For live streaming e-commerce giants accelerating their globalization, it is crucial to develop the ability to "adapt to local conditions" and find a suitable route to enter foreign markets.

In recent years, the intense competition in domestic live streaming e-commerce has forced major broadcasters and agencies to shift their thinking and seek new stories for their "second growth curve." Riding on the wave of cross-border e-commerce, major live streaming agencies, including Three Sheep Network by the Yang brothers, Xinba's Xin Selection Group, Yaowang Network, and Jiaogepengyou, have all sounded the clarion call for conquering overseas markets.

For top broadcasters who have gathered sufficient "traffic dividends" on various platforms domestically, as well as MCNs with rich market experience and influence, as the domestic market approaches its ceiling, simply selling products domestically is no longer their only option. More directly, if they don't come up with some "tricks," it will be difficult to retain the "family" in their live streaming rooms.

Of course, not all of them are engaged in live streaming sales. Xinba's overseas venture focuses on supply chains, introducing foreign supply chains into China. Jiaogepengyou acts as a solution provider, studying the different characteristics and needs of overseas markets and then selling solutions. Three Sheep continues its domestic slicing business.

For them, live streaming is merely a means, not an end. Besides live streaming sales, players must possess a wide range of skills. However, can business models that have repeatedly succeeded in the domestic market also yield fruitful results overseas? Is it really that easy to earn foreign money on the international stage? Under the opportunities of going global, how many challenges are lurking?

01 Top Live Streaming Sellers Launch Overseas

It is often said that "gold is everywhere abroad," though this saying is not entirely accurate. However, from an e-commerce perspective, there are indeed ample opportunities and growth space overseas.

According to iMedia Consulting data, China's cross-border live streaming e-commerce market is expected to reach 284.58 billion yuan in 2023, with a year-on-year growth rate of 155%. By 2025, the market size is projected to reach 828.7 billion yuan.

Specifically, eMarketer data shows that the growth rate of the Southeast Asian e-commerce market ranked first globally last year, making it the fastest-growing region for global e-commerce scale for three consecutive years. It is expected that by 2025, Southeast Asia's e-commerce GMV will reach $233 billion, with a compound annual growth rate of 24%.

The United States has been slower in live streaming sales but is now developing. Coresight estimates that as of 2022, the scale of live streaming sales in the US will reach $20 billion and will grow to $32 billion in 2023.

This is far from the domestic market size of trillions of yuan. However, as the domestic live streaming sales market gradually saturates, competition has entered a white-hot stage.

Frankly speaking, with the rapid development of the domestic e-commerce industry, both user growth and GMV have slowed down. Against this backdrop, going global has become a better option.

For domestic live streaming agencies, replicating their domestic business overseas is a logical next step. Last year's data from Crowley Index Research Institute also showed that nearly 30% of domestic MCN agencies have begun to explore overseas markets, while 14.9% are in preparation and observation.

Jiaogepengyou was the earliest to start its overseas business, incubating an overseas local company in Indonesia in May 2017. The following year, it began building a KOL matrix in Southeast Asia, and in 2020, it established a US company.

In May 2023, Xin Selection Group launched its international expansion plan, with Thailand as its first stop. At that time, Xinba indicated that in the future, Xin Selection Group would launch dedicated live streaming sales events in Japan, Singapore, Malaysia, and other regions.

Subsequently, Three Sheep collaborated with Singapore local influencer @shop with sasax for its first live streaming sales event, selling mostly Chinese local brand products. It is reported that this live stream set a new record for TikTok e-commerce sales in Singapore.

However, in comparison, the current overseas expansion of live streaming sales agencies can be divided into "selling goods" and "selling water." "Selling water" includes business models such as anchor training and brand operation outsourcing, which is the approach adopted by Jiaogepengyou. "Selling goods" includes not only exports but also importing through supply chain connections, as is the case with Xin Selection.

The ranks of those venturing overseas are gradually expanding, but the different market characteristics and consumption patterns of overseas markets are challenges they need to overcome. Whether it's individual big IPs or MCN agencies, replicating domestic success is not easy.

