The retail landscape has drastically changed over the past year. The way consumers choose and buy goods is now driven by the need for convenience, a fair price, and safety driven by the fear of contracting COVID-19 and the global lockdowns happening across different continents. Brands have had to adapt to consumers’ changing lifestyles—and much like it has set the tone with e-commerce, China is once again ahead of the curve with a new trend.
Livestream e-commerce, according to Forbes, is selling goods and services through video livestreams hosted by a brand ambassador or influencer. Described as part informercial and part variety show, China’s livestream e-commerce has over 430 million people across the country viewing livestreams regularly. What was once a budding trend has become a phenomenon, used by both large conglomerates and small enterprises to attract, entertain, and ultimately generate profit during these unstable times.
The Emergence of Livestream Shopping
Livestreams may have doubled in worldwide popularity due to the pandemic, but Chinese e-commerce platforms were utilizing this sales method well before the first COVID-19 case. According to research platform eMarketer, livestream e-commerce was already popular as early as 2017, when tech giant Alibaba introduced the “See Now, Buy Now” video feature for its Singles’ Day event. Currently, Alibaba’s Taobao Live hosts over 80% of all livestream e-commerce events in China.
By early 2020, majority of China’s retail brands had turned to livestreaming, referred to in Chinese as “pinpai zibo.” Forbes reports that around 80% of the brands available on e-commerce platform Taobao hosted a livestream shopping event during last year’s 11.11 Singles’ Day Shopping Festival. Mass market brands were not the only ones jumping on the trend—in 2019, Chinese luxury department store Intime started training its sales associates to conduct livestream e-commerce events to increase sales. The strategy paid off, as the store’s associates started making a week’s worth of sales with just one livestream.
Small enterprises also saw a lucrative opportunity to cash in. With entire metropolitan areas confined to their homes due to quarantine restrictions, rural entrepreneurs took advantage of the trend through laid-back, nature-driven livestreams to encourage city dwellers to purchase produce direct from farmers. One such story was reported by Bloomberg Asia—fruit farmer Jin Guowei, popularly known by his online handle “Brother Pomegranate,” made over 300 million yuan (around 46 million USD) in 2020 from livestreaming alone.
Opportunities in China’s Livestream Trend
Livestream e-commerce has now become an extremely lucrative sales method, generating 11% of total e-commerce sales in China last 2020. With the trend not set to die anytime soon (Women’s Wear Daily projects that it will account for 20% of all Chinese e-commerce sales by 2022), potential investors have the unique opportunity to tap into this rapidly growing sector.
Small businesses, in particular, are looking for trusted logistics partners to get their products to consumers quickly and safely. Currently, many SMEs are still relying on traditional providers like JD Logistics and Cainiao, and are searching for innovative new collaborators to improve their delivery methods.
As more brands and platforms introduce their own livestream shows, production value becomes even more important to ensure that consumers are entertained with high-quality visuals and engaging hosts. Collaborators in the field of video and event production, as well as tech solutions, are now integral to the overall process.
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