Shoppertainment creates business in and outside of China.

Dan Xu

Dan Xu is a partner and is in charge of the firm’s Intellectual Property & Data Compliance practice.

The Chinese e-commerce market is booming and with the COVID-19 pandemic, the market share became even bigger. In a recent article we already talked about legislation and market regulation.

Within the e-commerce industry the shoppertainment market is rapidly growing and experts say it could become one of the next big things in Europe and the US too.
Shoppertainment means combining entertainment, social media, games and e-commerce to interact with customers and to create a personalized, engaging shopping experience, ultimately to drive sales and boosts impulse purchases.
Examples are livestreaming and gamification: combining shopping and gaming. For instance, creating a virtual avatar life in an online gaming environment on Taobao where you can dress up your avatar and buy the same outfit for yourself. Or with the use of 3D showroom technology brands such as IKEA and Coach created a virtual walkthrough shopping experience.

Livestreaming

Livestreaming is one of the most popular forms of shoppertainment. It’s like an interactive ‘Home Shopping Network’ where sellers introduce products (primarily cosmetics, fashion and food and often limited-time offers), engage with their customers and customers can buy the showcased products.

Because livestreaming combines the discover, explore and buy stage, it shortens the path to purchase. Recommendations from for example Key Opinion Leaders help customers make purchase decisions even faster.

Last year the livestreaming users in China reached 617 million (62.4% of the total internet population). At first driven by Gen-Z and Millennials, middle-aged Chinese, seniors and consumers in China’s lower-tier cities are jumping on the trend. This year experts predict that the livestreaming market will be worth more than 80 billion CNY, breaking the 100 billion CNY barrier by 2023.

Social media platforms like WeChat, Xiahongshu, Weibo, Douyin or retail platforms like Taobao and JD all are integrating livestreaming within their platform.

Livestreaming regulations

Last November the Chinese Cyberspace Administration drafted rules to regulate the livestreaming market. Livestreamers must be over 16 years old, and if they are between 16 and 18, they still need a guardian’s explicit consent, in addition to providing their real-name identification. Platforms will have to submit regular reports to local authorities and stop illegal advertising.

Behavior that violates consumer’s rights, such as promoting pyramid schemes, bad social habits or falsifying data traffic (such as followers and likes) will be prohibited.


Business opportunities

In recent months the rapidly growing Chinese shoppertainment market has caught the attention from global brands and retailers. E-commerce companies in South East Asia are already taking inspiration from the Chinese shoppertainment market and with the global success of TikTok, it could be the next big thing in the US and Europe too.

Last December, TikTok already teamed up with retail giant Walmart to launch a livestream campaign. Amazon and Instagram are testing their own solutions within their platforms.

Furthermore, a study by Forrester and AliExpress, released last February, found that 70% of the surveyed European consumers in the U.K., Spain, France and Poland are interested in shoppertainment.

And with the fact that due to the COVID-19 pandemic online purchases increased significantly around the world, now is a good starting point for businesses to explore the business opportunities in the shoppertainment market.