Live Commerce Market China: GMV to Exceed US$1 Trillion by 2026

China Live Commerce 2024: Key Insights

• Market Growth: Live commerce in China generated a market GMV of US$540.3 billion in 2022. Its growth is expected to continue, with a forecast of US$1.1 trillion by 2026.

• Leading Platforms: Alibaba's live streaming service, Diantao, and Douyin are the most popular live commerce platforms for Chinese users. Douyin jumped from a GMV of US$5.8 billion in 2019 to US$222.6 billion in 2022.

• Live Commerce Market Trends: With a high earnings potential come the companies and streamers participating in China's live commerce market. Current trends on the scene include quiet selling and quiet luxury, weekly fashion shows by international brands, and all types of live streaming hosts.

Live commerce in China has surged since it first started on a large scale in 2016, with its market GMV multiplying every year. While live commerce is just becoming a thing in the West, China's live streaming eCommerce market is more mature.

That is why international brands like Zara are using live commerce as a way to introduce their products to a wider audience in China – and increase profits that way.

Here are the trends that shape China's live commerce market.

Live Commerce in China: GMV to Surpass US$1 Trillion by 2026

Market transactions for live commerce in China have increased steadily over recent years.

• Live commerce sales took off during the pandemic, without the typical slowdown in the years after. Instead, GMV increased to US$540.3 in 2022 and is expected to continue its upward trend.

• In 2023, live commerce transactions in China amounted to US$694.5 billion, equivalent to Kazakhstan’s GDP in the same year.

• By 2026, GMV is forecast to exceed US$1.1 trillion.

Growing transactions in this market are underlined by rising consumer participation rates, as seen below:

Since 2020, the share of internet users in China who watched livestreaming commerce has increased steadily. While the usage rate remained below 50% until 2020, it surpassed 50% in 2023, reaching 54.7%. 

Clearly, live commerce market revenues are growing in line with consumers' willingness to spend. But where do Chinese consumers prefer to spend their money?

Which Platforms Are Leaders in Chinese Live Commerce?

According to consumers, two platforms stand out with the highest usage rates:

• Taobao/Diantao, with 74% of consumers in China having used the Alibaba-owned platform to buy products via live stream.

• The second is Douyin, the Chinese version of TikTok, which 51% of Chinese consumers have used for live shopping.

• Other popular platforms on the list include Pinduoduo (26%), JD (15%), WeChat’s video channel (8%), Kuaishou (8%), which was China’s first short video platform, and other providers (3%). 

Douyin is an ideal example of how an engaging feature can drive transaction growth on a platform. The short-form video service is well ahead of its Western counterpart TikTok when it comes to generating revenue from livestreams:

• With a sizable base of US$5.8 billion GMV in 2019, transactions surged during the pandemic.

• In 2020, US$72.5 billion worth of products were sold via Douyin livestreaming.

• In the following years, GMV reached US$124.1 billion in 2021 and US$222.6 billion in 2022. To illustrate, US$200 billion is equivalent to the annual corporate revenue of tech giants like Alphabet, Google's parent company. 

Evidently, the revenue potential for live commerce in China is immense. All the more reason to investigate the current trends in the scene.

Live Commerce Trends 2024 in China

Live streaming offers advantages inherent in the format's characteristics: Brands looking to get instant feedback on a new product, clear out old inventory, or promote best-selling items can reap the rewards of live commerce. 

The ubiquity of live commerce in China reflects its high revenue potential: companies selling their products via livestreams include farmers and fishermen in rural areas. However, despite the potential to reach a wider audience than could ever be hoped for with a physical retail location alone, new customers are not easy to retain, due to the large number of streamers participating and vying for attention. 

As with any market, trends come and go, so what are the dominant trends in China’s live commerce scene today?

1. Quiet Selling

Live selling is pervasive in Chinese eCommerce, so producers and streamers are constantly coming up with new ways to stand out from the crowd. One of these methods is presentation style: Typically, product presentations are energetic, colorful, and flashy. Typical sales strategies include creating a sense of urgency, fun, and familiarity with the audience. 

A point of differentiation are brands and streamers that present a more understated style of promotion, also called quiet selling, which corresponds to the trend of quiet luxury on social media in Western markets. 

It's also a way to draw attention to products in line with the government's crackdown on the streaming sector in 2022, when the CCP (Chinese Communist Party)  launched a code of conduct for online streamers in June that year – restricting content with provocative takes or unusual and stigmatized topics posted by streamers who were acting up to catch the attention of viewers. 

But research shows that while it is relatively easy to generate one-time clicks or viewers, building a loyal following is much harder.

2. Weekly Fashion Shows and Product Launches

Zara is a prominent example of an international brand that caters to the tastes and habits of Chinese consumers to introduce its products. At the same time, the fashion brand is rebranding and upgrading its presentation to be more reminiscent of high-end products.  

Fashion is one of the top-selling product categories in Chinese live commerce: 

However, ahead of clothing, food is the most frequently purchased category via live commerce in China, with 54% of consumers saying they have bought it in the last 12 months. 

Clothing is not far behind at 45% of consumers. Among the top five are footwear (33%), skin care (30%) and hair care (26%), highlighting the popularity of beauty products for live commerce. 

Weekly livestreams showcasing the latest styles or overstocked products have the added benefit of engaging consumers on a more consistent basis, giving them a sense of being on the inside of the latest industry trends and developments.

3. Live Stream Hosting Trends

In a previous look at Chinese live commerce, we noted the wealth that successful livestream hosts can generate in a short period of time. It is clear that the competitiveness of the market stems from the high promise of fame, as influencer culture in China revolves around so-called Key Opinion Leaders (KOLs), who have a good rapport with the audience and sell products at lightning speed. 

But hiring esteemed KOLs comes at a cost, so companies are finding alternative hosts, some of which include

• Key Opinion Consumers (KOCs): Cheaper than big-name influencers and more accessible to a smaller audience they're more likely to know, KOCs post product reviews and answer questions more thoroughly than live streamers with millions of viewers. 

• Employee Hosts: Hosting livestreams has become a permanent position in companies, with employees receiving training at special training academies and schools, usually paid for by the employer. Hosts take a per-article commission, while companies take in most of the revenue.

• Virtual Hosts: Technological innovation enables the use of AI-generated virtual streamers, or avatars, which are free to use and don't have the limitations of human hosts, as streams typically last for several hours. According to JD, one virtual streamer broadcast for 28 hours on end and served more than 4,000 brands during last year's Singles' Day. 

Live Commerce Trends: Closing Remarks

China’s live commerce market follows the typical pattern of market maturation, with a more regulated and toned-down form of live streams contributing to the new norm. As market revenues continue to rise, so does the range of businesses promoting their products this way. 

The trend moving away from incredibly high margins for individual streamers to more evened out earnings across a wider market reflects our previous predictions. Recent emergences from innovative social commerce platforms like Flip indicate the potentially ubiquitous application of livestreaming in global eCommerce.

Sources: CNBC – McKinsey – New York Times – Sekkei Digital Groups – Walk the Chat – WPIC