This article is based on publicly available information and is intended solely for informational purposes. It does not constitute investment advice.

In my view, the current prosperity of industrial clusters fueled by live streaming e-commerce is not a coincidence but a natural outcome of technological innovation. Seventy years ago, the thriving American tech industry echoed with the prediction that technology would inevitably lead to abundance. Lewis Strauss, Chairman of the U.S. Atomic Energy Commission, outlined this vision of technological abundance in his 1954 speech to the National Association of Science Writers: "We anticipate our descendants will enjoy electricity so cheap it won't need metering; periodic regional famines will be historical relics; we'll traverse seas, underseas, and skies effortlessly, with minimal risk and extreme speed; as we grasp the causes of aging, our descendants will live far longer than we do." Strauss, a leader in nuclear energy development, saw technological abundance not as a hypothesis but as an optimistic iron law: technological progress would lead to universal consumption equity. Today, the diverse business models emerging from live streaming e-commerce in industrial clusters and the new employment opportunities it offers millions of ordinary people are manifestations of this iron law coming to fruition. The "Made in China in Live Streaming Rooms - 2024 Douyin E-commerce Industrial Cluster Development Report," released by Douyin E-commerce on December 31, showcases the tangible numerical impact of technological equity under the impetus of Douyin E-commerce's "Industrial Growth Plan": its industrial cluster business spans 130 cities in 27 provinces, with over 1.5 million small and medium-sized merchants in industrial clusters transacting daily on the platform. Merchants and influencers in these clusters support each other, forming unique ecological highlights. More than 9.48 million influencers earn income through live streaming sales for merchants in industrial clusters. For all advanced productivity platforms today, the question remains: as a technological force and representative of advanced productivity, how can we facilitate the transformation, upgrading, and high-quality development of the real economy, helping enterprises in industrial clusters build brands, reduce costs, and increase efficiency? This industry report seems to provide Douyin E-commerce's answer to this question.

01 A Bridge Connecting Industrial Clusters and Consumers

According to the Ministry of Industry and Information Technology, China's manufacturing value-added accounted for 26.2% of GDP and approximately 30% of the global total last year, firmly securing the top spot globally. Excluding the United States, which ranks second, China's manufacturing value-added surpasses the combined GDP of the manufacturing sectors of the eight countries ranked third to tenth. Today, China is truly a world factory, supported by hundreds of manufacturing industrial clusters and tens of thousands of mini industrial clusters. Economically, an "industrial cluster" is a strip-like concentration of chained industries where geographical agglomeration flattens talent and resource costs, reduces logistics costs, and enhances the entire cluster's resilience. This Douyin E-commerce report offers a glimpse into the diverse forms of China's industrial clusters: Shenzhen mobile phone accessories, Haining fur, Danyang contact lenses, and even Baoding tissue paper made it onto the top 10 list of industrial clusters most loved by consumers. As of 2024, there are 420 national-level industrial clusters in China, constituting the refined characteristics of the "Made in China" machine. One data point underscores the value of this industrial cluster ecosystem: only the UK during the Industrial Revolution, the US before and after World War II, and current China have controlled more than 30% of global manufacturing output. Any country that achieves this feat undoubtedly ranks among the world's powerhouses. However, the manufacturing industry naturally has low profit margins: according to China's latest top 500 enterprises list, manufacturing enterprises account for over 40%, but fewer than 18 have a profit margin exceeding 10%. Homogenization competition due to technology diffusion, many intermediate links between production and consumption, and unpredictable demand-side tidal effects all contribute to manufacturing's struggle to achieve high gross margins. Today's live streaming e-commerce platforms constitute a stabilizer between industrial clusters and consumers, smoothing out tidal effects and providing solutions for brand building beyond homogeneous infinite competition. More and more manufacturing enterprises in industrial clusters are steadily obtaining orders through live streaming e-commerce. With the platform's precise reverse customization capabilities, manufacturing factories can continuously optimize processes, shorten cycles, and reduce costs, thereby shaping new business opportunities, new employment forms, and achieving transformation, upgrading, and developing new qualitative productivity. It is because of such opportunities that, starting in 2022, Douyin E-commerce launched the "Industrial Growth Plan" and the "Golden Origin Plan" to systematically and scalably support industrial clusters and small and medium-sized merchants, contributing to regional economic growth. The report's numbers provide evidence of Douyin E-commerce's efforts: in 2024, Douyin E-commerce sold 15.4 billion orders of goods from industrial clusters, with sales exceeding 100 million yuan in 830 industrial clusters; live streaming sales accounted for 63%, and shelf scenario order volume increased by 70% year-on-year, forming a trend driven by both content and shelves. Both merchants and influencers benefit from Douyin E-commerce's industrial cluster empowerment. Over the past year, over 9.48 million influencers have conducted live streaming sales for merchants in industrial clusters and earned income. Additionally, Douyin E-commerce's ability to drive regional economic growth is evident: industrial clusters in central and western China and the northeastern regions have achieved sales leaps through live streaming. The sales growth rates of industrial clusters in Heilongjiang, Jilin, and Liaoning have all entered the top ten nationwide, while Yunnan is the only western province where both industrial cluster sales and the number of merchants rank in the top ten nationwide.

