[Dongeul Dongeul] Live Broadcasts Even on the Sea... China is Now in the 'Daihuo' Craze

Booming Live Commerce Industry in China
Market Size Estimated at $420 Billion
Alibaba Launches Influencer Training
Chinese Government Struggles with Broadcast Censorship

Last February, the overpass in Gulin City, Guangxi Zhuang Autonomous Region, China, was bustling with about twenty people despite the cold weather. They sat apart on mats, speaking to someone across their smartphone screens as if on a video call. Broadcasting lights emitting dazzling brightness and filming equipment were lined up everywhere on the overpass, leaving hardly any space to step.

These people are live streamers selling products on Douyin, a Chinese video platform. AFP reported on their outdoor broadcasts on cold winter nights, introducing the live commerce craze sweeping China.

Daihuazhoubao is broadcasting from the overpass in Guri-in City, Guangshi Manchu Autonomous County.

Live commerce refers to an online channel where sellers introduce and sell products in real time through video streaming. In China, live commerce is called ‘Daihuo (帶貨),’ meaning to carry goods. The hosts leading the broadcasts are called ‘Zhubo (主播),’ meaning broadcaster, combined as ‘Daihuo Zhubo (帶貨主播).’ Daihuo Zhubo have become indispensable to Chinese e-commerce platform companies like Alibaba by selling enormous quantities of goods.

Although live commerce has attracted attention in Korea as well, it has not gained popularity enough to become a societal trend like in China. So, why has live commerce become so popular specifically in China?

◆Rapid Growth Triggered by COVID-19...Evolving into Entertainment Content

The background lies in COVID-19. Due to the Chinese government’s strict quarantine policies and city lockdowns, Chinese people had a difficult year last year. In a situation where going out was difficult, live commerce selling everything from cosmetics to home appliances became a very convenient shopping channel.

On the other hand, live commerce provided great enjoyment beyond simple shopping functions. Influencers known as Wanghong appeared on live commerce, captivating viewers’ attention. For Chinese people spending dull time during COVID-19, their star power and flashy eloquence brought joy.

Daihuazhubo conducting live commerce.
[Image source=Baidu]

Live commerce has gradually evolved beyond shopping functions like home shopping into a kind of entertainment content. Wanghong would call out the names of long-time fans during broadcasts and treat viewers like fan club members.

The interactive communication feature is also cited as a reason for live commerce’s popularity. When viewers requested product explanations through chat windows, the hosts responded immediately. This relieved the frustration of Chinese people who could not go out to buy goods themselves.

◆Alibaba to Train 200,000 Influencers...Fierce Competition in Live Commerce

As live commerce gained huge popularity, competition among streaming platforms intensified. ByteDance’s Douyin and Kuaishou, leaders in China’s short-form content market, are threatening Alibaba and JD.com, which have dominated the online shopping industry for over 20 years, by focusing on live commerce.

Chinese Wanghong 'Li Ziqi'
[Image source=Baidu]

In response, Alibaba announced plans to train 200,000 Wanghong who will conduct live commerce in the future. It also promised to support 100,000 live streaming account holders with annual sales exceeding 1 million yuan (approximately 191.27 million KRW) and 1,000 live streaming studios through its subsidiary Taobao.

Daihuo Zhubo leading live commerce are also earning huge profits. Li Jiaqi, a famous Chinese Wanghong with 80 million followers, sold 15,000 lipsticks in just one day, generating sales of 2.216 trillion KRW. Following this event, Li Jiaqi earned the nickname ‘Lipstick King’ and made a staggering 27.4 billion KRW in 2019 alone.

A Daihuazhoubao in China is broadcasting from a fishing boat floating on the sea.
[Image source=The Guardian]

Daihuo Zhubo are fiercely competing, dreaming of becoming the next Li Jiaqi. On Chinese live streaming platforms like Douyin, broadcasts selling products in extraordinary ways to capture viewers’ attention are aired daily. One Daihuo Zhubo floated a fishing boat in the middle of the sea to sell seafood, while another decorated a set like a Mongolian traditional yurt to sell jerky.

◆Chinese Government Closely Watching Live Commerce...Crackdown on Tax Evasion and Strengthened Information Censorship

However, dark clouds have recently begun to gather over the once promising live commerce market. Regulatory measures started after incidents during broadcasts offended the Chinese Communist Party.

Li Jiaqi, who attracted public attention by selling out lipsticks, experienced a sudden broadcast suspension in June last year after decorating ice cream in the shape of a tank during a live broadcast. Some speculated that the tank-shaped ice cream decoration reminded authorities of the Tiananmen Square protests, leading to forced suspension. Li Jiaqi then disappeared from online appearances for three months.

The Chinese wanghong 'Biya' conducting live commerce. [Image source=Baidu]

Many Daihuo Zhubo have also been fined heavily for tax evasion. Famous Chinese Wanghong Viya was fined 210 million USD for tax evasion.

From the Chinese government’s perspective, the fact that broadcasts are streamed live poses significant pressure. Sensitive topics like Tiananmen and other censored issues could unexpectedly appear during broadcasts. As government regulations tighten, some platforms are even considering selling products through AI Daihuo Zhubo.

Will China’s live commerce industry continue to grow despite government censorship? It will be interesting to see how the live commerce industry, which made a leap forward thanks to COVID-19, will transform in the future.

This content was produced with the assistance of AI translation services.