A man with a telephone passes in front of a sign of the TikTok application of the Chinese company ByteDance, known locally as Douyin, at the International Expo of Artificial Products in Hangzhou, Zhejiang Province, China, on 18 d October 2019.
Reuters
BEIJING: Chinese consumers buy more through real-time streaming and video applications: a new trend that is taking over a part of the mass market traditionally dominated by e-commerce giant Alibaba.
Popular live streaming and short video applications became significant 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 the Kuaishou live video and streaming app, which on Friday raised more than $ 5 billion in Hong Kong’s largest IPO since the coronavirus pandemic, according to Wind Information.
Gross volume of goods (GMV) during the 11 months to November grew nearly eightfold from a year ago to 332.68 million yuan ($ 51,444 million), Kuaishou said in his prospectus. GMV is a metric commonly used in e-commerce to measure the total value of goods sold over a period of time.
The company primarily makes money by selling virtual gifts that users can buy for their favorite live broadcasters. Shares of Kuaishou rose nearly 200% on Friday open.
Along with various types of e-commerce players that have emerged in the last 2-3 years, … the desires of customers on online shopping platforms are also diversifying.
Douyin, the Chinese version of the TikTok video application owned by ByteDance, saw e-commerce transactions triple last year to 500 billion yuan in GMV, according to a report on Wednesday by Chinese technology news site LatePost.
However, most GMVs went to third-party e-commerce sites like JD.com and Alibaba’s Taobao, according to the report. Only about 100 billion yuan in Douyin’s GMV came from the app’s own e-commerce platforms, according to the report.
ByteDance said in a statement to CNBC that LatePost’s figures on GMV are inaccurate and that third-party sales resulting from redirected user traffic should not be counted as part of GMV.
Tencent’s Wechat messaging app, which has more than a billion daily active users, has also become a platform for online shopping.
In January, WeChat said GMV for companies running their own in-app mini-programs rose 255% last year to an undisclosed amount, while GMV for physical goods sold through of these programs increased by 154%.
“Along with various types of e-commerce players that have emerged in the last 2-3 years, including live streaming, social commerce, etc., customers’ desire for online shopping platforms is also diversifying. “Morgan Stanley analysts said in a report last month. Chinese consumer spending is projected to double in the next decade to $ 12.7 trillion.
Growing market for all e-commerce players
Reports on GMV video apps show how fast streaming platforms are growing as an online shopping portal, even if they still dominate established gamers.
For example, Alibaba’s video broadcast sales site, Taobao Live, generated more than 400 billion yuan in GMV by 2020, according to the latest earnings report. But the company’s GMV alone during the November 1-11 business holiday was 498 billion yuan.
“There is a lot of demand for e-commerce in China, so Alibaba, JD.com, has the market because they are online and offline,” said Suresh Dalai, senior director of consulting firm Alvarez & Marsal, which focuses on retail operations in Asia.
“They provide a one-stop shop through their ecosystem,” the Dalai Lama said. “These retailers are not suffering even with the departure of these new e-commerce players.”
Online retail sales of physical goods in China rose 14.8% last year to a total of 9.759 trillion yuan, accounting for a quarter of all consumer goods sold in the country, said the National Bureau of Statistics.
Although the number of online shoppers rose to 782 million in December, the country had more Internet users watching videos, with 927 million, the China Internet Network Information Center (CNNIC) reported this week. .
In particular, live e-commerce users increased by 123 million between March and December, for a total of 388 million, according to the report. About two-thirds of those users made a purchase while watching a live stream, according to the report.