TikTok and Amazon Bet on China’s Ecommerce Model. It’s a Dud
After setting up her lights, cameras, and microphones, Lynna Machida sat in front of a shelf of wigs and makeup in a professional studio in Los Angeles. A message pinged into her feed: “Could you try the number seven?” and she took the corresponding wig—manufactured by her Chinese client—down and pulled it over her long, thick hair.
Machida is an aspiring actor, but gigs dried up during the pandemic. Then, in mid-2022, she was approached by Dance Art, a multi-channel network (MCN) that hires influencers to sell products on platforms over TikTok and Amazon. Since then, she’s sold everything from cosmetics to charging cables. On Amazon Prime Day in July, she took part in an eight-hour marathon session, selling electrical appliances.
Success at livestreaming is all about creating a relationship with the audience, Machida says. Her interactions with her viewers have to be spontaneous and feel genuine. “Because they see me taking my moment, put on the wig, and then I have to adjust it, they think it’s real,” she says.
American social media is full of people selling things—TikTok influencers hawking their own branded products and Instagrammers pushing their followers to sponsored links. But true livestream ecommerce of the kind pioneered by Chinese retail giants—which is not unlike old-school television sales, where a host hawks products live over the internet, sweetening the deal with discounts and promotions—has never quite reached critical mass in the US. Now, lured by the vast scale of the business in China, companies including Amazon, YouTube, Shopify, and TikTok have invested heavily in live selling. But they’re struggling for traction. Facebook and Instagram have already bowed out. And experts from China say that the American market may just not be ready for livestream ecommerce.
“I haven’t seen one success case,” says Marina Jiang, an expert in cross-border ecommerce and founder of The Unoeuf Creative Consulting, a social marketing agency. “If there is one proof of concept in the United States, I would be willing to try it myself.”
Livestreaming—without the selling—has been huge in China for a decade. By June 2016, 325 million people—46 percent of all internet users in China—were regularly watching livestreams, according to the China Internet Network Information Center, a government agency. That year, companies began to integrate sales channels into their livestream offerings, and vice versa, led by fashion retailer Mogujie and Taobao, the country’s biggest e-tailer, which launched their services in March and April 2016, respectively.
Some early streamers were able to make a fortune. Huang Wei—known online as Viya—started streaming on Taobao in May 2016. She and her husband had started an online clothing store on Tmall (formerly known as Taobao Mall) in 2012 but struggled to turn a profit. Just 200 people watched her first livestreaming sales session. However, within four months of selling on her stream, she had made more than 100 million yuan ($14.4 million) in sales.
The industry’s real star emerged towards the end of 2016. Austin Li—China’s “Lipstick King”—won a nationwide online sales competition, launching his career at Taobao. A former salesperson for L’Oreal, he quickly built a following selling lipstick, sometimes trying on more than a hundred different shades in a single session. In a 2018 stunt, he competed with then-Alibaba CEO Jack Ma, winning by selling 15,000 lipsticks in five minutes.
