E-commerce livestreaming began in China, with brands using the medium as a way to show their products to consumers and directly interact with them. It has been fueling Chinese e-commerce ever since and 2019 was the year when livestreaming in e–commerce started to really take off – the livestreaming e-commerce market was worth around $63 billion in 2019. During last year’s Singles’ Day festival, Alibaba’s Taobao Live solely generated $2.85 billion worth of transactions within the 24-hour period.
While most livestreaming platforms in the West are focused on gaming and entertainment, livestreaming is the “go-to” option for Chinese consumers when seeking out new products and deciding on what to buy. And ит is the primary medium for key opinion leaders (KOLs) to engage with their audience in China.
E-commerce livestreaming has become popular, especially among female consumers in lower-tier cities and rural areas, and is expected to be one of the marketing trends in China in 2020.
How e-commerce livestreaming started
Livestreaming in e–commerce first emerged in 2014 when Chinese fashion e–commerce platform Mogujie began to experiment with it, with Alibaba’s Taobao, the world’s biggest e-commerce website, following the example soon after that. In this sense, livestreaming played three essential roles – to provide entertainment, to help customers better understand their products, and to activate sales.
In 2018 and especially in 2019, livestreaming began to take off. Brands became more and more open to the thought of using livestreaming, considering the growing competition and the increasing conversion costs. Livestreaming has become such a hit that competitors JD.com, Kaola, and Xiaohongshu have all announced plans to build out their own livestreaming ecosystems. About 45% of China’s internet population has used a live streaming app. In many ways, e-commerce live streaming is becoming a new way of marketing in China. At a time when shopping in China is moving online, direct interaction with your potential consumers and giving them a feel of what a product is truly like can be a powerful driver of sales.
Livestreaming hosts carefully curate their product selection to their fans’ tastes, which leads to high conversion rates. Taobao Live hosts often work with brands to give out gifts or product discounts to their fans. Prize draws are a popular way for hosts to engage with viewers. Livestreaming hosts often adopt a flash-sale strategy, where each sale lasts for only a short time and the number of products available is limited. In addition, hosts will periodically announce the remaining quantities in order to increase the sense of urgency for viewers to place an order.
The future: livestreaming in 2020
The coronavirus outbreak in China has given a significant boost to the livestreaming industry. Livestreaming was already hot. Data shows that the number of users for China’s online livestreaming industry has increased 10.6% year on year to 504 million in 2019, more than half of China’s total 854 million netizens. It is estimated that the figure will reach 526 million in 2020. The virus is expected to accelerate the trend. The same data projects the industry will hit $129 billion in 2020.