- Coresight Research has estimated the livestreaming market in China will bring in about $125 billion in sales this year, up from $63 billion in 2019.
- The market in the U.S. is valued at about $5 billion.
- Two-thirds of Chinese consumers said they have purchased products via livestreaming in the past 12 months, according to a survey by AlixPartners.
- Livestreaming will be a core component of e-commerce giant Alibaba's Singles Day shopping event on Wednesday.
A few months after Alibaba launched Taobao Live in 2016, husband-and-wife Mark Yuan and Zoe Zhang were approached by the Chinese e-commerce giant to test out the new livestreaming platform.
Zhang, once a fashion designer, had built a large following in the fashion industry through her personal blog, while Yuan, a production manager, had taken up lifestyle blogging. They amassed more than a quarter-million followers across social media platforms, and Alibaba was looking for influencers with a global reach.
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The Chinese couple, based in New York City, was asked to showcase via Taobao Live a $43 million townhouse on the Upper East Side. They had more than 110,000 people tune in to their first livestreaming event, where they strolled the multilevel building and pointed to key features and tested amenities. Afterward, they received 43 inquires from Chinese consumers who were interested in learning more about the home.
A few weeks later, a designer brand that was moving its headquarters reached out to the couple to help sell excess inventory. The brand had about 700 pairs of shoes it wanted to unload. Within three hours, during a livestream on Taobao, Yuan and Zhang sold all the merchandise.
"That was the moment we realized that livestreaming was going to change everything," Yuan said. "We were literally dealing with hundreds of customers, just three of us, addressing each customer's sizing concern and questions."
Today, the couple run their own New York-based livestreaming consulting group, And Luxe, and have grown to become two of the bigger names in Chinese livestreaming. Yuan and Zhang have a client roster that includes fashion brands Alexander Wang, Ba&Sh, DVF and Kim Kardahsian's fragrance line KKW.
The couple said they hope And Luxe will help American businesses learn the power of livestreaming and get brands on board with the trend before it's too late.
With livestreaming taking center stage at Alibaba's Singles Day shopping event on Wednesday, this type of marketing will be on full display. Key opinion leaders will attempt to pique consumer interest and drive a huge portion of e-commerce sales.
This year marks the 11th edition of the annual Singles Day event, which is also called the Double 11 shopping festival because it falls on Nov. 11, but some U.S. companies will be making a debut and using livestreaming to market their goods.
"Within five years in America, if you don't do livestreaming, your company will just disappear and get left behind," Yuan said. "Right now, if you're a business, you have a website. In the future, if you're a company in retail, you will do livestreaming."
Brands looking to grow in China already see the value in livestreaming, and the boost it can bring a business. Two-thirds of Chinese consumers said they have purchased products via livestreaming in the past 12 months, according to an AlixPartners survey of 2,029 adults conducted from Sept. 30 to Oct. 6.
Only 19% of those polled said they do not plan to shop via livestreaming during Wednesday's event. High-income consumers said they expect to complete a greater proportion of their purchases through livestreaming this year.
Deep discounts and "instant information" are two of the biggest factors people cited for turning toward livestreaming during the event.
"The sales lift is dramatic," said Max Bissell, director of Bissell Homecare's Asian division.
The Grand Rapids, Michigan-based cleaning products company first participated in Double 11 last year. The family-run business will be doing livestreaming from Taobao Live "around the clock" this year, with the goal of quadrupling sales from 2019. It will also be launching a new product in China, exclusively on Alibaba's Tmall platform, to drum up interest around the event.
"Social media is popular everywhere," Bissell said. "But in China, they have figured out how to monetize that much quicker. ... That's maybe the difference between Facebook and Instagram, versus some of the Chinese platforms. ... China is definitely in the lead."
Coresight Research estimates livestreaming in China will bring in about $125 billion in sales this year, up from $63 billion in 2019. The staggering gains have been driven this year by Chinese consumers turning to their smartphones to shop during pandemic lockdowns. The U.S. market is valued at only about $5 billion, according to Coresight.
"Shopping is a sport in China," said Coresight CEO Deborah Weinswig. "And this is a consumer who prides themselves on research before they buy something."
The desire for good advice drives Chinese consumers to turn to experts. In China, "even farmers have become influencers," Weinswig said. "People will buy their groceries from a farmer on a livestream."
There's no true equivalent to Taobao Live in America, and so the U.S. is still playing catch-up.
"The Chinese consumer embraces technology a lot quicker, unfortunately, than the Western world," said Bruno Schiavi, co-founder of Uncle Bud's, which makes hemp and CBD topicals and lotions. "And I think the influencers in China really are true influencers. ... The Chinese consumers really trust these people, and it's just the way of life in China now."
Uncle Bud's is participating in Singles Day for the first time this year. It joined Alibaba's Tmall platform two months ago in a rush to meet customers globally when international travel was brought to a near standstill during the pandemic.
The CBD brand will hold several livestreams on Wednesday. It already tapped its brand ambassador, retired NBA star Magic Johnson, to host one 20-minute livestream for Chinese consumers on Saturday, which broadcast from Los Angeles.
"The instant feedback is what I love," Schiavi said. "We can have a little bit more of an interactive time with our customers, and we love that."
He predicts livestreaming will become more popular in the U.S. within five years.
Time will tell. Last year, Amazon launched Amazon Live, which has programming akin to the home-shopping network QVC, but it hasn't taken off. The service has promoted products in categories like food, health and beauty, fitness and baby. But it can't boast the popularity of Taobao.
Brandon Kruse, co-founder of the retail tech platform CommentSold, is trying to help smaller American retail businesses get into livestreaming. The company provides the technology retailers need to host live broadcasts from their websites, social media accounts and mobile apps.
U.S. growth rates of retail sales from live broadcasts are four to five years behind China, Kruse said.
According to Alibaba, as many as 400 company executives and 300 celebrities are holding livestreams during this year's Singles Day. Pop singer Taylor Swift joined Chinese livestreaming megastar Huang Wei for a livestream last weekend ahead of Singles Day.
Earlier this year, Wei, known as Viya, used Taobao to sell a commercial rocket for 40 million yuan, or $5.6 million. The hashtag #WeiYaSellsARocket went viral on the Chinese social platform Weibo after the incredible feat.
More than 250,000 brands, including hundreds based in the U.S. like the sneaker maker Allbirds and the sunscreen company Supergoop, are expected to participate. Alibaba said its logistics arm, Cainiao, will charter at least 700 flights just to meet the supply chain demands of Double 11.
"Traditional e-commerce is going to end up looking like a really flat picture," And Luxe's Yuan said about the global growth of livestreaming. "Those two-dimensional pictures are becoming more and more boring."
"Everything is changing in retail," he said. "And we believe livestreaming is the future."