02 A New Narrative for Supporting Real Economy Transformation and Upgrading

These numbers reveal a Douyin E-commerce that supports the transformation, upgrading, and high-quality development of the real economy, helping enterprises in industrial clusters build brands, reduce costs, and increase efficiency. They also highlight many industrial clusters seizing the opportunities emerging from this empowerment trend and the millions of ordinary people behind them. These individuals fully showcase the characteristics, values, and spiritual connotations of goods from industrial clusters through live streaming, short videos, and mall models provided by Douyin E-commerce, effectively improving the efficiency of intermediate links and allowing high-quality goods from the source to directly reach consumers at affordable prices. For many small workshops, capturing such an opportunity once can lead to rapid growth. Take Humen, Dongguan, in the apparel industrial cluster as an example: Humen is the heart of China's apparel industry, with tens of thousands of factories shipping clothing worldwide daily. Besides well-known brands with high national recognition, thousands of small businesses hidden in numerous streets and alleys form stalls, stores, and many small merchants. It is these individual apparel merchants who, with Douyin E-commerce, have the opportunity to break through traffic restrictions and be seen and bought by more apparel consumers in live streaming rooms, mall showcases, and recommended short videos. In such opportunities, the smallest apparel economic entities at the upstream have the chance to break free from the smile curve, providing a possibility and potential path for the branding of the Humen apparel industrial cluster. By directly facing tens of thousands of consumers in live streaming rooms and responding to their diverse needs, they can cultivate a stable group of apparel users as their digital assets, escaping indiscriminate manufacturing competition and gradually capturing more value downstream in the industrial chain, ultimately enhancing their competitive advantage.

03 Industrial Cluster Innovation: New Employment, New Consumption, New Value

Inspired by the success of industrial clusters like Humen apparel, more and more clusters have shown greater vitality and achieved upgrading and innovation under the impetus of Douyin E-commerce, significantly enhancing consumption, employment, product circulation, and social value. Take the Guangzhou brand "CONCETERY Yanxuan," which entered the Douyin live streaming arena in 2020, as another example: today, "CONCETERY Yanxuan" has over 40 anchors across multiple live streaming rooms in Guangzhou and other locations, with nightly sales exceeding 1 million yuan. They also have their own designers and factories to ensure product supply and quality. However, in 2020, when Song Yudong, the founder of "CONCETERY Yanxuan," went live for the first time, he sold over 200 pieces of clothing in less than two hours, with sales exceeding 5,000 yuan. This live stream gave Song Yudong hope, and live streaming e-commerce began to rapidly upgrade his business. To increase sales, they started recruiting anchors, and the number of live streaming rooms increased from one to three. In less than three months, the hundreds of thousands of items in inventory were sold out. Realizing the huge potential of the Douyin E-commerce platform, Song Yudong decided to switch fully to it. After selling out the inventory, he led his team to start a new round of development, design, and production. It's not just Concetery Yanxuan; the vast network effect of live streaming e-commerce is accelerating the entire apparel industrial cluster's upgrade in Guangzhou. Practitioners realize that under the trend of "live streaming e-commerce + industrial clusters," they must continue to create women's wear with extreme cost-effectiveness, as only truly cost-effective products can thrive.

