The Future of Livestreaming in China
Last Tuesday at 8pm, the 15th Singles’ Day/Double-11 shopping festival kicked off. Although it didn’t have the razzmatazz of the festivals of yesteryear, and only limited data has been released, the platforms have been spinning their usual year-on-year growth snapshots and positive stories.
Livestreaming has been in the spotlight leading up to this year’s shopping festival, with Alibaba, Pinduoduo, Douyin and Kuaishou banking on streaming to contribute to a large share of sales. Taobao Live brought together 18 anchors and more than 100 brands to distribute ¥1 billion ($137m) worth of coupons in the 11 days leading up to the festival.
Within 30 minutes of 11-11 presales starting, China’s most famous livestreamer, Austin Li, recorded over 100 million viewers on his Taobao Live channel. He and 11 other livestreamers sold more than ¥100 million ($14m) of goods with the first four hours of the festival – not quite the dizzying heights of his record ¥10.7 billion ($1.7b) in 12 hours during Singles’ Day 2021, but he has been a little more conservative since that ice cream tank incident last June and criticism after belittling thrifty consumers last month.
Alibaba has been doubling down on livestreaming for some time now. In the past year alone, it has managed to attract more than 500,000 live streaming hosts who started their career on other live-streaming platforms. Despite many predicting livestreaming had peaked when Covid ended, it continues to grow, with 110 million ecommerce livestreams in the first half of 2023 selling ¥1.27 trillion ($170 billion) of goods and services on the major platforms.
Yet with all the hype and investment around livestreaming, not everyone is happy. In the weekend before the Singles’ Day festival, a quorum online argued that livestreaming didn’t create any new demand to grow the economy. Instead, livestreaming’s often heavily-discounted prices shifted wealth to the top KOLs and corporate platforms, while crushing the real economy, particularly small businesses.
The sentiment was widely supported online and follows a movement from traditional retailers. During the pandemic era when traditional retail was virtually impossible, numerous businesses pivoted to livestreaming to survive. They are now kicking livestreamers out. One of the markets at Hangzhou’s Sijiqing, known is “China’s No.1 clothing street”, banned livestreaming in March with the threat of ¥60,000 ($8,204) fines and confiscated equipment. Other markets have followed suit.
Then there are the livestreaming hosts themselves. Livestreaming used to be the most aspirational career for youth hoping to become the next Austin Li. Many of those who joined the profession in droves are now leaving as salaries have fallen 30% from last year, while workloads have increased dramatically.
On top of that, Douyin banned ‘rapid livestreaming’ last Friday, a less conventional method of livestreaming where hosts introduce new products at a hectic pace. Douyin livestreamer Zheng Xiangxiang, with over 531 million followers, caused a stir after showing products on screen for less than a second. The clothes she sold were shifted for an average of ¥23.12 ($3.15) and daily necessities were ¥10.94 ($1.53). Not great for hard working mom & pop retailers on the street.
Typically when platforms ban a type of behaviour, as Douyin did, they are pre-empting directives from Beijing, hoping that being proactive will lessen the chance of tougher regulations.
It is anyone’s guess whether Beijing will regulate livestreaming – some would argue that it attracts impulse shoppers and increases retail spending, which Beijing deeply desires at present – but officials will be monitoring it closely nonetheless.
Short of stiff regulations from Beijing, livestreaming is likely to stay a significant sales channel that reaches new audiences and inspires trial of your products. China Skinny has some smart strategies to convert some of those new audiences into repeat customers.
The only thing that brands can be certain about livestreaming is that it is a constantly-evolving beast – brand-owned livestreaming channels and low-cost AI-hosts are just two examples of how it has developed in recent years. Like anything in China, it pays to stay abreast of the trends, pick those that aren’t fleeting, and adapt as swiftly as you can.
