Live Streaming and Ecommerce: An Explosive Combination

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Live Streaming and Ecommerce: An Explosive Combination

There’s no denying the fact that the eCommerce sector in China is massive and highly developed. The country houses some of the most remarkable eCommerce companies, all of which contribute immensely towards the trillion-dollar industry. Alibaba, Tmall, Xiaohongshu, Amazon China, Dangdang, and Vipshop are just a few of the many eCommerce leaders shaping a fast-paced, tech-driven online buying-and-selling ecosystem in China. It’s also worth mentioning that China enjoys the highest rate of eCommerce as a percent of total retail sales and the highest absolute sales level. Let’s not forget, it also has one of the fastest growth rates in the world.


Now comes the blend of instant online purchasing and entertainment in livestreaming, also known as live eCommerce, which has taken China by storm. Essentially, livestreaming eCommerce seeks to create a market-like online shopping experience by looping in talk shows, game shows, auctions, and Home Shopping Network (HSN). Live streaming eCommerce isn’t a new phenomenon in China, but it was the COVID-19 pandemic that triggered its explosive growth. With the rise of globalisation and cross-border trade, brands from all over the globe—it is the USA or Australia—sell to China. As livestreaming gains traction, these brands get a new reason to do business in China.


Livestreaming eCommerce is all about promoting and selling products through streams of influencers on their own social media channels. These products are often housed in online shopping malls of China. It brings together instant buying of a featured product and buyer participation, either through a chat feature or a variety of reaction buttons. After the pandemic in China, livestreaming eCommerce has brought about a transformation in the retail industry and has positioned itself as a powerful sales channel. This is especially evident during times when brick-and-mortar stores are temporarily closed and consumers are having to switch to online shopping for their daily needs.


Livestreaming eCommerce is here to stay

Livestreaming eCommerce is going strong in China. The trendy and charismatic anchors of livestreams have managed to capture an extremely effective medium of marketing and sales, opening up incredible revenue potential for both small and big brands. Alibaba’s Taobao Live, which was launched in 2017, is believed to set the trail for livestreaming eCommerce in the country. Alibaba called it “See Now, Buy Now,” and over time, it managed to capture the lion’s share of livestream commerce. When it comes to shopping and entertainment, Taobao Live allows consumers to enjoy the best of both worlds.


Besides Alibaba’s Taobao Live, other eCommerce companies and tech players in China, for example, and Baidu, have jumped on the bandwagon of livestreaming eCommerce. Douyin, which is the Chinese counterpart of TikTok, provides shoppable livestreams within mobile apps. MOGU, a leading fashion enterprise, provides the same. From food to fashion to beauty aids to cosmetics, you can find pretty much anything here. So, shopping on livestreams makes the entire experience entertaining, engaging, and enriching. It would be apt to say that the shift in buying behaviour of people, along with the rapid boom in the technological landscape, has made China a leading country when it comes to livestream shopping.


A justified growth

Livestreaming eCommerce is estimated to be close to $60 billion annually. It’s mostly the millennials and Gen-Z who drive the sector, but middle-aged people and senior citizens of China are also following the trend lately. Top social media influencers run their own shows each night for four hours at a stretch from 8 pm to midnight. Through their shows, they sell curated products of all kinds, often at lucrative discounts. About 12 products are presented each hour, meaning there are 48 products per night. All these products can sell out in a matter of seconds. Product manufacturers pitch to these influencers. Only about 1 in 10 products is chosen after negotiating the prices. Therefore, the right balance of demand and supply is crucial to maintaining viewer engagement and action. The hosts, known as key opinion leaders (KOLs), demonstrate and critique the products, explain their features, answer call-in questions, and interact with celebrity guests. They are the ones who make livestreams a truly entertaining time for viewers.


Livestreaming has emerged as a powerful way for brands to generate awareness and push forward excess inventory. For small local businesses, such as craft artisans and independent farmers, livestreaming can help them reach customers more effectively. This has become all the more relevant in the post-pandemic world, where lockdown restrictions continue to be in place in China. Thanks to its immersive and entertaining nature, viewers keep watching longer. Through livestreams, brands can direct customer decision journey– starting from awareness and ending with purchase. Given the high conversion rate and tremendous engagement power, livestreaming ecommerce has revved up the sales engine of brands, especially after the pandemic, which has ushered in a time of rapid economic, trade, and psychological transformation across China.

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