Live commerce is redefining how consumers shop online, especially in Asia, where it has grown into a $700 billion market, accounting for nearly 20% of total online retail sales in China. In stark contrast, live commerce in the Western world remains in its infancy, with much potential yet to be tapped.

This article explores the success of live commerce in Asia, its impact on consumer behavior, and how Western brands can leverage these strategies to enhance their online presence and sales.

For the busy — 1 minute summary.

Live commerce in China is a $480 billion industry, driven by the influence of Key Opinion Leaders (KOLs) like 小杨哥 (Xiaoyang Ge). These influencers engage millions of followers through interactive live streams, creating an immersive shopping experience that converts viewers into buyers almost instantly.

For the curious — 3-minute summary.

Live commerce has revolutionised online shopping in China, growing into a $480 billion industry by 2022. Central to this growth are KOLs like 小杨哥 (Xiaoyang Ge), who use platforms like Douyin and Taobao Live to connect with audiences in real time. This format allows for immediate interaction, creating a sense of urgency that drives sales. While still emerging in the West, live commerce offers valuable lessons for brands looking to innovate their marketing strategies.

For the serious — 10-minute summary.

Live commerce, which combines live streaming with e-commerce, has become a dominant force in China’s digital economy. With sales reaching $480 billion in 2022, this model is driven by KOLs like 小杨哥 (Xiaoyang Ge), who blend entertainment with product promotion to engage massive online audiences. As Western brands seek to replicate this success, they can learn from the strategies employed by Chinese KOLs, including the use of multi-platform reach, creating urgency, and building authentic connections with consumers.

The Rise of Live Commerce in Asia

In Asia, particularly China, live commerce has become a dominant force in e-commerce, blending the entertainment of live video with the immediacy of online shopping. Platforms like Taobao Live and DouYin (China’s TikTok) have turned live commerce into a cultural phenomenon, with some live streamers generating millions in sales within hours. This success is driven by a blend of factors, including the influence of social media, the integration of real-time shopping experiences, and the ability to directly interact with viewers. China’s live commerce market has seen unprecedented growth, soaring from $28 billion in 2019 to $110 billion in 2022. This is a whopping of 285% increase over these years! Live commerce now accounts for about 10% of China’s total online retail sales, underscoring its importance in the e-commerce landscape.

Key Figures:

• $700 billion: Estimated market size of live commerce in China as of 2023. The live streaming e-commerce market in China reached nearly five trillion yuan (approximately $704 billion USD) in 2023.
• 20%: Proportion of total online retail sales in China generated by live commerce. A remarkable 20% from live commerce sales.

$14 Million Sales In An Hour 

KOLs like Xiaoyang Ge and Da Yang Ge (siblings) are pivotal to the success of live commerce in China. With a following of over 125.5 million, they engage with their audience through entertaining and informative live streams that often lead to products selling out within minutes. Their approach demonstrates the power of influencer-driven marketing in today’s digital economy. On the evening of April 27th 2024, at 6:50 PM, Xiao Yang Ge and Da Yang Ge officially resumed their broadcast on Douyin (China’s TikTok), drawing a massive audience. By 7:30 PM, Douyin reported that “Crazy Xiao Yang Ge” had climbed to 7th place on the platform’s live-stream popularity chart and 10th on the overall hourly ranking. During the nearly two-hour live stream, viewership soared above 14 million. Within just 13 minutes, they sold 40 million yuan worth of products, reaching 80 million yuan in 22 minutes, and surpassing 100 million yuan in sales within an hour (Approx $14 Million) . Xiao Yang Ge announced during the stream that he had “broken his own sales record.”

The Multi-Million Dollars Method and System

小杨哥 (Xiao Yang Ge) is a well-known live commerce personality in China, often referred to for his innovative slicing method and system in the live streaming commerce space. Here’s a brief overview:

1. Slicing Method:

Definition: The slicing method involves breaking down a live stream into smaller, bite-sized segments that are more engaging and easier for viewers to consume. Each segment focuses on specific aspects of the product or features, creating a dynamic and engaging presentation.

Application: Xiao Yang Ge uses this method to keep his audience engaged throughout the live stream. By dividing the content into segments, he can maintain viewer interest and highlight different product attributes effectively.

2. Slicing System:

Technology and Tools: The slicing system involves using advanced tools and technologies to manage and organise live streaming content. This includes software for video editing, real-time analytics, and audience engagement tools.
Benefits: This system allows for better management of live streams, ensuring that the content is delivered in an organised manner. It also helps in analysing viewer behavior and preferences, enabling real-time adjustments to the content strategy.

Engagement Metrics
Xiaoyang Ge’s live streams attract hundreds of thousands of viewers at any given time, with conversion rates reaching up to 30%. This level of engagement far exceeds the typical 1-2% conversion rate seen in traditional e-commerce, highlighting the effectiveness of live commerce in driving sales.

