HAS LIVE COMMERCE IN CHINA ALREADY PASSED ITS PEAK?

Last week, TechPlanet published an interesting article about the current business of China's #1 live stream host, Li Jiaqi (you know, the 'lipstick king'). While he is still the top live streamer on Taobao, his GMV has significantly decreased.

The MCN (Multi-Channel Network) company behind Li, Mei One, has tried to reduce reliance on Li and even started a channel with Li's assistants and mom (!) to compensate for falling sales. Mei One has cultivated several other hosts, but none of them have reached Li's level of success. It's also targeting the market segment of parents and started livestreams on branched to other platforms like WeChat Channels. Li's broadcasts have been extended in length, primarily through the support of his assistants.

On the first day of the 618 festival pre-sale, Li still had 10 million viewers, but the GMV was only RMB 2.5-3.5 billion. A few years ago, Li still sold RMB 5 million during the pre-sale event, so sales have declined despite Li now doing longer streams.

According to TechPlanet, live commerce peaked in 2022/2023. During the pre-sale of 2023's Double 11 festival, Li's GMV had already declined 50% YoY (RMB 9.5 vs 21.5 billion). It's difficult to say if this is because of the economy, fatigue in live commerce, or scandals surrounding Li himself.

Less than 10% of MCNs saw growth in 2024, and more than 60% say they find it challenging to find new growth paths. KPI pressure on staff for growth in sales and fans is very high. Competition among MCNs is fierce, and many MCNs are starting private brands (fewer middlemen, more margin) and expanding overseas for new revenue streams.

Li Jiaqi used to be able to negotiate the absolute lowest price on the internet from brands. Those days are over, and it remains to be seen how long Li Jiaqi can continue to charge his typical fee of RMB 100,000 (12.2K euro) + 20% commission for a product promo timeslot.

Source: mp.weixin.qq.com/s/uyrM…