Writer: Zhang Hao, President University MMT23-11B
1. Introduction
Background Introduction: The Evolution of E-Commerce The development of e-commerce has been rapid, continuously adapting and innovating. Initially, e-commerce websites were similar to digital catalogs, allowing people to view and purchase products online. Over time, with advancements in technology and changing consumer expectations, these websites became more interactive and personalized. The
widespread adoption of social media and smartphones accelerated these changes, leading to the emergence of social commerce, which integrates shopping with social media features. This paved the way for live commerce, which combines live streaming with online shopping, enabling real-time interaction between buyers and sellers.
Live Commerce as a Trend
Live commerce represents the next frontier in the evolution of e-commerce, merging the immediacy of live video streaming with the convenience of online shopping. It allows sellers to showcase products, conduct live demonstrations, and directly interact with consumers, creating an engaging and interactive shopping experience. This trend capitalizes on the power of influencer marketing, as influencers and store owners use live streams to promote roducts, answer questions, and engage with their audience in real-time, thereby driving sales and fostering brand loyalty.
Comparison Between Indonesia and China in Live Commerce
Market Maturity
Indonesia: The Indonesian e-commerce market is rapidly growing, with live commerce still in its developmental stages. Despite this, the country’s vast internet user base presents significant potential for live commerce.
China: China’s live commerce market is highly mature, serving as a global pioneer and leader in this field. The country boasts a large base of live stream hosts and viewers, supported by a sophisticated supply chain and logistics system.
Consumer Habits
Indonesia: Indonesian consumers are highly active in online shopping and social media usage, providing a solid cultural foundation for the growth of live commerce. China: Chinese consumers are accustomed to shopping through live streaming platforms, making live commerce an integral part of their shopping habits. The acceptance and participation levels among Chinese consumers are notably high.
Technology and Infrastructure
Indonesia: Although internet coverage and payment systems in Indonesia are improving, challenges remain in some areas, potentially impacting the live commerce experience. China: China’s advanced internet coverage, payment systems, and logistics capabilities
provide strong technological and infrastructure support for live commerce.
2. Data Collection
Market Potential and Growth Rate: By comparing live streaming data between the two countries, one can assess the market potential and growth rate of live commerce in Indonesia and China. This provides a basis for businesses to formulate market strategies and investment decisions.
Chnia data:
Internet Penetration Rate
As of December 2023, China’s internet user base reached 1.092 billion, an increase of 24.8 million from December 2022. The internet penetration rate reached 77.5%, up 1.9 percentage points from December 2022.
Data on the Scale of Online Shopping Users
As of December 2023, the scale of online shopping users in China reached 915 million, an increase of 69.67 million people compared to December 2022, accounting for 83.8% of the total internet users.
Data on Live Streaming Users and Sales
As of December 2023, the scale of live streaming users in China reached 816 million, an increase of 65.01 million compared to December 2022, accounting for 74.7% of the total internet users. Among these, the scale of e-commerce live streaming users is 597 million, an increase of 82.67 million compared to December 2022, accounting for 54.7% of the total internet users; the scale of game live streaming users is 297 million, an increase of 31.33 million compared to December 2022, accounting for 27.2% of the total internet users; the scale of reality show live streaming users is 200 million, an increase of 12.59 million compared to December 2022, accounting for 18.3% of the total internet users; the scale of concert live streaming users is 223 million, an increase of 15.96 million compared to December 2022, accounting for 20.4% of the total internet users; the scale of sports live streaming users is 345 million, a decrease of 28.47 million compared to December 2022, accounting for 31.6% of the total internet users.
Online Retail Sales Revenue
In the first 11 months of 2023, the national online retail sales reached 2 trillion USD, with a year-on-year increase of 11%. The contribution rate of physical online retail sales to the growth of the total retail sales of consumer goods reached 31.4%, accounting for 27.5% of the total retail sales of consumer goods, setting a new historical record.According to commercial big data monitoring, in the first 10 months of 2023, China’s live broadcast sales exceeded 314.29 billion USD, with a year-on-year increase of 58.9%, accounting for 18.1% of the online retail sales, driving the growth of online retail sales by 7.5 percentage points.http://www.mofcom.gov.cn/article/tj/tjsj/202401/20240103466170.shtml
Indonesia data:
Internet Penetration Rate
2023: Indonesia’s total number of internet users reached 212.9 million, with an internet penetration rate of 77.0%.
2022: The total number of internet users was 204.7 million, with an internet penetration rate of 73.7%
https://www.mckinsey.com/industries/retail/our-insights/resellers-the-unseen-engine-ofindonesian-e-commerce
2021: The internet penetration rate was approximately 61%
https://www.mordorintelligence.com/industry-reports/indonesia-ecommerce-market
Data on Live Streaming Users and Sales
Live streaming sales have a wide audience in the Indonesian market, with 78% of consumers being aware of the option to shop via live streaming, 71% having visited live streaming shopping platforms, and 56% having made purchases through live streaming.
https://www.mordorintelligence.com/industry-reports/indonesia-ecommerce-market
Online Retail Sales Revenue
E-commerce in Indonesia has experienced significant growth over the past decade. From 2012 to 2022, total e-commerce sales in Indonesia increased from $140 million to $15.6 billion, representing approximately 3.4% of total retail sales.
This 10-year growth of 11,143% has dramatically changed the landscape of Indonesia. While being a poorer infrastructure-ready economy, comparing with its neighbouring countries, we can still see e-commerce continue to grow dramatically over the coming years.
Resellers: The unseen engine of Indonesian e-commerce
April 11, 2023 | Article By Tertia Tay and Simon Wintels
https://www.mckinsey.com/industries/retail/our-insights/resellers-the-unseen-engine-ofindonesian-e-commerce
* Consumer Behavior: Understanding consumer behavior towards live commerce under different cultural backgrounds, including their purchasing preferences, viewing habits, and interaction patterns, helps businesses to optimize live streaming content and marketing strategies.
* Technological and Platform Innovations: There might be differences in technological applications and innovations between live commerce platforms in Indonesia and China. Researching these differences helps identify industry trends and potential innovation
opportunities.
* Regulatory Environment and Policy Impact: The regulatory policies regarding e-commerce and live commerce may differ between the two countries. Researching the impact of the regulatory environment on the development of live commerce can help businesses better comply with local laws and regulations, reducing operational risks.
3. Conclusion
Chinese platforms like Taobao Live and Douyin (TikTok’s counterpart in China) have been at the forefront of integrating live streaming into their e-commerce operations, attracting millions of viewers and generating significant sales volumes.
Indonesian e-commerce market is characterized by its diversity, with platforms like Shopee Live and Lazada Live leading the charge in live commerce.
The significance of live commerce in Indonesia and China reflects distinct differences in market maturity, consumer habits, and technological infrastructure. While China’s live commerce market is more developed, with robust technology and high consumer engagement, Indonesia’s market, though facing some challenges, holds vast potential for growth. Live commerce in both countries illustrates the innovative evolution of e-commerce, playing a crucial role in advancing the local e-commerce ecosystem