02 Hidden Reefs Beneath the New Blue Ocean

The developed nature of North America is often seen as the preferred destination for going global. However, ingrained user habits and a fragmented e-commerce landscape are "roadblocks" for live streaming e-commerce.

Unlike domestic users who are accustomed to shopping through live streams on social platforms, North American users place more emphasis on quick decision-making and efficiency in shopping.

For example, Amazon has been working to reduce users' online shopping time. In a letter to Amazon shareholders, Bezos wrote, "At Amazon, 28% of purchases are completed within three minutes, whereas shopping in physical stores takes about an hour. If you replace two physical store visits with two Amazon purchases each week, you can save 75 hours per year. This is important because we live in the always-busy early 21st century."

North American users' pursuit of quick decision-making in e-commerce is due to their rich offline activities, strong sense of time, and high time costs. Bezos calculated that, based on the minimum wage levels in most US states, Amazon saves users 75 hours per year, equivalent to saving them $750. Therefore, North American users who value quick decision-making in shopping naturally find it difficult to spend too much time on live streaming shopping.

Of course, there was no habit of live streaming shopping in China at first either, and platforms educated users through low prices. However, a similar model is difficult to replicate in North America.

North America has strict market regulations, and once deemed to have engaged in unfair competition in pricing, platforms will face controls. For example, Amazon once ordered that it could not make a profit and used low prices to seize the book market, but this was immediately halted by regulators. It is difficult for platforms to "trade low prices for market share" and form obvious price advantages through commercial competition.

When difficulties are encountered in venturing into the e-commerce live streaming field in Europe and the US, the culturally similar Southeast Asian market becomes the preferred choice. In fact, compared to European and American consumers who are more accustomed to efficient shopping methods, Southeast Asian consumers are more receptive to the form of anchor-led shopping.

However, looking back at the past three years, the market has not been easy. A simple example is TikTok e-commerce's start, acceleration, ban, and return in the Indonesian market, which has made the industry's understanding of the once-imagined "blue ocean" more three-dimensional, rational, and closer to the real world.

The hidden costs of the Southeast Asian market are enormous, and relevant policies change rapidly. Without a suitable team and networking resources, there is a risk of being stymied at any stage.

Although each overseas region has different ways of playing, domestic live streaming e-commerce enterprises can all tell new stories.

03 "Dimensional Reduction and Replication" of Domestic Mature Models

While all are going global to "dig for gold," each company has a different approach and sees different opportunities.

Take Crazy Little Yang Brother as an example. Three Sheep's previous venture into Singapore specifically sought cooperation with local well-known influencers to sell products from Three Sheep's supply chain. This is likely to be the main way Three Sheep will expand overseas for some time to come, leveraging local KOL resources to empower the brand, gradually establishing overseas MCN agencies, and completing the construction of a content matrix.

In contrast, Kuaishou's Xinba has many similarities with Crazy Little Yang Brother in its domestic sales model, but its approach to going global is basically the opposite.

For example, in last May's live stream in Thailand, Xinba led a group of his disciples and stood in the absolute center as the main force of sales.

Essentially, Xinba's "Xin Selection International Expansion Plan" is a "supply chain going global" approach, directly targeting the core of the supply chain through the C2M model, also known as "industry chain traceability live streaming," with the goal of accessing lower-priced overseas supply chains and expanding their global purchasing business. In other words, Xinba is not really interested in the overseas local user market but rather wants to sell overseas products or specialties back to China as an auxiliary means for domestic live streaming sales.

Neither Three Sheep nor Xin Selection has deviated from "live streaming sales." In comparison, Jiaogepengyou's approach to going global is more unique.

According to Hao Xijie, the person in charge of Jiaogepengyou, "We plan to do three things: first, marketing; second, live streaming sales; and third, helping merchants solve problems related to TikTok platform live streaming, short videos, and store operations." It is reported that the proportion of influencer marketing business accounts for 70% of the total overseas business, CPS (commodity promotion solution) distribution sales account for 10%, and agency operations account for about 20%.

