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5 Trends To Watch in Chinese E-Commerce Livestreaming in 2021

Summary

China’s e-commerce livestreaming industry reached a value of over US$165 million in 2020. As more firms turn to livestreamers, the market has become overcrowded and ROI has been slipping. To remain competitive, brands must be alert of the latest developments. This article points out the top five trends that market players should know if they want to maximize their investment in China’s e-commerce livestreaming in 2021 and beyond.

E-commerce livestreaming is a shopping method in which streamers introduce products and viewers are able to purchase those products in real-time. It was created to replicate the in-store sales experience of talking to a knowledgeable sales associate. Across major short video platforms like Douyin and Kuaishou, apps have created dedicated live streaming channels for influencers to promote. While western countries are just beginning to adopt the marketing method, the value of China’s e-commerce livestreaming industry reached CN¥1.06 trillion, or nearly US$165 million, in 2020, and its growth engine may just be revving up.

On June 1 from 12:00 a.m. to 1:00 a.m., the first hour of the 2021 618 Mid-Year Shopping Festival campaign, Taobao Live’s revenues exceeded the total annual revenues generated the year prior. The number went on to surpass CN¥2 billion by 1:30 a.m. Yet, these shining numbers were not exclusive to the Taobao Live platform. Over the campaign, it is estimated that livestreaming brought in about CN¥35.9 billion, or US$5.5 billion, to Douyin as well. 

All these figures reflect that e-commerce livestreaming continues to show remarkable growth. By the end of 2021, e-commerce livestreaming is expected to jump to a value of CN¥1.92 trillion, or just shy of US$300 million. While early adopters of the livestreaming sales model saw immediate return on investment, yields have been slowly chipped away alongside the rising popularity of livestreaming. It is a busy, competitive marketplace, and marketers would benefit greatly from staying abreast of livestreaming’s latest and greatest trends. In 2021, the following five key trends are keeping marketers on their China livestreaming A-game.

Omnichannel Livestreaming

Source: Captured from Shiseido’s brand-run stream on Taobao Live, Jianpeng Zheng and Zhen Yan couple’s stream on Douyin Live, and Goutianer stream on Xiaohongshu. 

Taobao Live is still the leader in e-commerce livestreaming. However, brands would miss significant opportunities for exposure by limiting themselves to a single platform. Over the 618 Mid-Year Shopping Festival, Douyin Live contributed over CN¥340 million, or a little over US$52 million, in revenue to WHOO, Lancôme, and Estée Lauder. Internet giant Kuaishou also contributed over CN¥5 million RMB, or US$770 thousand, in revenue to Estée Lauder on just May 25, 2021, alone. Meanwhile, while Xiaohongshu sales figures came in lower than others during the 618 Festival, it is still viewed as a possible contender for the next rising e-Commerce livestreaming platform to watch. Based on a Qiangua report, the average sales price on Xiaohongshu e-commerce livestreams is over CN¥100, or nearly US$15.40. In addition, over 30% of livestreaming rooms recorded an engagement rate in excess of 10%, highly exceeding the market standard.

Expert-Level Product Knowledge

Source: Captured from Mr. Dong Jewelry and Three Squirrels’ brand-run streams on Douyin and SK-II’s brand-run stream on Taobao Live.

Zheng Jianpeng and his wife Yanzhen along with Luo Yonghao are among the top key opinion leaders (“KOLs”) on Douyin with over 48 million and 17 million followers, respectively. Surprisingly, however, they were not the top streamers over Douyin’s 618 Mid-Year Shopping Festival. A jewelry-focused streamer with only seven million followers, Mr. Dong Jewelry, was said to have surpassed those mega-KOLs to rank as the the top streamer on Douyin. By brandishing his expert knowledge of the products that he sells, Mr. Dong has gained significant popularity.

Streamers who focus on one category can share unique in-depth knowledge in that area. As such, they can build up trust with the high-quality users and consumers within that category. Additionally, livestreamers that have gained the confidence of users typically boast higher conversion rates and average order amounts. After catching wind of these trends, Taobao Live recently launched an incubation program in May 2021 that targeted streamers whom specialize in selected categories. 

