On April 1st, Luo Yonghao— the founder of Smartisan Technology held a live streaming show on Douyin and sold 110 million within just 3 hours. The addition of Luo Yonghao makes the competition of e-commerce live streaming even more intense. The next day, the CEO of Ctrip Liang Jianzhang shown up on Douyin, selling five-star hotel vouchers and generated 26.91 million GMV within an hour.
As the biggest "Black swan" incidents in this year, the outbreak of COVID-2019 forced many offline businesses to have to shut down their store and restaurants. More and more companies switch to online business. The Ctrip, Intime Department Store, Haidilao have already stepped into the live streaming field to minimize the lost by the epidemic.
The top internet companies in China are quickly responded to the emergence of new opportunity and accelerated their deployment of e-commerce live streaming products. In the past half a month, Weibo launched the live streaming platform "Weibo Store”, Baidu has also been reported that their live streaming platform would be added on to Baidu APP soon. In addition to the traditional live streaming platform such as Kuaishou and Douyin, other social media platforms like Momo, Zhihu, Littleredbook, and online shopping website such as JD.com, Pinduoduo, Mushroom Street, have also join this battle.
Right now, Taobao, Kuaishou, and Douyin have been the three pillars in the eCommerce live streaming industry. According to a report released by China Merchants Securities in January 2020, Taobao has generated the grossest merchandise volume (GMV) and ranked on the top of the eCommerce live streaming industry, with an average of 220 million GMV and 180 billion annually GMV; the average daily GMV of the second-largest eCommerce live streaming platform Kuaishou reached 100 million, followed by the Douyin which generated about 20 million.
Among these three, Taobao is the first company who launched its eCommerce live streaming programme, bringing together with the head influencer Li Jiaqi and Wei Ya, as well as more than 600 MCN institutions. Douyin officially entered this market in 2018, benefit from its huge amounts of active users and the grant traffic, Douyin created a list of “top seller” products. Kuaishou otherwise focuses on the sinking market. By draining traffic from short videos platform to its e-commerce platform to realize the quick switch.
Unlike Taobao and JD.com, Pinduoduo did not set up a dedicated live streaming platform, but placed it on the banner of the landing page, attracting audiences by giving out red packets and showing the live streaming videos. On Weibo, customer can easily find and click into the 24 hours live streaming platform and save the goods they like that appear in the video. In contrast, there is no obvious live streaming portal on Xiaohongshu. Users need to search "Xiaohongshu live streaming" tags in the search box, follow their favourite KOLs then can watch the live show. Similarly, there are no obvious e-commerce live streaming portals on Momo and Douyu.
With the development of 4G networks, video technology has matured, and 5G will soon give us more imagination. The network traffic cost is becoming acceptable for most of the users, which provides a foundation for the developing of e-commerce live streaming. According to the consulting report of AiMedia, about 25% of the eCommerce live streaming users watch the show every day, and about 46% of the users watch the show weekly. On the other hand, the outbreak of the COVID-2019 has accelerated the progress of transforming business from offline to online.
During this special period, most of the offline markets have to shorten business hours and control the customer flows, so they have to look for new opportunities to acquire new customers and cash flow. The e-commerce live streaming platform is a good choice for those companies which are struggling to live.
Trend and opportunities
E-commerce live streaming is a trend for the live streaming platform, but the opportunities may vary from different categories of the live streaming platform. For example, the online gaming live streaming platform Douyu has about 90 per cent of male users, the majority of Douyu users are young male players who love games and e-sports, whose ages are concentrated between 18-35 years old. It is obviously they will show more interest in games and technology product rather than lipstick and cosmetics.
While on the e-commerce platform such Taobao and JD.com, female users are generating significantly higher value compared to men, eCommerce analyst Li Chengdong believes that the business model of E-commerce live streaming platform is similar, the major difference will stress on the customer segmentation and the type of the products.
In fact, no matter the business-driven platform (for example Taobao) or traffic-driven platform (for example Douyin), winner in this fierce competition will be the company with the perfect understanding of customers and a reliable supply chain management system.