Shopping while watching a host sell products during a live event is not a new concept, think QVC. But shopping this way has been updated for the digital age. In China, digital payments, live streaming and eCommerce functionality are completely integrated within a single eCommerce platform like Taobao or Tmall, both owned by Chinese eCommerce giant Alibaba. It would be analogous to Amazon, Instagram and Paypal being part of the same platform. Viewers can easily purchase products through links while viewing a live stream. This seamless integration has fuelled the growth of live streaming in China.

It is estimated that the live streaming market in China was worth $4.4 billion in 2018 up 37% over the prior year. It may seem like a relatively small base but Alibaba only integrated live streaming on its platform since around 2016. In a few short years more than 100 million people in China watch a live stream each month.

In categories like beauty & personal care, packaged foods and apparel, more than half of consumers discover products through entertainment-driven content. In China KOLs which are Key Opinion Leaders, which are like influencers, are one of the best ways for brands to connect with consumers. Another benefit of live streaming for brands is that unlike QVC live streaming in China reaches a younger audience as well.

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Live streaming has also become an important part of Alibaba’s Singles Day shopping event. During the last Single’s Day which was held on Nov. 11, 2019 live streaming generated $2.85 billion or 7.5% Alibaba’s gross merchandise volume sales on that day. Taobao’s most successful live-streamer, Viya, live streamed for 8 hours on Singles Day with 43 million consumers watching. The “Lipstick King” Li Jiaqi spent more than 6 hours live streaming with 37 million consumers watching. Viya even did a live stream with Kim Kardashian for Singles Day to sell KKW fragrances. 150,000 fragrances were sold within seconds.

The “Lipstick King” Li Jiaqi during a live stream

Speaking about live streaming, Remi Blanchard, a Project Leader at a Chinese market research firm said "product safety and security scandals have made Chinese consumers particularly suspicious towards brands and products, especially when sold online."

“[Through a video live stream] Chinese shoppers feel reassured by the in-depth product introduction and testing that KOLs provide them in a live and ‘no filter’ environment."

Amazon also sees potential in live streaming and last year launched Amazon Live. Amazon Live is a live-streaming home shopping platform. The platform consists of Amazon talent hosting live home shopping shows as well as live streams from brands that sell on amazon.com.

Why Live Streaming is Becoming a Popular Way of Selling Products