Live stream shopping is booming in China. China’s live streaming e-commerce sector generated RMB 433 billion (US$ 61 billion) in transactions in 2019, according to a report from third party data mining and analysis firm iiMedia Research Group. In 2020 livestream e-commerce revenue is expected to double to RMB 961 billion (US$ 136 billion), according to Chinese research form iiMedia Research helped by increased usage due to the coronavirus pandemic.

Source: iimedia

With China’s ecommerce sector generating revenue US$ 867.6 billion in 2019, China’s live stream ecommerce market accounted for just about 7% of the country’s total ecommerce revenue for the year. There is potential for this figure to increase going forward.

Source: Statista

The appeal of livestream shopping is that it introduces a human element to online shopping which makes it is more social and interactive, and customers can get a better understanding of the product according to a survey conducted by the China Consumers Association. Unsurprisingly, live streaming is increasingly becoming a go-to option for Chinese consumers looking for new products, promotions, and deals, particularly in categories such as beauty and fashion, food, and home products.

China’s live stream e-commerce is much more than the 24-hours infomercials business model pioneered by Home Shopping Network and QVC (NYSE: QVCC). China’s livestreaming e-commerce experience has been described as a combination of QVC, Facebook Live (NASDAQ: FB), and an e-commerce platform such as Amazon (NASDAQ: AMZN), all rolled into one. This helps drive consumption, and therefore sales.

The growth momentum is expected to continue thanks to growth drivers such as 5G technology, and China’s growing cross-border e-commerce market. In November last year, China Unicom (NYSE: CHU), China Telecom (NYSE: CHA), and China Mobile (NYSE: CHL) rolled out their 5G service plans.China is on the road to owning the world’s largest 5G network and becoming the world’s largest 5G market by 2025 with 460 million 5G users according to forecasts by the Global System for Mobile Communications Association. With just 7% of the country’s population using 5G currently, there is ample potential for growth. 5G will substantially increase internet speeds which should help increase livestreaming content quality while decreasing latency, thereby potentially making livestream shopping more popular in China which is already the world’s largest livestreaming market.

According to data from China Internet Watch, the number of China’s cross border online shoppers is expected to exceed 200 million by 2020 and total online sales are predicted to reach RMB 1.9 trillion. Cross border shopping is expected to emerge as a key growth engine for China’s ongoing consumption growth. With cross border purchases accounting for just 2.2% of the total online retail market, there is tremendous potential for growth and live-streaming is expected to play a key role in the market’s upward march. Live-streaming helps to alleviate trust concerns among China’s growing population of cross-border ecommerce shoppers.

According to a report by Frost & Sullivan, Japan is perceived to be the most trusted country for cross border online shopping among Chinese shoppers (72%), followed by South Korea (60%), the US (55%), Australia (37%), France and Germany (both 26%), and the UK (23%). For merchants in countries where Chinese cross-border shopper trust is not as high as Japan and South Korea, addressing this trust deficit could potentially unlock spending on imported products from those countries.

Unlike a typical 2D shopping experience live stream shopping, live stream shopping allows shoppers to view the products in more dimensions, which increases shoppers’ trust, and thereby boosts online shopping expenditure.

For instance, in mid-May this year, Pinduoduo’s livestreaming session of its six bonded warehouses showing the workings of the warehouse, and popular imported items such as imported milk powder, diapers, and more drew more than 1 million Chinese consumers. A live broadcast session of one of Pinduoduo’s bonded warehouses in Fuzhou, Fujian Province drew 170,000 viewers, which led to a more than 220% year-on-year increase in turnover of the Jiangyin Bonded Warehouse.

Notable players

Unsurprisingly, most of China’s traditional ecommerce platforms such as Tabao, Tmall,, and Pinduoduo (NASDAQ: PDD), are aggressively using livestreaming as a revenue generator. Launched in 2016, Taobao Live was among the pioneering platforms to use live streaming as a marketing tool to facilitate e-commerce. Following this, video live-streaming platforms such as Douyin, Bilibli (NASDAQ: BILI), Douyu (NASDAQ: DOYU), and Qudian (NYSE: QD) added e-commerce functionality into their platforms. ByteDance’s Douyin, the Chinese version of the popular video sharing app TikTok, tied up with Taobao and TMall in March 2018, enabling viewers to buy products from these platforms without leaving the TikTok app. Realizing its potential,, Pinduoduo and Suning subsequently jumped into the bandwagon. However, unlike Taobao and Tmall, their livestreaming initiatives are at relatively early stages.

