What can China tell us about the future of social commerce and content?
来源:World Economic Forum;发表于:2021-07-08;人气指数:465
What can China tell us about the future of
social commerce and content?
https://www.weforum.org/agenda/2021/05/china-future-social-commerce-content/
A screen shows the live sales
total for Alibaba's Taobao Live annual Singles' Day shopping event.
Image: REUTERS/Aly Song.
18 May 2021
Matthew Quinlan
Managing Director,
Accenture
*Social
commerce – purchases made via social media – is a huge industry in China, with
sales projected to reach $363 billion in 2021.
*Brands
who use social media influencers are reporting much higher conversion rates
than through traditional advertising models.
*Here
are the possible implications for the future of media and what it could mean
for a post-pandemic creative economy.
In October 2020,
Viya, one of China’s most popular influencers, livestreamed to over 149 million viewers on Alibaba's Taobao Live platform during the annual
two-day Singles’ Day shopping event. If Viya’s audience were a country, it
would be the ninth largest in the
world, larger than Russia. Viewers could purchase products without leaving the
TaoBao platform; her audience spent over 4.8 billion yuan ($719 million) on products she promoted. And Viya
was just one of many – that day, over 66,000 livestreamers across different Chinese platforms attracted a
total of 709 million viewers.
China is a
powerhouse of social commerce. Sales generated from Chinese social commerce are
projected to reach $363 billion in 2021, up 36% year on year
and more than triple what they were in 2018. Social commerce will account for
13% of total e-commerce sales in 2021. The growth has largely been driven by
two technology platforms, Alibaba and Tencent, which have successfully integrated social media,
digital payment infrastructure and product discovery into their platforms.
Today, they account for 90% of e-commerce, 85% of social media and
85% of the e-wallet/digital payment market in China.
Figure 1. Social commerce
represents a growing share of the total e-commerce market in the US and China.
(Source: E-Marketer).
Growth
in digital content has changed how brands are marketed
The success of the social commerce model is starting to
be replicated outside of China, in part because users across markets are simply
spending more time with digital media platforms. The average time spent with
digital media per user grew between 2018-2019 by 6% in the US and 8% in China.
This trend was only reinforced by COVID-19 – between 2019 and 2020, average
time spent increased by 12% in the US and
10% in China.
The growth of
digital content consumption and content creation are closely aligned. Every minute in 2020, users uploaded 500 hours of content to YouTube, posted
more than 347,000 stories on Instagram, and downloaded TikTok more than 2,700
times. For creators with the largest audiences, this equals social influence,
which many have translated into commercial value for brands. Today, 70% of brands use influencers to promote their brands
and 63% are planning to increase
their spending on influencer marketing in 2021.
The proportion
of users reporting that influencers impact their purchase decisions is as high
as 40% on Twitter and 72% on Instagram. The low barriers to produce content
have generated significant rewards for creators: the top 10 highest-paid
YouTubers each made over $10 million
in 2019. And this trend is expected to grow as global spend on influencer marketing has already surpassed ~$8
billion and will reach $15 billion by 2022.
Working with
influencers is arguably more effective for a brand. Whereas traditional online
display ads might achieve 4% customer conversion,
livestream commerce on platforms like TaoBao translates 32% of views to items added to shopping carts. These
trends have been compounded by a rise in ad-blocking and the introduction of tools by companies like Apple that reduce advertisers’
visibility into metrics that show ad conversion, which have made it harder for
brands to target audiences and measure returns on digital advertising.
Is
China’s model for commerce and content replicable globally?
Many of the
factors driving success in China exist elsewhere, signalling that the stage may
be set for global growth of commerce and content. Projections suggest that
social commerce will grow at 29% annually between 2020 and 2028, a remarkable
rate that will shape the future creative economy.
Figure 2. Projected growth in
global social commerce. (Source: GrandView Research).
The first
parallel is that a few key digital platforms have successfully captured large
user bases and share of attention comparable to the biggest Chinese
players. Instagram has 1 billion monthly active
users (MAUs) worldwide, each spending on average three hours per month on the
platform. Hulu has over 230
million MAUs worldwide, spending an average of 18 minutes per session. TikTok has nearly 700 million MAUs worldwide, each
spending more than five hours per month on average on the platform. These
networks are attractive choices for brands looking to reach new consumers and
test new models of commerce.
