How Live Streaming E-commerce is Reshaping Shopping in China?

Updated: May 15, 2020

1. What is Live Streaming E-commerce?

The essence of “live streaming+ e-commerce" can be viewed as "TV + e-commerce," which is the so-called T2O model (TV to Online) model, previously known as TV shopping. It hosts the broadcasting of a real-time video to viewers over the internet, and at the same time, allows viewers to purchase the item from an embedded link online immediately.

Live streaming e-commerce is a transformation of sales patterns and brings value to traditional e-commerce. According to Everbright, the live streaming e-commerce market is worth around $63 billion in 2019, accounting for 9% of the total estimated e-commerce sales of $723 billion this year.

The reason for this blowout trend is that live streaming videos serve not only as a tool to showcase product information in a more intuitive and comprehensive way than the two-dimensional descriptions do but also as a customer engagement channel where consumers can interact with the vetted user and get to know the product information in a more detailed way, thus reducing trial and error costs. It makes shopping efficient and convenient, significantly enhancing customers’ shopping experience and allowing them to free up more time from product selections and rating reviews.

"Lipstick King" Li Jiaqi, is live streaming on Taobao

2. What are the Major Live Streaming E-commerce Models & Representatives in China?

According to Everbright, Taobao Live, short-video platforms Douyin and Kuaishou are dominating the live-streaming market in China. The remainder of the marekt is taken up by e-commerce platforms like Pinduoduo, Netease Kaola, Mogujie and etc.

Live streaming e-commerce is a brand-new marketing monetization model. There are currently two major models of live streaming e-commerce.

1. E-commerce platform embedded with live streaming function

This model is the most popular among all, based on User-generated Content (UGC) or Professionally Generated Content (PGC), and they utilize live streaming methods to create rich and novel content. The purpose is to bring additional traffic to the platform, increase conversion rate and generate more GMV.

Followed are the main live streaming e-commerce platforms in China.

2.. Live streaming platform linked with e-commerce platform

Douyin, the domestic version of Tiktok, has enabled a feature that allows its users to apply for a virtual window on the platform to sell the goods. The link leads the users to purchase goods from e-commerce platforms including Taobao,, Netease Koal, etc.

Shopping journey from the virtual window on Douyin

In June 2018, Kuaishou (Kwai), a famous Chinese short-video app, introduced a similar feature that enables live-streamers to sell goods via an on-platform store. Moreover, Kwai also opened up its WeChat mini program called “Little Shop”, allowing users to link the products from e-commerce platforms such as Taobao, where the whole user journey of "Little Shop" remains in the closed-loop of WeChat.

Shopping Journey of "Kuaishou Little Shop" in WeChat eco-system

3. Customer Profile of Live Streaming E-commerce in China

In the above chart, we can see that 70% of the live streaming e-commerce users are under 30 years old and 55% are male. More than half of them earn less than 3,000 RMB. 45 % of the live streaming users are from the first- and second-tier cities, and students and freelancers are the main force.

4. Status Quo of Live Streaming E-commerce in China

As mentioned earlier, the total scale of live streaming e-commerce in 2019 is expected to reach 440 billion ($63 billion). Due to the improvement of the interactive form and evaluation system, live streaming e-commerce has achieved over 10 times the industry scale of TV shopping in just 3 years. From a structural point of view, Taobao Live is expected to achieve GMV250 billion in 2019, and Douyin (Tiktok) and Kuaishou will achieve GMV40 billion /25 billion, respectively.

In the first half of 2019, Chinese netizens in third- and fourth-tier cities had the highest conversion rate of live e-commerce, reaching 46.1%; followed by first-tier cities, with 38.9%.

What is worth mentioning is that since 2017, Pinduoduo has activated a large number of consumers in low-tier cities including third& fourth-tier cities where it is difficult to reach through traditional offline channels. Compared with users in first and second-tier cities, users in lower-tier cities can obtain less information about shopping decisions, and their shopping decisions are more likely to be influenced by social platforms and KOLs.

5. Trends of Live Streaming E-commerce in China

With the rapid development of the online live streaming industry, the live streaming e-commerce platform continues to expand high-quality content, add more interactive gameplay, infiltrate more application scenarios, and accurately interpret user needs, push appropriate content to retain users, and achieve a series of actions from traffic driven, content distribution and diffusion, until product realization. The entire live streaming ecological industry chain is maturing and is constantly being improved and adjusted.

The form of online shopping experience will gradually approach the mature offline scene. With the popularization of commercial 5G networks and the future maturity of VR, AR, and other technologies, the online shopping experience will far exceed the traditional e-commerce and gradually approach the real "cloud shopping”. Customers will benefit the convenience of live streaming e-commerce in terms of in-store communication, product selection, product traceability, etc.

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