eCommerce: Social Commerce

Live Commerce in China: Key Insights

• Market Growth: Livestream commerce market size grew exponentially during the pandemic, reaching US$425 billion by 2021. Growth slowed down thereafter, with the market size amounting to US$695 billion in 2023.

• Generational Preferences: At 34%, Gen Z in China are the most active live commerce users by generation, slightly higher than Millennials (31%). In contrast to live commerce, Gen Z’s use of traditional eCommerce is much lower, at 19%.

• Most Used Platforms: Taobao and its livestream app Diantao are the top used platforms for live commerce shopping in China, with 74% of shoppers using it. Douyin is second, with 51%.

• Global Preferences: China has the highest share of live shoppers in the world, at 81%. In comparison, other big eCommerce markets like the United States (40%), Germany (26%) and Japan (15%) are far behind.

Live commerce took off in China in 2016. But it was during the pandemic that its market exploded, as the zero-covid policy forced consumers to stay at home and shop more online.

We analyze the market development of live commerce shopping in China over the years. We also discuss the preference for live shopping among different generations of Chinese shoppers and the top used platforms, alongside how different markets across the world are adopting this trend.

China’s Live Commerce Market Size: Development from 2019 to 2026

Data about livestreaming commerce in China shows that in terms of size, the market has seen a continuous growth since 2019.

The largest growth jumps occurred during the pandemic years. In 2020, the market size increased by an unprecedented 196% and reached US$180 billion.

The upward trend continued in 2021, when the market grew by 136% and hit US$425 billion.

From 2022 and onwards, as the lockdown restrictions were loosened and the normalization period began, the growth rate slowed down. For instance, the marked size increased by a much more modest 27% in 2022, followed by a slightly improved 29% in 2023.

Nonetheless, the market did not decline or register negative growth, indicating that a more durable shift towards live commerce happened amongst Chinese consumers. The market size also kept on recording growth, with its worth amounting to US$695 billion in 2023.

Forecasts predict that the live commerce market will grow steadily and surpass the US$1 trillion mark by 2026.

The phenomenal success of live commerce in China, coupled with favorable external conditions, has led to the emergence of a plethora of providers and livestreaming hosts. But its usage among consumers varies according to the shoppers’ generation.

Generational Preferences: 34% of Gen Z in China Uses Live Commerce

According to market research, people from Gen Z are the most active live commerce users in China.

34% of Gen Z shoppers have engaged in live shopping, compared to only 19% who participated in traditional eCommerce, as of 2021.

For all other generations, traditional eCommerce participation is much higher than live commerce use.

For example, 38% of millennials are eCommerce users versus 31% who are livestream shoppers. Similarly, 27% of Gen X are eCommerce shoppers versus 23% of those who are live commerce participants.

The trend indicates the popularity of live commerce amongst younger shoppers in China. It also confirms the position of Gen Z as an increasingly important demographic to consider for businesses in China, particularly when it comes to eCommerce marketing strategies.

China’s Most Used Live Commerce Platforms: Taobao Leads, Followed by Douyin

In recent years, the livestream commerce market in China has become more competitive, with many players now challenging Taobao’s lead.

Considering the latest usage data from October 2022, Alibaba’s well-rooted eCommerce platform Taobao, and its flagship livestream app Diantao (formerly known as Taobao Live), lead in popularity among Chinese live commerce users, with a usage rate of 74%.

Douyin follows in the second place, with a usage rate of 51%. Pinduoduo and JD.com also exhibit double-digit usage rates, while WeChat Video Channel and Kuaishou account for relatively smaller rates of 8% each.

When it comes to the share in total GMV, however, Kuaishou and Douyin have already passed Taobao and Diantao, according to data published by Statista.

Taobao had quickly become the leader in the livestream commerce market since its inception in 2016, accounting for more than half of the sector's GMV by 2020.

But Kuaishou and Douyin gained ground in the following years, contributing higher GMV shares than former leader Taobao/Diantao. By 2022, Douyin made up nearly half (47%) of the total GMV of leading live commerce Chinese platforms. Kuaishou stood second, accounting for 27% of the total GMV.

