If a single word were to encapsulate the live streaming e-commerce industry in 2024, "transformation" would be apt. The year witnessed significant changes in the status of live streamers, the dynamics of human-product-venue interactions, and platform positioning.

01. Shift One: Reassessment of Top Live Streamers' Status

In 2024, controversies surrounding top live streamers and platforms persisted throughout the year. The "small essay" incident involving Dongfang Zhenxuan simmered throughout the year, frequently making headlines in the first half, ultimately leading to Dong Yuhui's separation from the platform.

Closely following was the scandal involving 'Xiaoyangge,' a prominent influencer from Anhui Sanyang Company, embroiled in the sale of counterfeit Hong Kong mooncakes, sparking widespread public outcry.

Adding to this, there was the incident of fake red envelopes in Li Jiaqi's live stream and the suspension of accounts of Xinba and 'Xiaoyangge' due to a hairy crab dispute. The status and role of top live streamers underwent a reassessment in 2024.

Beneath the surface, the deeply intertwined relationship between live streamers and platforms poses risks. Essentially, as traffic peaks, trust between live streamers and users is weakening, and purchasing power is declining. Platforms may also seek stability by lessening their ties with super head streamers.

Market analysts attribute this shift to multiple factors. Firstly, consumer habits and psychology are evolving. After years of ups and downs, consumers have become more rational and are no longer easily swayed by the fiery rhetoric of top live streamers. Secondly, the rise of emerging live streaming platforms and new generations of live streamers has diverted traffic and market share from established streamers. Notably, niche streamers have garnered specific audiences with their professionalism and unique perspectives, gradually building fan bases.

02. Shift Two: Reconfiguration of the Human-Product-Venue Dynamic

Against this backdrop, the human-product-venue relationship has undergone a reconfiguration. Regarding the "human" element, while top live streamers undoubtedly have a loyal fan base, diluting the influence of a single streamer has become a common strategy.

The concentrated traffic once gave top live streamers bargaining power and even the ability to "break prices." Super head streamers initially secured a unique position in the e-commerce transaction chain by offering low prices. However, in recent years, various floor price agreements and public scrutiny of streamers' personal conduct have diminished their appeal. Since last year's Double 11, merchants have increasingly emphasized building their own broadcasting capabilities to reduce dependence on top live streamers. Both Li Jiaqi and other major streamers have begun to gradually reduce their product promotion frequency, replaced by institutionalized operations. The live streaming industry is witnessing a "great retreat" of top live streamers.

During this year's 618 shopping festival, super head streamers were absent from various battle reports, and MCN agencies such as Qianxun, Meiwan, and Worry-Free Media did not release specific sales data. The value of super head streamers as an e-commerce channel has been somewhat diluted, and their business model is undergoing transformation.

Meanwhile, the proportion of digital avatars is on the rise, with JD.com leading the way. On the eve of the 2024 Chinese New Year, JD Cloud's Yanxi digital avatar technology achieved breakthroughs in large-gesture and multi-action choreography, enabling digital avatars to exhibit greater movement range and more lifelike expressions, transitioning from "movable" to "alive."

On April 16th at 6:18 PM, JD.com's founder Liu Qiangdong appeared in JD Supermarket and JD Home Appliance and Furniture procurement live streams as the "Procurement Dongge AI Digital Avatar." During the live stream, the avatar moved occasionally and gestured, displaying rich details. According to JD.com's official sales report, the live stream attracted over 20 million views in less than an hour, with cumulative sales exceeding 50 million yuan.

During this year's 618, JD.com launched a special "CEO Digital Avatar Live Stream" event, featuring founders and CEOs such as Gree's Dong Mingzhu, Hisense's Hu Jianyong, LG's Lee Dong-seon, Miniso's Ye Guofu, and Jieliya's Shi Zhancheng, who participated in live streams through JD Cloud's Yanxi digital avatar technology. Judging by sales data and interaction indices, these live streams performed better than expected.

Regarding the "product" element, building proprietary brands has become a common strategy. Over the past year, almost all top live streamers and MCN agencies have embarked on building their proprietary brands, with food products becoming a hotly contested area. It is foreseeable that proprietary brand building will become standard practice in live streaming in the future. Analysts believe this is to tightly control the supply chain, product quality, and avoid uncontrollable factors.

In terms of the "venue," platforms have also begun to reassess the structural contradictions between themselves and live streamers. Streamers rely on platform algorithms for traffic distribution, transforming ordinary individuals into internet celebrities, which gives them the ability to generate traffic, leading them to "hold hostage" the platform.

