LIVE STREAMING COMMERCE

IN CHINA
A STATISTA DOSSIERPLUS ON THE DEVELOPMENT OF LIVE
STREAMING E-COMMERCE IN CHINA
Table of contents

01 Overview 04 Consumers
▪ The history and development of live commerce ▪ Demographics and preferences
▪ What’s behind the e-commerce revolution? ▪ A new consumption norm
▪ Spotlight on online shopping festivals ▪ Concerns and opinions

02 Live commerce platforms 05 Outlook

▪ How does it work?
▪ Impulse buying
▪ The major players and their competitors

03 Live commerce hosts

▪ The power of influencers
▪ The hidden giant: MCNs
▪ Personality and trust is the key

2
China’s most buzzworthy e-commerce trend
Executive summary
The e-commerce industry has become an important pillar of China’s
consumer economy. Between 2014 and 2019, the share of e-commerce
in retail sales in China nearly doubled to slightly over 20 percent.
Worth ten trillion yuan, this sector is the world’s largest e-commerce
market – twice the size of the U.S. e-commerce sector – yet hundreds of
millions of China’s rural population have not shopped online yet. Since
2015, an alternative revenue stream, namely live streaming commerce
or live commerce, has emerged as a way of buying and selling products.
It has gained immense popularity and brought revolutionary changes to
the e-commerce scene and online shopping behavior behind the Great
Wall.
Live streaming commerce is a form of online shopping similar to
television shopping channels with sales discounts displayed. Typically,
an influencer broadcasts live on a streaming platform as a host to
introduce various products verbally, demonstrate how to use them, and
answer questions from the audience in real time. Consumers can make
purchases directly from the video while simultaneously watching.
Compared to traditional e-commerce, live commerce adds richer
production information on top of photos and text descriptions. It offers
3
a real-time, interactive, and social shopping experience, just like
watching a variety show with infomercials and chatting with other
internet users.
While gaming and entertainment are still the main focus of live
streaming platforms outside China, the market of commercial live
streaming is set to reach 961 billion yuan in China in 2020 – almost 10
percent of China’s e-commerce market. Industry experts expect live
commerce to become even more mainstream, given the accelerating
effects from the coronavirus pandemic and several exciting
technological breakthroughs.
This DossierPlus offers an overview of China’s live commerce market.
What makes it so special? Is it possible for other countries to copy the
trend? The report covers the development of major platforms and their
business models, the top-ranked hosts and their formula for success,
and the consumers’ perspectives. It concludes with a market outlook in
China and the recent development of live streaming commerce outside
China.
 „
“
In China, e-commerce is not a dessert. It’s
become the main course.

-
Jack Ma
Cofounder of Alibaba

4
01 Overview
▪ The history and development of live
commerce
▪ What’s behind the e-commerce revolution?
▪ Spotlight on online shopping festivals
Five years of development at a glimpse

Phase I (Infancy) Phase III (Mature)

▪ Traditional e-commerce platforms ▪ Development shifted to various verticals like
(Taobao and Mogujie) sought to show hosts, supply chain, and other resources
combine “streaming” and “content” with integration to shorten long industry cycle
e-commerce to enhance customer problems.
stickiness and traffic monetization ▪ Taobao Live remained the top performer,
▪ Market drivers: mature hard- and introducing celebrity hosts and rural live
software, declining traffic cost, booming commerce to raise its userbase; JD.com, Mogujie,
mobile & gaming streaming and other rivals invested more in influencer
training; more market newcomers appeared:
NetEase Kaola, Red, Pinduoduo, and Zhihu.

2016 2017 2018 2019 2020

Phase IV
Phase II (Rapid growth)
▪ More diverse and fragmented market
▪ More labor of division developed within the landscape, while the dominance of
industry with different roles appearing, market leaders is more significant. New
including MCNs and supply chains. tactics (hyper-personalization and
▪ Mogujie and Taobao refined the operation augmented reality) are introduced.
with host training, increasing supply chain ▪ Coronavirus pandemic impacts:
control, and marketing content upgrades; vendors livestreamed to boost sales,
Kuaishou, Douyin, Xigua Video, Meipai, and and government officials hosted live
other video platforms tried testing live sales shows to promote local products.
commerce.

6
Reshaping online shopping: the convergence of live streaming and
e-commerce
Commercial live streaming has taken China by storm
The concept of commercial live streaming first appeared in China in
2015, amid the boom of mobile and gaming streaming. It was also the
time when smartphones and online payment methods became
ubiquitous in the country, along with a mature Wi-Fi and 4G technology.
Having scoped out the potential of live streaming, the online retail giant
Taobao was the first to implement this real-time video feature into its e-
commerce business in 2016 to boost its user engagement. Its close
rivals Mogujie and JD.com also launched live streaming functions in the
same year.
It did not take long for live streaming to become a natural extension of
e-commerce. In 2017, Taobao reported a purchase conversion rate of
over 50 percent, meaning five out of ten online visitors added products
to their shopping carts. This proved that live streaming could be an
effective sales-driven marketing format in e-commerce. Merging
entertainment and commercial, this new online shopping model can
benefit different parties. Not only can brands get exposure and
generate sales, but consumers can also get more information on
products in an entertaining way.
Source(s): China Internet Watch, iiMedia, Forbes
7
The market expanded rapidly after Taobao’s success. Between 2017 and
2018, there was a rising demand for multi-channel networks (MCNs) to
provide content and influencer management support. Video streaming
platforms like Kuaishou, Douyin, Xigua Video, and Meipai were eager to
incorporate commercial elements into their well-established streaming
operations. In 2019, live streaming commerce entered a mature stage
with more e-commerce providers and social media platforms
participating, such as NetEase Kaola, Red, Pinduoduo, and Zhihu.
In 2020, the coronavirus lockdown confined millions of Chinese to their
homes, making e-commerce more popular than ever. To compensate
for offline business losses, various brands, mall operators, and even
local government officials have turned to live commerce. To enhance
the physical shopping experience in the digital world, live shopping
platforms have been testing more features, like hyper-personalization
for content suggestions, augmented reality for clothes and makeup try-
on, and personal beauty advice services. Undoubtedly, the healthcare
crisis has accelerated the digital makeovers in China, making business
more resilient and dynamic.
The ecosystem behind the shows
Upstream Midstream Downstream

