Luo Yonghao, the founder of struggling Chinese smartphone maker Smartisan, announced Thursday he is embarking on a new business endeavor: an e-commerce livestreaming business selling gadgets, groceries, and snacks.
Why it matters: Luo is an internet celebrity as well as one of China’s most iconic tech entrepreneurs with a number of outrageous antics under his belt. But he is also ridden with debt after notching a series of failed businesses including an e-cigarettes startup and a synthetic “shark skin” manufacturer.
- Livestreamed e-commerce has taken off in China with sales reaching RMB 440 billion (around $62.3 billion) in 2019.
- Alibaba’s livestream e-commerce platform Taobao Live has seen rapid growth as offline businesses increasingly seek out online marketing and sales channels during the Covid-19 epidemic.
Details: Luo will form a team to sell products including tech gadgets, books, furniture, groceries, and snacks on livestream platforms, he said in a post on his social media account on Thursday.
- Luo said he used to believe that there was no value in e-commerce livestreaming. “But after reading a report by China Merchants Securities (CMS), I decided to become a livestreamer,” he said.
- It’s unclear which report Luo was referring to. Chinese media implied it might be a report that the state-owned securities firm released in January, which said China’s livestreamed e-commerce market may “reach RMB 1 trillion in the future.”
- “Never bought anything from livestreaming platforms? That’s because you’ve never seen us livestream,” he told his 16 million followers on micro-blogging platform Weibo.
- The post amassed more than 8,000 comments and 26,000 likes on Weibo as of Friday.
Context: In November, Luo was placed on an official blacklist for debt defaulters, which barred him from spending on travel and other major purchases. A court record showed that he along with Smartisan, the smartphone company he founded, owed RMB 3.7 million to suppliers.
- Founded in 2012, Smartisan was never able to distinguish itself in China’s fiercely competitive smartphone market. In its six years of operations, the company sold only around 3 million smartphones, in sharp contrast to top-performing Huawei, which shipped 240 million units last year alone.
- Beijing-based Bytedance licensed in January a number of Smartisan’s patents to ramp up its online education business. The TikTok owner also recruited dozens of employees from Smartisan later that month.