The future of ecommerce livestreaming: Lessons from China's selling machine
“Five, four, three, two, one,” she says before the consumer floodgates open, and her product deal is released. Viewers of Huang Wei’s nightly livestream can’t click fast enough to buy; the host’s featured products sell out in mere minutes. If her audience pleads for more discounted product in the chat, she’ll advocate for them, asking her off-camera producers to deliver. Sometimes, they do.
Known by her stage name Viya, Huang Wei may be China’s most famous salesperson. In 2020 her Alibaba-driven livestream hit a record-high viewership of 37 million—more than the Games of Thrones finale, Sunday Night Football, and the Oscars.
But if you’re envisioning Viya alone, livestreaming from her home like a Twitch gamer, you’d be wrong. Viya streams from a studio in a ten-storey warehouse as part of Qianxun Group. This enterprise handles supply chain management and talent, made up of dozens of livestreamers like Viya. Think Home Shopping Network, but online and interactive.
Ecommerce livestreamers are some of the most profitable creators in China. The most popular creators run nightly four-hour livestreams that can feature 12 discounted products every hour, for a total of 48 every evening.
Through agencies like Qianxun Group, brands pitch their products to each host, who receives an appearance fee and a cut of the sales. Whereas in North America, creators are oftentimes paid a flat fee for promotion, Chinese hosts have access to massive ecommerce companies who broker deals for them like traditional entertainment
agencies—except those agencies are also deeply embedded in the ecommerce process as a whole.
In China, livestream ecommerce is a behemoth propped up by “super apps” like Alibaba’s Taobao, which uses integrated video, group chat, and payment experiences to fuse entertainment and buying. When a viewer watches a live ecomm stream in China, they can purchase an item without leaving the stream—and by the time they finish their purchase, the host has moved on to the next product. The cycle begins anew.
Technology in North America and Europe pales in comparison to that of Chinese ecomm buying experiences. Depending on your perspective, you can view this as a necessity or an inconvenience: North American and European ecommerce technology is a half-integrated, somewhat siloed conglomeration of online marketplaces, social media channels, payment processors, and third-party apps that power a lot of brick and mortar stores who just happen to sell online.
China, on the other hand, sees the highest rate of ecommerce in the world. In 2019, almost 35% of total retail sales in China happened via ecommerce—and that was before the pandemic. In 2020, that figure shot up to nearly 45%.
With so much of China’s ecommerce revenue fueled by livestreaming and the personalities behind the camera, it’s only natural to wonder if the trend will hit North America and Europe in the same way. While many cultural and regulatory differences stand between a perfect replica of Chinese ecommerce livestreaming, DTC brands in North America can still learn a lot from the exploding trend. Amazon didn’t invest in live shopping for no reason, after all.
Quick facts: ecommerce livestreaming in China
- In 2019, about 30% of China’s population viewed livestreams.
- In 2019, 37% of China’s online shoppers made livestream purchases.
- In China, 80% of ecommerce livestreaming happens through Alibaba’s Taobao Live.
- Other ecomm livestreaming players include Baidu, JD.com, Douyin, and MOGU.
- Less than 10% of livestream customers make repeat purchases—livestreaming is great for quick cash but not so great for long-term revenue.
North American ecommerce livestreaming potential: Where is it?
While parts of Asia are miles ahead of North America with all-encompassing ecommerce livestreaming platforms, that’s not to say live selling isn’t happening here. It’s just that the digitization of massive enterprises like the Home Shopping Network and QVC is happening more slowly, while other emerging players gain some serious ground in the meantime.
In 2019, the U.S. accounted for just $1 billion of the global $60 billion ecommerce livestreaming market. But according to Coresight Research, that number is expected to grow to $25 billion by 2023.
So who’s driving that growth?
Obvious players are Facebook and Amazon, but neither have entirely cracked the code on a seamless buying experience during a livestream (skip ahead if you want to know more about Amazon’s strategy so far).
TalkShopLive, on the other hand, while only at 2 million users, saw a 700% increase in sales during the pandemic.
