It’s been a great year for ByteDance, the Chinese startup behind the viral video sharing app TikTok. Monthly active users on the app have skyrocketed, with the latest clocking in at a staggering 800 million+. It’s safe to say the people waiting for TikTok to not be a thing anymore, may be waiting for a very long time.
With that in mind, ByteDance has just recently began dipping their toes into the “Live commerce” industry — mini infomercials for the smartphone age. Live commerce is projected to become a 961 billion yuan ($135 billion) industry this year, according to Chinese data provider iResearch. That is double the year-earlier figure, and nearly one-tenth of all Chinese online shopping.
Most of ByteDance’s income currently stems from sales of advertising on TikTok. The tech monolith looks to diversify its earnings by expanding into e-commerce, but it faces the virtual adversaries Alibaba & JD.com which currently dominate 80% of the market.
ByteDance introduced in-app purchasing for Chinese users on TikTok this spring. Previously, those watching live commerce videos on TikTok would order products through Alibaba and other e-commerce sites.
Bailian Group, which runs four No. 1 Department Stores in Shanghai, started live sales on TikTok in May. On the 1st day, they reported an impressive 300 million yuan in turnover in just 3 hours.
ByteDance has also recruited Luo Yonghao, an internet celebrity and entrepreneur famous for his conversational style. Luo started streaming live commerce videos on TikTok in April, and his content generated sales of 170 million yuan in just 3 hours on the first day!
Ever since corona virus devastated China, retail sales have slumped prior-year numbers. Live commerce has become the antidote, with frenzied sellers rushing towards it seeking an edge.
Live commerce differs from regular commercials in that anyone beyond commercial brands can participate. Streamers range from ordinary business owners to models and online influencers. This feature has the potential to further evolve e-commerce as we currently know it. Product and brand promotions will be that much more in your face and in the hands of your favorite influencer, all conveniently integrated within social platforms.
Success hinges on utilizing TikTok’s interactive app features and vast army of private content producers. Live streamers of various niches have already developed a vast following of fans.
Live commerce vids have a chat feature letting viewers communicate with the streamers. Unlike traditional picture or video ads, a seller can execute a more persuasive pitch for the product, giving them an edge.
Meanwhile, livestream commerce has yet to become a thing in the United States. This means the market is still untapped and prime for a takeover. Combine that with the large list of TikTok celebrities who already have millions of followers, and ByteDance has a powerful e-commerce weapon at their disposal.