Millennials in China are sparking ideas that take social media and live streaming to new monetary heights, such as converting a virtual Lamborghini into a down payment on a real Audi automobile in a month with no cost.
Equipped with smartphones and selfie sticks, youngsters are cashing in on a live-streaming boom by broadcasting their everyday lives — from singing to playing eSports to putting on makeup or eating an entire pizza.
The flurry of likes, hearts and comments is similar to Facebook Live or Twitter's Periscope. But the popularity of virtual gifts that can be purchased by fans to express their appreciation for the streaming stars has fueled a boom.
With top live-streamers easily attracting more than 100,000 viewers to individual screen showrooms, money follows through purchases of items like sunflowers worth 0.10 yuan (U.S. 1.5 cents) each, or a virtual Lamborghini that costs 100 yuan ($14.50).
Such digital gifting allows many young people in China, with or without a college degree, to earn spending cash each month.
Easy money
"It's an easy way to earn pocket money," said 19-year-old Ding Gaoxing, a part-time streamer with more than 10,000 followers on Panda TV, a popular Chinese streaming site. "I like to play video games, and now I can make money by doing it."
Born in Shanghai, Ding is now a second-year student at Singapore Polytechnic. By live-streaming during his leisure time, Ding makes more than the average salary of university graduates in China.
"I broadcast about 60 hours a month, earning about 10,000 yuan ($1,450) by cashing out virtual gifts that my fans sent me," Ding told CNBC Asia.
By comparison, fresh university graduates entering the job market would earn a bit more than a third of that amount, according to a 2014 report released by China's Ministry of Education.
"I can earn much more by live-streaming than working a normal day job, but I still have to look for a job after graduation," said Ding. "That's ironic."
Craving for interactive, real-time and cheaper content, more Chinese youth are joining the trend.
According to China Internet Network Information Center, the number of live-streaming users reached 325 million by the end of June － that's nearly half of China's total internet population of 710 million.
New money spinner
Besides online entertainment, the live-streaming explosion is also boosting China's e-commerce sector, with stores and brands trying to tap in.
Alibaba's Taobao and its rival JD.com, two of China's biggest online shopping sites, have both launched their own live-streaming platforms - Taobao Live and JD Live. Shop owners and brands can hire popular live-streamers with large fan base to help promote their products, and meanwhile, a link to the purchasing page hovers on the streaming screen.
Viewer loyalty to popular live streamers can translate into consumer trust of products, according to a report released by China Tech Insights,an industry research project established by Tencent Online Media Group.
"Consumers [in China] still have a strong distrust of e-commerce brands," China Tech Insights said.
But according to Taobao Live, the Conversion Rate of Content on the live-streaming site is 32 percent - in other words, 320,000 items will be added to buyer shopping carts per one million views, with actual purchase figures not available.
"It's more than likely that live streaming will become a standard feature of all e-commerce platforms in China in the close future," the report concluded.
Increasingly mature labor chain
The trend has spawned support services, such as one run by Ma Tingting, 25, who manages an agency of more than 100 contracted live-streamers in Chengdu, China.
"E-commerce stores come to me and I will assign live-streamers to promote their products," Ma told CNBC Asia. "Top streamers in my team can help sell more than 1,000 items within a day."
According to a performance report that Ma disclosed to CNBC, one top streamer in her agency earned 203,129 yuan ($29,505) from Aug. 21 to Sept. 19 by selling 2 million yuan worth of products. Ma declined to detail her commission rates for signing up top streamers.
A game changer?
Live streaming revenues in China between June and August 2016 reached 1.7 billion yuan ($246 million), according to China Tech Insights, spawning new apps such as Panda TV, Douyu Tv, YY, Inke and Momo, portal and micro blogging giant Sina, instant messaging and gaming company Tencent, video streaming sites Youku, Tudou, LeTV and iQiyi.
According to a report released by China International Capital Corporation, the market size of China's streaming industry reached 10 to 15 billion yuan in 2015, covering aspects such as hosting and producing videos and other support services.
Credit Suisse stated in its September research report that it believes the Chinese personal live streaming market will be $5 billion next year — $2 billion less than China's take from movie box office receipts and half the size of the country's mobile gaming market.
Alex Yao, JP Morgan's China Internet Research chief, said the growth will likely lead to M&A among the various players.
"I think there are quite a large number of private guys in the space doing live broadcasting in all formats from eSports live-broadcasting, to reality show, to entertainment show," said Yao.
"I think over the next one or two years, the market will go through consolidation stage, but at least a handful of these private names will stand out and demonstrate their usage system ability and monetization capability."
Government control
The live-streaming trend has not gone unnoticed by officials in Beijing.
In early November, China's Cyberspace Administration of China (CAC) released new policies that take effect on Dec. 1 on the live-streaming industry, requiring content providers to obtain qualifications and set rules on monitoring user data.
In addition, platforms will have to collaborate with regulators to provide information about users who stream content that the government considers threatening to national security of social order.
Will the new rules scare streamers away and cool down the boom? Yao said there would be little impact for non-political content.
"For the business focused on entertainment-oriented content, such as talent shows, reality shows, and eSports shows, those guys should be okay," Yao told CNBC.
"I think as long as they don't touch the politically sensitive content, these names should be fine, but if you move out of the boundary there, you will see negative impact."
