Chinese fund managers have flocked to live-streaming platforms in a quest to boost sales as customers have avoided physical contact due to the Covid-19 pandemic.
Now pushed by the pandemic, live streaming is becoming the new norm among fund managers. As a result, regulators, such as the Shenzhen Office of the China Securities Regulatory Commission, have started rolling out guidelines, noting that fund managers should enhance their legal compliance when live streaming.
Before the pandemic, retail fund managers saw live streaming mainly as a means for educating investors, but the success of retail sector e-commerce live-streaming platforms caught their eye.
“ETF fund managers favour the [third-party distribution] live-streaming channels the most,” says an executive from a fund management company based in Shenzhen. “They interact with retail investors via the channels. Although they also talk briefly about market trends, the main aim is to sell funds.”
The most commonly used live-streaming platforms are under Alibaba’s Ant Fortune, Tencent’s Tenpay, and Shanghai Tiantian Fund Distribution, one of the largest online third-party fund distributors in China.
The shift by fund managers in China to live-streaming sales is largely possible due to the country’s highly digitalized fund management industry, especially in the mutual fund space.
As of end 2019, the online financial e-commerce platform of Shanghai Tiantian Fund Distribution has onboarded 7,861 mutual funds managed by 140 fund managers, recording 71.8 million subscriptions, and total sales of 659 billion yuan (US$95 billion) during the past year, according to the company’s annual report.
In addition to third-party distribution platforms, most fund managers and banks also have their own online platforms for retail investors. Many of them started their live-streaming service before Covid-19 aiming just to provide better investor education.
2020 is all about digitization, and live streaming is taking an increasing role in it, but there is still much uncertainty in the business.