 

Strategies For Success In Live Commerce

Content that Resonates

Xiaoyang Ge’s success lies in his ability to create content that resonates deeply with his audience. By combining humor, cultural relevance, and useful product information, he builds a strong connection with viewers, making his recommendations feel personal and trustworthy.

Strategic Partnerships and Collaborations

Collaborations with brands are central to Xiaoyang Ge’s strategy. By selecting products that align with his audience’s interests, he ensures that his promotions are both relevant and effective. This approach not only drives sales but also strengthens the trust between Xiaoyang Ge and his followers.

Multi-Platform Strategy

Leveraging multiple platforms like Douyin, Taobao Live, and Kuaishou allows Xiaoyang Ge to reach a broad and diverse audience. Each platform offers unique features that cater to different viewer segments, maximising visibility and engagement.

Creating Hype and Urgency

One of the key tactics in live commerce is creating a sense of urgency through limited-time offers and exclusive product drops. Xiaoyang Ge excels at generating FOMO (fear of missing out), encouraging viewers to make quick purchasing decisions during his live streams.

Is Live Commerce Popular in the Western World?

While live commerce is a well-established industry in China, it is still gaining traction in the Western world. In markets like the U.S. and Europe, live commerce remains an emerging trend, with potential for significant growth. Western brands can benefit from adopting the strategies that have proven successful in Asia, integrating them into their digital marketing efforts to engage audiences more effectively and drive sales.

Why Live Commerce is Booming in Asia

Several factors contribute to the explosive growth of live commerce in Asia:

• High Smartphone Penetration: The widespread use of smartphones and high-speed internet connectivity makes live streaming accessible to a large audience.
• Cultural Integration: Live streaming has become deeply integrated into social media culture in Asia, with influencers and brands regularly using it to engage with their audiences.
• Interactive Experience: The real-time interaction between hosts and viewers creates a sense of community and urgency, driving impulse purchases.
• Influencer Power: Influencers play a crucial role in promoting products during live streams, leveraging their credibility and relationship with followers to drive sales.

Lessons for Western Brands

Western brands have much to learn from the success of live commerce in Asia. Here are some key strategies they can adopt:

• Embrace Influencer Collaborations: Partner with influencers who resonate with your target audience to create authentic and engaging live shopping experiences.
• Leverage Multi-Platform Reach: Expanding beyond traditional social media platforms to include emerging live streaming platforms could open up new avenues for reaching and engaging with target audiences.
• Create a Sense of Urgency: Use limited-time offers, exclusive products, and real-time interactions to encourage immediate purchases.
• Focus on Mobile-First Experience: Optimise the live shopping experience for mobile users, ensuring seamless navigation and easy checkout processes.
• Build a Community: Foster a sense of community and connections by engaging with your audience during live streams, responding to their questions, and making them feel part of the brand. Learning from KOLs like Xiaoyang Ge, Western influencers and brands can focus on building more authentic and relatable connections with their audiences, which is key to driving higher engagement and conversions.
• Learning from the Asian Model like Interactive Engagement: Western brands can enhance customer engagement by incorporating live streaming into their e-commerce strategies, offering real-time interaction that adds value to the shopping experience.

Potential Challenges in the Western Market

While the potential for live commerce in the Western world is significant, there are challenges to be aware of:

• Cultural Differences: Live commerce must be adapted to fit the cultural norms and consumer behavior of Western audiences.
• Platform Integration: Western social media platforms are still evolving their live shopping features, and brands need to navigate these changes strategically.
• Trust and Authenticity: Western consumers may be more skeptical of influencer marketing, so building trust and authenticity is crucial.

Key Lessons 

• Live commerce is a powerful tool that has reshaped e-commerce in Asia especially China and holds immense potential in the Western market.
• Western brands can learn from the Asian model by embracing influencer collaborations, leveraging social media platforms, and creating engaging, real-time shopping experiences.
• Adapting live commerce strategies to suit Western cultural and market conditions is essential for success.
• Brands should focus on building trust, authenticity, and community through their live commerce efforts.

Live commerce has transformed online shopping, becoming a major trend in Asia and expanding into Western markets. According to McKinsey, this trend is driven by the ability of live commerce to create highly engaging and interactive shopping experiences. Influencers like Xiao Yang Ge have leveraged these elements to achieve impressive sales figures by utilising real-time interactions, personalised content, and exclusive offers.

Xiao Yang Ge’s success can be attributed to his unique slicing method. This strategy involves breaking live streams into smaller, focused segments, which keeps viewers engaged and highlights various product features. This method not only boosts engagement but also capitalises on technological advancements to enhance the shopping experience.

While live commerce offers exciting opportunities, it also comes with challenges. According to McKinsey, brands must address these issues effectively to succeed. Brands aiming to succeed in this space must navigate these challenges while leveraging the powerful engagement tactics that live commerce offers.

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