Fostering or Hindering Sales? Overlapping Influencer Followers in Live Streaming E-Commerce (Job Market Paper)
Abstract: In social media, consumers often follow multiple influencers, leading to instances where they encounter advertising messages for the same product from different influencers. When firms switch influencers to promote their products, overlapping followers between the previous and current influencers are inevitable. This study develops a formal model to examine the impact of overlapping followers on a firm's incremental sales when engaging a new influencer. We generate and empirically test predictions using live-streaming e-commerce data from Douyin (the Chinese version of TikTok). By employing a novel approach that utilizes Natural Language Processing (NLP) to estimate the overlap in followers between influencers and their respective product demands, we find that overlapping followers can positively influence incremental sales if their demand patterns align more closely with those of the previous influencer's exclusive followers and if the previous influencer had higher demand than the current one. Conversely, firms may not benefit from overlapping followers under different conditions.
Abstract: The past decade has witnessed the growing prevalence of live streaming selling (LSE). As streamers serve as a proxy between manufacturers and consumers, product assortment management has been a critical strategic factor for their success. Relying on data collected from Douyin, a prominent Chinese LSE platform, this study aims to investigate the impact of diversification on LSE performance through the lens of adding new categories in live streaming sessions. The results in this study show that product category diversification, in general, has a significant positive effect on sales during live streaming events. However, this effect is alleviated by the semantic similarity between the newly introduced and existing categories. In addition, we find that product diversification has a negative impact on the sales of incumbent categories. This study contributes to the literature on product assortment by providing insights into the role of product diversification in the context of real-time selling. We also discuss the managerial implications for the platform and streamers.
Boosting Livestream Sales: Can New Partnerships Make a Difference? (With Anqi Wu)
Abstract: As livestream platforms have become a nontrivial e-commerce channel bridging businesses and consumers through influencers, firms are faced with the dilemma of whether they should work with new influencers or stick with the ones they have been collaborating with. This study aims to speak to this question by investigating the impact of new influencer collaborations on livestream sales performance. Building on the social tie theory, we posit that new collaborations contribute to livestream sales through the expended online social networks established by new influencers. We test this position leveraging data from Douyin, a leading livestream platform in China, and adopting multiple propensity score matching approaches to alleviate the endogeneity issue. Our results show that new collaborations increase product sales by approximately 20%. Our mediation analysis further shows that this effect is fully mediated by the expanded online social networks contributed by new influencers, thereby confirming our theoretical arguments. Furthermore, our moderation analysis combined with a casual tree model indicates that smaller firms benefit more from collaborating with new influencers. We further strengthen our findings using multiple instrument variable models to show negative impacts of firms’ influencer tenure on their sales. Lastly, we conduct several sensitivity and robustness checks that provide credible support to our findings. Our research enhances the quantitative understanding of livestream market collaborations and offers important implications for firms, influencers, and livestream platforms aiming to boost sales performance.
Abstract: Some consumers and marketers are concerned about certain social media platforms, as they may be addictive to consumers and not profitable for companies who try to sell their products or brands via livestreaming on social media. This chapter is about the convergence of livestreaming for e-commerce on social media platforms. The authors examine data (n = 613, 000 products) from the Chinese version of TikTok (Douyin). While it may appear that the use of social media-based livestream for product sales is successful, this research shows that the practice is not profitable (the revenues do not justify the expenses to the companies for livestreaming their products). The platform (Douyin) encourages companies to buy streams; however, these streams are sometime invalid. As such, livestream sales strategies via social media may be a loss leader. In the age of cancel culture and corporate boycotts for brands, this research suggests that brands and consumers may turn away from social media-based livestream feeds due to the dark side of livestreaming.
Mechanisms of Enhancing Learning with Unequal Preparation: An Experimental Study on Generative Artificial Intelligence Use and Proficiency in Programming Learning (With Yuan Jin and Wei He)
Livestreaming Shopping Strategy Optimization for Reducing Product Return Rates: A Comparative Study (With Jinglu Jiang)
Competition on Screen: The Impact of Competitor Ads on Viewer Attention (With Wen Xie, Yuanchen Su)