Even before Covid-19 kept Chinese shoppers at home and out of the stores, they started loving livestreaming—buying everything from lipstick to instant noodles via short, engaging personal videos on platforms such as Taobao, Kuaishou and Douyin, as well as a host of new platforms that tripled in number in 2019. Livestreaming provides immersive experiences, personalized recommendations and, as the country eventually locked down during the Covid-19 pandemic, an entertaining alternative to physical shopping trips.
Virtually nonexistent three years ago, livestreaming now accounts for 4% of total online retail sales in China and about 1% of total retail sales. A number of factors make livestreaming the hottest retailing trend. It has a vast potential audience for mobile video—a huge market of consumers for the low-priced local products promoted on short videos. Combine that with the mature ecosystem of platforms, key opinion leaders (KOLs), brands and operating parties. The number of products promoted on Taobao via livestreaming nearly tripled in 2019—before the pandemic—and the number of Taobao livestreaming merchants almost doubled.
But livestreaming comes with a fundamental challenge: Many of the products sell on promotion. For example, products on livestreams hosted by top KOLs such as Li Jiaqi and Viya usually sell at a 30% to 60% discount to the Tmall price and sometimes lower than the Double 11 festival prices. While it has introduced a new way to purchase consumer goods and encourages impulse shopping, livestreaming also has influenced the overall rate of fast-moving consumer goods sold on promotion and, as a result, has depressed average selling prices.
As we endure historic times introduced by the Covid-19 pandemic, this year’s report includes a deep look at changing consumer behavior.
The global Covid-19 pandemic has extracted a terrible human toll and spurred sweeping changes in the world economy. Across industries, executives have begun reassessing their strategies and repositioning their companies to thrive now and in the world beyond coronavirus.