A report by global accounting firm KPMG and AliResearch reported that China’s live streaming e-commerce industry totaled 433.8 billion RMB ($65.8 billion) in 2019 and is expected to double by the end of 2020.
The live streaming market in China
Live streaming is the real-time recording and transmission of audio and video content to a viewer. Live streaming platforms were born in China in connection with the gaming industry, but have now expanded to many other fields. These include entertainment, cuisine, information and shopping. These features boost sales and reach an increasing number of consumers. They are rethinking the future of shopping. Changing habits mean interacting with consumers is more important than ever!
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In 2019, Chinese users who watched live streams exceeded 504 million and in 2020 it is expected to reach 526 million.
The host of the live streaming can be a KOL (Key Opinion Leader), a KOC (Key Opinion Consumer) or even a simple user. KOLs are the Chinese web celebrities, while KOCs are those consumers who have great proximity to their following on social media and greater engagement with it than KOLs.
In China, live streaming https://global.chinadaily.com.cn/a/202011/20/WS5fb77801a31024ad0ba957ac.html is mainly used in terms of online sales. The union between live streaming and e-commerce is the so-called live-commerce. While watching a live stream, Chinese users can inquire about a product and buy it right away, without ever switching apps. Many brands are using this tool to increase sales.
Why is live streaming so widespread in China?
The increase in this type of content is part of the trend of moving from textual content to video content. These formats are more engaging and interesting and keep the user stuck on the screen. Users like to feel part of the conversation and contribute with their thoughts.
Live streaming increases the feeling of “virtual” contact with the host. Especially for the ability to send messages and receive answers in real-time. Receiving live feedback on a product you want to buy has much more impact than simply replying later.
For example, Viya and Li Jiaqi, two of the most famous live streamers, promoted Taobao’s singles’ day and gained 300 MILLION viewers whilst also bringing in 1 billion RMB ($152 million). Viya has sold 5.87 billion yuan ($890 million) in products from July to September, according to Xinhua News Agency.
Due to the pandemic situation, we are now facing, it is important to reinvent the marketing strategy to reach the consumers and consolidate the relationship with a client living far.
For example, on Taobao Live there are hundreds of live streams of chefs cooking in their restaurants. Even if it is not possible to go out to eat, in fact, you can order food at home. It continues with real estate agents offering virtual tours of apartments. Then there are singers who hold online concerts and farmers who show themselves in the act of picking fresh vegetables ready for shipment. It all stems from the recent focus on health and the difficulty of many to find fresh products.
New regulations on live streaming in China
Recently new regulations on live streaming have been approved.
The media regulator said Chinese live streaming companies will be forced to limit the amount of money each viewer can spend on live streaming platforms.
The rules requested streaming sites to set maximum values for single donations and also limit the daily and monthly spending of each user.
The new directive also impose platforms to verify the age and real identities of live-streamers.
Therefore, people under the age of 18 and those who did not undergo a “real name registration” will be stopped from spending money on the platforms.
The best platforms for live streaming in China
It is the live streaming service integrated into the Taobao App and divided into categories of interest (lifestyle, food, etc.).
It is first on the list by popularity and market share. Furthermore, it is expected to reach 500 billion in turnover in the next three years. The most famous KOL active on this platform is Viya.
Douyin is one of the most used apps in China right now. It belongs to the group Byte dance and it works with Toutiao (Chinese buzz feed). Douyin is a short video app with 500 000 daily users. The app is the perfect platform for Kols (influencers) and has recently open to companies.
Douyin users are young. They are the so-called generation Z and are high consumers of short video content. They open the app up to 5 time a day and spend an average of 30 minutes a day scrolling videos.
Douyin suggest highly targeted content to its users. The more someone uses the app, the more the content suggested will be targeted, making it even more addictive, but also a great tool to display ads.
Kuaishou is quite similar to Douyin, but they have different target audience.
Kuaishou’s audience is concentrated in small to medium-sized cities compared to Douyin. For this reason, the two giants manage to coexist, although they are based on the same format.
Many e-commerce experts predict that these consumer groups will support the growth of future consumption in China.
Other platforms that effectively support live streaming are the WeChat mini-programs, Little Red Book and JD Live.
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