In just a few short years, shopping by livestream has become all the rage in China. Think QVC online and on steroids.
Influencers, brands and retailers have swarmed apps like WeChat and Douyin — the Chinese version of TikTok — to hawk everything from makeup and clothes to cars and beef jerky.
Viola Zhou and Caiwei Chen, reporters at Rest of World, have been writing about this $500 billion market and how it’s changing in a stagnant Chinese economy. Chen explained to Marketplace’s Lily Jamali how livestream shopping took off in an explosive fashion during the pandemic.
The following is an edited transcript of their conversation.
Caiwei Chen: During that time, China was under lockdown. A lot of people were trapped at home. They couldn’t go out, they couldn’t go to a mall, they couldn’t go to the offline stores to shop for products. So, what they decided to turn to is a curated stream of online livestreams. These livestreamers will provide really good services. They will guide [consumers] through the decision process of buying a product, they will try clothes on, they will try on the makeup to demonstrate it. This became the start of how livestreaming shopping became an extremely diversified and sophisticated industry.
Lily Jamali: Who are the sellers?
Chen: At the beginning of the pandemic, we saw a lot of influencer livestreams. These streaming stars are very charismatic, they have a lot of sales experience, so they have their big, loyal following. These livestreamers tend to partner with different brands and companies and promote maybe 20 different products during one livestream of theirs. That is how a lot of people got drawn into livestreaming. But later in the pandemic, especially last year and early this year, we’re seeing a lot of brands and companies themselves starting their own livestreaming channels.
Jamali: Let’s talk about specific people that are doing this. For some, this is their whole job, like Austin Li, who is also known as the Lipstick King. Tell me about him.
Chen: Austin Li is probably the first person that will come to mind if you ask any Chinese person who has experience shopping in livestreams. Online, he’s sort of playing every young girl’s best friend kind of character. And because of how good he is at selling cosmetic products, he earned himself the title Lipstick King.
Jamali: I saw in your article that Li once sold a billion dollars’ worth of merchandise in one day. That is unreal.
Chen: That’s right. He has made a lot of miracles happen, and now he has a whole livestreaming company that has signed a lot of livestreamers to do this together with them and they have multiple branches.
Jamali: Let’s take a look at a video together of some of these influencers trying to make a sale on a platform that’s run by the same company as TikTok. Viola, what is this person selling?
Viola Zhou: This woman is selling a yogurt product. I think this channel is actually run by a dairy company in China actually. She’s basically telling parents that this product is very good for children because it contains a lot of fresh fruits, and it tastes really great.
Jamali: But what’s notable also is there’s not a lot of people watching this livestream, right?
Zhou: There are about nine people watching this livestream and because I took the screenshot as I was watching it, there’s basically just eight people who are watching it. And usually when you are livestreaming for a company, you would have your colleagues monitoring the show. Sometimes there are maybe two or three people who are actually, like, her colleagues, so basically, there are, like, very few people watching.
Jamali: That doesn’t seem like a very good sign.
Zhou: Yeah, it’s not very good. It’s not a very good show.
Jamali: Viola, in the article, you describe livestream shopping as a bubble. What signs are you seeing that that bubble is starting to pop?
Zhou: One factor is the economy on the whole is not doing as well as before. At the end of the pandemic, people were struggling to find jobs and people became less likely to do impulsive shopping online. Another factor is the industry has become really, really crowded. So, we just saw so many more channels and so many more products being listed.
Jamali: Anything you’d want to add to that, Caiwei?
Chen: Yeah, something I want to note is I think the profession has matured. Before, people had a lot of wild imagination and hopes for what livestreaming could be because the industry was growing rapidly. But currently, that dream, that bubble, has burst. We’re seeing the growing rate has significantly slowed. We’re not seeing that many people getting rich overnight. Young people have to go through more selective processes to go into these professions. The work has also become more demanding.
Jamali: Yeah. Tell me about that. You spoke to a couple of these livestreamers about what the job is like. Viola, what did they tell you?
Zhou: Individual livestreamers are feeling that their job is getting more difficult. Livestreaming is not an easy job. You have to keep talking for hours, usually like four to six hours, and you have to act superpassionate. You have to be really persuasive; you have to act like you are intimate friends with your audience. It’s really not easy. You have to show your sincerity and you have to know your products really well. So, it’s a very, very tough job. The reason why people are doing it is because it pays better than most other entry-level office jobs that you can find in China, but increasingly that is no longer, no longer the case. The people we interviewed said they are being asked to livestream for longer hours. And also, there are people who told us that because they work for a new livestreaming company or because the competition is so intense, that sometimes they would be sitting there talking for hours with zero people making purchases. One person described it as feeling for an entire month that she was speaking into a mirror, looking at herself and trying to have someone respond to her, but no one will respond. So, she felt like she was going crazy just by doing this job.
Jamali: And there are some companies that are trying to make this take off here in the U.S. Viola, do you think that American consumers will go for this?
Zhou: We need to see what happens in the next few months or even years. It takes a lot for the ecosystem to grow. First, consumers need to develop the habit of shopping while watching TikTok, basically. And on the other hand, in China, businesses are very used to giving out discounted products because they trust that the channel would help them sell a lot. But in many Western countries, retailers and businesses haven’t developed the habit of lowering their prices just for these livestreams. So consumers don’t have much incentive to buy from livestreams because, if the price is the same, many people would rather try it in a physical store.
A successful start has not always ended well for top livestreamers. Take Austin Li, the Lipstick King we talked about.
Last year, he disappeared from public view for a time. He was selling a Viennetta ice cream cake that bore a striking resemblance to a military tank, and his livestream suddenly cut out. The stream aired on the anniversary of the 1989 Tiananmen Square massacre — a man standing defiantly before Chinese tanks remains one of the most iconic images from that historic event.
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