How Did Taobao Live Revolutionise The Ecommerce Customer Experience In China?

Sukanya Shettigar

When Alibaba launched Taobao Live in 2016, it pioneered a new approach that would go on to change the customer experience of businesses online. In the six years since, live commerce has become a global phenomenon, and is quickly establishing itself as an effective product marketing and customer engagement strategy for every e-commerce brand.

The world realised the importance of live commerce truly during the pandemic when in-store shopping had come to a standstill. For businesses to stay afloat, live commerce became a necessity. Let’s take an example of the global fashion industry:

According to the McKinsey State of Fashion 2022 report, the global fashion industry wasn’t expected to reach its pre-pandemic levels until 2022. However, the Chinese fashion industry was estimated to have reached its pre-pandemic levels and surpassed it in 2021 itself.

A major reason for this growth was China’s early adoption of live commerce. Let’s take a look at the numbers indicating the growth of Chinese live commerce and the role Taobao Live played in it:

TaoBao Live
Source: Mckinsey and Capillary Technologies 

 

The sectors that are leading the category of livestreaming

Livestreaming in China
Source: Mckinsey

 

What factors enabled this e-commerce revolution by Taobao Live?

The emergence of Taobao Live as a global force is linked to a few factors that are common to China, a country that is a heavily-monitored and walled garden for users online. This led to the growth of superapps like WeChat or Taobao Live. Today, Taobao Live is the largest social commerce platform in the world and the sixth most visited website on the planet

The Covid-19 pandemic saw exponential growth in live commerce. In fact, the live commerce market value more than doubled in between 2019 and 2020, from US $67 billion to US $171 billion. Since then it has maintained this positive growth year-on-year.

Let’s take a look at how Taobao’s community-based, content-driven and technology-enabled approach adapted to some of the other common global consumer trends. Thus, making it conducive to the growth of live commerce:

Gen-Z and Millenial audience
Gen-Z and millennial audiences form a majority of both shoppers, with 70% of Gen-Z consumers buying products directly from social media. They are more accustomed to consuming content in the format of videos on their phones.

Social Media Penetration
In China, more than half of the country is linked to some social media platform. The number of social media users is expected to reach 1.1 billion users by 2023.

Popularity of E-commerce
The world has seen an e-commerce boom in the last two years, but China was already ahead of this curve. In 2019, China had over 35% of the overall retail sales from e-commerce, which was the highest of any country in the world. Their e-commerce sales levels are almost 3x higher than the US which is in second place. This growing popularity is partly due to the widespread adoption of live commerce. It is a sign that integrating live commerce in a full-funnel strategy will draw more users to your website.

Evolving Customer Behaviour
Most of the customers are well-versed in engaging with live shopping and shoppable videos. This change in the customer behavior and preferences has led to a growth in customers choosing to engage more with shoppable video.

What does Taobao Live get so right about live commerce?

Taobao has carved stellar success in the live commerce space, and here’s how they’ve done it —

Feature multiple formats

TaoBao Livestreaming
Source: Marketing to China

Taobao Live shows that experimenting with different formats ensures visitors to e-commerce websites are entertained while being pushed to make purchases. Product live streams can be done in the form of tutorials, interviews, behind-the-scenes videos and even short films.

Choose influencers not just celebrities

Taobao Live
Source: Marketing to China

Instead of choosing celebrities to promote products on their website, Taobao Live chose 10,000 content creators (Wanghong). These could be salespeople from physical stores, popular online figures, or industry experts. This enables them to not just sell beauty and apparel products, but also high-value products like cars. In one live event featuring Geng Shuai, a kitsch village craftsman, he was able to engage 4.8 million viewers and sell 1623 cars in two and a half hours.

Using AI to reach target audiences

Taobao Live
Source: Forrester

From 2017 onwards Taobao Live has been using Artificial intelligence (AI) to target users based on their content consumption pattern and monetization. This helps customers find content about products that will suit their taste and encourages them to browse for longer.

Adopt in-stream engagement

Taobao Live
Source: Marketing to China

By enabling a buying experience without having to leave the video, Taobao Live is able to generate more impressions that lead to transactions. This seamless customer experience is native to the Taobao experience and helps to improve overall campaign performances.

Summary

Taobao Live is a prime example of how you can leverage live commerce for your website. It highlights why your brand needs to shift from social commerce that is limited to the walled gardens of social media and make the leap to Social Commerce 2.0. Transform your website to a community-based platform where you build a website that drives engagement as well as sales.

Read our latest eBook that unearths how global brands can translate TaoBao’s success in their markets

If you are getting started on this journey, Firework can help you elevate the customer experience online through a powerful CMS which brings an immersive live shopping experience to your website. With Firework, you can increase average session time and control user data from one platform. Firework provides shoppable video and livestreaming commerce capabilities for retailers, consumer brands and publishers that want to tap into their own customer data to build engaging video experiences across their own digital properties and social channels.

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