByteDance. The ambitious target still pales in comparison with Douyin’s estimated e-commerce GMV of over 800 billion yuan last year.
Chen Huajing gives English lessons to students in Tonglu County, Zhejiang province, March 2022. Luo Meihan/Sixth Tone
A new hope
For now, the cutting edge of livestream e-commerce looks like Chen and YES Tutoring: a small group of earnest young people in small-town China, trying to interest British consumers in cheap products from nearby factories, ranging from scarves, earrings, and nail decorations, to pencils.
When Zhang Xiaojun, principal of the agency, first heard about cross-border livestreaming, she was in a desperate situation. By November last year, she was struggling to make payroll and had difficulty in falling asleep almost every day. When an e-commerce company called Meipin contacted her saying they needed English-speaking streamers, she leapt at the chance.
“We settled down the deal after a cup of coffee,” Zhang says, snapping her fingers. “I was like, wow, a way out, which also fits into our language ability. We have to try.”
But for Chen, transitioning between the two roles was not easy.
“After the policy, the tutoring industry is a dead end,” Chen says. “But to put aside my favorite thing to do what I may not enjoy makes me feel a sense of loss.”
Chen was scared when thinking of British viewers behind the screen, worrying they would judge her spoken English and ignore her pitch.
“A livestreamer is like a salesperson, which is suitable for those with a clear sense of purpose, planning, and impetus,” she says. “I am not very good at sales.”
Deng Yahui, founder of Homietech, a Hangzhou-based cross-border e-commerce marketing company, says that transitioning from teaching to selling goods is a big leap for tutors.
“Previously they were passing on knowledge to students,” Deng says. “Now they are peddling goods, which is not only about introducing a product, but more importantly, pushing consumers to place orders in a soft and appropriate manner.”
Chen hosted live shopping shows to hone livestreaming sales skills two to three times a week and took training organized by Meipin, who guided her through the process and reviewed her performance after joint live shows with another tutor-turned-streamer.
In March, she was finally ready to go solo with a two-hour show. She brought in a total of 73 pounds ($87), which would be split between Chen and the company.
“Before, I served as an assistant sorting scarves and replying to comments for other hosts,” Chen says. “But the revenue I make on my own, regardless of high or low sales, is what I contribute, giving me a sense of accomplishment.”
Chen Huajing models scarves during a livestream show. From TikTok
During the first few months of the year, the livestreamers sold scarves for around 400 pounds a day in two livestream shows lasting for two to three hours each, far lower than the company’s 3,000 pounds-a-day goal, according to Hu Liang, director of operations at Meipin. The tutors take a 10% to 20% cut of sales, which means barely any additional income from the part-time work.
Chen, YES Tutoring, and Meipin are very small-time compared to domestic onshore titans like Li Jiaqi. They’re also small compared to New Oriental, another tutoring-turned-streaming operation that’s hit pay dirt by offering free English lessons alongside sales pitches in the domestic market, peaking at over 60 million yuan in daily sales and then falling to a current average of around 20 million yuan.
But Meipin is about as big as it gets in the UK TikTok marketplace. When the company hit 1,300 pounds in daily sales once, it was enough to rank in the top 10 for TikTok’s UK market that day.
The results have been so underwhelming that TikTok has no current plans to expand into other western markets. The Financial Times reported in early July that the company canceled plans for Western Europe and U.S. livestream stores — a report the company denied, saying it never had such plans in the first place.
Meipin hopes to hire full-time livestreamers when it’s earning enough money, but for now it says the tutoring partnership has made it possible to enter the market while saving on labor costs.
“Very few are making profits now,” Hu says. “But if you hope to make a fortune in the TikTok livestreaming market, now is the time to step in.”
Hu Liang, director of operations at Meipin, monitors the company's livestream shows, Tonglu County, Zhejiang province, March 2022. Chen Si/Sixth Tone
A big if
Current livestream efforts in Europe and the U.S. are both too close to Chinese models, and not close enough, says Ed Sander, a tech observer who speaks and writes about China’s digital economy. Over 70% of Chinese livestreaming buyers earn less than 5,000 yuan a month, around half the national median income, and most live in lower-tier cities with few retail and entertainment options — not necessarily an analogue to TikTok’s core demographic of highly online youth.
But many also don’t deliver what makes Chinese livestreams so compelling: charismatic hosts, highly polished presentations, and real bargains on desirable products.
“Live commerce in the west often is little more than a demo of a non-discounted product,” Sander says. “The ‘sinking market’ outside the biggest Chinese cities have a lot of price sensitive buyers, creating enormous momentum for discounted commerce. I wonder if this will be the same in the west.”
Styles need to change too, says Homietech’s Deng.
“Western consumers do not like a pitch that’s just a pitch. You have to guide them to take a look at virtual goods on their own,” he says. “Domestic livestreaming shopping shows, especially on Douyin, are more like a hypermarket, with hosts shouting over the loudspeaker, ‘the price will be higher in seconds!’”
Due to a shortage of talent, Deng says, anyone who can speak English well is qualified to host shopping shows for foreign customers.
But with more language professionals expected to join the sector by the end of the year, an understanding of cultural differences and overseas consumer habits would become important, Deng says.
A livestream studio filled with scarves, in Tonglu County, Zhejiang province, March 2022. Luo Meihan/Sixth Tone
‘As long as I work hard’
For the English tutors in Tonglu, cross-border livestreaming is one of the best options they have after the tutoring crackdown.
Rebecca, a 32-year-old livestreamer at Meipin with 10 years of English tutoring experience, has switched roles smoothly over the past few months, with her best-selling record reaching over 900 pounds in nearly three hours.
She usually garners 300 pounds in sales in a live show, surpassing her peers, which she attributes to her outgoing personality and having more life experience than younger livestreamers.
“Livestreaming to customers is a much shorter-term service process than teaching students. You just need to host a live show and make sure they receive goods,” Rebecca says. “But ultimately, all I hope is to bring both groups what they really want and need.”
She’s mulling a career switch to full-time TikTok hosting, hoping it can bring an annual income of over 400,000 yuan. But Rebecca is sticking with her tutoring job and a stable salary until she sees the live shopping business on TikTok really take off.
“As long as I work hard at the early stage, I can enjoy the fruits later,” she says. “Now all we can do is just to do every step well.”
(Header image: Chen Huajing peddles scarves to UK customers during live shows on TikTok in Tonglu County, Zhejiang province, March 2022. Chen Si/Sixth Tone)