The rise of live stream commerce in China

Commercial live streaming is booming in China, with three players dominating the market

Live stream commerce is one of the latest trends in an ever more diverse digital commerce world. The new digital shopping trend – which is currently experiencing a major boost in China – combines the live broadcasting of product presentations on streaming platforms with eCommerce functions. It reminds a bit of the long-gone home shopping era, but with the crucial difference that consumers can make instant live purchases and interact with presenters. Consequently, live stream commerce has advantages for both sides: Brands and vendors can extend their reach and increase credibility and consumers profit from more detailed information on the products and direct engagement. The effects are stunning: Live stream commerce providers in China report incredibly high conversion rates of 65% (compared to 0.4% in traditional eCommerce), and the market is estimated to have reached CNY961 billion or a share of 10% of the overall Chinese eCommerce market in 2020. Following the trend, more and more Chinese eCommerce and social media platforms are introducing live streaming functions. These are the main competitors:

The success in live stream commerce in China largely coincides with general user numbers: The three commercial live streaming providers that generate the bulk of the total live stream commerce GMV in China in 2020 are also the platforms with the highest general monthly active user numbers: With a GMV of CNY500 billion or a share of 51% in total Chinese live stream commerce GMV in 2020, the eCommerce platform Taobao Live is the most important player in the field. At the same time, Taobao Live records the highest number of monthly active users compared to other Chinese live stream commerce providers (756 million in March 2020). Number 2 and 3 in terms of user numbers also take 2nd and 3rd place when it comes to live stream commerce GMV: The social media platforms Kuaishou and Douyin generated live stream commerce GMVs of CNY250 billion and CNY200 billion in 2020, respectively. This corresponds to total 2020 live stream commerce GMV shares of 26% for Kuaishou and 21% for Douyin. Less relevant live stream commerce players include eCommerce frontrunners like JD.com or Pinduoduo, who are likely to try to catch up and expand their engagement in the promising new eCommerce field in the near future. If and when commercial live streaming as a new way of eCommerce will set foot into other markets around the world is an exciting topic worth to follow up .

Note: The top 3 live stream commerce players are out of scope in the ecommerceDB online store database, which covers B2C online stores that generate first-party net sales. Online marketplaces and social media platforms are not included.

 

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January 2021