As a result,
platforms are becoming more creator and commerce friendly.Amazon, for
example, launched a programme in early 2019
allowing influencers to promote products through livestreams as a way to help
merchants drive discovery. Around the same time, the company also rolled out an
app to help influencers create, capture, and manage livestreams. In mid-2020,
Amazon started allowing creators to earn a commission on the sales, as well as introducing a tiered system that rewards the most active streamers with
better placement on the site.
This is in no
small part due to the strong relationship that creators hold with their
audiences – increasing their value to distributors, which are now seeking to
attract creators both for their content and their followers. In 2019, Spotify
signed an exclusive deal for The Joe Rogan Experience, one
of the world’s most popular podcasts, which soon became Spotify’s most
popular podcast of 2020. Providing
an audience with reasons to stay is equally important –
an area where a meaningful library of content can make a difference. After
Microsoft took the video game streamer Ninja from Twitch to launch its Mixer service in 2019, an estimated
85% of Ninja’s followers came to Mixer with him, but only 6% stayed on after
the first stream ended.
In response to
the emerging opportunity, media and entertainment companies are increasingly
integrating purchasing and payment capabilities, either independently or through
partnerships. For example, Shopify and TikTok have
established a partnership where Shopify merchants can deploy shoppable video
ads on TikTok, and Hulu is transforming traditional video ads into prompts
where consumers can scan QR codes or receive push notifications to their
devices. Early moves such as these are expected to accelerate the fast-growing
social segment of the US e-commerce market,
generating $36 billion in sales in 2021.
A new category
of platforms is also emerging that provides individual creators with the
incentives and business infrastructure to monetize their followers
directly. Substack pays some writers upfront
sums to cover their first year on the platform
in exchange for keeping a large proportion of the first year subscription
revenue.
What
does this mean for the creative economy?
Some indicators
are already emerging of how these dynamics could change the creative economy.
First of all, audiences appear increasingly comfortable spending money as they
consume content. In the US, 48% of internet users aged 18 to 34 bought something through social commerce in 2019,
with an average order size of $70. In
China, the 2020 Shanghai Fashion Week was
entirely livestreamed, creating opportunities for offline content to be
monetized online. The growth of livestreamed staged events, including concert
performances within gaming platforms, will drive new opportunities for brands
and professional creators to collaborate.
To adapt,
traditional distributors will invest in new capabilities that leverage the
power of creators. Distributors will introduce business models that naturally
support “win-win” relationships, for example through ongoing revenue share or
subscriptions amortized across large global audiences. Some distributors are
experimenting with ways to share equity with creators, while others are
redesigning advertising systems. NBCUniversal Checkout, for
example, allows commerce options to be embedded into the viewing experience, so
brands can both advertise and sell on NBCU properties.
As this happens,
some creators will start to bypass relationships with platforms entirely, a
process that is already happening. Certain creators have started building their own sites to avoid editorial control and platform fees.
Brands also see this as an opportunity to eliminate distributors as the
middleman. For example, to partner with Viya, brands go through an application directly to Viya’s team and provide
up to 30% commission on sales she generates. To some extent, this increases the
bargaining power of top creators and a new ecosystem of agents, business
partners, and brand franchises is growing up around top creators. However, most
creators will continue to rely on distribution partners to reach large
audiences and provide the experience and back-office support they need.
An increasing exchange of
value between players.
As the
convergence of commerce and content continues, the way that value is generated
within media and entertainment industries will shift with it. The Value Map, introduced by the World Economic Forum and Accenture, simplifies this diverse ecosystem by illustrating the
roles involved within content creation, distribution, and consumption. Commerce
in content is redrawing the value map, requiring brands to re-evaluate where
they invest, and forcing distributors and creators to evolve experiences,
incentives, and value exchanges to strike winning collaborations.
The author would
like to thank Jacqueline Liang, Nicole Kozlak and Reena Sudan from Accenture
for their valuable contributions.