04 Live Streaming + Industrial Clusters: Nurturing New Commercial Value

It is evident that the organic integration of industrial clusters' production technology and cost advantages with live streaming e-commerce's benefits can bring truly cost-effective high-quality products to consumers nationwide. From this perspective, Douyin E-commerce is facilitating the transformation and upgrading of regional real economies, achieving a win-win situation in both commercial and social value. For instance, the rise of live streaming e-commerce in the flower field is elevating Shandong's phalaenopsis industry to new heights: previously, phalaenopsis production was relatively fixed annually, and sales had obvious seasonality, peaking around the Spring Festival as a New Year's flower. However, with leading e-commerce platforms like Youhuali, the phalaenopsis peak season has successfully been extended. Now, Youhuali's annual sales of phalaenopsis exceed the annual output of finished flowers from phalaenopsis enterprises. Phalaenopsis farmers also welcome this change. Live streaming e-commerce effectively helps them clear inventory, speed up flower shed circulation, and thereby increase revenue per unit area. Recognizing live streaming e-commerce's potential, even traditional farmers have begun cultivating their own anchors and trying to get closer to the consumer market. This small phalaenopsis industrial cluster has created new consumption, new employment forms, and new business models through its integration with Douyin E-commerce.

05 From White-label to National Brand: The Persistent Efforts of Industrial Clusters

By embracing live streaming e-commerce, merchants in industrial clusters aim not only for business expansion but also for transforming their private-label products into nationally recognized brands. This endeavor not only contributes to the high-quality development of numerous industrial clusters but also boosts consumption, drives employment, and fosters rural development. For instance, during last year's "CHENSMCHEN" brand live stream, transactions surpassed 35,000 within eight hours, with a peak hourly transaction volume of 25 million yuan and a final transaction volume of 107.5 million yuan, setting a new record for the women's wear category on Douyin E-commerce. However, more remarkable than breaking the billion-yuan mark in a single session is the fact that "CHENSMCHEN" officially launched its fur category just a year ago. In today's competitive market, achieving rapid growth in the high-end fur category is no mean feat. This apparel live streaming e-commerce company astutely recognized that amidst widespread low-price competition, the demand for high-quality products from affluent consumers was being overlooked. Supporting data underscores this observation: According to Deloitte, the gross merchandise volume (GMV) of the luxury goods industry on Douyin E-commerce surged by 254% year-on-year in 2023, with 73% of Chinese luxury goods consumers utilizing Douyin. As a symbol of luxury and elegance, fur has witnessed a surge in demand alongside other luxury goods on Douyin E-commerce. With short videos and live streaming as primary communication channels, platforms like Douyin have amassed users across various consumption levels, primarily younger individuals who can be precisely targeted through content. In an era where cost-effectiveness is the norm, fur, which focuses on niche markets and precise needs, presents greater opportunities. While private-label products initially attract cost-effective users by saving on marketing budgets, as competition intensifies, traffic costs will inevitably rise. When sales reach their peak, merchants must seek product upgrades, and Douyin E-commerce provides timely examples of brand building through live streaming e-commerce. The successful rise of "CHENSMCHEN" on Douyin live streams demonstrates that today's industrial cluster players are deeply contemplating brand building amidst the traffic era, and the emergence and growth of Douyin E-commerce have significantly accelerated this process.

06 Conclusion

In his concise review of Japan's economic history, Peter Thiel succinctly outlines the advantages and challenges faced by a nation built on manufacturing. In essence, low-cost competition focused on catching up has inherent limitations, and eventually, all players may encounter the ceiling of homogeneous competition. Conversely, technological innovation fosters species prosperity, enabling it to break through the barriers imposed by low-cost competition and giving rise to new employment models and business paradigms. Technological upgrades, embodied by advanced productivity, ultimately enhance societal value, allowing everyone to truly experience the benefits of equitable consumption. This Douyin E-commerce report echoes Peter Thiel's perspective. By empowering manufacturing industrial clusters through live streaming e-commerce, an advanced form of productivity, whether it be through creating new employment models, fostering new consumer demands, or developing diverse industrial forms, ultimately contributes to a thriving industrial cluster ecosystem. These developments further affirm the dual economic and social value of live streaming e-commerce.