Ad requests & spendings

MCNs
Marketing strategy & a suitable Traffic (Strategic alliance)
matrix of influencers Support &
training

Supply samples
Brand awareness & sales
Influencers

Sell Place orders

Products
Consumers
Factories Product
information &
Brand owners
discounts

Platforms

Ship products Ship products

8
What’s behind the e-commerce revolution?
New technology is the foundation and 5G, AI, VR, and big data will be the next driving forces
Cellular networks
(4G & 5G)
•Internet penetration rate:
22.6% in 2008 → 64.5% in Mar 2020;
mobile internet reach over 98.6%
Online payment
•Various third-party payment
providers, with Alipay and
Tenpay as market leaders
•Seamless integration of
online payment and
purchase methods
9
Smartphone
•New tech advancements in photos, video
formats, and other features supporting live
commerce apps
•User numbers: 581m in 2015 → 925m 2020
Logistics support
Live commerce •Rapid delivery, low cost,
and an extensive network
•A vibrant sector led by SF
Express and ZTO Express
Go online, go live
Key figures of China’ s live streaming commerce industry

Thanks to technological breakthroughs, shopping has turned into a few
easy clicks which can be done during lunchtime, commuting, and even
sleepless nights. As of June 2020, China had about 750 million online
shoppers who made most of their purchases via smartphone.
China’s e-commerce market is massive, but it might soon be saturated
after years of rapid growth. Live streaming is like a fresh breath into the
sector, stimulating buying by adding a fun and exciting shopping
experience.
It comes as no surprise that this teleshopping idea has been well-
received, as studies have also shown that Chinese consumers generally
embrace transformation and innovation to a greater extent than their
global counterparts. Live commerce has amassed about 500 million
users – over a third of China’s population – and one in two made a
purchase in 2019. Consumers are eager to see their questions about
the displayed products answered in real time and get the exclusive
discounts or flash sales just a second later.

500m 82.5k +50k

users in 2019 hosts as of Aug 2020 live shows/day in H1 2020
260m 2.7k 20m
views/day in H1 2020 new hosts in Aug 2020 products sold in H1 2020

Source(s): iiMedia, MasterCard, China’s Ministry of Commerce

10
 Stepping into the new era of retail e-commerce
Market size of live commerce in China from 2017 to 2019, with an estimate for 2020 (in billion yuan)

1,200
Making mobile shopping entertaining

China’s live streaming commerce will soon

1,000 961 be a trillion-yuan market. In 2020, it is set
to grow at a CAGR of 270 percent, reaching
961 billion yuan from merely 19 billion
yuan in 2017. Behind the boom are the
Market size in billion yuan

800
tech-savvy Chinese consumers who
demand a richer online experience.
600 To cater to the rising consumer demand
for a more exciting and informative digital
433.8 shopping experience, Chinese e-commerce
400 giants have scoped out the market
potential of streaming to enhance
consumer engagement and spending. Live
200 commerce works as a more effective
133
digital showcase to replicate the physical
19 shopping environment, where consumers
0 can have real-time interactions with live
2017 2018 2019 2020* stream hosts.

Note: China; 2017 to 2019; *estimate

11 Source(s): DATA100 Insight; ID 1127635
 Spotlight: the midyear shopping festival (6.18)
Gross merchandise volume of JD.com during China’s 618 shopping festival from 2016 to 2020 (in billion yuan)

300
From JD anniversary to a sales bonanza
269
The midyear shopping festival, also known
250 as 618, as it runs from June 1 to 18 each
year, was first launched online by JD.com
for its anniversary in 2004. The e-retailer
202
200
promoted its 618 campaign to a larger
GMV in billion yuan

marketing scale in 2009 for the first time.

159 That year, sales on June 18 alone exceeded
30 million yuan. JD.com did not wait long
150
to turn this one-day event into a month-
120
long celebration.

100 618 has become one of the major e-

80
commerce battles. Despite the coronavirus
pandemic (or possibly because of it),
50 online sales were high. Across the 18-day
sale in 2020, about 331 million people
were estimated to have watched
0 shopping-related live streaming.
2016 2017 2018 2019 2020

Note: China; 2016 to 2020

12 Source(s): WalktheChat; JD.com; ID 1128633
 Spotlight: Singles’ Day (11.11)

Alibaba's gross merchandise volume on Singles' Day from 2011 to 2019 (in billion U.S. dollars) A nationwide shopping spree
50
Since the early 1990s, Singles’ Day, aka
volume in billion U.S.
Gross merchandise

38.4
40 Double Eleven, has long been a holiday
30.8
25.3 for students to celebrate their
dollars

30
17.79 singledom. Inspired by the sales success
20 14.3
9.3 of JD’s 618 campaign, the Chinese e-
10 5.8
0.82 3.04 commerce titan Alibaba kicked off its
0 Singles’ Day sales promotion in 2009.
2011 2012 2013 2014 2015 2016 2017 2018 2019 The idea behind it is celebrating being
single by online shopping and self-
Gross merchandise value of Singles' Day sales on JD.com in China from 2017 to 2019 (in billion yuan)
indulgence. Other e-commerce
250 platforms gradually joined the battle,
204.4
offering various discounts and
GMV in billion yuan

200
159.8 promotions.
150 127.1
Today, Singles’ Day is the biggest annual
100
shopping event in China. Over 460
50 million people shopped on Alibaba’s
0 C2C e-commerce platform Taobao on
2017 2018 2019 Singles’ Day in 2019.

