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.

Wei Sheng

Writing about semiconductors and telecommunications.