For traffic platforms, this "tail-wagging-the-dog" scenario is not the intended outcome but an inevitable consequence of algorithm-driven decisions, increasingly harming platforms. In recent years, platforms have devised various solutions to address this issue, but none have addressed the root cause. The underlying reason is that, to some extent, there is a symbiotic relationship between internet celebrities and platforms.

03. Shift Three: Accelerated Development of Shelf E-commerce

Precisely because internet celebrities are a "double-edged sword" for platforms, the development of shelf e-commerce on platforms like Douyin and Kuaishou has significantly accelerated this year.

In 2022, Douyin E-commerce evolved from "Interest-based E-commerce" to "Omni-interest E-commerce," integrating shelf spaces into the platform's strategic plan. However, as live streaming (content venue) continued to grow rapidly in 2022, the official did not pay sufficient attention to shelf spaces.

With the slowdown in live streaming growth, intensified price competition, and increasing paid traffic and return rates, the voice calling for "live streaming is hard to make money" has grown louder. Platforms have begun to focus on shelf spaces, even elevating them to a strategic position equal to content venues.

Douyin has also realized that the gross margin of live streaming is declining, which may lead to the loss of merchants, especially small and medium-sized merchants and white-label merchants who are not adept at live streaming due to its high barriers to entry and fierce competition. If live streaming were the only sales channel, it would only drive them away. Therefore, Douyin has begun to vigorously promote shelf e-commerce, specifically product cards.

Earlier this year, Douyin E-commerce launched an app called "Douyin Mall Edition," forming an independent e-commerce shopping platform separate from the main site, further emphasizing shelf spaces and moving closer to traditional e-commerce. From an interface perspective, Douyin Mall is indistinguishable from typical shelf e-commerce platforms like Taobao and JD.com.

Meanwhile, Kuaishou has become even more aggressive in supporting shelf e-commerce, transitioning from initial indecisiveness to strong support last year. Kuaishou CEO Cheng Yixiao proposed the concept of "pan-shelf," which differs from traditional shelf e-commerce. It encompasses e-commerce entry points beyond live streams, including recommendations, malls, searches, and stores. "To meet the deterministic consumer demand spilling over from content venues and serve consumers 24/7," Cheng believes that merchant self-broadcasting and influencer live streams can only cover a maximum of ten to fourteen hours a day, unable to meet all consumer needs. For repeat purchases, consumers can have a better experience in malls and other pan-shelf scenarios.

The simplest distinction between shelf e-commerce and live streaming e-commerce is that shelf e-commerce corresponds to "people finding products," while live streaming e-commerce corresponds to "products finding people." From a consumer journey perspective, the former starts with a search, with a relatively clear purchase intention; the latter begins with browsing, where consumers are attracted to products while viewing content, making purchases with less clear intentions.

Merchants operating under these two models follow different traffic logics. Shelf e-commerce relies on advertising to drive traffic, requiring merchants to purchase traffic from platforms for visibility. Live streaming e-commerce traffic relies on content output, needing interest-based distribution to push products to users. These fundamental differences give rise to different behavioral patterns. For example, live streaming e-commerce may stimulate impulse purchases, leading to higher return rates.

Compared to the past focus on interest-based distribution mechanisms such as content creation, live streaming, and user interaction, Douyin is now attracting merchants with stronger product management capabilities, price competitiveness, and supply chain efficiency, better suited for shelf market competition.

04. Conclusion: Live Streaming E-commerce and Shelf E-commerce Complement Each Other

Finally, it should be noted that live streaming e-commerce and shelf e-commerce are not opposed but complementary. Live streaming e-commerce and shelf e-commerce each have unique advantages and applicable scenarios, coexisting and mutually promoting within the e-commerce ecosystem.

Essentially, live streaming and short videos are not polar opposites of shelf e-commerce but rather manifestations and extensions of it. Traditional shelf e-commerce relies on product images, text descriptions, and other information to present product details, meeting the needs of most consumers but with limitations in interactivity and immediacy. Live streaming and short videos enrich product presentations with vivid visuals and real-time interaction, providing consumers with more references during purchasing decisions.

The future of e-commerce does not lie simply in transitioning to live streaming or short video e-commerce but in closely integrating shelf e-commerce with interest-based e-commerce, forming a complete and healthy e-commerce ecosystem through innovation, content, and interaction.

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