In the first half of 2023, China's total retail sales of consumer goods surged to 22.76 trillion yuan, showing an impressive YoY growth of 8.2% after the pandemic subsided. Online retail, in particular, experienced substantial expansion, reaching 7.16 trillion yuan with an outstanding YoY increase of 13.1%. Among all market performances, of particular significance is the trend where traditional e-commerce growth is gradually decelerating, while livestreaming e-commerce takes the spotlight as a promising new avenue for growth. Data reveals that the market size of livestreaming e-commerce reached a staggering 3.5 trillion yuan in 2022, showcasing remarkable YoY growth of 48.21%.1
Over the past few years, the growth of livestreaming e-commerce has consistently outpaced the overall e-commerce market. A prime example can be seen during the 618 E-commerce Shopping Festival of 2023. According to Syntun, the festival's total GMV reached an impressive 798.7 billion yuan,with a YoY increase of 14.77%. Out of this total, comprehensive e-commerce grew by 5.44% to a GMV of 614.3 billion yuan, while livestreaming e-commerce achieved a GMV of 184.4 billion yuan. Despite its smaller scale compared to comprehensive e-commerce, livestreaming e-commerce exhibited an exceptional growth rate of 27.61% YoY. Furthermore, the market share of livestreaming e-commerce within the overall e-commerce landscape witnessed a steady rise, increasing from 11.1% in 2021 to 20.8% in 2022, and further surging to 23.1% during this year’s 618 shopping festival.2 This upward trajectory underscores the rising influence and importance of livestreaming e-commerce as a significant player in the dynamic online retail sector.
Differences between traditional e-commerce and livestreaming e-commerce
The transformation of the e-commerce landscape deserves careful attention, as it signifies a fundamental change in consumer’s preferences and purchasing behavior. What are the differences between traditional e-commerce and livestreaming e-commerce? How is livestreaming e-commerce reshaping consumers' shopping habits?
Traditional e-commerce platforms, such as Tmall, primarily cater to consumers with specific purchase intent. Visitors usually arrive with the intention of buying a particular product and search to gather product and price information before making a purchase. This sales model can be referred to as "shelf e-commerce," where consumers actively search for products.
Conversely, on livestreaming e-commerce platforms like Douyin, the leading and most prominent livestreaming ecommerce platform in China, user’s purchase behavior is often more spontaneous and unconscious. Many users are drawn in by visually appealing content and engaging live interactions during livestreaming which ignite an impulse to make purchases. Through the utilization of advanced big data technology, livestreaming e-commerce platforms can effectively understand consumers' preferences and demands. Consequently, they provide tailored content that aligns with users' interests, leading to highly effective conversions. Sales under this model are referred to as "interest-based e-commerce," as it actively helps merchants discover consumer’s potential needs, and precisely matches those needs with relevant products. 3
How to leverage livestreaming e-commerce to drive sales
As livestreaming e-commerce has emerged as the driver to exponential business growth, it becomes of utmost importance to adeptly harness livestreaming to capture attention, drive traffic, and boost sales to new heights. In the following sections, this article digs into the “FACT” operational strategies of Douyin e-commerce, to provide insights into the effective practices of livestreaming e-commerce.
F stands for Field, representing the operation of brands' own accounts and stores on the platform. This strategic approach revolves around building a compelling brand presence to attract and engage consumers effectively.
Tips for effective field operation:
Strategically position brands and products to precisely target intended customers
Produce abundant high-quality short videos and livestreaming content to engage consumers
Ensure reliable and stable product supply
Provide Comprehensive pre-sales and after-sales services
Employ data analysis for informed decision-making
A stands for Alliance, underscoring the significance of collaborating with multi-level influencers. By forming strategic partnerships with influencers, brands can extend their reach, tap into new consumer segments, and drive sales.
Tips for effective alliance operation:
Proactively connect with influencers to broaden collaboration opportunities
Identify influencers whose audience profiles align with the brand's target audience, ensuring better fit and higher conversion rates
Collaborate with influencers of different styles and levels to achieve broader audience penetration
Utilize data analysis to refine influencer selection for better marketing results
C stands for Campaign, emphasizing the utilization of various marketing activities on the platform. Brands can leverage Douyin's marketing campaigns and initiatives to increase exposure, boost sales, and elevate brand awareness.
Tips for effective campaign operation:
Engage in multi-level marketing campaigns that align with specific business objectives and contribute to the overall business growth
Prioritize not only GMV but also brand influence and consumer awareness. A well-rounded marketing approach is essential for achieving lasting success
T stands for Top Key Opinion Leaders (KOLs), mainly referring to highly influential figures in specific vertical areas and popular celebrities with a huge fan base. While alliance operation is more applicable for daily business activities, Top KOLs operation is better suited for major promotional campaigns, as it can amplify brand message and reach a wider audience with a powerful impact in a short timeframe.
Tips for effective top KOLs operation:
Leverage the expertise of top influencers in vertical areas to enhance product credibility
Capitalize on the massive influence of celebrities to create marketing buzz on social media platforms and gain huge exposure
Livestreaming e-commerce is gaining strong momentum, making it a vital cornerstone of any ambitious brand's comprehensive marketing and sales strategy in China's fiercely competitive market. Embracing this innovative sales model and closely staying attuned to consumer preferences are key factors that enable businesses to unlock new growth opportunities and thrive in the ever-changing landscape of online retail.
REACH24H, the creator of ChemLinked, has extensive expertise in managing Douyin (TikTok) and has formed strong collaborations with more than a thousand KOLs. The comprehensive services of REACH24H, such as flagship store management, short video promotion, self-livestreaming of stores, and KOL-invited livestreaming, assist brands in gaining wider recognition and boosting sales simultaneously.
We are delighted to share with you one of our successful cases, where we effectively utilized Douyin to lead a UK health brand to achieve remarkable success in the Chinese market. For further information, please email contact@chemlinked.com.