(1) Note: Worldwide, China; November 11, 2011 to 2019 (2) Note: China; 2017 to 2019
13 Source(s): Alibaba; ID 364543 Source(s): 100ec.cn; ID 1177071
02 Live commerce platforms
▪ How does it work?
▪ Impulse buying
▪ The major players and their competitors
The common magic of commercial live streaming platforms
Compared to the traditional model, live streaming commerce shortens involved in the traditional supply chain. Live sales shows can also test
the supply chain, reducing the required steps and time of a product to the popularity of products before mass production.
reach to consumers after leaving the factory. This way, products are
Compared to e-commerce, live streaming commerce has a relatively low
directly transported to live streaming studios or warehouses. The
return rates of products. Consumers are better informed and can ask
amount of products to be sold during the live streaming sessions is
questions and make requests during the shows. This helps avoid wrong
usually determined before the shows. After consumers have made
expectations regarding products because of misleading photos and
purchases, the products are then delivered directly to them. This can
models. A lower return rate can save costs on after-sales services,
greatly reduce inventory cycle time and saves costs on other players
logistics, and storage.

Production Distribution Consumption

Traditional Province-level City-level

Product processing Brand merchants Supermarkets Consumers
supply chain agencies agencies

E-commerce Stores/
model
Product processing Brand merchants RDC/CDC Consumers
warehouse

Live streaming
commerce Product processing Live streaming studios/warehouse Consumers
model

15
The real-time miracles
A lower market price, flattening the industry chain, and enhancing marketing and sales efficiency

Live streaming commerce Traditional e-commerce Traditional distribution

Cost (¥) Revenue (¥) Cost (¥) Revenue (¥) Cost (¥) Revenue (¥)

Supply chain 10 5 10 5 10 5

Merchants 15 36 15 47 15 29
(marketing cost: 15)

MCN 51 6 44 19

E-commerce 57 6 62 6 63 34
Merchants can earn
The more, but with higher
Consumers 63 cheapest 68 97
marketing costs

Note: China; October 2020

16 Source(s): Everbright Securities, JD Logistics
Catching the spur-of-the-moment deal
Tactics used among live commerce platforms to stimulate impulse buying
Charismatic hosts
• Authenticity
Personable and grounded, an ideal host can
create intimacy with viewers, think about what
customers need, and help them make the best
decision.
• Trustworthiness
To build trust with consumers, products featured
on the shows should be carefully tested and
selected by the hosts or the supporting teams.
Products of poor quality should be rejected.
Viewers are more prompted to buy the products
recommended by an anchor they trust.
• Fandom
A-list live streamers often engage their audience
and develop a sense of loyalty with the viewers.
Loyal fans are more likely to return to the same
hosts and shop.
17
Exciting experience
• Getting consumers’ attention
To make consumers look forward to the next
shows, teasers about the coming sales discounts
and special deals are released before the shows.
This creates interest and excitement among
consumers.
• Real-time social interaction
Anchors interact with audience in real time, like
greeting viewers by calling their names,
answering their questions, and fulfilling requests.
This replicates a guided shopping experience
and consumers feel taken care of instantly.
Viewers can also interact with each other, just
like shopping with a group of friends.
• More transparency
Sometimes, production scenes are shown in the
shows. Consumers get a chance to know more
about the conditions of farms and factories, as
well as how products are made.
Show settings
• Conformity
Loyal fans of live streamers tend to be active and
engage more during the shows. This can
influence other viewers in their purchase
decision, making them more likely to participate
in impulse buying.
• Scarcity
Before the shows, hosts and merchants reach an
agreement on limited-time discounts and deals.
Some popular offers can run out if consumers
are not fast enough to place the order.
• Urgency
Countdown clocks, low stock warnings, and
announcing sales records in real time can spur
on buyers to make a purchase.
Consumers are tempted to make unplanned purchases

Conversion rates of e-commerce by category in China as of 2020 Level of consumption desire triggered when watching live streaming
commerce shows among users in China in H1 2019

Live streaming commerce 65%

Extremely high Relatively high Normal
Relatively low Extremely low

Top-tier influencer e-commerce 20%

53%

Social commerce 8% 25%

15%
6%
1%

Traditional e-commerce 0.4%

(1) Note: China; as of October 2020; conversion rate refers to the percentage of visitors or viewers
who make purchases (2) Note: China; H1 2019
18 Source(s): Topklout; JD Logistics Source(s): Forward Intelligence (Qianzhan)
The three kings
How did Taobao Live, Douyin, and Kuaishou reach the top of the ladder?
The live streaming shopping arena in the world’s second largest
economy is vibrant with domestic players. Some of the names that
repeatedly pop up with impressive sales figures are Alibaba’s Taobao
Live, ByteDance’s Douyin (aka Tiktok), and Kuaishou. In terms of product
offerings, the three have their own specialties with only small overlaps.
Other newcomers like Red (social commerce), Bilibili (video streaming),
Douyu (game streaming), and Youzan (e-commerce SaaS) are expected
to bring live commerce to new heights.
Alibaba introduced live streaming into its e-commerce platform Taobao
in 2016 with the aim to enhance its user engagement. Received with
tremendous enthusiasm, Alibaba launched its dedicated live streaming
channel Taobao Live in 2019. Although Taobao Live is still a tiny part of
Alibaba’s business in terms of GMV, the live commerce bellwether has
ample room to grow. With more celebrity hosts and AR features, live-
streaming sessions on Taobao Live have shown robust growth rates.
Kuaishou, also known as Kwai in overseas markets, rolled out its live
commerce services in 2017. The second largest short video app backed
19
by Tencent has hundreds of millions of daily active users in China, most
of which are from lower-tier cities and towns. Content on Kuaishou is
more down-to-earth, often related to the daily life in rural China. The
app has made its name in sales of farm products and cheap goods
under 100 yuan. Its seamless integration of e-commerce into social
media, including video sharing and live streaming, has brought out high
purchase and sharing rates on live sales shows.
Douyin joined the live streaming commerce army in 2018. It began with
providing links to traditional e-commerce platforms, enabling direct
purchases within Douyin. The video streaming app specializes in selling
big brand beauty and fashion products. Soon after the company formed
its own e-commerce department in June 2020, it announced a plan to
ban links from live streams to external e-commerce sites as a step to
keep sales revenues and traffic on its platform. Undoubtedly, the most
popular short video app in China has potential to become the next big
fish in e-commerce.
Social media is gaining ground in e-commerce with its huge and
young userbase advantages

