Why Livestream Shopping Has Been Successful in China Vs the USA

Over the past years, ways to shop have increased with many businesses transitioning from brick-and-mortar stores to digital platforms. Thanks to e-commerce which has paved the way for businesses to be visible and sell online. With TikTok gaining popularity, the platform has revolutionized social media into a social commerce platform.

Simply defined, live stream shopping is a new way used by brands and retailers to promote and sell their products in real time. Typically, it combines entertainment and shopping, enabling human connections through social media and live streaming. It adds another level of “immediate” interaction between brands and followers. Some brands collaborate with influencers, for example, in evolved ways to partner and the Key Opinion Leaders are in many cases the host of the Livestream shopping sessions on behalf of the brands.

This article gives a deeper insight into the live-streaming shopping landscape and how your business can benefit from it.

In China, live-stream shopping is massive. In 2016, Alibaba introduced Taobao live and this way of shopping has been rising since then. During the pandemic, consumers spent much more time streaming online content, and businesses have leveraged this consumer trend to make sales and grow their brands digitally. Currently, China’s e-commerce revenue for the Livestream sector is projected to reach $720 billion in 2023. This year alone, China’s biggest live streamer, Austin Li aka The Lipstick King, sold products worth over $ 3 billion on the first day of the pre-sale shopping activity before the 11/11 festival, which happens on the 11th of November every year. This is how impactful influencer marketing is in China! In 2022, the 11/11 Festival generated over $14 billion according to Star Chart data. Platforms like Taobao, Douyin (the Chinese counterpart of TikTok), Kuaishou, and Jing Dong are like virtual shopping malls where people spend time browsing and participating in a digital social experience. It is a common practice for users to watch live streams to be entertained, find good deals, and learn about new brands.

In the US, the market is set to reach $20 billion in 2022, and continued growth is projected to grow 5 times the current figure. Amazon has not yet fully embraced the live stream way of selling due to various factors such as consumer preferences and efficient logistics. Most Americans visit the Amazon website to buy products they are already familiar with therefore buying and selecting products on Amazon is not integrated with entertainment. A similar live stream hosted by KOLs or influencers and celebrities is found on QVC, the Taobao equivalent in the US.

In comparison to China, although the Livestream trend is taking off more slowly in the UK and US than in China, social networks like TikTok, Instagram, Pinterest, PopShopLive, and CommentSold are creating a space where brands and businesses can provide Livestream shopping. In June this year, YouTube partnered with Shopify to allow merchants to have their products featured on YouTube creators’ channels and content. In the US, viewers can purchase seamlessly on Shopify through YouTube’s onsite checkout.

When the pandemic started, the live stream landscape expanded in China as consumers weren’t able to go out and shop. As a result of lockdown regulations, the Livestream shopping culture grew rapidly among Chinese consumers. Watching Livestream content kept consumers entertained and many businesses leveraged this trend leading to accelerated conversions. Additionally, Chinese consumers tend to trust KOLs and influencers more than in western countries. Chinese consumers trust influencer opinions as they seem more reliable than the local search engine, Baidu. When you search for a product on Baidu, the search engine results that come up are all paid, therefore Chinese prefer obtaining information from influencers to searching online. So if you ever consider expanding your business to China, you will want to incorporate influencer marketing into your strategy.

When the pandemic started in China, western countries took a long time to respond to the pandemic regulations of lockdown, so their shopping livestyles didn’t change positively toward Livestream shopping. Consumers still had the liberty to move around and shop, so this new shopping trend was nowhere near their way of living. Moreover, China has the most efficient logistic organization compared to other countries. Currently, China is the world’s largest e-commerce market contributing 52.1% of all e-commerce sales worldwide. Chinese consumers are motivated to buy products through Livestream shopping because it is convenient. Buying a product online is as simple as clicking a button, and delivery happens faster than anywhere else.

It makes sense why live-stream shopping is more successful in China. With Livestream shopping patterns, in the US, users consider one to three minutes as the ideal length of a marketing video. Additionally, viewers want to enjoy the videos they watch, which is another obstacle against the QVC-style push-to-sell model used by most live-streaming sessions.

It’s undeniable that with its popularity rising, the Livestream shopping trend is spreading and gaining ground in western countries. There is a possibility too that it may fail to thrive the way it has in China.

In China, e-commerce is way more advanced as we mentioned earlier. Purchasing products during a Livestream session in China is seamless due to the payment systems Alipay WeChat, and Douyin’s independent payment system to make purchases directly from the app. Not to also mention, prices on the Livestream are way cheaper than buying on the e-commerce platforms!

Meanwhile in western countries, social commerce is not as encouraging yet for most consumers. For instance, during a Livestream session on TikTok, it is only possible to make a purchase by exiting the app. Consumers find this method tedious and inconvenient. Amazon does a great job running commerce. It has a great system that helps them execute packaging and delivery however they still have a long way to go when compared to Taobao, the top e-commerce Chinese marketplace under Alibaba Group. Shopify is also a great competitor on the rise as it has built an e-commerce infrastructure that enables brands to sell anything, anywhere. Shopify even launched Shop Pay on their merchant stores as well as a mobile app, Shop allowing customers to pay as fast as they can. However, Shopify is still dependent on its merchants using social network apps such as Instagram, YouTube, Google, Facebook, and TikTok.

Livestream shopping has been working for China, leading them to where they are now, at the top of the live-commerce pyramid, however, does this mean western countries will follow and overtake them? The issue of convenience and cheaper offers on Chinese Livestream sessions is a huge motivator for them to continue shopping. Westerners may take a longer time to adapt to the idea of social shopping online due to current barriers that make the customer’s buying journey long and tedious.

In conclusion, whether researching on Amazon, being inspired on Instagram, watching adverts on TV, or unpacking an order at home, the ecosystem of places shoppers can engage with brands is expanding. It is essential for brands to integrate social commerce into the customer journey. As a result, brands will be closer to delivering truly connected omnichannel experiences. Are you considering incorporating social selling into your strategy in 2023, but aren't sure if this is the right time? Drop us a line and we’ll help you figure out what’s right for you.