"I want to give up." One day during the 2017 Spring Festival holiday, a young man planned to end his streaming career. However, on the third day before his planned shutdown, traffic suddenly surged—it turned out he had been placed on a resource slot that night—so he continued. He is Li Jiaqi. Live commerce has written the latest rhapsody of the internet era. Within just two years, capital, brands, MCNs, and streamers have poured in, each showcasing their talents. According to China Merchants Securities forecasts, live commerce will be a trillion-yuan market. In the face of such a grand trend, no one can afford to ignore it. The future of live commerce has arrived, and it is vast with big opportunities. In 2018, there were only 6,000 Taobao streamers, but by the end of March 2020, Taobao announced partnerships with over 1 million streamers. The number of Taobao streamers grew from 6,000 to an astonishing 1 million in just two years. In fact, at this time last year (June 2019), there was not a single Taobao Live agency service provider in the market. Image from Alibaba Research Institute's "2020 Taobao Live New Economy Report" During the 2018 Double 11, Li Jiaqi competed with Jack Ma in selling lipstick; at that time, Li Jiaqi's 3.53 million yuan in sales over 5.5 hours was already astonishing. Who could have imagined that on June 1, 2020, Dong Mingzhu's live streaming session would generate 6.5 billion yuan in sales? Live commerce continues to expand our imagination. Is the impact of live streaming limited to this? Far from it. Many celebrities have begun to engage in live streaming, which may change our entertainment lives; Short-video platforms and e-commerce platforms have all entered the live streaming arena, which may affect the future internet landscape; Even more than half of post-00s choose streamer as their first career choice, and live streaming will influence more futures. Although the communication forms in the marketing industry have been constantly updated, never before has something like "live streaming" swept across classes so suddenly. Coupled with the special circumstances of 2020, people are full of doubts about the future of "live streaming":
- Is live streaming just a product of the special pandemic, a flash in the pan?
- Can live streaming break through the category limitations of beauty and FMCG, surpassing the category ceiling?
- Will live streaming become the future television, changing all content consumption?
- Is brand live streaming really beneficial, or is it just "losing money for applause"?
- Where will top streamers go, and how will succession occur?
- What impact will live streaming have on supply chain and distributor systems? ...... -01- Question 1: Is live streaming just a flash in the pan? In the internet world, many things are fleeting, from OFO bikes a few years ago to Luckin Coffee recently, from thriving to being booed, it doesn't take long. Buffett once said, "Only when the tide goes out do you discover who's been swimming naked." Greenspan put it more precisely: "A bubble can only be identified as a bubble when it bursts." The overheating of live commerce does not need to be denied; the pandemic has concentrated consumer spending and entertainment online. Therefore, some in the industry believe that live streaming is merely a flash in the pan. When the pandemic recedes, consumer spending will shift back to offline scenarios, and as users tire of live streaming, it will lose its appeal. But this view clearly neither understands the essence of live commerce nor sees the broader internet trend. Live streaming has become a standard feature and underlying function of more and more internet products. With the development and popularization of 5G and other technologies, it is not an exaggeration to call live streaming the "new infrastructure" of the internet. But why live streaming? For the retail industry, live commerce reconstructs the "people, goods, and scenes" , greatly improving the efficiency of product circulation. This is the foundation for live commerce becoming a future trend. Efficient models replacing inefficient ones is undoubtedly the direction for all industries. According to Taobao Live's official statement, in live commerce, "people" refers to the streamer, "goods" to the product, and "scenes" to the live room. Streamers help users select products by providing professional knowledge; "goods" combine "quality, price, and value" to meet user needs; "scenes" use diverse live room formats to connect offline scenarios like factories and malls, and use interactive elements like lucky draws and red packets to increase user stickiness. The reconstruction of "people, goods, and scenes" makes the live commerce chain user-centric, transforming the traditional "people find goods" into "goods find people," increasing conversion efficiency. According to data provided by a clothing merchant to HUXIU, daily store live streaming conversion rates range from 7% to 10%, meaning out of 100 people entering the live room, 7 to 10 will place an order. This is higher than the 5% for graphic pages. Additionally, a