In the run-up to this year’s Singles Day shopping festival, a number of high-profile livestream stars moved freely between different major platforms like Taobao and Douyin, highlighting newfound cross-platform freedom in China’s online retail sector.
Why it matters: This trend shows Chinese livestream retail sector is being more open amid increased antitrust pressure from regulators. Previously, there was a tacit agreement within the industry that top livestreamers were bound to certain platforms. The loosening provides new opportunities for e-commerce stars, platforms, and for brands.
Details: Livestreamers being able to sell products across different platforms helps them avoid overdependence on a single platform and also means that they can gain support from other platforms in driving traffic, shorten the time needed to monetize their livestreams, according to a research report by Zhao Lingyi, chief analyst of retail e-commerce at securities firm Shenwan Hongyuan, and cited in Chinese media outlet Chinese Securities Journal on Monday. Livestreamers earn commissions on the products they promote and can also convert virtual gifts from their fans into cash.
- Ahead of this year’s Singles Day shopping festival, some top livestream stars who used to stream exclusively on Douyin (the Chinese version of TikTok) joined Taobao Live. They include Chinese entrepreneur Luo Yonghao, New Oriental Education’s founder Yu Minhong, and Taiwanese singer and fitness trainer Will Liu (or Liu Genghong). For example, Luo Yonghao alternated with different stand-up comedians from the same company to do a series of e-commerce livestreams on both Douyin and Taobao’s platforms during this period.
- Alibaba said in a Nov. 7 press release that top stars and celebrities joining Taobao Live is “a strong testimonial of its unparalleled commerce infrastructure and holistic solutions for ecosystem partners.”
Context: The livestream e-commerce industry has grown rapidly since the beginning of the Covid-19 pandemic. According to a report released by consulting firm iResearch in 2021, the total revenue of China’s live e-commerce industry will hit RMB 1.2 trillion ($166 billion) by the end of 2022, with the figure expected to increase to RMB 4.9 trillion in 2023.
- Though running businesses on multiple platforms enables merchants to potentially reach bigger audiences, it has also raised concerns over the homogenization of content on e-commerce platforms.
- Alibaba’s Taobao platform has promised more support and cash incentives for influencers and new hosts, and the company says new hosts are a major growth driver, with the pre-sale value generated by this group growing by 684% year-on-year for this year’s Singles Day festival.
- Chinese regulators have tightened tax scrutiny of e-commerce stars since last year, with top e-commerce influencers Viya and Cherie halting livestreaming after being fined for tax evasion.
- Since early 2021, Chinese regulators have looked more closely at tech majors’ merger deals and imposed fines on various deals and unfair competition practices. And one of the notable punishments was Alibaba getting fined RMB 12.8 billion in April 2021 over antitrust practices including “forced exclusivity.”