MAU of major live streaming commerce platforms in China in March 2020 (in millions)

Taobao Live 756

Pinduoduo 441

JD.com 268

Mogujie 11

NetEase Kaola 6 E-commerce

platforms +
VIP.com 5
live streaming

Kuaishou 470
Social media +
e-commerce
Douyin 469

Note: China; March 2020; MAU refers to the number of monthly active users
20 Source(s): Analysys; Forward Intelligence (Qianzhan)
Taobao Live is the bellwether for turning viewers into buyers
Estimated share of live streaming commerce GMV in China in 2020, by platform

It’s more than “See Now, Buy Now”

250bn Long before launching Taobao Live, Alibaba’s Taobao was

CNY already one of the biggest C2C e-commerce platforms in
500bn China. With a huge active userbase and an extensive
CNY merchant network, Taobao has successfully transferred
26%
these advantages to Taobao Live.
200bn
51% CNY The live commerce pioneer has developed a systematic
“See Now, Buy Now” model. Apart from a good
consumer reputation with its effective buyer warranty
21%
and return policies, the platform also has an engaging
user experience design and functions to boost user
2% engagement.

To ensure high quality content, Taobao Live works closely

with PGC (professionally generated content) platforms. It
also provides a management tool and tips for hosts. Live
streaming hosts Viya Huang, Austin Li, and other
Taobao Live Kuaishou Douyin Others (JD.com, Pinduoduo,
Mogujie, Suning, VIP.com, RED, etc.) influential anchors have achieved their online fame
through Taobao Live.

Note: China; as of October 2020

21 Source(s): 100ec.cn; Forward Intelligence (Qianzhan)
Taobao Live owns the most influential hosts powering its revenue
A comparison between Taobao Live, Kuaishou, and Douyin regarding MCN and influencer networks

Number of MCNs +1k as of April 2020 +1k as of June 2019 +400 as of June 2020

Total number of
+16k +55k 55-100k
influencers

Top-tier: 12-22 Top-tier: 50-60 Top-tier: 12-22

Number of influencers
Mid-tier: 1-2k Mid-tier: 3-4k Mid-tier: 1-2k
by tier
Long-tail: 15k Long-tail: 50k Long-tail: 50-100k

Number of top 50 hosts

in terms of GMV in Aug 18 15 17
2020

Share of GMV of top 50

56% 25.3% 18.7%
hosts in Aug 2020

Source(s): iResearch; Forward Intelligence (Qianzhan)

22
Taobao Live captures more active consumers with a higher
spending power
User profiles of Taobao Live, Kuaishou, and Douyin

Female user
share
60% 41% 49%

Geographical
Second and third tier cities, rural area Third and below tier cities First and second tier cities
location

Occupation Student, white collar Blue collar Student, white collar

Age Mainly 20-40 More at 25-35 More under 24

Active time
period
7-11pm 6-9pm 8-11pm

Source(s): Mianchao; AliResearch

23
03 Live commerce hosts
▪ The power of influencers
▪ The hidden giant: MCNs
▪ Personality and trust is the key
Everyone can go live and sell, but consumer trust is still the key
More celebrities, brand merchants, and farmers want to make a mint as live stream sales hosts

Live streaming commerce is largely based on influencer marketing thousands of rural farmers as live streamers to help boost their income
concepts. The hosts are usually young female influencers with follower and promote agricultural products.
numbers ranging from over one million (mega) to approximately
100,000 (mid-range) to below 10,000 (nano).

Apart from influencers, more and more celebrities, like Yang Mi, Fan Favorite hosts of shopping-related live streaming in
Bingbing, and Angelababy, are joining the trend to stay in the spotlight. China 2020
Undoubtedly, their fame and popularity boost traffic, yet they do not
80%
always guarantee impressive sales figures. With sufficient sales
knowledge, a good understanding of the products, and a “relatable” 69%
image, influencers have more advantages than celebrities, especially in
keeping a lower return rate and a higher buyer retention rate. 52%

Share of respondents
To stimulate sales and offset loss caused by the corona pandemic, some
CEOs of brand merchants, governors, and even farmers have also
hopped onto the live streaming bandwagon. Some of them have 18%
achieved remarkable results: Trip.com’s executive chairman, James
Liang, has sold 294 million U.S. dollar worth of travel packages and
hotel bookings in 25 shows as of November 2020; Gree Electric’s
Local influentials Merchants Celebrities Influencers
chairwoman, Dong Mingzhu, reached home appliance sales of 44 like mayors or
million U.S. dollars in one live stream session. Taobao Live has recruited governors

Note: China; May 2020; under 40 years; 3,106 respondents; among residents of first- to fourth-tier cities
25 Source(s): DATA100 Insight; ID 1130282
 Influencer marketing
Types of influencers and their differences

Key opinion leaders, or KOLs, in China can be

Online celebrities divided into different tiers according to the
Mega/ number of active followers. Top-tier KOLs such
Active followers: over 5m
Suitable for brand awareness and to macro: as Viya Huang and Austin Li can often generate
spark interest Top-tier KOLs(1%) a huge amount of viewing traffic. However, the
price tags for hiring them are going up, and
their followers usually have various interests.

