A phone holder will walk past a sign of TikTok app by Chinese company ByteDance, known locally as Douyin, at the International Artificial Products Expo in Hangzhou, Zhejiang Province, China October 18, 2019.
Reuters
BEIJING – Chinese consumers are buying more through live streams and video apps – a new trend that is grabbing a segment of the huge market traditionally controlled by Alibaba, an e-commerce giant.
Live streaming and short video apps became important marketing channels in 2020, generating billions in merchant sales by connecting viewers to existing e-commerce sites, or their own.
Just take the example of Kuaishou’s short video and livestreaming app, which on Friday raised more than $ 5 billion in Hong Kong’s largest IPO from the coronavirus pandemic, according to Wind Information.
Total trading volume (GMV) for the 11 months through November grew nearly eight times from a year ago to 332.68 billion Yuan ($ 51.44 billion), Kuaishou said in its forecast. GMV is a metric commonly used in e-commerce to calculate the total value of goods sold over a given period of time.
The company specifically makes money by selling meaningful gifts that consumers can buy for their favorite live streams. Kuaishou shares rose nearly 200% at open Friday.
Along with different types of e-commerce players growing up in the last 2-3 years, … consumer desire for online shopping platforms is also multiplying.
Douyin, the Chinese version of ByteDance-owned TikTok video app, saw three times as many e-commerce transactions last year to 500 billion Yuan in GMV, according to a report Wednesday from Chinese tech news site LatePost.
However, most of the GMV went to third-party e-commerce sites like JD.com and Taobao at Alibaba, the report said. Only about 100 billion Yuan in GMV Douyin came from the app’s own e-commerce platforms, the report said.
ByteDance said in a statement to CNBC that LatePost’s figures on GMV are not inaccurate and that third-party sales resulting from redirected consumer traffic should not be counted as part of the GMV.
Tencent’s Wechat messaging app, which counts more than 1 billion daily active users, has also become a platform for online shopping.
In January, WeChat reported that GMV for businesses running their own mini-programs in the app rose 255% last year to an undisclosed amount, while GMV rose for corporate products shipped. sales through these programs 154%.
“Along with various types of e-commerce players emerging in the last 2-3 years, including live streaming, social commerce, etc., the desire of consumers on on-demand buying platforms line is also diversifying, “Morgan Stanley analysts said in a report last month. They predict that Chinese consumer spending will double in the next decade to $ 12.7 trillion.
A growing market for all e-commerce players
The reports on GMV video apps show how fast the streaming platforms are growing as a gateway to online shopping, even though established players still have control.
For example, Alibaba Taobao Live video streaming sales site generated more than 400 billion Yuan in GMV for 2020, according to the latest earnings report. But the company’s GMV for holiday purchase 1 to November 11 was 498 billion Yuan.
“China has a lot of demand for e-commerce, so Alibaba, JD.com, have a market because they are both online and offline,” said Suresh Dalai, senior director of the company Alvarez & Marsal consulting, which focuses on sales operations in Asia.
“They provide a one-stop shop through their ecosystem,” Dalai said. “Those sellers, they don’t even suffer with these new e-commerce players coming out.”
Online sales of physical goods in China rose 14.8% last year to a total of 9.759 trillion yuan, making up a quarter of the consumer products sold in the country, the National Bureau of Public Affairs said. Statistics.
While the number of online shoppers rose to 782 million by December, the country had more Internet users watching videos, at 927 million, a government agency China Internet Network Information Center said ( CNNIC) in this week ‘s report.
Notably, live streaming e-commerce users rose 123 million between March and December, for a total of 388 million, the report said. About two-thirds of those consumers have made a purchase while watching a live stream, the report said.