01 The impact of the pandemic over the past three years has become increasingly profound, not only changing people's consumption habits but also driving digitalization and business model transformation across the retail industry. Livestream e-commerce has swept through the entire retail sector. In traditional retail, livestream e-commerce has gone from explosive popularity to silence, and now to calm, with supermarket livestreaming gradually becoming more rational. Take Beijing-based retail enterprise Chaoshifa as an example. In the first half of this year, Beijing Chaoshifa made new moves in its livestream e-commerce business. "In terms of on-site livestream selling, Chaoshifa this year established a dedicated 'Special Business Unit' for online business. Since its establishment, this department has broken the traditional organizational structure of Chaoshifa's physical supermarkets," said Wang Zengqing, Chairman of Chaoshifa. "As a special department, the 'Special Business Unit' currently has no specific positioning or management hierarchy, and reports directly to the Executive Deputy General Manager." "From the sales data of livestreams, the average sales per session have reached over 200,000 yuan, gradually rising from tens of thousands to over 100,000, and then to 170,000-180,000. In a recent livestream collaboration with P&G, one session achieved nearly 500,000 yuan," Wang said. "Currently, from an operational data perspective, we are in a phase of rapid growth." Chaoshifa conducts livestream e-commerce at least once a week. "Sometimes we have dedicated collaborations with our brands, manufacturers, and suppliers to promote related products." Currently, the typical livestream time slots are from 6 PM to 8 PM, or 6:30 PM to 8:30 PM. According to customer visit data, each session attracts between several thousand and over ten thousand viewers, showing a continuous upward trend. Regarding the product categories for livestreaming, Wang said that it is currently full-category selling, with online categories covering items not available in physical stores, leaving significant room for expansion. Currently, Chaoshifa has not set specific business targets, KPI assessments, or fixed operational and staffing models for the livestream 'Special Business Unit.' He stated that there are no specific indicators for how much sales, traffic, repeat purchases, or GMV this special business unit can generate. The focus this year is to build the framework, and next year to streamline operations before making an overall positioning. Livestream e-commerce is part of online sales, which has always been a key focus for Chaoshifa. Wang told Ling Shou that Chaoshifa's online business operates under two major models: First, collaboration with online enterprises. Because Chaoshifa holds agency rights for major brands such as Dove, Nestlé, and Red Bull, it leverages these agency and distribution rights to cooperate with platforms like JD.com, Pinduoduo, and Suning for online business. "The market share of this business has grown at a very high compound annual growth rate over the past five years," Wang said. Second, since the outbreak of the pandemic in 2020, Chaoshifa has continuously built and strengthened its online retail business. "Over the past three years, it has grown from a few million yuan to over 20 million last year, and is projected to reach nearly 60 million this year," Wang said. "This year, our goal is to build the entire online business, including on-site livestream selling, community group buying, and expansion of online operations to attract group-buying customers," Wang added. In fact, within Chaoshifa's nearly 5 billion yuan in sales, online sales already account for over 700 million yuan.
02 Looking at the hypermarket segment, offline business has been sluggish in recent years, facing numerous operational challenges, and store closures have become a "main theme" for some foreign retailers. Walmart, an early entrant into the Chinese market, has also encountered challenges such as declining foot traffic, store closures, and falling performance. Notably, since the pandemic, Walmart hypermarkets began launching livestreams on short-video platforms in 2020, starting their livestream business. A person in charge of Walmart hypermarket operations told Ling Shou, "To make it more convenient for customers to learn about and purchase Walmart hypermarket products both online and offline, we launched livestreaming to cover a broader audience, sharing quality products across all categories in a more vivid and engaging format with an immersive shopping experience." The person said that from the very first livestream, Walmart has been continuously exploring the needs of livestream consumers and creating diverse livestream scenarios based on consumer demand. Different livestream strategies are adopted for different platforms. For example, on JD.com's video channel category livestream days, themes such as personal care, fresh produce, snacks, and kitchen are launched based on consumers' daily needs, making it easier for consumers to precisely purchase daily necessities. On the Kuaishou platform, the "Boss's Price" IP livestream program collaborates with major brands, inviting brand bosses to the livestream to offer consumer benefits, while also bringing consumers closer to the brands. "While watching the livestream, customers can place orders with one click and enjoy Walmart's '3-kilometer delivery within one hour' commitment, creating a 'livestream + express delivery' shopping experience of watching, buying, and receiving instantly," the person told Ling Shou. Regarding future plans for hypermarket livestreaming, the person said that Walmart hypermarkets will continue to enrich livestream content, optimize livestream products, and expand livestream reach, allowing more consumers to see the lifestyle proposals from Walmart hypermarket livestreams, discover good products, and experience good service. In fact, Walmart had already laid out its online business as early as June 2016, when it announced a series of deep strategic collaborations with JD.com. In this somewhat "cross-border" cooperation, JD.com acquired major assets of Walmart's Yihaodian, while Walmart received 145 million newly issued Class A ordinary shares of JD.com. This also marked the beginning of Walmart's e-commerce business in the Chinese market. At this year's Fortune Most Powerful Women Summit held in California, Walmart International President and CEO Judith McKenna said, "China may have the world's largest digital ecosystem. We have learned a lot from the Chinese market." McKenna noted that China is the most advanced country in terms of consumer use of digital shopping tools, and the U.S. will follow China's lead in making e-commerce the default way to purchase groceries and other goods. She said that China's online shopping giant Alibaba holds a significant position in e-commerce. In 2016, Alibaba proposed the "New Retail" concept, which combines online shopping tools with in-store shopping, integrating ordering, payment, and even product production into a single company's vertical system. Walmart has now entered the grocery business to create a similar "New Retail" experience for customers.