Mid-range KOLs are more affordable and easier

Thought leaders
Active followers: 1-5m
Suitable for conversion goals
Mid-range KOLs (20%)
to contact. They can help brands reach a broad
audience with polished and appealing content.
As their audience trust their authentic
recommendations and reviews, they have
proven to be good at driving conversions.

Key opinion consumers Long-tail KOLs tend to work directly with brands
Active followers: 100k-1m Micro/nano: Long-tail KOLs (79%) they are passionate about. They are cost-
Suitable for brand connection, effective, niche-specific, and very close with
credibility, and loyalty their audience. This makes them good brand
ambassadors.

Source(s): Daxue Consulting; Dragon Social

26
MCNs manage influencers for brand marketing services
The real force supporting the hype of live streaming commerce
Support
• Traffic operation:
Traffic analysis & support
• Content production:
Script writing, filming,
production, post-
production & editing
Multi-
• Business development:
channel Talent training,
networks consumer data analysis,
(MCNs) feedback plans
Consumers
27
The middlemen between brands and KOLs
Most top-ranked KOLs do not work alone,
Goals
• Increase in follower instead, they often sign contracts with multi-
and view numbers channel networks (MCNs) to diversify their
content. MCNs and KOLs usually agree on a
• Release regular content 70/30 percent split of the agency fee paid by
• Traffic monetization Influencers brands.
MCNs are agencies that manage the activities
of influencers across social media and e-
commerce platforms. MCNs create core
content for platforms and train professional
Ideal outcomes influencers. Apart from handling sales
• Higher consumer promotions for brands, MCNs also help
engagement them identify suitable influencers to hire with
software and data intelligence. To
• A stronger brand
awareness influencers, MCNs provide various kinds of
support to help them keep their followers’
• A higher sales attention, achieve sales and marketing goals,
conversion rate as well as adapt to the market changes more
rapidly.
 The Achilles heel of MCNs: the necessity for A-list KOLs to stand
out in the competitive market
The 24.5 billion-yuan market expanded from 160 to 28,000 local players between 2015 and 2020

Multi-channel network (MCN) market size in China from Leading live commerce MCNs based on total traffic on Taobao
2015 to 2019, with an estimate for 2020 (in billion yuan) platform in July 2020 (in million unique views)
Total traffic in million unique views
30
Star KOL:
Qianxun 167
Viya Huang
24.5
25
Market size in billion yuan

Star KOL:
Mei One 88
Austin Li
20
16.8
Star KOL:
The Chen Fan 87 Cherie Zhu
15

11.2
Nstar 74
10
7.8

4.6 Sweet Star (Tianxing) 53

5

0.8
0 Fengchen 52
2015 2016 2017 2018 2019 2020*

(1) Note: China; 2015 to 2019 (2) Note: China; July 2020
28 Source(s): iResearch; ID 894986 Source(s): iResearch
 The Matthew effect: two star sellers are the cash cows
Leading live commerce hosts based on GMV in China in October 2020 (in million yuan)

The live sales queen and the “lipstick king”

Viya (Huang Wei) 9140.57
Viya Huang and Austin Li are the best-known faces of China’s
Austin (Li Jiaqi)
live streaming commerce. Viya Huang is famous as the live
5953.29
stream queen who can sell anything, and Austin Li has won
his title as the “King of Lipsticks” by selling 15,000 lipsticks in
Cherie (Zhu Chenhui) 1599.72
just five minutes during a live broadcast.

Xin Ba (Xin Youzhi) 1303.72 The top-notch influencers can pull dozens of millions of
viewers into one live show and rake in billions of yuan in sales
Dandan
revenue. Some of them even achieved a higher annual sales
983.47
revenue than many public companies in 2019.

Lieerbaobei (Li Lie) 721.72 There are also black sheep in this booming industry. Some
purchase traffic to fake consumer engagement figures. In
Luejiaxiaopang (Li November 2020, the A-list live streamer Xin Ba was involved
691.30
Ran)
in a false marketing scandal and had to carry out a product
Shidapiaoliang (Shi recall and refund. In June 2020, a mid-range KOL (called Liao)
655.72
Shi) was even arrested during live streaming for selling counterfeit
products.
Chen Jie (Kiki) 555.55

Note: China; October 2020

29 Source(s): sina.com.cn, WeMedia, BiaNews, ifeng.com
Sparking online word-of-mouth influence
Crucial characteristics of successful live commerce hosts
Authentic
Popular anchors often possess a personable
and grounded image, which makes them
relatable for consumers.
Just like a customer representative, live
streamers put themselves into viewers’
shoes. They understand what their
subscribers want and help them make the
best shopping decision.
30
Trustworthy
Word of mouth is the most trusted
advertising source for consumers. Viewers
are more likely to buy the products
recommended by an anchor they trust.
A top-performing host is able to demonstrate
an in-depth knowledge of the displayed
products. The audience expects an objective
and professional opinions from a
knowledgeable expert.
Engaging
Popular streamers often engage their
audience and chat with them like close
friends. The opportunity to be named by the
anchor also gives buyers a sense of
belonging.
It is common for hosts to address their
viewers with endearing terms like “sweetie”
and “honey”. Besides gossip, anchors also
share their personal life with the viewers to
create intimacy.
Spotlight: China’s live commerce queen
Number of Viya Huang’s followers on selected e-commerce and social media platforms in China as
of December 2019 (in millions)

Followers in millions The picky perfectionist is beloved

Before diving into live commerce, A-list anchor Viya Huang had already
accumulated some experience in sales and performance. Her online
Taobao Live 12.47 store success captured Taobao’s attention and she was recruited as
one of its live streamers in 2016. Her followers account for a third of
Taobao Live’s daily active users.

