The total scale of China’s live-streaming e-commerce industry is expected to reach 1.05 trillion yuan (about $157.7 billion) in 2020, up 210 percent year on year from 433.8 billion yuan in 2019, according to a recent report.
Saleswomen introduces products via live-streaming. (Photo/People's Daily Online)
The penetration rate of live-streaming sessions in the e-commerce market just hit 4.1 percent last year, according to the report jointly issued by international accounting company KPMG and Alibaba’s research arm AliResearch, indicating rapid growth in the live-streaming e-commerce sector.
Data from China’s Ministry of Commerce shows that there were over 10 million e-commerce related live-streaming sessions in China, attracting more than 50 billion views and helping sell 20 million products in the first half of the year. That equates to an average of more than 50,000 such sessions and over 260 million views per day.
Merchants are the leading players in e-commerce live-streaming activities, said the report. According to statistics from Alibaba’s live-streaming unit Taobao Live, 90 percent of live-streaming sessions and 70 percent of its transaction volume came from merchants’ live-streaming activities on the platform. During this year’s mid-year online shopping spree, nine of the top 15 live-streaming sessions, with a transaction volume of more than 100 million yuan, were owned by brands and merchants.
On the first day of the shopping spree, the transaction volume of more than 37,000 Chinese brands soared by at least 100 percent year on year, said the report.
For brands and merchants, live-streaming marketing is not only a matter of expediency, as it softens the blow brought by COVID-19, but is also a regular operation strategy.
Over 70 percent of surveyed brands said they boosted sales of products through live-streaming campaigns, while more than 60 percent held that the good reputation enjoyed by their products and services attracted consumers to their live-streaming sessions.
The increasing number of brands looking for live-streaming campaigns have given rise to agencies known as multi-channel networks (MCNs). Taobao’s data reveals that there are 200 MCNs on the platform, compared with none in June 2019.
The live-streaming e-commerce sector has also created jobs in China. According to a study from Renmin University of China, Taobao Live has created more than 1.73 million job opportunities related to live-streaming operations.
Moreover, live-streaming e-commerce also has plenty of room for growth. According to Li Ming, head of Taobao Live MCN operations, Alibaba’s Tmall reported more than 260 billion yuan in sales during last year’s Singles’ Day online shopping carnival, which falls on Nov. 11 every year. However, the transaction volume from Taobao Live’s live-streaming activities was less than 20 billion yuan, accounting for 7 percent of the total sales, Li explained.
“So it seems that Taobao Live still has ample room for growth,” Li said, explaining that the growth of Taobao’s live-streaming sessions has remained at above 100 percent over the past eight quarters.
“This trend indicates steady growth rate,” Li said, adding that almost half of China’s internet companies are tapping into live-streaming marketing this year, as they see a huge potential for profits.
“Live-streaming e-commerce will become more popular,” said Kang Yong, chief economist at KPMG China.
Live-streaming marketing will become a new basic requirement for the e-commerce sector, and new infrastructure, including 5G, will make live-streaming application scenarios more diversified, Kang noted, expecting accelerated training of live-streaming talents as well as more professional live-streaming e-commerce.