Reckitt, the owner of Durex, is hoping that Chinese customers’ love of livestream shopping would translate to condom purchases, but in order to increase its share of the over $5 billion condom industry, the company will need to walk a “delicate line”.

The excitement surrounding livestreaming, which has emerged as a key factor propelling the e-commerce boom that has engulfed China since the start of the COVID-19 pandemic, may assist the British consumer goods group (RKT.L), opens new tab in its pursuit of stimulating growth in the second-largest economy in the world.

Approximately in China, livestreaming brought approximately $238 billion in revenue in 2022. That is projected to increase to more than $300 billion by 2025, per eMarketer, a research organisation.

Reckitt has already experienced success in China with live selling household products, but condom sales may be more difficult given that Chinese authorities keep a strict eye on internet content relating to sex, although they don’t always specify exactly what constitutes a sexual offence.

“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.”

However, considering the scale of the multi-billion dollar condom market, the potential for Reckitt is strong. According to Daxue Consulting, the China Business Research Institute has predicted that China’s condom sales will reach $5.2 billion in 2024. Durex, the industry leader, is expected to hold a 40% market share as of 2020.

Reckitt revealed on Wednesday a 1.2% year-over-year decrease in like-for-like net revenue for the fourth quarter and a 7% reduction in total net revenue to 3.56 billion pounds ($4.51 billion). The business withholds its China sales data.

Leading Reckitt’s business in Greater China, Arjun Purkayastha, said livestreaming is a major growth engine for the company, contributing “close to double-digit” sales of Reckitt products in the nation, such as Strepsils throat lozenges and Dettol sprays.

“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.

Purkayastha pointed out that Reckitt’s livestreaming channels in China are not like the Instagram-driven models that are popular in the West, where sponsored influencers who have directly used the items endorse them. Rather, workers in studios or other places such as factories explain the origins of products, providing details and making sales pitches to consumers.
Purkayastha continued, “It’s just a matter of time that we learn to do it in a classy manner without offending anyone” in China.

Yaling Jiang, the founder of research and strategic consultant ApertureChina, stated that livestreaming and short videos have become increasingly important in China due to the country’s changing media consumption patterns. This includes condoms.

“Chinese people can easily get sick and tired of a brand. I think Durex understands this…It’s good to see them trying new things,” she said.

According to Daxue’s Suheng Wu, Durex may be the only company capable of successfully executing livestream condom sales. The company has a long experience in the Chinese market, interspersed with shrewd marketing strategies and comparatively few errors.

This is partly because of a track record of deftly navigating China’s socially restrictive media environment, garnering millions of fans on Douyin and Weibo among other social media sites.

Its efforts, like the Chinese New Year Durex mahjong gift set from the previous year, which cleverly substituted innuendo-laced tile names for the usual ones, or the Durex Tetris game on the popular app WeChat, frequently become viral.

But Wu, 24, stated that in some situations, the natural uneasiness associated with sexual content will persist.

“If I was watching Douyin and a condom livestream came on, I would be curious to see what it says,” he added. “But if I was in the room with my parents, I would swipe away so fast!”

Because livestreaming frequently offers steep discounts and low prices, it has contributed to an increase in spending in China. However, a growing number of businesses, such as Reckitt, have announced that they are moving away from significant discounts.

“There’s a lot of reason to be optimistic,” Purkayastha said of the China market. “This talk of deflationary environment and all these things, we don’t really identify with it – I think it’s big headline news. But the reality on the ground is it’s almost business as usual.”

(Adapted from Reuters.com)