Video-Driven E-Commerce: the Next Frontier for Online Retail


Video content has completely changed the way consumers do and conceive purchases. After having pioneered social-commerce, China is now setting the model for video-driven e-commerce both at home and abroad


Instead of slowing down, the importance of video content in the e-commerce industry keeps growing. It started in China three years ago but now, the trend to sell and buy through online videos is taking the whole world by storm.

If in the People’s Republic, video platforms such as Douyin – or TikTok for the Western market – and Kuaishou are now established Taobao’s products sellers, in the US, even Google has finally added new shopping features to its YouTube.

Video content is the true ultimate frontier for e-commerce and YouTube is just one of the last video platforms to have adapted to this revolutionizing trend. Again, China is setting the model and the West is following.


Video-driven e-commerce - smartphone

© Pexels. Global tech companies are now replicating successful concepts from their Chinese peers, from the super app to social-commerce to video-driven e-commerce.


At first, China has pioneered the super app, a one-stop-shop for services from shopping to money transfers to bookings, then it has implemented concepts such as group buying and live-streaming. But TikTok’s short-video format has changed the whole game.

Actually, video-driven e-commerce saw explosive growth in 2016 when Alibaba’s Taobao began providing live-streaming features to its users. At that time, the live-streaming market was valued at $3 billion, a 180% increase over the previous year. Since then, video contents have boomed so much so that in 2018, the Taobao marketplace generated an extraordinary $15.1 billion in transactions from live-broadcasts.

For what concerns e-commerce in China, it is now a consolidated phenomenon. Today, more than 40% of whole online transactions take place in the Middle Kingdom. According to the China Economic Review, the country’s retail market is estimated to hit $6.77 trillion by 2019 with e-commerce representing 14.46% of the market.

But the Chinese online shopping frenzy does not limit to the national borders. China not only sets the model for cross-border e-commerce but it is also exporting online retail culture abroad, helping foreign digital markets to boom. Three years ago, the market size of cross-border retail e-commerce sales in the PRC was $78.5 billion and this figure is expected to exceed $140 billion by 2021.

It should, therefore, come as no surprise that Chinese companies are striving to leverage the huge market of online retail, getting more creative year after year. Video content in e-commerce is the result of this. Not only short-videos but also live-streaming are leading marketing trends in 2019.


As about 95% of e-commerce activity in China is made through mobile devices, video content has thus become a powerful tool for the online retail industry.


While players like Vine pioneered this format back in 2012, Chinese companies have been the first to turn the short video concept into real success. The short video app from Chinese company ByteDance, TikTok, in fact, quickly ranked 1 among the most downloaded free apps.

Short videos represent a bite-size entertainment, a content that people can enjoy anytime, anywhere. Therefore, since this trend started last year, it drastically changed the way users consume content and therefore transformed the whole marketing industry. Indeed, not only is video content eye-catching, but it also provides a channel for customers to see how a product looks and feels in real life.

Nevertheless, with the rising popularity of short-video apps, the live-streaming format also started to gain a renewed interest among users. Although completely different from the Douyin style, live-broadcasting, as well, is reshaping the entire e-commerce sector. Today, e-commerce penetrates the majority of live-streams whether through fashion show broadcasts or via internet celebrities reviewing the latest cosmetic product, enabling consumers to buy what they see on the screen in real-time.

An example is the Single Day – China’s biggest sales event – during which the e-commerce giant Alibaba live-streamed a fashion show called “See Now, Buy Now”. The show was broadcasted live on 10 platforms including Taobao and Weibo, allowing millions of consumers to buy products on the spot.


video-driven e-commerce - live-streaming - cifnews

© Alizila. China has become the largest market for live-streaming, which is expected to be worth $8 billion in 2019.


According to statistics, more than 100 million viewers watch a live online video event every month while nearly 32% of users now buy products through live-streaming videos. As a result, on one hand, an increasing number of Chinese e-commerce companies are integrating live-broadcasts to their marketplaces. On the other hand, Western platforms are trying to catch up with China’s e-commerce model.

Currently, many Chinese “parallel” marketplaces allow merchants to link a series of products to the stream while social media platforms such as WeChat, Weibo, and Little Red Book are joining the fray by testing e-commerce functions as well.

In the West, instead, launched in February 2019, Amazon Live features live-streams of hosts showing certain products, which users can buy directly from a carousel that displays under the video. And now even Google is testing new shopping features in its video platform, YouTube. Below those videos showing a product, the US internet giant will insert dedicated advertisements linked to its marketplace, Express, where users can finalize the purchase.


Live-streaming is not only booming but it is also fueling Chinese e-commerce with nearly 32% of customers now buying products directly on real-time video platforms.


But what is the difference between short-video content and live-streaming in e-commerce?

Short-videos usually last just a few seconds, less than a minute. They need to catch the attention of the potential customer very fast. Here, creativity is at its best and it has been also claimed to be addictive. Indeed, according to the app analytics firm QuestMobile, Chinese people spend 9% of their time online on video clips like TikTok’s, a 5.2 % jump from 2017.

Live-streaming, instead, is a much more interactive and involving experience. During real-time videos, viewers can interact with the streamer asking questions about the product they want to buy. Then, by clicking on the “purchase” button, users can add the item to the cart and check out in just one easy transaction without clicking away from the live video.

The nature of live-streaming is what makes it a trusted and reliable source of information for consumers, who can discover new products or receive shopping tips from China’s most popular Key Opinion Leaders, with whom viewers often establish a real bond of trust.

Indeed, video content is so important for e-commerce because it satisfies the customer’s thirst for trust and transparency, as well as the growing need for entertainment and social engagement. Therefore, as well as in the case of social-commerce – a combination of social media features and online shopping – with video content, China has pioneered the first form of “entertain-merce”, a combination of entertainment and e-commerce.


video-driven e-commerce - kuaishou - rural farmers - live-streaming - cifnews

© Abacus. Kuaishou said there are 1.15 million rural users selling local products on its app through both short videos and live-streaming.


Artificial intelligence and big data have been leveraged to target users who want to buy a certain product or who are browsing online to make a purchase. The video format, instead, finally reach that audience that does not have immediate plans to make a purchase. To target those potential customers, companies must rely on great content to grab their attention and videos are the perfect tools to achieve the unachievable.

Although maintaining the quality of the content and the user experience could represent a challenge for brands, video-driven e-commerce certainly has the right ingredients to be a long-lasting trend.


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