Viya’s shows are a master class in salesmanship. In order to build trust

Weibo 5.36 with her followers, her team has an intense product selection process
which covers checking brand reputation, screening ingredients, and
testing products. Products which do not meet her high standards are
rejected. This instills a high level of trust in the audience that her
recommendations are always reliable. The internet celebrity also made
Douyin 2.61
use of her influence to boost anti-poverty campaigns, and even host a
fundraiser for the coronavirus-torn city, Wuhan, in spring 2020.

Viya has a close bond with her followers, who call her “Dora-Viya” – a
nod to Doraemon, an anime character who can fulfill wishes with
Overall 20.44
gadgets from his magic pouch. To increase her fans’ loyalty, Viya calls
them “Women of Viya”. With a sense of loyalty, fans are more likely to
return to the same hosts and follow the call.

Note: China; December 2019

31 Source(s): chinaz.com; Sanyan Caijing
Spotlight: China’s “Lipstick King”
Number of Austin Li’s followers on selected e-commerce and social media platforms in China as of
December 2019 (in millions)

Followers in millions The savior of females’ wallets

Before becoming a Taobao live streamer in 2017, Austin Li had

gained sales experience with beauty products. He became famous
Douyin 36.46 due to his impressive lipstick sales figures during a two-hour live
stream session, in which he tried 380 lipsticks on himself. In 2019,
Forbes China included him on the “list of elites under 30.” His
followers account for about 20 percent of Taobao Live’s daily active
Taobao Live
users.
17.05
With a good understanding of female consumers, Li has become a
favorite among urban beauty lovers who are more active on
Douyin. His energetic, humorous, and overdramatic speaking style
makes his shows very entertaining. He reviews products in an
Weibo 8.56
impartial and honest manner, sometimes even criticizing big
brands bluntly. All these factors have made him stand out as an
adorable and reliable host.

Like Viya, Li has also used his popularity to do good and show
Overall 62.07
social responsibility. In a live stream before the Chinese New Year
in 2020, the influencer raised about 71.4 million yuan in viewer
donations for the early Chinese coronavirus epicenter Wuhan.

Note: China; December 2019

32 Source(s): chinaz.com; Sanyan Caijing
Spotlight: the veteran of China’s e-commerce
Number of Zhang Dayi’s followers on selected e-commerce and social media platforms in China as
of December 2019 (in millions)
Followers in millions The once golden crown is fading

Zhang Dayi is a prominent social influencer, the face of

traditional e-commerce in China. Along with her model
Taobao Live 12.39 experience and fashion sense, she ventured into e-commerce
in 2014 with her own fashion store on Taobao, a hugely
successful move. Her shop once reported an annual
transaction value of 1.5 billion yuan. In 2019, Ruhan Holidings,
Weibo
the influencer incubator co-founded by her, went public on
11.64
NASDAQ, making her the first Chinese influencer with a stake
in a NASDAQ-listed company. TIME chose her to be one of the
25 most influential people on the internet in 2019.

Douyin
However, Zhang’s legendary success does not guarantee her
0.28
continuous online influence. The online celebrity was more
active on the Chinese Twitter equivalent, Weibo, and only
joined the live stream army in September 2019. She usually
introduces her new products in her live shows which mostly
Overall 24.32 have less than one million viewers. Compared to Viya Huang
and Austin Li, the fashion blogger now might appear to be
negligible in live commerce, in terms of mobilizing power.

Note: China; December 2019

33 Source(s): chinaz.com; Sanyan Caijing
04 Consumers
▪ Demographics and preferences
▪ A new consumption norm
▪ Concerns and opinions
Most of the consumers are social media natives and live in fast-
developing cities
Just like in traditional e-commerce, female consumers are more active
and tend to spend more than their male counterparts in commercial live
streaming in China. It comes as no surprise that young people are using
this new shopping format the most, since they are social media-savvy and
quick to embrace innovative ideas.
While over a quarter of the live shopping viewers came from lower-tier
cities, hundreds of millions of people in rural China have never shopped
online. This means there is huge potential in unleashing the rural
spending power when air delivery networks and drones can reach remote
regions.

Share of live stream users watching live Age distribution of live commerce Geographical distribution of live
commerce shows in China as of H1 2019, shoppers in China as of March 2020 commerce users in China as of March
by gender 2020, by city tier

46%
55% 50%
45%
33%

28% 21%
Female Age
9% 6%
Yes No 2% 5%

20 years or below 21 to 30 years Tier-1 cities Tier-2 cities

49% 51% 31 to 40 years 41 to 50 years Tier-3 and -4 cities Small towns and
rural villages
51 to 70 years
Male

(1) Note: China; H1 2019 (2) Note: China; March 2020 (3) Note: China; March 2020
35 Source(s): iiMedia Research Source(s): CCA,; Forward Intelligence (Qianzhan); CBNData Source(s): 21 Ceping Lab; Forward Intelligence (Qianzhan); CBNData
 Live commerce users have a higher consumption capacity
Online consumer buying power of live commerce users and mobile shopping users in China as of
March 2020, by selected platforms

Share of respondents
Taobao Live Kuaishou Douyin Mobile shoppers aged 15-35 years

21%
41.4%
Below 200 yuan
27.6%
29.8%

50%
42.3%
200-1,000 yuan
47.9%
49.8%

29%
16.3%
Above 1,000 yuan
24.5%
20.4%

Note: China; March 2020

36 Source(s): QuestMobile,; Forward Intelligence (Qianzhan); CBNData
Have you watched and then shopped today?
Frequency and preferred times of day to watch shopping-related live streaming among
respondents in China as of May 2020