Brand-run streamings also illustrated staggering growth before this 618 Festival. Taobao Live disclosed that over 55% of streams that surpassed CN¥100 million, or US$15.4 million, in revenue in 2020 were brand-run. Three Squirrels, one of China’s largest snacks brands, recorded CN¥65 million, or US$10 million, in revenue from its brand-run streaming on Douyin in January’s New Year Shopping Festival. This was equivalent to more than 40% of the CN¥160 million, or nearly US$25 million, total revenue that Viya Huang, one of China’s top KOLs, brought to the brand in the entire 2020. So, leave your KOLs behind – viewers may instead be more interested in the deep product knowledge of your employees.

Virtual Idol E-Commerce Streams

Source: Captured from livestreams on Tmall Global (天猫国际), Tmall Global Direct Import Supermarket (天猫国际进口超市)and 壁虎看看 KOL’s captured photo.

Virtual idols, the animated replicas of a person, have become increasingly popular in China. Originated in anime and popularized on video sharing platforms, a report from iQiyi disclosed that more than 390 million Chinese netizens now watch virtual idols. The trend has migrated to livestreaming platforms, with CBNDATA revealing that virtual idol streamers have conducted increasingly more e-commerce livestreamings since August 2020. While strange to some, the novelty of virtual idols has captivated many across China, particularly among Gen-Z users.

Virtual streamers have helped some brands extend livestreaming hours and replace streamers when they become sick or unable to perform. Despite many who argue that virtual streamers cannot test products and have difficulties interacting with viewers in a human-like manner, some virtual streamers are still warmly received. For example, “I’m Bu Bai Chi (我是不白吃)”, a Douyin virtual streamer that recommends food products and shares food knowledge, is said to generate over CN¥100 million, or US$15.4 million, revenue per year and even recorded recorded over CN¥5.95 million, or US$916,000, in revenue via 12 streamings from April 1 to April 15, 2021. As technological innovations allow virtual idols to become increasingly human-like, marketers may begin to reduce costs and make the switch over to virtual idols for many livestreaming promotional campaigns.

Top Product Categories in 2021

Tao Charts revealed that pet food and pet products recorded a 1,000% revenue increase from e-commerce livestreaming over the first hour of the 618 Festival’s pre-sale period compared with the year prior. Additionally, despite few livestreamers promoting sports medicine, sports products, and local service products, these three areas were all listed as the top growing categories in 2020. For example, livestreaming sales of tooth adjustments and fascia guns grew by 13,546% and 864% respectively in 2020. ‘Local service products’ was among the top three categories with the highest revenue increase rate over 2020 Single’s Day.

Male Consumers Loosen Their Wallets

Taobao Live witnessed massive growth among male customers since 2018, and Tao Charts claimed that the number of male shoppers dramatically increased by 205.4% YoY in 2020. Furthermore, despite consistent growth over the past several years, CBNDATA concluded that ‘male spending’ still had vast untapped opportunity in e-commerce livestreaming as the percentage of male consumers that purchase through e-commerce livestreaming still trails far behind the relative percentage of male netizens to total e-commerce livestream viewers.

Spending Grows Among China’s Greying Population

Additionally, CBNDATA disclosed that customers over the age of 50 were likely to record a higher average order amount than the general market. Notably, as the pandemic pushed consumers towards online shopping, many silver-haired consumers picked up e-commerce for the first time. While in-person shopping has since largely returned to normal, many in China’s greying population have already adapted to the new wave of online buying. 

Going forward, there will be significant opportunity for product livestreaming that targets both the male and greying populations.

Looking Forward at E-Commerce Livestreaming

E-commerce livestreams have already gathered more than 388 million viewers in China. It is a mature ecosystem that includes merchants, platforms, and thousands of Multiple-Channel Networks (MCNs) that manage the promotional activities of streamers. However, along with the boom in business and entrance of massive players, complaints on fake claims, dissatisfied product quality, and trademarks are on the rise. In response, Chinese regulators released a trial guideline to regulate online livestreaming marketing in May 2021, and additional policy is expected to follow in the future.

Nonetheless, e-commerce livestreaming will undoubtedly continue its explosive growth and offer unprecedented opportunity for businesses that embrace the practice in years to come. Remaining on the cutting edge and adapting to the latest trends will be critical to maximizing investment and positioning businesses well for the fierce competition that awaits in this emerging market.

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