2021 China’s Livestreaming e-Commerce Industry ReportSource:iResearch
September 22,20216:47 PMOverview
Growing Individual Livestreaming e-Commerce Users
Nearly 40% Chinese netizens are livestreaming e-commerce users and the proportion is still growing
As of the end of 2020, China had 617 million online livestreaming users, accounting for 62.4% of its total netizens. The livestreaming e-commerce users reached 388 million, 123 million more than in March, accounting for 39.2% of the total Chinese netizens. 66.2% of users place orders after watching livestreaming e-commerce videos. As the number of Chinese netizens is further increasing, the consumers have a better understanding of the interactive, social, entertaining features of livestreaming. As products sold through livestreaming e-commerce are usually cheaper, trustier, and more intuitively introduced, users’ acceptance of online livestreaming and livestreaming e-commerce has been increasing. An growing share of netizens are livestreaming e-commerce users and they spend more and more time on livestreaming videos every day.
Increasing Livestreaming e-Commerce Companies
The industry chain is quickly penetrating into the supply chain and operation process.
After precipitation from 2016 to 2018, the livestreaming e-commerce industry exploded in 2019. Livestreaming has become a common method for the platforms to increase users' view time and the conversion rate. The popularization of livestreaming quickly resulted in a new ecosystem. The industry quickly changed from utilizing traffic dividends to exploring dividends of the entire ecology, gaining increment through precision operation and supply chain penetration. Livestreaming e-commerce service companies and employees surged in 2020. According to data from Qichacha, by the end of 2020, China had 6939 newly registered livestreaming e-commerce companies and 8862 in accumulation. According to iResearch, the numbers of livestreaming service agencies focusing on celebrity livestreaming and enterprise livestreaming were 6528 and 573, respectively. The number of streamers has been growing and hit 1.23 million at the end of 2020. Ecological prosperity indicates fierce competition, which drives the industry chain to keep generating more value, especially the value of supply chain and operation.
The Livestreaming e-Commerce Industry is Developing Rapidly
The size of the livestreaming e-commerce market has exceeded 1 trillion yuan and is growing rapidly.
The size of China's livestreaming e-commerce market hit 1.2 trillion yuan in 2020, with an annual growth rate of 197.0%. It is estimated to grow at a CAGR of 58.3% in the next three years and exceed 4.9 trillion yuan in 2023. Livestreaming has become a normal marketing method and sales channel in the e-commerce market. The number of users, the frequency of placing orders, and the per customer transaction will keep increasing. Among them, users will increase a lot and the increase in order frequency will be relatively small. Both of them are expected to reach saturation quickly. The increase of per customer transaction will be small but will last a very long time. Livestreaming e-commerce quickly spreads in the social consumer goods and online shopping markets. In 2020 livestreaming e-commerce accounts for 3.2% of the total retail sales of consumer goods, and 10.6% of the online shopping retail market. The latter is expected to reach 24.3% in 2023.
Livestreaming e-Commerce Empowers the Supply Chain
Livestreaming e-commerce can reduce the supply chain links, the information gap and the feedback time.1.Production and sales: shorten the supply chain links. Livestreaming e-commerce can directly connect factories and consumers without the middlemen. The reduction of links reduces the feedback time and the information gap, and helps brands find and cover potential consumers. Livestreaming is also a flexible and quick sales method with real-time interaction. The streamers select products for their fans. Producers can quickly receive feedback on the livestreaming marketing effect of a product, which indirectly improves the survival of the fittest in the industry. Streamers need rich and high-quality SKUs to guarantee the frequency and attractiveness of their live videos, forcing the supply chain to respond faster and provide more new products more frequently.2.Fulfillment: Increased demand for warehouse and distribution integration. Since orders made through livestreaming e-commerce are fragmented and of a huge number, it is a perfect scenario for the efficient model of integrated warehousing and distribution. Preparing commodities in regional distribution centers of multiple places based on the expected number of orders, supported by fast turnaround and shipment, can save at least one transshipment and distribution. With the rising digital level of the supply chain and the more accurate forecasting on the demand side, offline stores can become front warehouses, and the model of integrated warehouse and distribution will be more common. The growth of orders for fresh products from livestreaming marketing has promoted the development of cold chain transportation. More livestreaming rooms and warehouses have been established in the place of origin to ensure product quality.
The opportunities brought by livestreaming e-commerce at the meso and micro levels are greater than those at the macro level. Theoretically, the more individual, the more the benefit and the greater the risk. The value of incremental factors to different subjects at different stages varies. The increase of users is prominent in the short term, the increase of per customer transaction is slow but will last for a long time. Generating unplanned demand by upgrading the supply chain and then changing the unplanned demand into planned demand to upgrade the consumption structure is the longest and most fundamental increment.
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