The TikTok issue has been in the news for some time. Thus, ByteDance is looking for other markets and opportunities. For some time now, Bytedance has been engaging in live-streaming e-commerce business. It is turning its Douyin platform into a live-streaming e-commerce platform. It is becoming just like Taobao Live.
How does Douyin turn into Douyin e-commerce?
Users can build Douyin e-commerce stores on the Douyin platform conveniently. Vendors can either create a native Douyin e-commerce store or link up their Taobao or JD.com store. Afterwards, all the vendor has to do is adding live-streaming and short videos, and sales can start.
What’s Bytedance’s intention to turn Douyin into Douyin e-commerce? The market!
So why does Bytedance want to turn Douyin into Douyin e-commerce? The reason herefore is pretty obvious. The live-streaming e-commerce market started out quite small in China. Its size was merely 19 billion RMB in 2017. Since then, the market has expanded exponentially by approx. 50 times. For 2020, it is estimated that the live-streaming e-commerce market in China will reach 961 billion RMB!
Currently, Taobao Live is the largest live-streaming e-commerce platform. In 2019, the platform had more than 400 million users and its GMV (Gross merchadising volume) was more than 200 billion RMB! That is half of the entire market! In 2020, the Covid-19 pandemic had a huge impact on Taobao Live’s development. The number of new merchants on Taobao Live increased by 719% from January to February.
Thus, all live-streaming platforms are trying to follow suit and find their sweetspot within the market. And why not? Platforms like Douyin and Kuaishou have huge number of users – Douyin is the biggest with over 400 million DAU (daily active users) and Kuaishou comes in second with over 350 million DAU.
So, all Douyin has to do is turning its huge DAU into GMV? It’s that simple right?
Is Douyin e-commerce successful?
Well, Douyin has huge DAU, but its GMV doesn’t reach the same level. For 2020, Douyin has set an ambitious GMV target of 200 billion RMB. Yet, its actuals are not that good yet.
In April this year, Douyin e-commerce achieved a GMV of 67 million RMB. And in July its GMV nearly doubled to 130 million RMB. Even though the growth is impressive, these numbers are a far cry from the GMV target of 200 billion RMB. It seems that it’s not easy to turn DAU into GMV.
This is a really interesting development. Even though Douyin has so many users, it cannot transform into an e-commerce platform overnight. It will take some time until it can rival Taobao Live.
Matter of fact, right now, its biggest rival is Kuaishou. In 2019, Kuaishou achieved a live-streaming e-commerce GMV of 35 billion RMB. For 2020, it has set a GMV target of 250 billion RMB.
What do you think of live-streaming platforms like Douyin engaging in e-commerce? How do you think Douyin will develop in the future? Do you think TikTok will go down a similar path? Let me know your thoughts in the comments section below 👇