eCommerce: Social Commerce

Live Commerce Trends in China: Key Insights

• Live Commerce Market Growth: The live commerce market in China reached a GMV of US$540.3 in 2022, and is forecast to grow consistently, reaching US$1.1 trillion by 2026.

• Explosive Trajectory of Leading Platforms: Alibaba's livestreaming service, Diantao, and TikTok's counterpart, Douyin, are the most widely used live commerce platforms among Chinese consumers. Douyin jumped from a GMV of US$5.8 billion in 2019 to US$222.6 billion in 2022.

• Live Commerce Trends 2024: Motivated by the high revenue potential, a variety of companies and streamers are joining the live commerce fray in China. The most recent trends on the scene include quiet selling and quiet luxury, weekly fashion shows by international brands, and various forms of livestream hosts.

Since 2016, live commerce has proliferated in China on a large scale. The market has continued to grow since then. While live commerce is currently taking off in the West, China's livestreaming eCommerce market is more mature. That is why international brands, such as Zara, have discovered livestreaming as a way to introduce their products to a large audience – and ultimately make money. How much?

Live Commerce in China: GMV to Surpass US$1 Trillion by 2026

Live commerce transactions in China have grown steadily over the past years. Of course, the pandemic acted as an accelerator for live commerce sales, but the typical dip in the years after did not materialize. Instead, GMV increased to US$540.3 in 2022 and is expected to continue its upward trend. In 2023, live commerce transactions in China are estimated to total US$694.5 billion, which is equivalent to Kazakhstan’s GDP in the same year.

By 2026, GMV is forecast to exceed US$1.1 trillion. The expansive development of this market is underlined by rising consumer participation rates, as seen below:

Since 2020, the share of internet users in China who watched livestreaming commerce has increased steadily. While the usage rate remained below 50% until 2020, it surpassed 50% in 2023, reaching 54.7%. 

Clearly, live commerce market revenues are growing in line with consumers' willingness to spend. But where do Chinese consumers prefer to spend their money?

Diantao and Douyin Lead Live Commerce in China

According to consumers, two platforms stand out as having the highest usage rates: Taobao/Diantao, with 74% of consumers in China having used the Alibaba-owned platform to buy products via live stream. The second is Douyin, the Chinese version of TikTok, which 51% of Chinese consumers have used for shopping.

The next platforms are Pinduoduo (26%), JD (15%), WeChat’s video channel (8%), Kuaishou (8%), which was China’s first short video platform, and other providers (3%). 

Douyin is an ideal example of how an engaging feature can accelerate transactions on a platform. The short-form video service is well ahead of its Western counterpart TikTok when it comes to generating revenue from livestreams:

With a sizable base of US$5.8 billion GMV in 2019, transactions surged during the pandemic. In 2020, US$72.5 billion worth of products were sold via Douyin livestreaming. In the following years, GMV reached US$124.1 billion in 2021 and US$222.6 billion in 2022. To illustrate, US$200 billion is equivalent to the annual corporate revenue of tech giants like Alphabet, Google's parent company. 

Evidently, the revenue potential for live commerce in China is immense. All the more reason to investigate the current trends in the scene.

Live Commerce Trends 2024 in China

Live streaming offers advantages inherent in the format's characteristics: Brands that want to get instant feedback on a new product, clear out old stock, or promote best-selling items can reap the rewards of live commerce. 

The ubiquity of live commerce in China reflects its high revenue potential: companies selling their products via livestreams include farmers and fishermen in rural areas. However, despite the potential to reach a wider audience than could ever be hoped for with a physical retail location alone, new customers are not easy to retain, due to the large number of streamers participating and vying for attention. 

As with any market, trends come and go, so what are the dominant trends in China’s live commerce scene today?

1) Quiet Selling

Live selling is pervasive in Chinese eCommerce, so producers and streamers are constantly coming up with new ways to stand out from the crowd. One of these methods is presentation style: Typically, product presentations are energetic, colorful, and flashy. Typical sales strategies include creating a sense of urgency, fun, and familiarity with the audience. 

A point of differentiation are brands and streamers that present a more understated style of promotion, also called quiet selling, which corresponds to the trend of quiet luxury on social media in Western markets. 

It's also a way to draw attention to products in line with the government's crackdown on the streaming sector in 2022, when the CCP (Chinese Communist Party)  launched a code of conduct for online streamers in June that year – restricting content with provocative takes or unusual and stigmatized topics posted by streamers who were acting up to catch the attention of viewers. 

But research shows that while it is relatively easy to generate one-time clicks or viewers, building a loyal following is much harder.

2) Weekly Fashion Shows and Product Launches

Zara is a prominent example of an international brand that caters to the tastes and habits of Chinese consumers to introduce its products. At the same time, the fashion brand is rebranding and upgrading its presentation to be more reminiscent of high-end products.  

Fashion is one of the top-selling product categories in Chinese live commerce: 

However, ahead of clothing, food is the most frequently purchased category via live commerce in China, with 54% of consumers saying they have bought it in the last 12 months. 

Clothing is not far behind at 45% of consumers. Among the top five are footwear (33%), skin care (30%) and hair care (26%), highlighting the popularity of beauty products for live commerce. 

Weekly livestreams showcasing the latest styles or overstocked products have the added benefit of engaging consumers on a more consistent basis, giving them a sense of being on the inside of the latest industry trends and developments.

3) Live Stream Hosting Trends

In a previous look at Chinese live commerce, we noted the wealth that successful livestream hosts can generate in a short period of time. It is clear that the competitiveness of the market stems from the high promise of fame, as the influencer culture in China revolves around so-called Key Opinion Leaders (KOLs), who have a good rapport with the audience and sell products at lightning speed. 

But hiring esteemed KOLs comes at a cost, so companies are finding alternative hosts, some of which include

• Key Opinion Consumers (KOCs): Cheaper than big-name influencers and more accessible to a smaller audience they're more likely to know, KOCs post product reviews and answer questions more thoroughly than live streamers with millions of viewers. 

• Employee Hosts: Hosting livestreams has become a permanent position in companies, with employees receiving training at special training academies and schools, usually paid for by the employer. Hosts take a per-article commission, while companies take in most of the revenue.

• Virtual Hosts: Technological innovation is enabling the use of AI-generated virtual streamers, or avatars, which are free to use and don't have the limitations of human hosts, as streams typically last for several hours. According to JD, one virtual streamer broadcast for 28 hours on end and served more than 4,000 brands during last year's Singles' Day. 

Live Commerce Trends: Closing Remarks

China’s live commerce market follows the typical pattern of market maturation, with a more regulated and toned-down form of live streams contributing to the new norm. As market revenues continue to rise, so does the range of businesses promoting their products this way. 

The trend moving away from incredibly high margins for individual streamers to more evened out earnings across a wider market reflects our previous predictions. Recent emergences from innovative social commerce platforms like Flip indicate the potentially ubiquitous application of livestreaming for eCommerce worldwide.

Sources: CNBC – McKinsey – New York Times – Sekkei Digital Groups – Walk the Chat – WPIC