A person holding the phone signs the app Tickcock of the Chinese company ByteDance, locally known as Dongyon, at the International Artificial Products Expo on October 18, 2019 in Hangzhou, Zhejiang Province, China.
BEIJING – Chinese consumers are buying more through livestreaming and video apps – a new trend that seizes a slice of the mass market that has traditionally been dominated by e-commerce giants Alibaba.
Popular livestreaming and short video apps became important marketing channels in 2020, generating billions in merchant sales by connecting viewers to existing e-commerce sites, or on their own.
According to Pawan Video, take the example of short video and livestreaming app Kuishau, which raised more than $ 5 billion in Hong Kong’s largest IPO after the coronovirus epidemic on Friday.
Gross merchandise volume (GMV) for the 11 months through November has risen nearly eightfold to 332.68 billion yuan ($ 51.44 billion) from a year earlier, Kuisho said in its prospectus. GMV is a metric commonly used in e-commerce to measure the total value of goods sold over a given period of time.
The company makes money primarily by selling virtual gifts that users can buy for their favorite live streamer. Kuaishou shares rose nearly 200% on open Friday.
Along with the wide variety of e-commerce players in the recent 2-3 years, the appetite of customers on online shopping platforms is also diversifying.
According to Wednesday’s report by Chinese tech news site Letpost, the Chinese version of the TyTalk video app, a Chinese version owned by Bytens, saw GMV triple the e-commerce transaction last year, to 500 billion yuan.
However, most GMVs moved to third-party e-commerce sites such as JD.com and Alibaba’s Taobao, the report said. About 100 billion yuan in Duyin’s GMV came only from the app’s own e-commerce platform, the report said.
ByteDance said in a statement to CNBC that the latepost figures on GMV are not accurate and that third-party sales resulting from redirected user traffic should not be counted as part of 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 said the app rose 255% last year for businesses running their own mini-programs to an undisclosed amount, while GMV for physical goods sold through those programs rose 154% .
Analysts at Morgan Stanley said in a report last month, “In recent 2-3 years, a variety of e-commerce players, as well as live streaming, social commerce, etc., have also been increasing customer appetite on online shopping platforms is.” He predicted that Chinese consumer spending would double to $ 12.7 trillion over the next decade.
Growing market for all e-commerce players
Reports on GMV of video apps show how fast streaming platforms are growing as a portal to online shopping, even though established players still dominate.
For example, Alibaba’s video streaming sales site Taobao Live produced more than 400 billion yuan in GMV for 2020, according to the latest earnings report. But the company’s GMV 1 to 11 shopping holiday alone was 498 billion yuan.
Suresh Dalai, senior director at consulting firm Alvarez & Marsal, said, “There is a lot of demand in China for e-commerce, so Alibaba, JD.com, has a market because they are both online and offline. Retail operations in Asia.
“They provide a one-stop shop through their ecosystem,” Dalai said. “These retailers, these new e-commerce players also have no problem with them coming out.”
The National Bureau of Statistics said that online retail sales of physical goods in China grew 14.8% last year with total sales of 9.759 trillion yuan.
While the number of online shoppers had grown to 782 million by December, the country had more Internet users at 927 million, the government agency China Internet Network Information Center (CNNIC) said in a report this week.
In particular, e-commerce users grew by 123 million between March and December for a total of 388 million, the report said. The report stated that about two-thirds of users made purchases while watching Livestream.