China is by far the most advanced market when it comes to Video Commerce and Live Shopping. For years, Chinese consumers have been buying directly from livestreams, with more than 50% of the consumers regularly shopping this way.
However, the retail landscape in China is starting to change, as more international brands expand their efforts to win the hearts of Chinese consumers.
In this article, you will get a complete overview of the live shopping landscape in China and what opportunities there are for international businesses to enter this highly competitive and sought after market.
The Chinese video commerce landscape - all you need to know
Live shopping in China differs greatly from social commerce in the West in several ways.
First and foremost, almost all live shopping in China is platform-based. The retail landscape consists of a few, powerful marketplaces all offering their own livestream capabilities.
The streams are usually on 24/7, with a heavy emphasis on gamification. Shoppers can choose what streams to tune in to, and the marketplaces have algorithms pushing and promoting the best-performing streams, leading to fierce competition between retailers. Each platform values different metrics, with some requiring the streamed content to be unique in order to broadcast.
Chinese consumers are way more likely to purchase something from a livestream than we are in the West. Since the medium has a longer history, thus more familiarity and higher levels of trust, consumers are willing to spend even on big ticket items such as cars.
Another stark difference between Chinese livestreaming and Western social commerce is that livestreams serve as the new way of watching TV in China. It’s simply an integrated part of the entertainment rotation, making for more of an impulse-driven shopping experience.
Finally, being a livestream host in China is a very respected profession.
Hosting is a skill, and companies either cultivate their own talents for the screen or hire from host agencies. The “host to influencer pipeline is strong”, so to speak.
Some of the most successful hosts even have their own channels on the leading marketplaces, selling airtime to brands looking to advertise.
The Tough Reality for Social Commerce and Live Shopping in China
The unique nature of the Chinese retail market also represents some unique challenges that - especially international brands - are looking to curb.
Because of the intense competition between marketplaces and live shopping platforms, topline sales are struggling. Many retailers feel like it’s a race to the bottom, having to provide bigger and bigger discounts to sell goods and be favored by the algorithms. Combine this with sky high return rates - a natural consequence of the impulse-based shopping behavior of consumers - and you have severely suffering margins.
The response to this situation has been brands looking for ways to strengthen their D2C channels, taking ownership of both their content, pricing and branding.
The solution - a new live shopping micro-trend
Investments in private domains are on the rise in the Chinese market, with brands looking to drive more traffic to their own websites and apps.
This is a well-known strategy from the western sphere, allowing for more control of the customer experience. The challenge in China, however, is the general consumer behavior of platform-first shopping, meaning that the value proposition should be significantly stronger on businesses’ owned domains.
To add a layer of familiarity, large, international players are implementing their own live shopping offering directly in their apps or on their websites to accommodate the preferred way of shopping amongst Chinese consumers. They are not building the software themselves, however. This is where Bambuser steps in.
Expand your business with Bambuser
As the world’s leading provider of live shopping and virtual commerce software, Bambuser has all the functionalities in place to accommodate the Chinese shoppers' demands.
We have recently expanded our business to this region, building and embedding our technology directly into the Chinese apps, such as WeChat, for our international clients to take full advantage of today.
The world has already seen industry leading brands, such as Zara, bringing live shopping to their own platforms with great success. The audience is responding positively, with increased traffic and much higher conversion rates as a result.
By enticing customers with exclusive drops, early access and special perks, brands are successfully taking ownership of the customer experience, all while packaging it in a way tailored to the Chinese consumer.
We predict this trend will pick up massively in 2025, with large, international corporations and luxury brands leading the way.
Are you ready to expand your business in China, too?
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