Chinese Live Commerce Market 101

Live commerce is the method of introducing and selling products and services during a live stream, or live video broadcast on the Internet. Live streaming simply refers to online media broadcast in real time, like a webinar (Zoom Meeting) or game play (like Twitch). When you combine live streaming and e-commerce, you get Live Commerce, where real-time interactions between shoppers and sellers take place.

In China, Live Commerce is a huge market. Taobao Live, Douyin, & Kuaishou are among the major players that drive the Chinese Live Commerce market, which was worth USD 151 Billion in 2020 after growing 291% from the previous year. This fact shows how quick the industry has grown to become one of the country’s most popular sales channels in a few short years.

Currently, the Live Commerce market is one of the core concerns of the Chinese government, and therefore the regional government has set up a live commerce base to encourage the development of Internet Celebrity (Wanghong). With the market growth and increasing sales skyrocketing every day, movie stars, singers, entrepreneurs are actively participating as Wanghongs in the live commerce market in China.

Chinese Live Commerce Market Trend

The Chinese live commerce market has experienced exponential growth since 2017 and has seen a growth of over 820% from 2017 to 2020. During this boom, Taobao has risen as the leader in the marketplace with 57.6% of the market share, followed by Douyin and Kuaishou with 9.2%, and 8.1%, respectively.

Picture 1: Chinese Live Commerce Market Value & Major Live Commerce Platform Market Share

Currently, the trending social media platforms in China are Douyin, Kuaishou, Xiaohongshu, and Bilibili. Douyin and KuaiShou are platforms that focus on short clips and live commerce, while XiaoHongShu focuses on images and short clips, and BiliBili on video and Live Commerce. A brief overview of the platforms is shown in the table below:

Table 1: Overview of The Trending Social Media Platforms in China

Distribution of Product Categories & Prices on the top Chinese Live Commerce platform

According to the ‘Top 100 product categories and prices’ data on Taobao live, the top live commerce platform in China, from January to August 2020, it shows that the main product sales occurred in the categories of clothing, beauty, desserts, bags, and accessories, where product prices were focused in the range of 100~500 yuan.

Picture 2: Main Product Categories Sales Distribution on Taobao Live

 

Local Government Live Commerce Bases

With the funding from the Chinese government, the Hangzhou Regional Government has established a multiplex base in May 2020 to encourage the growth of new Internet Celebrities (Wanghong). Chengdu and Wuhan have also established Live Commerce bases shortly after. The three bases serve different purposes to drive Live Commerce growth. The Hangzhou base functions as a multiplex to serve the needs of all stages of Live Commerce including logistics and bigdata, the Chengdu base as a national live commerce broadcasting station, and the Wuhan base as an incubator to help the mid-level Wanghong excel.

Conclusion

Overall, China’s Live Commerce market has experienced exponential growth since 2017 and is still continuing to grow rapidly to this day. An understanding of the Chinese Live Commerce is essential for anyone wishing to enter the Chinese market. This is not only a core aspect of market penetration, but also the most realistic revenue creation model for under-represented brands in China. With continued support and interest from the Chinese government, the market is expected to see further growth and with it the new star Wanghong.

Hebronstar Ventures

Han Jae Rin/ Senior Expert