Live commerce has risen in the East. Now, it’s about to take on overseas markets. MCN realities are trying to export this business overseas, particularly in a more culturally-similar Southeast Asia
Live commerce is the hottest trend in China’s online retail world right now. But concretely, what is live commerce? In few words, it is the fusion of livestreaming and e-commerce, and is showing no sign of abating anytime soon. According iiMedia Research, total transactions on Taobao Live channel, reached USD 35.2 billion, while other players such as Kuaishou and Douyin, have increased their livestream sales target for this year to USD 35.2 billion and USD 28.2 billion respectively. Livestreaming is nor the direct consequence of this life digitalization nor only the ultimate entertainment format but it is the internet’s next form of digital communication.
Livestreaming in e-commerce emerged in 2014 when Mogujie, a Chinese fashion e-commerce platform, started experimenting with it, while soon after, Alibaba’s Taobao, which is the world’s biggest e-commerce website, followed suit with its own livestreaming channels. Livestreaming is no longer an insignificant influencer marketing tool but a channel to be reckoned with. Today is the new normal in Chinese e-commerce world. Once a simple channel for in-real-life (IRL) broadcasting, livestreaming has grown into a multi-billion dollar business in China, where even national TV channels have also joined the game.
©YouTube. Meipai is one of the most popular platforms for beauty bloggers, to which Chinese consumers turn for tutorials and advice.
But why is it so welcomed? First livestreaming is the “go-to” option for Chinese consumers when seeking out new products and deciding on what to buy. It is an essential part of the discovery journey, unlike for consumers in Western countries. Second, livestreaming allows experts to demonstrate the products when being used and talk through their functions in the liveliest way possible.
The number of online live-streaming service users in China reached 560 million as of March 2020, accounting for 62% of the country’s total number of 904 million internet users, an increase of 163 million from the end of 2018, according to a report on China’s internet development. In more detail, e-commerce livestreaming sessions topped 4 million in the first quarter, according to China’s Commerce Ministry.
This explosive growth has sparked intense competition among Chinese multi-channel network (MCN) companies, whose services range from programming and promotion to influencer and audience development. And now MCN realities are trying to export the Chinese model of live commerce overseas, particularly in a more culturally-similar Southeast Asia.
©Alizila. Women outnumber men as live-streamers, but most of the audiences are male.
Pioneers such Lazada (owned by Alibaba) agree that the potential is immense. Li Hualin, the President of WebTVAsia Greater China, thinks that an e-commerce boom in Southeast Asia is imminent. These sentiments are echoed by Hu Yu, the CEO of cross-border influencer marketing platform WOTOKOL, while main e-commerce platforms in SEA region (including Shopee, Lazada, and Amazon) have already integrated livestream shopping as part of their services. But due to achieve this goal, the Chinese model of live commerce will require patience and tenacity. Experts feel that there are still several challenges to overcome before live commerce can truly become a mainstream in Southeast Asia.
China’s live commerce boom has inspired copycats. Singaporean ecommerce platform Shopee launched its own live streaming service, Shopee Live, in March 2019
The e-commerce industry in SEA is still fairly young, is growing faster with both consumers and brands open minded concerning new trends. They might eventually leapfrog traditional e-commerce shopping to embrace live commerce as the dominant format for online retail, but the e-commerce ecosystem and supply chains are still too weak. In China, for example, factories are able to quickly turn around and fulfill the exact number of orders for any item that is promoted during livestreams. For highly popular items promoted by top KOL, companies can even predict sales from their livestreams and prepare enough stock to meet demand.
Another problem, is Southeast Asia poor logistics network. Compared to China, it has a huge gap. Even experienced Chinese logistics companies like Cainiao or Shunfeng, are still in their early stages of operations here and they found difficulties to found an integrated logistics network that connects the widely distributed countries and archipelagos in the region. Without doubt, even combining local and chinese players investments, it will take time for them to build a comprehensive network in Southeast Asia area.
©Shopee LIVE screengrabs. Singapore-based e-commerce platform Shopee has joined the live commerce race in 2019.
Moreover, the industry lacks local influencers who can match up to Chinese influencers. The local audience is also different, they are less receptive to sales and promotional tactics that are popular with Chinese livestreamers, such as collecting vouchers or forwarding to friends. Instead, they are attracted to the humor and artistic talents displayed by hosts, even when they are selling.
For instance, a robust live commerce ecosystem demands high standards. In China, e-commerce livestreaming become a daily aspect of a merchant’s brand, a new kind of brand marketing scenario, but such ecosystem does not yet exist in SEA region. It is certainly thrilling to dream how live commerce might transform the Southeast Asian online retail ecosystem in the future, but given the numerous shortcomings at the moment, what all players need is patience.