03 In the past two years, besides the sluggish performance of Walmart's hypermarket business, the popularity of Sam's Club warehouse membership stores has become a model for the industry. According to Bloomberg data, Walmart's sales in the Chinese market have shown a downward trend over the past three fiscal years. From 2016 to 2020, Walmart closed around 80 stores in China, and by September 2021, its store count had decreased to 378. While contracting its traditional stores, Walmart has been intensively expanding Sam's Club membership stores in China. According to Walmart China data, by the end of 2021, Walmart had opened 36 Sam's Club stores in 22 cities in China, with membership reaching 4 million. This year, Walmart plans to increase the number of Sam's Club stores to 40-45. The aggressive expansion of Sam's Club is partly due to the small explosion of warehouse membership stores in China, with consumers increasingly accepting paid membership systems. On the other hand, it reflects Walmart's repositioning in the Chinese market: while maintaining its core business, it aims to target the middle class and above with more precise product positioning. Unlike traditional hypermarkets, warehouse membership stores use a "buy a ticket to enter" model to lock in consumers, primarily relying on annual membership fees as core revenue rather than retail price differences. Regarding Sam's Club's livestream e-commerce business, it is more about creating an omnichannel shopping experience for consumers and helping them better understand the value for money of its products. A Sam's Club representative told Ling Shou, "About two years ago, Sam's Club began sharing information about new store openings and introductions of 'new, novel, and special' products through livestreams, which attracted the attention of many members and potential members." The representative said that since then, Sam's Club has continuously learned and discovered members' preferences and needs, designing a series of livestream activities around their life scenarios and demands. The person mentioned that during the current "Double 11" promotional period, Sam's Club livestreams have designed special sessions for skincare and beauty knowledge sharing; the mother-and-baby session covers clothing, food, travel, and entertainment, sharing with new moms how to easily and scientifically raise children; the "Slow Life" series is closer to daily life, with Sam's Club kitchen chefs sharing cooking techniques for high-end ingredients and wine pairing suggestions. Sam's Club provides members with omnichannel shopping options. In addition to in-store shopping, members can also learn more about product application scenarios and gain life inspiration through Sam's Club's official WeChat video channel, WeChat official account, Xiaohongshu, and other social channels. Furthermore, Sam's Club also presents global trendy lifestyles to members through online concerts and "cloud camping" events. Regarding future plans for livestream channels, the representative said that Sam's Club will continue to create more interactive and fun online experiences to reach members through richer channels and add novelty to their lives.
04 As the retail industry becomes increasingly segmented, warehouse membership stores, fresh food e-commerce, community small stores, and hypermarkets are all continuously transforming to adapt to changing consumer behavior. Online and offline, traditional and emerging formats are colliding and learning from each other in this era, and retail enterprises are accelerating their pilot livestream businesses. Last month, Wumart Group piloted a supermarket-scene livestream in Beijing. Through the Douyin platform, Wumart's store flagship store shipped products nationwide for the first time. In the future, it may leverage the backend processing system and delivery network of Wumart's subsidiary Dmall to implement instant delivery from livestreams. Ling Shou learned that Wumart uses livestream setups to broadcast for 6-8 hours a day on Douyin, selling daily necessities such as rice, flour, cooking oil, and household chemicals to consumers nationwide through real supermarket scenes. It is reported that Wumart is considering launching a livestream version of instant delivery, which would enable real-time delivery of products ordered during livestreams. Using Dmall's backend processing system and delivery network, Wumart hypermarket products could be delivered nationwide instantly through livestream selling. "For example, if a consumer in Zhejiang places an order after seeing livestream product information, the nearest store will pick and deliver the goods. This can be understood as a livestream version of food delivery," Wumart said. It will optimize the logistics and delivery system to achieve instant delivery, with a pilot for livestream instant delivery in Beijing. Industry insiders believe that Wumart's instant delivery business on Douyin aligns with Douyin's intention to expand into instant retail. Douyin has considerable traffic in local life services. As the transaction scale of instant retail continues to rise, Douyin is also looking for entry points. The cooperation between Wumart and Douyin benefits both parties by leveraging local life traffic and product supply chains to explore instant retail through livestreaming. Amid the pandemic, physical supermarket enterprises exploring online livestreaming provide consumers with a new shopping experience, breaking the limitations of time and space for traditional retail. This allows better consumer reach, while consumers gain more choices and enjoy a more diversified shopping experience. In this regard, an industry observer told Ling Shou that a complete "livestream" is not just about the few hours in the studio: to truly excel at livestreaming, one must complete a full closed loop from initial user contact to retention and long-term operation. "In every successful livestream, the host and the pacing are particularly important. The selected host should have a certain credibility among customers and a high level of understanding of both customers and products, so as to resonate with customers during product explanations and interactions, thereby driving order volume and sales growth." The observer said that emphasizing the integration of online and offline, and meeting customers' diverse needs from multiple dimensions, can also drive sales growth for physical stores. But from another perspective, whether livestream e-commerce can bring performance increments to supermarkets, how much growth it can generate, and which categories are more suitable for livestreaming all still need to be explored in practice and analyzed on a case-by-case basis. Similarly, livestream e-commerce may not be suitable for every supermarket.