Published: 12:06, June 20, 2024
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AI-powered livestreaming rivalries heating up
By Fan Feifei
A seller promotes products through livestreaming in Haian, Jiangsu province, during 2024 June 18 shopping gala. (GU HUAXIA / FOR CHINA DAILY)

Competition in China's booming livestreaming e-commerce sector has intensified during this year's June 18 shopping carnival as major online retailers ramped up efforts to promote sales and entice a more diversified customer base via livestreaming fueled by advances in technologies, such as 5G and artificial intelligence.

Data from Taobao, Chinese tech heavyweight Alibaba Group's online marketplace, showed that sales from 38 livestreaming rooms on Taobao surpassed 100 million yuan ($13.8 million) as of midnight on May 31.

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Turnover from livestreaming sessions related to electronic device sales hosted by e-commerce giant JD's professional procurement and marketing teams surged tenfold year-on-year in the first hour of the midyear promotional gala that kicked off at 8 pm on May 31.

Dong Yuhui, a top livestreamer from East Buy, the livestreaming e-commerce arm of Chinese private tutoring company New Oriental, promoted a variety of products like smartphones, drones, projectors and floor-cleaning machines during a live broadcast via his Douyin livestreaming room on May 28. The sales surpassed 10 million yuan in just one hour, while orders placed by viewers exceeded 10,000 within 20 minutes.

Zhu Keli, founding director of the China Institute of New Economy, said e-commerce via livestreaming will not only improve the consumer shopping experience, but also attract more online traffic and bolster sales of e-commerce platforms.

With the rapid development of 5G, AI and other cutting-edge digital technologies, livestreaming will be more widely applied in e-commerce and become an important driving force promoting the growth of e-commerce, Zhu said.

Consultancy iiMedia Research said that revenue of China's livestreaming e-commerce sector reached 1.7 trillion yuan last year, up 16 percent year-on-year. This figure is expected to reach 2.14 trillion yuan in 2025.

"Livestreaming has become a key method widely adopted by consumer brands to retain existing users, attract new customers and boost sales revenue," said Cui Lili, director of the Institute of E-commerce at the Shanghai University of Finance and Economics.

Cui said there is an interdependent relationship between top livestreaming influencers and platforms, and that livestreaming hosts or internet celebrities should disseminate high-quality content to attract more user traffic, not just sell products.

In addition, short-video platforms are doubling down on efforts to expand their presence in livestreamed shopping, and online traffic volume is shifting from traditional e-commerce platforms to apps such as Douyin and Kuaishou, as well as social media platform Xiaohongshu, said Mo Daiqing, a senior analyst at the Internet Economy Institute, a domestic consultancy.

Livestreaming offers a new model of operations for online marketplaces and could settle the problem of information asymmetry, said Chen Tao, an analyst with internet consultancy Analysys in Beijing, adding such services have gained popularity among younger consumers.

This promotional method can allow hosts to interact with customers in real time and answer their queries, which will significantly improve shopping experiences and encourage more shoppers to make purchases online, Chen said.

Global consultancy PwC said in a report that with only a few years of development, direct sales via livestreaming have emerged as a promising channel, leveraging the strength of both key opinion leaders and key opinion consumers.

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"As competition in the livestreaming e-commerce sector heats up, livestreamers will no longer be limited to a certain online marketplace and will be able to choose different platforms to increase their exposure and rev up sales," said Jiang Han, a senior analyst at market consultancy Pangoal.

Jiang said authorities should formulate and improve relevant laws and regulations to ensure the healthy development of the livestreaming e-commerce sector, strengthen the supervision and testing of product quality, and protect the legitimate rights and interests of consumers.

He also called for establishing a ranking system for livestreaming e-commerce providers and giving assessments of anchors and merchants to improve the transparency and integrity of the modality.

Livestreaming featuring virtual hosts has also emerged as a new trend. Global consultancy Forrester said more business-to-consumer (B2C) brands are using virtual hosts to attract digital-savvy and novelty-seeking young consumers, as they cost less than human talent and reduce risks such as celebrity scandals.

Experts said the use of virtual hosts in livestreaming sessions can bring a feeling of freshness to users, while brand owners can attract new consumers via this innovative method.