trust bond forms between users and streamers. Streamers use their teams to help users discover needs, select products, and compare value, greatly shortening consumer decision-making. Live rooms can also use red packets, flash sales, and discount codes for intuitive and interactive sales promotion, and users can even influence the upstream supply chain through their needs. Shiqu's brand live room in South China (beauty theme) If anyone still says live commerce will be a flash in the pan, they may not realize that live streaming can achieve a win-win situation for users, streamers, merchants, and platforms simultaneously. On e-commerce platforms, live streaming may become as common as product detail pages. At the same time, the integration of "live streaming + technology + brand" may shine even brighter, bringing more possibilities to live marketing in the future. Alex, General Manager of Shiqu South China, believes that brands should not treat live streaming merely as a lifesaver for sales or a transaction platform; it is actually a means for brands to convey value and build relationships with customers. Today's live streaming is mostly limited to selling goods, but in the future, with the support of technology and content, live streaming will demonstrate more channel value for brands, close the loop of brand and performance, and become an important platform for integrated marketing. The current "influencer live streaming" may not be a long-term marketing technique. Alex believes that converting "influencer traffic" into "brand traffic" and "traffic users" into "retained users" is the key to future live marketing. -02- Question 2: Can live streaming break through the category ceiling? If you started paying attention to live commerce in 2018, you might have noticed that live selling was mainly concentrated in vertical categories like clothing and beauty. Of course, even today, the main forces of live commerce are still FMCG, beauty, and daily necessities. Therefore, some believe that live selling has a category ceiling, and that ceiling is the ceiling for the entire industry. Those who support the "category ceiling" theory usually argue that products in beauty, personal care, daily necessities, and FMCG have characteristics of low cost, high gross margin, and high repurchase rates, and can be directly experienced and demonstrated through streamer interaction in the live room, making them natural live streaming categories. Other categories do not have such advantages and are therefore not suitable for live streaming. But now, facts clearly show that 3C digital products, cars, real estate, and even high-priced B2B goods frequently appear in live rooms. We also believe that live streaming will experience a penetration from key categories to all categories, meaning "everything can be live streamed." Why will live commerce eventually cover all categories? The reason is that the key to live commerce lies in improving product circulation efficiency, greatly increasing user conversion through the trust relationship between users and streamers. This applies to any category. Consider this: even if your friends are not real estate experts, their advice still influences your home-buying decisions. Our emphasis on social friends' opinions is not strongly related to the category itself; the trust bond in live streaming is similar. On April 1 this year, Luo Yonghao entered Douyin's live room. Unlike other streamers, Luo's main fan base is male, so he focused more on 3C digital products, attracting industry attention. On the same day, Wei Ya conducted a live stream selling a rocket; within 5 minutes of listing, over 800 people placed deposits, and the transaction was successfully completed. Additionally, Luo Yonghao has sold Haval cars, Wei Ya and Li Xiang have sold real estate, and on Kuaishou, B2B companies like Sany Heavy Industry and Zoomlion have sold excavators. If previous live streaming tested price, product selection, and promotion, testing the streamer's mass sales ability and supply chain integration ability, then in the future, more professional people will bring goods for segmented categories, with more obvious stratification, testing the streamer's professional knowledge in vertical fields and their ability to express and output that knowledge. In summary, "everything can be live streamed" is not a false proposition. The trend of live commerce breaking through categories is becoming increasingly clear. Many new vertical categories even have live streaming dividends, and brands should pay close attention. -03- Question 3: Live streaming = future television? Every live streaming user has probably noticed that today's so-called live selling is mostly presented in a "hawking" style, which has sparked various controversies. One widely circulated view is that "live streaming is the TV shopping of the internet era." Of course, as mentioned earlier, live commerce is a new business model, clearly not a replica of TV shopping, but it does have the problem of monotonous content presentation. We believe that under the diverse demands of platforms/brands and user aesthetic fatigue, live selling is gradually forming differentiated content competition, and live streaming will have more highlights in content. If we further imagine, streamers/live streaming platforms may profoundly influence mass entertainment and even replace television stations. In terms of content presentation, we predict two obvious directions for live streaming, which can also interweave and merge:
