In recent years, the landscape of e-commerce has undergone a seismic transformation, with the dramatic rise of live-streaming shoppingThis trend blossomed around 2019, as platforms like Taobao, JD.com, Douyin, and Kuaishou embraced the convergence of live-stream technology and retailWhat emerged was a new shopping phenomenon that rapidly gained traction, propelling the live-streaming e-commerce sector to unprecedented heightsInitially, growth skyrocketed at an astonishing rate of 245.9%, but projections from iResearch suggest that by the years 2024-2026, growth rates will stabilize around 18%, indicating a maturation of this once explosive sector.

This evolution signifies a transition from explosive interest to a more normalized state of business, or perhaps a decline in raw noveltyWith diminishing innovative content from suppliers and a limit to consumer attention spans, the number of viewers and conversion rates from live-stream purchases are now plateauing

As competition intensifies, the cost of attracting viewers has reached new heights, driven not only by the escalating price of traffic purchases but also by the fees associated with high-profile hosts and myriad operational investments.

Compounding these changes is a move towards regulation and standardization, with increased scrutiny aimed at preventing false advertising, unreasonable marketing practices, and fraudulent transactionsGone are the days of aggressive promotional strategies, as the industry now shifts towards a more sustainable and accountable model.

Recent media reports illustrate this trend vividlyFor example, data from Douyin shows that its gross merchandise volume (GMV) growth plummeted from 60% at the beginning of the previous year to below 20% by SeptemberSimilarly, Kuaishou recorded a GMV growth rate of just 15% in the third quarter, indicating a plateau in overall performance compared to previous quarters

• 10-Year U.S. Treasury Yields Rise
• Surge in U.S. Treasury Bonds
• The End of Prosperity in the U.S. Stock Market
• Lianlian Digital Lists on HKEX, Boosting Cross-Border Payments
• NVIDIA Stock Plunges Over 6%

As these digital platforms begin to exhibit signs of growth stagnation, the industry faces increasing scrutiny about its future viability.

As we look ahead to 2024, it becomes apparent that this pivotal year may redefine the contours of live-streaming e-commerceRather than succumbing to a narrative of decline, it is more insightful to explore what persists beyond the initial excitement—whether it be a redefined business model, sustainable operational frameworks, or a deeper evolution in consumer buying habits.

The factors contributing to the so-called “growth ceiling” are both intricate and criticalLive-streaming e-commerce, at its essence, emerges from the intertwining of platform content properties with retail functionalitiesThus, the limitations faced by this model are directly tied to the proportion of e-commerce information within the broader spectrum of content available to users.

When the prevalence of e-commerce-related content surpasses a certain threshold within this content ecosystem, user fatigue may ensue, resulting in diminished advertising effectiveness

By monitoring user engagement metrics—such as viewing time, retention rates, and conversion rates—following an increase in e-commerce content, platforms can estimate the limits of their market potentialFor example, in early 2022, Douyin’s experimentation revealed that an e-commerce content share of more than 8% substantially reduced user retention and engagement on its main site.

In anticipation of this growth limitation, leading players in the live-streaming e-commerce arena have proactively prepared for transitionsWhile short video platforms initially expanded their e-commerce capabilities primarily through impulsive consumer behavior, they now strive to guide users toward intentional shopping experiences in a bid to exceed previous limitations.

During 2024, these transformations have accelerated with Douyin introducing an independent shopping app in March, followed by a search app in September

This pivot towards structured shopping environments reflects a desire to optimize user experiences, allowing for enhanced user searches as a way to locate desired products efficiently.

Quantitative data from QuestMobile highlights this transition: from March to November 2024, Douyin’s shopping app experienced a compound monthly growth rate of 42.8% for active usersNotably, many new users came from traditional retail platforms like Taobao and PinduoduoHowever, users leaving Douyin were often heading to these same rival platforms, suggesting an ongoing competitive struggle.

Furthermore, initiatives promoting broader shopping scenarios are becoming increasingly evident in the platform’s marketingFor instance, during the recent Double 11 shopping festival, Douyin reported that revenue from shelf-based functionalities constituted 42% of total sales, while Kuaishou reported a staggering 110% increase in GMV from general merchandise channels.

Another intriguing shift lies in the platforms' renewed focus on the compatibility of live-streaming sales with various merchant types and product categories in the future.

Reporting from 36Kr indicated that Douyin performed another round of restructuring in December, aligning the oversight of industry operations into a restructured A and B group model under a unified leader

Historically, Group A targeted brand merchants, emphasizing GMV growth; meanwhile, Group B focused on smaller and white-label sellers, aiming for order volumeHowever, as Group B’s performance fell short of expectations, there has been a decisive shift to prioritize GMV growth across all sectors of the platform.

In essence, brand and white-label merchants possess inherently different strategies for live-streaming salesHigh-value non-standard products necessitate passionate presentations from hosts, while white-label goods typically focus on rapid sales conversions through aggressive, high-frequency streamsBrands can afford deeper marketing budgets; yet, overexpenditure on live-streaming operations can dilute price competitiveness.

Consequently, the trend of segmentation is likely to become more pronounced, with shelf-based shopping becoming the primary focus for future revenue ambitions among live-streaming e-commerce platforms.

What remains clear is that consumers are emerging from a period of heightened emotional engagement, rallying behind a more measured approach to shopping, while we also see a noticeable de-emphasis on high-profile content creators

Streamers play a pivotal role in this evolving ecosystem, directly linking consumers with products in a personable, engaging mannerYet, as the industry matures, the reliance on individual personalities is waning.

Throughout 2023, several prominent controversies surrounding key influencers brought their credibility into questionThe scandal involving Li Jiaqi in late 2023, for instance, provoked widespread discussion about the influencer marketing modelCritics pointed to emotional responses from top hosts during public scrutiny, resulting in backlash and muted responses from fansAdditionally, incidents of product misrepresentation intensified concerns about the accountability of top streamers, who once benefitted from the impression of providing superior value.

As consumers grow more discerning, it appears that the previous model of concentrating traffic around a handful of influential hosts is on the decline

This shift is accompanied by an increasing desire for niche, localized content that caters to specific consumer interestsEmerging influencers are beginning to shape market trends, exemplified during the previous Tianmao 618 festival where a rising wine influencer recorded over 10 million in sales in just 43 minutes.

Platforms have also begun incentivizing merchants to explore self-broadcasting, as typical industries observing notable self-broadcasting sales exceed 50%. This approach provides brands with tighter control over finances and fosters a closer connection with their consumer base, facilitating more effective multichannel marketing strategies.

As live-streaming evolves from a sensational sales phenomenon into a foundational aspect of the e-commerce sector, we are still in the early chapters of this ongoing taleThe reemergence of essentials in nurturing a genuine consumer connection reflects a notable milestone in the journey ahead.

To conclude, the industry's latest phase emphasizes the critical need for recalibration of strategies and expectations

Beyond the staggering sales figures that characterized the industry's heyday, the true legacy of live-streaming e-commerce may lie in its ability to redefine core retail narrativesThis shift has irrevocably embedded content creation into the fabric of e-commerce evolutionTraditional retail frameworks now eagerly adopt content strategies, recognizing that the influencer-led approach has given way to more nuanced forms of engagement that encompass storytelling, deeper product narratives, and interactive elements.

With platforms actively pursuing new directions—such as tailored narrative marketing approaches and real-time consumer engagement methodologies—the future of live-streaming e-commerce promises to be enriched by diverse avenues and surprising innovationsHowever, adjusting expectations will likely remain a pivotal theme, as platforms strive to invent fresh solutions in an increasingly complex marketplace.