In simple terms, Jiaogepengyou mainly targets domestic and foreign merchants, providing domestic and foreign anchor training and business training based on cross-border business. Selling solutions and courses not only helps domestic and foreign merchants improve their business capabilities but also indirectly promotes the international dissemination and localized application of e-commerce knowledge.

Judging from the overseas expansion trends of leading enterprises in the live streaming e-commerce sector, such as Three Sheep, Xin Selection, Jiaogepengyou, and Dongfang Zhenxuan, going global has become an important trend for the industry to seek new growth points. However, opportunities inevitably come with risks.

04 Going Global is an Opportunity, but Even More of a Challenge

"Anchor – Product – Live Streaming Platform" is the classic model in the domestic live streaming e-commerce community and the basic model for e-commerce live streaming in all markets. However, different customer habits and market environments pose challenges for pioneers in overseas markets who were once thriving in the Chinese live streaming market.

The key to replicating the successful experience of domestic e-commerce in international markets lies in whether it can achieve deep "localization." For e-commerce agencies to succeed in overseas markets, they must go beyond simply replicating domestic models and directly face and effectively solve core issues such as cultural differences, market adaptability, and operating costs.

Take Three Sheep as an example. While its accumulated short video live streaming experience and robust supply chain in China have laid a solid foundation for going global, the cultural divide in overseas markets cannot be ignored. The international adaptability of entertainment styles, the localization adjustment of content creativity, and the competitiveness of product pricing strategies under cross-border costs are all challenges for Three Sheep Network to consider. How to retain brand characteristics while precisely reaching and attracting overseas consumers is a crucial part of its overseas strategy.

In addition, Three Sheep has continued its domestic slicing approach overseas, building a certain influence on TikTok through a large number of sliced content. However, the cultural habits behind the content are issues that influencers must face squarely when going global. For example, in the Southeast Asian market, there are significant differences in the complex cultural styles and beliefs among various Southeast Asian countries. For influencers and agencies, this means spending a lot of time learning and understanding local cultural habits to avoid offending local users.

The overseas business leader of an agency said, "Overseas influencers have a different perception of work compared to domestic ones. They have a stronger sense of self and are more easily satisfied with the status quo. For example, our team believes that slight optimizations can significantly boost GMV, but some influencers are unwilling to pay more work costs, thinking that the current situation is already quite good." This reflects the fundamental differences in values between domestic and foreign influencers, which may also be a problem faced by Three Sheep.

Unlike Xin Selection Group, whose core customer base is still domestic, so it does not need to worry too much about the impact of cultural differences. However, going global with supply chains is also no easy feat.

For example, international logistics involves more links, such as customs clearance and cross-border transportation, which increase the complexity and uncontrollable factors of logistics. Moreover, in a globalized supply chain, it becomes more difficult to monitor every link from production to delivery in real-time, requiring more advanced information system support. The internationalization of supply chains involves complex logistics, inventory management, and coordination with local suppliers. Xin Selection needs to ensure product quality and supply stability while controlling costs.

The best way to solve these problems is to set up local teams or cooperate with mature local companies to maximize integration into the local business environment. The head of a relatively mature MCN agency in overseas business said, "To develop overseas, you must have a local partner, and the agency must stay there steadfastly. You must go to the local area, respect the local area, and truly compete with local agencies."

Whether it is the business environment in Southeast Asia or Europe and America, they are very different from the domestic environment we are familiar with. The difficulty in directly borrowing operational models is just one aspect; more importantly, it's about "starting from scratch" in terms of resource accumulation. Before achieving deep localization, discussing the "opportunity period" is meaningless.

From a business logic perspective, live streaming e-commerce does not rely on short-term explosions but rather on long-term accumulation. From a long-term perspective, live streaming is more promising, more stable, and more in line with the business logic of scale. However, the complexity and variability of overseas markets are higher. It is not an overnight task for anchors and enterprises to develop the ability to "adapt to local conditions" and find their own routes to go global.