1. Gamified, highly interactive live content, using new technologies to provide novel experiences;
2. Variety-show-style, highly directed live content, providing richer content through content planning. With the gradual maturity of AR/VR technology, the popularization of 5G, and the maturation of AI, live rooms will use new technologies for sensory interaction and enhance user experience, such as allowing users to try lipstick colors or use products through technology, similar to the technical attempts brands made in H5 pages in earlier years. In this direction, live rooms may eventually become "game rooms" or "interactive screening rooms," and live selling may become an interactive gaming experience for users. Virtual streamers/robot streamers will also become more common. Additionally, we can see that many live rooms have begun to incorporate more diverse and linear content designs, making live selling content more inclined toward entertainment consumption. Watching live streaming as a streamer's talk show, comedy performance, or knowledge popularization has become a trend. In April this year, the "CCTV Boys" attempted a "talk, learn, sing, and joke" live selling session, which netizens commented as "funny and meaningful, better than variety shows." It ultimately brought in 500 million yuan in sales in 3 hours, with over 10 million viewers. In Luo Yonghao's live room, we can also see that as he adapts to the streamer role, the content is becoming more "talk-show-like." In mid-May, Wang Han and Taobao Live began experimenting with a live variety show called "Set Off for Beauty," which brought 20 million interactions and 156 million yuan in sales on its first broadcast. Many celebrities have appeared as guests in streamers' live rooms, and the content scripts show a clear trend toward variety shows. Alex, General Manager of Shiqu South China, believes that high-quality variety-show-style live content can achieve sales conversion while enhancing user brand stickiness and favorability, thereby achieving a full-chain marketing loop. This is the direction for live streaming to achieve both brand and performance goals. Variety-show-style is the main direction for live streaming to counter homogeneous content, and the boundary between variety shows and live streaming is becoming increasingly blurred. As mentioned earlier, live streaming may affect the entire entertainment consumption content, which indirectly affects traditional TV stations and long-video websites. Long-video platforms have already influenced local TV content through self-produced dramas, and live streaming's cross-dimensional competition in the entertainment field may be one of the biggest highlights in the future. Of course, this also means live streaming may face more content regulation. In short, the imagination space for live streaming content remains vast. -04- Question 4: "Store live streaming" vs. "person live streaming": who will win? Public attention on live streaming mainly comes from the breakout of top streamers like Li Jiaqi, Wei Ya, and Xin Ba. In early 2019, Li Jiaqi became popular on Douyin with phrases like "OMG," and since Douyin was already a national entertainment product, the public followed the trail and noticed live selling. Creating iconic streamers through external platforms was also Taobao Live's main operational strategy at the time. But problems soon emerged: the more the public focused on top streamers, the higher their selling efficiency, and the more platforms would allocate traffic resources to them. This is the "Matthew effect" in the streamer ecosystem. There were rumors in the industry that Wei Ya's GMV accounted for 30% of Taobao Live's nightly total, and Li Jiaqi's 20%. The oversupply made live streaming a "game for a few brands." This head effect also triggered a chain reaction: streamers demanded excessive discounts, and live streaming fees rose. As more brands began live streaming, the early high ROI dividends were hard to maintain, and the market returned to equilibrium. This led some to find that "live streaming doesn't make money," or even "losing money for applause," and investing in top streamers tests brand profit margins. The increasingly severe head effect clearly does not align with platform ecosystem balance, nor does it achieve "inclusive benefits" for merchants. According to multiple media reports, Taobao executives were quite dissatisfied with the "Matthew effect" in the live streaming ecosystem, so they adjusted their operational strategy later, shifting from supporting "person live streaming" to supporting "store live streaming," empowering mass merchants. We can also clearly perceive that Li Jiaqi and Wei Ya's public voice