According to the latest Adobe Digital Economy Index, global ecommerce sales hit US $4.2 trillion in 2021, a trend which was in no small part fuelled by the Covid-19 pandemic. However, in 2020, China accounted for more than a quarter of these sales, thanks to its booming online shopping market.
One particular area of growth in the Chinese ecommerce sector is livestreaming. Livestreamed ecommerce and online shopping is growing rapidly in China. In 2020, Forbes estimated the market segment was worth US $60 billion, and undoubtedly the pandemic has helped this number to increase.
In 2019, around 30% of China’s population watched livestreams, with the number increasing to 39% the following year. As the livestreaming market thrives in China, more consumers are choosing to buy products through these channels.
To explore this unique market and its relationship with coffee, I spoke with two coffee professionals based in China. Read on to find out what they said.
You may also like our article on what it takes to be a coffee influencer.
What is livestreaming?
Livestreaming is the real-time streaming of any kind of media over the internet, typically through a dedicated platform. Livestreams can cover a wide range of topics, such as gaming or social media. But in some countries (namely China), livestreaming is becoming an increasingly popular way to purchase products.
According to the Chinese newspaper Chongqing Morning Post, China’s livestreaming market grew by around 119% in 2020. Revenue reached some CNY 971.23 billion (US $153 billion) during the same year – a staggering increase compared to the CNY 19.64 billion (US $3.9 billion) recorded in 2017.
Yohana Goitom H. is the co-founder of BeginBecoming, a Shanghai-based food and beverage strategy consulting firm. She also owns and operates several coffee shops in the city.
“Livestream marketing is popular because of the convenience factors,” she explains. “It’s like a one-stop shopping experience where livestreaming celebrities are selling and recommending the products at a discount.
“Having professionals sell coffee via livestreaming platforms is popular,” she adds.
A wide range of products can be purchased on livestreams in China – from makeup to food items and clothing. In particular, coffee is quickly becoming a growing livestreaming market segment.
DP Wu is the General Manager of Torch Coffee, a roaster from Portland, Oregon, US, with a location in Pu’er, China. He explains how livestreaming can also be used as an educational tool for consumers.
“Barista livestreaming involves showing viewers how to use coffee equipment, and to share the experience of extracting and brewing coffee.”
However, this practice is significantly less popular than using livestreams to promote and sell coffee products.
“There have been a few educational livestreams over the past few years, focusing on cupping and extraction techniques for espresso,” Yohana adds. “However, there are also many barista vlogs and social media accounts which are used more effectively as educational resources.”
The significance of livestreams in China
Although livestreaming is becoming increasingly popular in many countries, the Chinese market is experiencing incredible growth.
Chinese ecommerce management company Dianshang Bao states that the number of domestic livestream viewers reached 309 million in 2019 – representing some 34% of the country’s internet users. And considering the rollout of Covid-19 lockdowns in the country through 2020 and beyond, it’s safe to assume that these numbers have increased since.
According to Statista, the most popular livestreaming platforms in China are Taobao and Douyin. Taobao’s livestreaming service, Taobao Live, has by far the largest reach in the country, having amassed over 400 million users in 2020 alone.
Taobao is owned and operated by Alibaba, which also runs the Chinese Tmall ecommerce platform. Collectively, Forbes estimates Taobao alone has an 80% market share of all livestreaming in the country.
“Livestreaming is a natural progression from ecommerce, so it’s the obvious route for coffee brands on ecommerce platforms as well,” Yohana tells me.
But what makes livestreaming so popular in China?
Well, aside from providing a convenient way to shop online, livestreams typically involve well-known celebrities or media personalities promoting and selling discounted products.
Yohana also explains: “Livestreaming is becoming a popular career choice among Generation Z in China, and a lot of the livestream baristas also belong to that demographic.
“The average age of baristas across our coffee shops is 25 and the latest Shanghai Coffee Consumption Index shows that Shanghai has over 6,900 cafés,” she adds, indicating the buying power and sheer size of this demographic.
Born roughly between 1996 and 2010, Generation Z now accounts for some 15% of China’s population, and is helping to drive the enormous growth of the country’s livestreamed ecommerce market.
How are livestreams used to sell coffee?
Although a vast range of products are sold via livestream, coffee sales are becoming increasingly prominent.
In 2019, Starbucks China partnered with one of Taobao’s most well-known livestreamers, Weiya. This was the first time the brand had promoted or sold its products via a livestream.
Within five hours of the livestream starting, Starbucks sold over 160,000 coffee vouchers. Within 25 minutes, it had attracted over 4.4 million viewers.
“Consumers participate in the live broadcasts and constantly interact and ask questions,” DP tells me.