Source: Jing Daily

Alibaba-owned Taobao Live has several advantages in the space. Apart from its first mover advantage, Taobao is also China’s leading e-commerce sector which helped propel it’s dedicated livestreaming unit Taobao Live to become the leading live stream e-commerce platform as well with a market share of 79%, followed by ByteDance-owned Douyin (known as Tik Tok overseas), and Tencent-backed (OTCPK: OTCPK:TCEHY) (OTCPK: OTCPK:TCTZF) Kuaishou with market shares of 13% and 8% respectively.

Source: Everbrite

Unlike Taobao Live, the latter two are not traditional ecommerce platforms, rather they are live streaming video platforms that have integrated e-commerce functionality. This gives Taobao certain advantages such as offering customers the convenience and security of being able to make payments within the platform; more than 70% of Taobao and Tmall customers for instance, make payments within the app (most likely through Alibaba’s payment solution Alipay) while just 38.4% of Douyin customers do so, and 62.5% of Douyin customers have to jump to a third-party payments app to make payments according to a survey conducted by the China Consumer Association. With Kauishou, 44.3% make payments within the app while 54.7% jumped to a third party payment platform.

Another advantage Taobao wields over its two nearest competitors is that Taobao Live offers a wider variety of products in a wider variety of product categories ranging from clothing, beauty, baby, and food compared to rivals such as Douyin which focuses more on beauty and fashion. This suggests Taobao owner Alibaba is well placed to capitalize on the livestream trend.

According to Alibaba last year 400 million users watch Taobao’s 60,000 plus livestream shopping shows hosted by brand, stores, or influences, and generated US$ 28 billion and during Alibaba’s Singles’ Day 2019 shopping holiday on November 11 alone, Taobao Live generated sales of RMB 20 billion (about US$ 2.85 billion) which accounted for around 7.5% of the company’s total Singles’ Day sales of RMB 268.4 billion.

China’s livestreaming market expected to more than double this year from RMB 433 billion (US$ 61 billion) in 2019 to RMB 961 billion (US$ 136 billion) in 2020, according to Chinese research form iiMedia Research. With Taobao Live commanding a market share of more than 50% according to figures from Everbrite, there is tremendous opportunity for Taobao Live to drive Alibaba’s e-commerce revenue. is China’s second largest e-commerce platform, but its livestreaming unit JD Live, is not among the top three livestream e-commerce platforms in China. While part of that may be attributed to JD Live being a late entrant, JD Live could emerge as a formidable player with its advantage in certain product categories that require careful handling such as home appliances thanks to its in-house logistics network (unlike archrival Alibaba which outsources logistics operations to its logistcs affiliate Cainiao Network).

According to a 2019 report on China’s Home Appliances Market by the China Electronic and Information Industry Development Research Institute, commanded a 22.39% market share followed by Suning, and Tmall ranked second and third respectively. With online penetration of China’s RMB 891 billion home appliance market expected to reach 50% this year (up from 41.17%),’s livestreaming unit should help drive sales as this channel enables consumers to ask questions, and gain a greater understanding about such relatively high-value products before making a purchase. has also made moves to boost sales through a tie-up announced last month with Kuaishou, China’s third-largest livestream e-commerce player. The partnership is significant in many respects; Kuaishou has 3-5 times higher e-commerce conversion compared to Douyin, and more than 50% of Kuaishou’s 300 million plus users comes from tier 3 and tier 4 cities, where household appliance penetration is relatively low (according to market research firm IBIS World, household appliance penetration in tier 1 and tier 2 cities stands at around 85%, compared with less than 50% in tier 3 and tier 4 cities). This offers an opportunity to further its goal of penetrating into lower tier cities.

Source: Walkthechat

Livestreaming currently accounts for just about a tenth of’s e-commerce revenue (which reached RMB 576 billion during the year ended 31 December 2019). Although JD Live is at relatively early stages compared to rivals such as Tabao Live, JD Live has been aggressively using it as a revenue generator recently and the company’s efforts appear to be generating results, which suggests tremendous potential for livestreaming to account for a greater share of JD’s revenue going forward. Just last month, Dong Mingzhu, Chairwoman of Gree Electric Appliances (one of China’s largest electric appliance manufacturers) who is known locally as the “home appliances queen” participated in a livestreaming session on JD Live, generating RMB RMB 703 million (nearly US$ 100 million), the highest yet for live streaming sales in the home appliances industry. The same month, she participated in a live streaming session on Kuaishou, generating sales of RMB 310 million (US$ 44 million).

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: Please take note, this is only one aspect in weighing the attractiveness or non-attractiveness of the companies mentioned as an investment and should not be used independent of other factors. This article examines one segment of the companies’ businesses, and other factors such as valuation are not addressed. This article is not a recommendation to buy or sell any stock mentioned.

Editor’s Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.

Read More