has declined this year, while brand live streaming has increased, and CEO live streaming has become a trend, with the most typical example being Gree's Dong Mingzhu. "Store live streaming" can serve as a brand's daily sales scenario, with more sustainability and autonomous operation. In the long run, it also better aligns with brand interests, so some in the industry call it an upgraded version of the graphic detail page. Additionally, "store live streaming" can seamlessly connect with private domain traffic marketing, accumulating users and enhancing stickiness. "Store live streaming" naturally requires brands to build their own live streaming teams. A complete live streaming team typically includes the following five types of people. In small teams, one person may hold multiple roles, and brands can also outsource some roles to professional marketing service companies. Building a store live room (brand live room) is both a systematic review of brand value and strategy and requires rich e-commerce operational experience. Enterprises may encounter pitfalls during execution and can achieve more efficient and cost-effective setup by partnering with experienced marketing service providers. In fact, store live streaming has become mainstream. According to Taobao data, 90% of live streaming on Taobao Live comes from merchants, and 10% from streamers/influencers. 70% of transaction volume is contributed by merchant live streaming, and 30% by streamers/influencers. It is clear that "store live streaming" is a necessary path in brand live marketing. -05- Question 5: How will today's streamers be eliminated? Streamers and celebrities are increasingly converging, and MCNs and traditional celebrity agencies are also converging. Yang Tianzhen of Yi Xin Entertainment, known as the "agent sister," recently announced a shift to live streaming agency. In any case, streaming is ultimately a business about "people." Although top streamers like Li Jiaqi and Wei Ya occupy the public eye today, it is clear that streamers, like entertainment celebrities, have a relatively short career life cycle. Li Jiaqi has also publicly stated that he cannot stream forever, which is why he plans to create his own brand. The career cycle of individual streamers is limited, and there will clearly be more fresh personas entering the streaming scene for replacement. Currently, most MCNs use "old leading new" methods for traffic inheritance and incubation, such as Xin Ba and San Da Ge's "master-apprentice system," or Li Jiaqi promoting his assistant. In addition, a noteworthy trend is the rise of virtual live streaming, a phenomenon unique to Generation Z, which may represent the future direction of streamers. On the evening of May 1, Taobao Live invited virtual idols like Luo Tianyi and Le Zhengyi to stream. After Luo Tianyi appeared, the number of online viewers on Taobao reached as high as 2.7 million, with nearly 2 million people tipping and interacting. Earlier in March, Tide invited virtual idol Luo Tianyi for a Jingdong live stream of laundry beads, and in April, Li Jiaqi partnered with Luo Tianyi in an L'Occitane live stream. Although virtual idols/virtual streamers are still relatively rare, their power should not be underestimated. According to the "2019 Tencent Post-00s Research Report," the top three idols most mentioned by post-00s are Luo Tianyi, Hatsune Miku, and Wei Wuxian, all virtual idols. Virtual streamers can break through the physical limitations of human streamers, and besides controllable public relations risks, they may also reduce live streaming operational costs. With the application of AR/VR technologies in live rooms, virtual idols' selling may become more frequent. Additionally, fixed streamer groups are also a trend, such as the "CCTV Boys" live streaming actions. Appearing as a group makes it easier to arrange content, divide roles, and perform, and can also meet more diverse user preferences and aesthetic tastes. "Streamer groups" are somewhat equivalent to idol groups in the entertainment industry. The pairing of Li Jiaqi and his assistant can be seen as a two-person "streamer group." Since the assistant left the live room, Li Jiaqi has even been reported to be in poor condition. Shiqu hosted the Guangyao live room at the Guangzhou Live Festival main venue, with group streaming becoming mainstream. In summary, the future trends of streamers can be referenced from the development of the entertainment industry. Both virtual streamers and "streamer groups" are worth brand attention and investment. -06- Question 6: Where will top streamers go? Different streamers have different conversion efficiencies, which drives the Matthew effect in the streamer ecosystem, meaning brand traffic concentrates from mid-to-tail streamers (low-efficiency) to top streamers (high-efficiency). Streamers play the role of traffic hubs in e-commerce, which also increases the commercial bargaining power of top streamers/KOLs. Wei Ya once compared her live room to a "universal supermarket," and she has been called "Doraemon Wei Ya." It can be seen that Wei Ya's role is similar to "online Walmart." Li Jiaqi has publicly expressed hope to create a Chinese beauty brand renowned globally. Additionally, Xin Ba on Kuaishou has established the "Xinxuan" e-commerce platform, and he also has a considerable "master-apprentice" account matrix on Kuaishou. The increased bargaining power of top streamers/MCNs will break the previous interest distribution in the marketing chain, squeezing the profit space of other related parties. In real marketing, brands are relatively weak when facing top streamers, and top streamers have essentially become a channel platform. The direction top streamers take is of great significance to live commerce marketing. Although top streamer teams now own or hold shares in MCN institutions, for MCNs, the incubation of top influencers is accidental, and there is no established methodology. Papitube cannot incubate another Papi Jiang, Ruhun cannot incubate another Zhang Dayi, Meiwan cannot incubate another Li Jiaqi, and Qianxun cannot incubate another Wei Ya. Therefore, Shiqu predicts that top streamer teams, wanting to expand and capture more commercial value, will penetrate the upstream and downstream of the industry chain. Top streamers will have two major possible development directions: First, top streamers will gradually expand to the upstream and downstream of the commercial industry chain, especially in factories and supply chains. In extreme cases, they may even create their own brands or platforms, such as Xin Youzhi's Xinxuan platform and Li Jiaqi's anticipated self-created brand; Second, top streamers will gradually become trust endorsements for products, existing as another intermediary. For example, many brands/users believe that products Wei Ya has sold are of high quality and recognized as hit products. This can also be seen as a form of streamer IP value. Shiqu's brand live room in South China (home theme) -07- Question 7: Streamers beating celebrities, live streaming disrupting the entertainment industry? More and more celebrities are appearing in live rooms. Besides "variety show regulars" like Li Xiang, Wang Zulan, and Chen He, even popular actresses like Yang Mi and Fan Bingbing are appearing more frequently. Recently, Kuaishou announced major news that Jay Chou has joined the platform, marking his first Chinese social media account, called "the only one on the internet." According to industry sources, Jay Chou's entry will also test live selling. Live selling combines content flow and product flow, giving brands a clear value evaluation standard—sales data—which will potentially affect brand judgments of other KOLs, even celebrities, and even the entire entertainment industry. KOLs/celebrities joining live streaming has become the norm. Celebrities engaging in live selling can also be seen as a means of traffic monetization. Although celebrity popularity varies greatly and is closely related to media exposure, in live rooms, the simplest and most direct evaluation standard for brands remains sales. It is not difficult to find that many industry data reports on celebrities have begun to evaluate based on selling ability, while traditional marketing values like brand reputation and brand image are difficult to quantify. In fact, live streaming has had many attempts in the entertainment field. At the end of last year, Hu Ge visited Li Jiaqi's live room, and Li Jiaqi sold 250,000 movie tickets for the art film "The Wild Goose Lake" in 6 seconds, becoming a hot event in the film industry. In May this year, Liu Tao, under the alias "Liu Yidao," joined Alibaba, seen as a watershed for celebrity live streaming. Previously, celebrities mostly visited live rooms; now, celebrities are taking control of live selling. Celebrities like Yang Mi, Wang Zulan, Chen He, Wang Han, and Liu Yan are continuously demonstrating their "real" commercial value through live selling. Alibaba has also launched a grand celebrity live streaming plan, with Li Xiang and Li Xiang (Li Xiang? likely Li Xiang the host) making live selling their main career. Since the skill requirements for live selling are completely different from those for film and television performance, celebrities may experience some discomfort in live streaming. However, brands' emphasis on sales will invisibly shape the future form of celebrities and even the film and television business model. Additionally, celebrity live streaming may also impact current endorsement marketing. Some observers believe that celebrity live selling is a new "light endorsement" model. Of course, these remain to be observed long-term. In summary, "selling power" has become a more important commercial indicator for content creators like streamers/influencers/KOLs/celebrities, and may have profound effects on the future entertainment content ecosystem. -08- Question 8: Behind the live room, is the supply chain undergoing major changes? A live room can be seen as a product hub station: in front are massive user needs and data, behind are countless product factories and raw materials. Both ends rely on the live room for throughput, which to some extent gives live streaming the