Chinese authorities are counting on live streaming to stimulate retail sales in 2023

Chinese authorities are counting on live streaming to stimulate retail sales in 2023

Chinese authorities are counting on live streaming to stimulate retail sales in 2023

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The macroeconomic factor, coupled with the Covid-19 outbreak, has dampened retail sales in China. According to government data, Chinese retail sales of social consumer goods declined by 1.8% to 4 trillion yuan in December 2022, when compared to the year before. To revive economic growth and drive retail sales, Chinese authorities are counting on live streaming to stimulate sales in 2023.

  • Shenzhen, the southern technology hub in China, announced the plan to drive retail sales growth, which has been reeling under the pressure of the pandemic outbreak and economic slowdown. City authorities, in March 2023, unveiled a plan that focused on transforming the region into a live-streaming e-commerce hub by 2025.
  • The plan aims to attract 50 well-known influencers to Shenzhen and cultivate another 3,000 live streamers over the next three years. The goal of the plan is to achieve over 300 billion yuan in sales by 2025. The increasing focus on live streaming is part of the strategy to drive consumption in Shenzhen.

To expand the live-streaming sector in Shenzhen, city officials are planning to incubate and attract at least 100 top-tier agencies. Furthermore, Shenzhen is also building 50 industrial estates that will be dedicated to driving the growth of the live-streaming sector. With the ambitious goal to achieve 300 billion in retail sales, Shenzhen is seeking to catch up with the well-established live-streaming sector in China.

Hangzhou, which is home to Alibaba Group Holding and 69,000 live streams, achieved 503 billion yuan in sales. According to government data, the firm achieved the following results during the first ten months of 2021. Shenzhen, in comparison, was able to achieve only 152 billion yuan in sales during the first 11 months of 2022. This shows the major disparity between the retail sales in two of the leading Chinese cities.

To achieve its ambitious plan, Shenzhen also announced that it will assist e-commerce platforms having headquarters in the region. Moreover, city officials are also tasked with exploring new technologies such as artificial intelligence, metaverse, and virtual idols to drive retail sales growth over the next three years.

Back in 2020, Shenzhen announced similar plans to boost the growth of its live-streaming sector. The focus, during the time, was to nurture 1,000 influencers and to develop 10 live streaming bases. As the live-streaming segment recorded strong growth during the global pandemic outbreak, city officials have now announced to double down on their efforts in the e-commerce sector to accelerate retail sales and declining consumption.

In China, the live streaming market has been a growing success and many leading global e-commerce players have tried to replicate the success in their home markets. Amazon and Flipkart are among the many that have launched live-streaming capabilities for their shoppers globally. Even Chinese tech giants such as ByteDance have launched such shopping capabilities in the global market to accelerate their growth.

In China, the popularity of live streaming is also engulfing the education sector. Many K12 education institutions, such as New Oriental Education & Technology Group and Doushen Education, are betting on the live-streaming e-commerce sector. This shift to live streaming was led by the introduction of the Double Reduction Policy in 2022.

  • Teachers of these institutions have become widely popular on live-streaming platforms such as Douyin. For New Oriental, the number of live-streaming accounts on Douyin has surged from one to six, since its premiere on December 28, 2021. These accounts have attracted 36 million fans and have launched a total of 52 self-operated products.
  • The popularity of live streaming in the education sector can also be seen in the financial numbers reported by New Oriental. During the two period, from June to August 2022, New Oriental recorded an operating profit of US$78 million up 140.5%, which is significantly higher compared to the year before.

Alongside New Oriental and Doushen Education, TAL and Scholar Education have also entered the live-streaming sector. These institutions are also publishing short videos on platforms like Douyin to tap into the growing popularity among students.

Going forward, PayNXT360 expects more K12 education institutions to look at the growing popularity of live-streaming in their segment and adopt a similar growth strategy. This, coupled with the increased focus of city officials on the live-streaming market will, therefore, keep aiding the growth of the social commerce market in China over the next five years.

To know more and gain a deeper understanding of the Chinese social commerce market, click here.

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