Live Commerce: A Shrinking Trend?

As the livestream commerce market in China follows its path, the rise of new hosts and providers shows that the market is becoming more diverse and competitive. New businesses, livestream providers, and hosts are seeking to gain influencer status through this business model.

As more and more competitors join the fray, not everyone is able to gain the audience to generate the millions of yuan common when the trend first took off. As a result, host incomes are shrinking.

Other factors shaping the live commerce market are that consumers are being more frugal due to the economic recession in China, and the rise of AI influencers who are doing the same jobs for less money.

Moreover, companies like Douyin are taking note of the rapid growth of sellers in live commerce and are moving to regulate it for several reasons:

1. Protect consumers: Livestreams often leave little room for detailed product information, potentially leading to uninformed purchases. Douyin's crackdown includes a ban on quick launches and penalties for violators.

2. Concern about quality and environmental impact. As items promoted on livestreams are often inexpensive, they tend to contribute to waste and pollution.

3. Risk of exploitation: Low-cost items may discourage returns, thus ensuring the seller's profit despite potential customer dissatisfaction.

Beyond China: India and Thailand Are Emerging Consumer Markets for Live Commerce

Livestream commerce has redefined the way brands connect with their audience in China – and it has the potential to reshape eCommerce in other countries as well.

Currently, at 81%, China houses the largest share of live commerce shoppers. This is the highest percentage among all countries and is well above the global average of 46%.

However, the data shows that region-wise, other countries in Asia are emerging markets for live commerce shopping.

Consumers in India (75%) and Thailand (73%) are taking to the trend readily, compared to online shoppers in other nations. Another notable consumer market is the UAE, where 72% of online shoppers said they participate in live shopping.

In comparison, the trend of live shopping is slower in markets like the United States (40%), UK (35%), Australia (31%) and Germany (26%).

Live shopping is least preferred in Japan which, at 15%, has the lowest share of shoppers who engage in live commerce. Several factors could be contributing to this low preference, including an engrained popularity of convenience stores which means consumers are less likely to watch a live shopping stream before making purchase decisions.

Live Commerce in China: Closing Thoughts

China’s live commerce market has seen continuous expansion in the past years, with projections optimistic for the future. But notably, the growth rate has slowed after the pandemic, and signs of market saturation are also visible.

The eCommerce ecosystem and consumer behavior in China both proved conducive to the growth of live commerce. In fact, high smartphone penetration and an existing inclination towards social commerce can be credited with the success of live commerce in China.

On the other hand, live commerce is yet to attain similar popularity levels in the North American and European markets. The introduction of new technologies and features – such as the recently launched TikTok Shop – can accelerate this trend going forward, particularly among Gen Z who are active social media users and buyers.

Live Commerce: FAQs

What does live commerce mean?

Live commerce is a form of social commerce. It combines live video streaming with online shopping, allowing viewers to watch and interact with sellers in real-time while making purchases.

What are the benefits of live commerce?

The benefits include real-time interaction between buyers and sellers, immediate feedback, a more engaging shopping experience, and the ability to see products demonstrated live.

How big is the livestream commerce market in China?

In 2023, China's livestream eCommerce market size was worth US$695 billion, up from US$61 billion in 2019. It is expected to reach US$1,138 billion by 2026.

Why is livestream shopping popular in China?

Livestream shopping in China is popular due to the widespread use of smartphones, convenient online payment methods, the influence of social media, and the engaging format that combines entertainment with shopping.

How does live shopping work?

Live shopping works by sellers or influencers streaming themselves live, often demonstrating or discussing products. Viewers can watch these streams, ask questions, and make purchases in real-time during the broadcast.

Why live streaming eCommerce, so popular in China, has yet to catch on in the U.S.?

Live streaming eCommerce in the U.S. faces challenges like different shopping habits and concerns about privacy. The concept is also newer in the U.S., and people might need time to adapt to it.

How do I sell on live streaming?

Choose a suitable platform, set up a good quality live stream, and engage actively with your audience while showcasing your products. Offer exclusive deals and use viewer feedback to improve future streams.

Sources: Statista, Wunderman Thompson.