ability to reconstruct the supply chain. The reconstruction of the supply chain by live streaming mainly refers to the implementation of the "C2M" model. C2M means consumer-driven production: front-end collects consumer preference data, uses customization for agile production, and then products reach consumers directly. C2M has characteristics of no inventory, customization, and refinement, and is considered a future industrial model. C2M is not a new concept, but it has two major difficulties in implementation: First, front-end consumer preference big data is difficult to directly reach factories, and data volume is generally insufficient; Second, flexible supply chains are difficult to build seamlessly, with many coordination costs. This is why, although C2M was proposed in 2016, it has always faced significant resistance in implementation. But e-commerce live streaming has advanced the C2M process. Top streamers like Wei Ya and Li Jiaqi, on one hand, possess large amounts of user data and extensive product selection experience, with the ability to insight into user consumption needs; on the other hand, they have sufficient supply chain bargaining power to transmit user needs back to upstream factories, enabling customization. The C2M model has now been relatively maturely applied in categories like clothing and white-label daily necessities. It can be said that C2M has found a landing point in e-commerce live streaming. Of course, C2M under e-commerce live streaming is still customized production under large-scale effects, difficult to meet the unique customization needs of small groups. C2M remains a broad industrial digitalization challenge that requires multi-party efforts to promote industrial upgrading. Previously, Pinduoduo's "goods find people" social group-buying model, covering lower-tier markets and supporting "Pinduoduo factories," is often considered a representative of the C2M model. Now, Alibaba has launched the "Super Factory Plan" and "Billion-yuan Production Area Plan." During 618, Taobao Special Edition launched live streaming, promoting C2M customized goods, and introduced the "Super Factory Director Plan" focusing on factory director live streaming, seen as a direct challenge to Pinduoduo. The C2M battle is about to begin. -09- Question 9: Price butcher, distributor system broken and reorganized? The emergence of e-commerce years ago was seen as a challenge to the traditional distributor channel system. E-commerce eliminated some intermediate links and lowered prices, but it hurt traditional distributors' interests. Later, many brands used "e-commerce exclusive" products to avoid such issues, but the pressure on the distribution and pricing systems has always existed. Most live rooms are known for low prices. According to the China Consumers Association's "Online Survey Report on Consumer Satisfaction with Live Commerce Shopping," the top four reasons for purchasing after watching live streaming were: high cost-effectiveness (60.1%), liking the displayed product (56.0%), price discounts (53.9%), and limited-time/quantity discounts (43.8%). Ultra-low prices also pose a major challenge to the pricing system of traditional offline brand distributors, especially evident in Gree's live streaming. Dong Mingzhu's multiple live sessions in one month brought in a total of 7.6 billion yuan in sales, but a significant portion of these were orders from Gree distributors. According to Jiemian reports, some industry insiders suspected "fake orders," but Gree denied this. According to HUXIU, some distributors indeed reported that the live streaming price for certain models was lower than the distributor's purchase price. Dong Mingzhu also stated in her June 1 live room that she would transform her 30,000+ offline stores into "experience stores," "places to communicate and interact with consumers." This sends a clear signal: Dong Mingzhu is using live commerce to drive a transformation of the distributor channel. The reason is not complicated: when live room prices are lower than distributor purchase prices, the brand is essentially competing with distributors for market share, creating channel interest conflicts. But with live commerce becoming a future trend, traditional distribution channel transformation is imperative, and this is also the inevitable advancement of the "new retail" integrating online and offline. It is not hard to foresee that more and more traditional offline brands will concentrate resources on online e-commerce channels, with offline serving more as brand experience venues. Live selling will greatly accelerate this "new retail" process. Live commerce is a unique and interesting proposition of this era. From "everyone can live stream" to "live streaming changes everything," it does not seem far off. The future world is unpredictable, which is what makes human history interesting. What the future of live streaming will look like, no one can be sure, but one thing is certain—the future of live streaming is not live streaming. Source: Shiqu (ID: SocialTouchST), Author: Shiqu Tips will be paid 400-2000 yuan upon adoption.