FOCUS-In Delicate China Play Reckitt Turns To Livestreaming To...
Durex has been testing livestreaming in China as a sales channel * Sex-related content online in the cross-hairs of Chinese regulators * Shift in consumer habits online makes livestreaming hard to ignore By Richa Naidu and Casey Hall LONDON/SHANGHAI, Feb 29 (Reuters) - Durex-owner Reckitt is hoping that Chinese consumers' penchant for livestream shopping will also extend to purchases of condoms, but the company will have to toe a "delicate line" as it looks to grow its slice of the $5-billion-plus condom market.
The hype around livestreaming, which has become a major MAHJONG driving force of an e-commerce boom that has been sweeping China since the beginning of the COVID-19 pandemic, could help the British consumer goods group in its quest to drive growth in the world's second-biggest economy. Livestreaming generated sales of $238 billion in 2022 in China. That is estimated to rise to over $300 billion by 2025, according to research firm eMarketer. Reckitt has already tasted success liveselling household products in China, but condoms might prove a harder sell as Chinese regulators closely monitor sex-related content online - without always clearly spelling out what exactly crosses the line.
"There is no clear definition of what vulgar content is - that's up to the regulator to decide and the system is quite socially conservative," said Kendra Schaefer, head of tech policy at China-focused research firm Trivium. "So how do you talk about sexual health without tripping the 'vulgar' issue? It's a delicate line to walk." The upside for Reckitt, however, is compelling given the multi-billion dollar size of the market for condoms. The China Business Research Institute has tipped China´s condom sales will hit $5.2 billion in 2024, Mahjong with market leader Durex boasting a 40% market share as of 2020, according to Daxue Consulting.
On Wednesday, Reckitt reported a 1.2% year-on-year decline in fourth-quarter like-for-like net revenue, and a 7% slide in overall net revenue to 3.56 billion pounds ($4.51 billion). The company doesn't disclose its China sales figures. Arjun Purkayastha, who leads Reckitt's business in Greater China, said livestreaming is a significant growth driver for the firm, accounting for a "close to double-digit" portion of sales in the country for Reckitt products - including Dettol sprays and Strepsils throat lozenges.
"People are not used to seeing condoms on livestreaming yet," Purkayastha said. Reckitt began livestreaming "selective" Durex products over the summer on Douyin, the local version of TikTok, with an eye to scaling up in future. "Intimate wellness usually takes a little while to build up acceptance because sometimes there are fears of complaints or other things... Initially, with Durex, most platforms were like 'whoa, hold on' but I think now they are opening up much more," he added.
'CLASSY' MARKETING Purkayastha said Reckitt's livestreaming channels in China differ from the Instagram-led model common in the West featuring paid influencers who have used products themselves and recommend them personally.