Share of respondents Share of respondents A part of daily life

Leisure time after dinner Live stream commerce is beloved by

More than ten times a
week
Six to ten times a week
Three to five times a
week
Once to twice a week
Less than once a week
(7-9 p.m.)
8% Before bedtime
(10 p.m. - 12 a.m.)
On weekends or rest time
16%
Breaks at work or school
During lunch or dinner
45%
Other fragmented time
During commuting time
27%
After midnight (after 12 a.m.)
After getting up/during
washing up or breakfast
5%
Whenever and wherever possible
67%
many Chinese consumers. It is not
56% just about shopping, but more about
enjoying a fun variety show and
54% connecting with other people. To
some young Chinese, watching live
27% sales shows is a normal daily routine,
a new entertainment option to kill
21% boredom during commuting and
other time spans.
14%
A majority of Chinese consumers
14% stream live shopping shows at least
once a week, some even everyday,
9% mostly in the evenings and on
weekends. Half of the viewers make
6% purchases at least once a month.
2%

(1) Note: China; May 2020; under 40 years; 3,106 respondents; among residents of (2) Note: China; May 2020; under 40 years; 3,106 respondents; among residents of
first- to fourth-tier cities first- to fourth-tier cities
37 Source(s): DATA100 Insight; ID 1130145 Source(s): DATA100 Insight; ID 1130257
Hunting for the best deals for fashion, beauty, and food items

Most purchased products in live streaming sales among Leading factors considered when shopping in live stream Good quality and low price?
respondents in China as of June 2020, by category commerce among respondents in China as of May 2020
Fashion, beauty, food, and daily
Share of respondents Share of respondents supplies are the most in-demand
product categories in live
Clothing and apparel 36.49% Quality 63.86% commerce. It is common to see
anchors try on clothes, test
Cosmetics 36.14% Price 63.51% cosmetics, or taste food
products during a live stream.
Food 35.79% Brand 41.75%
When it comes to shopping
Daily supplies Sales volume
during a live broadcast, many
30.18% 32.63%
Chinese consumers pay the
Household decorations Popularity of the host
most attention to product
27.02% 23.16%
quality and price. They often find
Consumer electronics Image of the platform
it hard to resist a cheap deal. In
23.51% 21.75%
addition, a good visual
Other commodities Scale of the merchant
presentation can make products
15.09% 14.04%
more appealing and enhance
Never bought anything Others 3.16%
consumption desires.
11.58%

(1) Note: China; May 26 to June 2, 2020; 5,415 respondents (2) Note: China; May 26 to June 2, 2020; 5,415 respondents
38 Source(s): Beijing Consumer Association; ID 1125811 Source(s): Beijing Consumer Association; ID 1125875
A cheap deal and advanced visuals are irresistible
But sales tricks are common: emotional purchases, or following the crowd or the call blindly

Leading factors considered when shopping in live stream Major reasons for buying products recommended by hosts in live
commerce among respondents in China as of May 2020 sales shows among respondents in China as of April 2020
Share of respondents Share of respondents

The selling skills of the

Low prices 50.53% 45%
hosts are excellent

Good visual presentation 44.56% I like and trust the hosts 43.3%

Fear of missing out when I see

Impulsive shopping 29.12% other viewers snatching the 39.3%
products in live stream

Conformity 26.32% Sales promotion and discounts 30.9%

I can see the products from

Recommended by the hosts 21.05% 13.8%
different angles directly

Others 8.77% Others 1.9%

(1) Note: China; May 26 to June 2, 2020; 5,415 respondents (2) Note: China; as of April 2020; approx. 15,000 respondents; among residents of first- to fourth-tier and lower cities
39 Source(s): Beijing Consumer Association; ID 1125857 Source(s): 21 Ceping Lab; 21jingji.com
But live commerce does not come without its problems
Reasons for not shopping in live streams among respondents in China as of March 2020

Share of respondents

Worried about no guarantee of product quality 60.5%

Worried about after-sales problems 44.8%

Haven't tried shopping in live streaming 30.9%

Worried about online payment problems 26.4%

Worried about consumer rights problems 25.3%

Do not trust live stream platforms 23.1%

Do not trust live stream hosts 17.5%

Note: China; January to March 2020, 5,333 respondents

40 Source(s): CCA; Forward Intelligence (Qianzhan); CBNData
The risks of live shopping

Level of consumer satisfaction with live commerce Most concerning aspects of live streaming commerce Most Chinese consumers have a
among respondents in China in April 2020 among surveyed shoppers in China as of June 2020 good experience with the
services of live commerce: more
Share of respondents Share of respondents product details, a smooth
purchase process, and fast
delivery.
Poor quality 64.91%
Very satisfied 12.07%
However, there are major
concerns regarding product
No warranty 55.44% quality problems, like defects and
Relatively satisfied 67.24%
counterfeits, and lack of buyer
warranties, such as bad return
Fake popularity 50.18% policies and poor after-sales
services. Besides, online
Not satisfied 16.81% shoppers are increasingly aware
Fake advertising 49.82%
of the credibility of brands, hosts,
and live commerce platforms.
Fake online popularity and false
Very unsatisfied 3.88%
Others
marketing have been on
7.37%
consumers’ radar.

(1) Note: China; April 2020; 1,064 respondents (2) Note: China; May 26 to June 2, 2020; 5,415 respondents
41 Source(s): iiMedia Research Source(s): Beijing Consumer Association; ID 1125898
A rising awareness of consumer rights
Leading ways to protect consumer rights when encountering problems in live stream
shopping among respondents in China as of June 2020
Share of respondents Who should be responsible?