Yohana, meanwhile, says that using well known hosts to sell coffee via livestreams is important.
“The majority of coffee-related livestreams are marketing. The hosts usually have little coffee knowledge, but sometimes they dress as baristas.
“Occasionally, there will be a barista present to explain how to brew the coffee products,” she adds. “Sometimes a barista will join the livestreamer to brew coffee and answer questions, but coffee knowledge is not necessary to sell coffee online through these platforms.”
One of the most prominent examples of this kind of marketing took place on China’s equivalent to Black Friday or Cyber Monday: the 11.11 online shopping festival.
“Coffee was ranked tenth in the search list among the top ten consumer food categories,” Yohana explains. This was helped by promotion from one of the most famous livestreamers in China.
“Li Jiaqi (李佳琦) is a livestream celebrity. His Taobao was the most viewed online store this year.
“Li Jiaqi sold and promoted several coffee products. For one of the lead-up events to the 11.11 festival, he hosted a six-hour livestream, which attracted over 51 million views.”
Yohana elaborates on some of the products that were showcased in the livestream.
“Li Jiaqi promoted the Saturnbird brand which makes instant coffee products. It had the largest sales volume among all the coffee products sold on his Taobao livestream.
“On the same livestream, he also sold Koubei coupons. These can be used in cafés that participated in the event, including Costa Coffee, SeeSaw, Peet’s, and a new popular chain called Bear Claw.”
Influencing consumer behaviour
The Chinese coffee consuming market is experiencing an annual growth rate of 30%: making it one of the fastest-growing coffee markets in the world. This means the potential for livestreaming to affect sales is significant.
DP says: “Barista livestreaming has a significant impact on consumers, especially in the Chinese market.
“Consumers agree with the opinion of coffee professionals because they see them as more authoritative,” he adds. “The behaviour and language baristas use in the livestream has a notable impact on consumer purchasing.”
Demonstrating coffee knowledge and skill in livestreams is essential to showcase the reputation and quality of the product to the viewer.
“In December 2019, Starbucks launched a 365 days of Starbucks campaign with a hashtag on Taobao,” Yohana says. “They featured Li Jiaqi on a livestream-style short film, where he performed a few barista tasks at a Starbucks store.”
She adds: “Just three days after its release, the video received over 80,000 comments and over 110,000 reposts on Weibo alone.”
DP highlights how other media channels can be used to highlight coffee products in the Chinese market.
“In August 2020, I co-directed the film《coffee or tea》and I recommended one of our coffee products,” he explains. “The same product was also launched on our video platform at the same time that the film was released, which positively affected sales.”
Over 10 million ecommerce livestreams were hosted in China during the first half of 2020 – attracting an audience of over 560 million. According to government reports, around half of these viewers used livestreams for online shopping.
But off the back of the enormous commercial success of selling coffee via livestreams in China, could the same marketing models be utilised in other countries?
First and foremost, there is evidence that Chinese livestreaming services are having a direct influence on other international coffee sectors. In May 2020, the Electronic World Trade Platform was launched by Alibaba and the Rwandan government. Through a livestreaming event hosted via Tmall, over 3,000 bags of Rwandan coffee were sold in less than a minute.
Yohana tells me how her team at one of her coffee shops have been experimenting with livestreams.
“One of our baristas at our Blue Collared concept store, Qitiao, plays bass, makes creative coffee drinks, and talks about tattoo art to connect with his audience,” she explains. “But we’re still in the early stages of figuring out the Douyin algorithms.”
The recent growing popularity of coffee influencers also indicates the potential opportunity opportunity to expand coffee livestreams into other markets. Typical coffee influencer content on social media includes brew recipes and posts promoting coffee products.
“Baristas’ passion for coffee was a turning point in how consumers connected with coffee,” Yohana explains. “Will they still play a role as coffee consumption transitions to the digital realm?
“Only time will tell, but if we can learn anything from the past, it’s that coffee consumers are more likely to trust and connect with a barista, rather than a salesperson.”
The soaring popularity of China’s livestream sector shouldn’t be ignored, especially as the country’s coffee sector continues to grow alongside it. In time, we should expect to see more crossover and an increase in the number of coffee products sold through these channels.
However, beyond that, China’s livestreaming market presents a solid example of how exceptionally profitable the industry can be. Global coffee businesses scaling their online presence would do well to pay close attention to it and learn how to successfully navigate it. It could become a crucial international marketplace in the years to come.
Enjoyed this? Then read our article on ecommerce & coffee in China.
Photo credits: BeginBecoming
Perfect Daily Grind
Want to read more articles like this? Sign up for our newsletter!