What the West Can Learn From China’s Live Commerce Success
The success of live e-commerce in China illustrates key differences in how consumers in China and the West interact with online brands.
Ask someone in the West about livestreaming, and they may look back at you blankly — that is, unless they are under 25, in which case they may likely mention gaming or TikTok. Ask someone in China, and you’re more likely to hear about e-commerce.
Livestreaming simply refers to online media broadcast in real time, like a webinar (think a Zoom lecture) or game play (think Twitch). When you combine livestreaming and e-commerce, you get live commerce, where real-time interactions between shoppers and sellers take place. It is basically a refresh of the old late-night TV infomercial, except, unlike infomercials, it is dynamic, exciting, and occurs in prime time.
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In China, where live commerce is huge, a good host can generate millions in sales in just a few hours. In 2019, the Chinese live commerce market was estimated to reach 440 billion yuan (around $63 billion), according to Everbright Securities. By March 2020, the number of live commerce users had reached 265 million, accounting for 29.3% of the country’s total number of internet users.
And that was before COVID-19 hit.
Lockdown conditions across China boosted live commerce in early 2020, when consumers were unable to visit shops. In February, Taobao Live, a livestreaming platform run by Alibaba, saw numbers jump 700% compared with the previous month. Seeing the domestic success of live commerce, Alibaba launched AliExpress Connect on its global e-commerce platform AliExpress in May 2020. The platform allows content creators and influencers to work directly with AliExpress to monetize their creativity and talent. In response to a survey by AlixPartners in early October 2020, two-thirds of Chinese consumers said they had purchased products via live commerce over the past 12 months. In China, it is common for brands to livestream weekly, or even daily.
Live commerce also played a significant role in China’s Singles’ Day on Nov. 11. The 2020 holiday — the world’s biggest shopping day, on which the uncoupled purchase gifts for themselves — saw a number of Western brands joining in. For example, hemp and CBD product company Uncle Bud’s ran a live commerce event hosted by NBA legend Magic Johnson. Cartier hosted its first jewelry show on Taobao Live, unveiling more than 400 timepieces and jewelry items, netting a virtual audience of nearly 800,000 people.