When consumers face problems in live

Contact the live streaming platform
Contact the retailer
Complain to the authorities
Contact the live streaming host
Contact the manufacturer
File a lawsuit
62.46%
commerce, most of them choose to
contact the live stream platforms directly.
46.32%
Many try to find the retailers, while some
file a complaint with the authorities or
contact the live stream hosts.
31.23%
This consumer behavior reveals the
ambiguous legal relationships between
29.82% live commerce platforms, brands, and
hosts. Without clear regulations for live
commerce, this could result in short-
23.86% term growth at the expense of long-term
health.
9.82%

Accept the bad luck 8.07%

(2) Note: China; May 26 to June 2, 2020; 5,415 respondents

42 Source(s): Beijing Consumer Association; ID 1125905
Will live commerce replace e-commerce soon?
Most Chinese consumers were not sure about the future of live commerce before the corona pandemic

Attitudes on the market outlook of live streaming commerce Intention to participate in live streaming shopping in the future among
among respondents in China in 2019 respondents in China in 2019

Share of respondents Share of respondents

Positive Impartial/ wait-and-see Negative Definitely 15.33%

Maybe 57.66%
46.26%

Indecisive / indifferent 19.71%

27.21% 26.53%

Maybe not 6.57%

Definitely not 0.73%

Note: China; January 22 to February 3, 2020; 1,983 respondents

43 Source(s): iiMedia Research
“
“
If you do build a great experience, customers tell each other
about that. Word of mouth is very powerful.

-
Jeff Bezos
Founder of Amazon.com
Conclusion and outlook
What’s next in China, and can the West copy China’s live streaming commerce miracles?
The coronavirus pandemic has opened a door for new product
categories in China’s live shopping, like for example agriculture products.
With the support of platforms like Taobao Live and JD.com, thousands of
farmers have used live broadcasts to sell their products online. As live
commerce has gone more mainstream, the Chinese government has
planned to regulate the industry more strictly and has high hopes to use
it to support business and alleviate poverty in rural areas. However, it
will probably take some time to tackle the common industry problems,
like false marketing, and high return and refund rates. On the other
hand, the advancement of the 5G network, AR or VR, and other
technologies will drive the industry to bring a better streaming and
shopping experience to consumers.
China’s live streaming commerce is about four years ahead of other
parts of the world. The trend has not quite caught on outside the Great
Wall: Amazon launched Amazon Live in 2019, but it has not attracted
much attention yet; YouTube, Facebook, and Instagram have only just
begun adding the purchase linking feature to live videos. It is worth
noting that the western players have not built up a complex ecosystem
like Alibaba to integrate entertainment offerings with shopping and
payments. The e-commerce giant is able to provide a seamless shopping
experience because of its vertical integration with digital payment,
content distribution, and logistics companies.
45
In fact, the technological leapfrog in China has caused live streaming
commerce to explode in the country. An advanced 4G/5G infrastructure,
a high mobile payment adoption, and a mature logistics support are all
crucial foundations for live commerce. Another important market
driving force are surely the tech-savvy consumers in China. Chinese
consumers have become more affluent and willing to spend more on
themselves. At the same time, they are also cautious when online
shopping, where counterfeits and poor product quality problems are
common. They tend to make purchase decisions based on word of
mouth and on suggestions from someone they can trust. Influencer
marketing in live commerce is thus an effective sales strategy as it
focuses on brand reputation and consumer trust in hosts. While live
shopping has become a deeply embedded habit for Chinese consumers,
its effects outside of China still largely depend on the local consumer
preferences and habits.
Right next to China, Southeast Asia is slowly picking up the concept of
live commerce. Some prominent e-commerce players in the region, like
Alibaba-owned Lazada and Tencent’s Shopee, have been rolling out live
streaming commerce. Lazada has coined the term “shoppertainment”,
which refers to a shopping experience combined with social interactions
and entertainment, like music concerts and games. The experiments in
Southeast Asia will tell whether the live streaming model can adapt to
the local e-commerce scenes and become a new revenue stream
outside China.
Glossary
5G
Next mobile network technology standard. It has a higher data speed
and lower latency than the existing 4G LTE.
C2C (customer to customer/ consumer to consumer)
A business model that facilitate the trade between customers, typically
in an online environment.
CDC / RDC (central / regional distribution center)
A large warehouse for one or more companies that distributes goods to
provincial users with strong inventory preparation and capacity.
Customer stickiness
The increased chance that customers will continue to use the same
products or services that were bought in the last time period.
Conversion rate
The percentage of visitors who take a desired action, such as filling out
a form or making a purchase.
DAU (daily active users)
A metric to measure the number of unique users who have visited or
interacted with a website or an app within the last month (30 days).
46
GMV (gross merchandise volume)
A metric to measure the total volume in dollars of sales over a given
time period.
KOL (key opinion leaders )
A common term used in China refer to influencers.
MAU (monthly active users )
A metric to measure the number of unique users who have visited or
interacted with a website or an app within the last month (30 days).
MCNs (multi-channel networks)
Companies or entities that work with multiple channels and content
creators, often on video streaming platforms such as YouTube, to
further areas such as audience development, funding, promotion, and
monetization.
PGC (professionally generated content)
A term refers to the content produced by creative professionals.
Traffic monetization
A process of converting existing traffic to a particular website or app
into revenue.
Sources

100ec.cn JD.com
199IT JD Logistics
21 Ceping Lab MasterCard
21jingji.com Mianchao
Alibaba Ministry of Commerce , China
AliResearch MOFCOM China
Beijing Consumer Association QuestMobile
BiaNews Sanyan Caijing
Bloomberg SCMP
CCA sina.com.cn
CBNData Trustdata
China Internet Watch WalktheChat
chinaz.com WeMedia
CNNIC
DATA100 Insight
Daxue Consulting
Dragon Social
Everbright Securities
Forbes
Forward Intelligence (Qianzhan)
ifeng.com
iiMedia Research
iResearch

47
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Further reports
European eCommerce Monitor 2020
Digital Market Outlook - e-commerce report 2020

48
Lai Lin Thomala
Lai Lin Thomala is a researcher with a focus on the internet, media,
and advertising in Greater China. Since joining Statista in 2019, she
has published in-depth reports with well-structured insights on topics
such as social networks, mobile apps, gaming, online video, and,
online dating.

TEL (040) 284 841 286

E-MAIL lai-lin.thomala@statista.com