CommentSold, whose primary feature is to “turn social media comments into sales” on Facebook Marketplace, offers a Facebook livestream selling feature that makes it easier for customers to convert on a live video. While the product is a far cry from the Alibaba-Taobao machine in China, the company did see a 50% increase in spending per viewer in 2020 and 300% more retailers using livestreams to sell their wares.
Ntwrk, a mobile-first video shopping platform that sells collectible items—called “exclusive drops”—saw 400% growth in 2020.
Then, of course, there’s Amazon.
Amazon and live selling: What it looks like now and what’s to come
“Amazon hasn’t even scratched the surface of the potential of live selling, and they’d be the first ones to tell you that,” says Steve Susi, partner at KANE Creative Group and former Amazon Advertising executive creative director, international. “In North America, we have so many legacy systems and supply chains in place that make it more difficult for American retailers to scale livestream selling quickly. China, on the other hand, came online later with explicit directives from the government, and so has been able to bulldoze right through such problems.”
In 2019, Amazon launched its Live platform without much fanfare, which remains difficult to find on its homepage to this day. When asked about how Amazon drives traffic to its livestreams, Susi says, “It’s the influencers who drive a lot of that traffic––they tell their Instagram or YouTube audience they’ll be livestreaming on Amazon, and their fans go to watch and buy. Any presenter who’s part of Amazon’s Influencer Program gets a cut of every sale.”
The French Glow is model Helene Desmettre’s Amazon Live channel, where she and her husband sell everything from home essentials to beauty products. Desmettre is a member of Amazon’s influencer program.
While the potential of Amazon Live has yet to be realized, Susi says Amazon is expanding to other ways to sell products in an interactive format, namely their Fire TV OTT platform.
“Both brands and customers have yet to take full advantage of this, but you can shop with your remote on the biggest screen in your home,” Susi says. In the past, Amazon OTT has hosted browsing and buying experiences in categories like automotive, home essentials, insurance, and cosmetics, offering interactive elements like choosing the right shade of lipstick with your remote and buying the product on-screen from a cleaner version of Amazon’s classic product detail page.
The real potential, according to Susi, is through Amazon X-Ray meta-tagging, layered beneath Amazon Prime streaming—it’s how you’re able to pause your Fire TV content and learn about the actors on-screen at that moment.
“I see a world where everything on-screen is meta-tagged and available to buy instantly with your remote,” he says. “Amazon owns the entertainment property through Amazon Studios, the supply chain, and prop and costume inventory. They don’t need to ask anyone for permission, which removes a lot of barriers.”
And then there’s Twitch
You couldn’t be blamed if you forgot that Amazon bought Twitch in 2014. Amazon has largely left Twitch alone to operate as a separate entity and honor their original vision, bringing people together in a live format for entertainment––not shopping.
But late last year, Amazon knocked down financial walls between itself and Twitch, opening doors for profit-sharing. (This is a big deal––it’s widely assumed that Amazon’s R&D of the Alexa platform was funded through ad revenue.)
“Twitch hasn’t wanted to sell products at scale on its platform, and rightfully so,” Susi says. “People are there to find out how to beat the dragon in the game they’re playing, not to be sold an Xbox controller.”
But still, Susi says there are untapped opportunities to make Twitch more shoppable, just that it may be one tab over from the main livestream experience. Amazon’s single sign-on universe creates jaw-dropping amounts of consumer data every day, which means it can test some shopping features on Twitch with a tiny segment of its audience.
“At Amazon, you can take a tenth of 1% of users and test a little message, say, on the bottom-right of the screen,” Susi says. “If trying to sell the new Xbox controller fails and customers hate it, it’s mostly okay because the other 99.99% of Twitch users didn’t see it, yet Amazon has garnered valuable data. But I wouldn’t be surprised if tests like this were happening.”
In China, the tests are already complete: People will watch a modern, digitized version of the Home Shopping Network, and they’ll swarm deals if it’s easy enough to buy. While a perfect North American replica may not exist yet, it may not be as far away as we think.