Beixiazhu, a 22-hectare e-commerce center in eastern China, comes alive as night falls. Auto rickshaws with open beds full of goods clog the roads, prompting local authorities to interfere and guide traffic.
A cacophony of ripping tape fills the air as express delivery services scramble to fulfill orders amid the sounds of passing vehicles.Beixiazhu, a booming, sleepless village in Yiwu, Zhejiang province’s manufacturing center, has quickly transformed its conventional export-oriented industry into a live-streaming e-commerce La La Land.
Many exporters in the city have turned to live streaming in search of new opportunities and riches since the pandemic upended their lives. According to local government statistics, Yiwu, a county-level city with a population of 1.2 million, now employs about 60,000 people in live-streaming e-commerce. Xiang Nan, a moon-faced 32-year-old who spends his afternoons wandering around the village searching for products to sell in his streams, is one of them.
The terms “supply chain” and “live-streaming hot-selling product” are prominently displayed in nearly every ground-floor shop in Beixiazhu, indicating that they provide not only sample products, but also support services for online salespeople like Xiang.
“Those people driving tricycles might have a net worth of millions of yuan,” said Xiang, pointing to the men crowding the street. “They drive tricycles during the day, and sports cars at night.”
Xiang aspires to live a life like this. He said that he wishes to become an internet star, which has resulted in a small number of people becoming extremely wealthy by selling goods online. Live-streaming celebrities like Viya and Xinba can sell as much merchandise in a few hours as a typical shopping mall can in a year. For many in China, live-streaming e-commerce is a promising field. And if they do not strike it rich, they will be able to sustain themselves.
According to state broadcaster China Central Television, live-streamers in Yiwu held more than 72,000 sessions in the first half of 2020, with a total revenue of 9.8 billion yuan (S$2 billion).Nonetheless, as more people enter the industry, it has become fiercely competitive, rendering attracting audiences a difficult job.
Xiang, who is from the poor inland province of Guizhou, has gone so far as to dress up as a grey-haired “grandma” on the short-video app Douyin, run by Beijing-based ByteDance, as a Chinese version of TikTok.
“You need to have some mockable moments (to attract viewers),” he said.
No gimmicks, however, have helped Xiang replicate a stroke of luck he had last summer, when his team sold over 200,000 yuan worth of goods in a single night.
“I put a series of chinaware on sale, and all of a sudden, we sold seven sets of those within 10 seconds,” Xiang recalled. The order numbers were so high that Xiang worried whether he had enough cash on hand to get the products from the factory and cover delivery fees.
That particular night stood out in his live-streaming career. According to Xiang, he only made a few thousand yuan this month, barely enough to cover his living expenses. He has, however, chosen not to abandon live streaming.
“Everyone has a dream to become rich,” he said.
Yiwu hopes that people with such aspirations will follow them in Beixiazhu, which, with its dozens of low-rise buildings full of matchbox-sized shops, is at the heart of the city’s e-commerce transformation. With favorable policies, the local government has successfully supported the e-commerce industry. It opened the “Lugang e-commerce area” in 2016, which covers 1.5 million square meters.
It released a paper detailing how the city will embrace live-streaming e-commerce at the end of 2020.According to the paper, any multichannel network entity that signs a contract with a Yiwu company and generates taxable revenue of 200 million yuan, 50 million yuan, or 10 million yuan will be compensated with 5 million, 800,000, or 100,000 yuan, respectively.
According to a study by research firm eMarketer, the Chinese retail industry is on track to become the first in the world with the majority of its revenues coming from e-commerce, which is expected to account for 52.1 percent of overall retail sales in China this year, up from 44.8 percent last year.Yiwu, which is known for producing low-cost Chinese products such as Christmas decorations and socks, is benefiting from the rise of domestic e-commerce as exports decline.
Most foreign merchants have stayed away due to travel restrictions imposed to combat the spread of Covid-19.
Compared to the noisy and often chaotic streets of Beixiazhu, the huge Yiwu International Trade City, the world’s largest small commodities market, was surprisingly quiet during a recent visit. Yiwu has a long tradition in commerce. Despite its lack of arable land, the city has a long history of trading with wealthier neighboring cities and counties.Yiwu was one of the first cities to take advantage of the shifting political winds after China’s reform and opening up began in 1978, led by late paramount leader Deng Xiaoping.
Zeng Xiaoping, who came to Yiwu two decades ago from a small village in Zhejiang province’s Wenzhou, was one of many young people searching for new opportunities.The 42-year-old, like many other villagers, opened her own shop selling belts in a large bazaar in the district.
For years, the shop offered a steady income for Zeng’s kin, before the pandemic struck. Last year, her company experienced a drastic downturn, prompting Zeng to open a clothing wholesale shop two kilometers away in Beixiazhu.
“The year of the pandemic, we didn’t have a single order; it was terrible,” Zeng said. “The situation 10 years ago was completely different. The International Trade Market was bustling at that time.”
Zeng, who has a college-aged son, sells clothes for a few yuan to a few hundred yuan. She claims that the 30-square-metre shop is not yet profitable because the higher annual rent of 300,000 yuan has greatly increased her costs. Zeng, on the other hand, wanted to try her hand at live-streaming e-commerce.
China’s largest short-video apps, Douyin, with 600 million daily active users as of August 2020, and Tencent-backed Kuaishou, with 300 million daily active users and a strong initial public offering in Hong Kong in February, are among the market’s top players.Zeng, who has a college-aged son, sells clothes for a few yuan to a few hundred yuan. She claims that the 30-square-metre shop is not yet profitable because the higher annual rent of 300,000 yuan has greatly increased her costs.
Zeng, on the other hand, wanted to try her hand at live-streaming e-commerce.
China’s largest short-video apps, Douyin, with 600 million daily active users as of August 2020, and Tencent-backed Kuaishou, with 300 million daily active users and a strong initial public offering in Hong Kong in February, are among the market’s top players.Zheng Liuping, a 36-year-old live-streamer originally from Anhui province, had pursued a variety of jobs after leaving middle school, including working as a woodworker at the age of 15 and operating a roadside stall in Huzhou, Zhejiang province.
He now sells kitchen appliances like pots and pans on Jinri Toutiao, another ByteDance-owned website, where he live-streams every day from 7 p.m. to midnight.
While there are always stories about people getting hundreds of thousands of orders in a single night, the best thing for most people to do while streaming is “be earnest and down-to-earth”, Zheng said.
In describing how e-commerce has become big business for Yiwu, Zheng said, “You can hear the sound of tearing tape, of express delivery the whole night. For example, if the merchants living next door had a big day, you can hear the sound even if you close the window.”
Yiwu opened its small-commodity market in September 1982, and it issued the first official document in China recognizing the legalization of farmer vendors and specialist markets.
Over the last two decades, the Yiwu International Trade City, a bazaar with over 70,000 stalls selling 1,700 categories of manufactured goods, has seen a rise in Chinese trade as it has attracted buyers from all over the world looking for anything from shovels to shoes. However, as the pandemic struck, business ceased. Foreigners were unable to reach China due to new regulations, and travel restrictions in other countries have limited the number of visitors. As a result, many merchants have shifted their attention back to the domestic market.
Another aspiring live-streaming influencer, Wang Lei, who left his factory job to relocate to Beixiazhu, agreed that success in live-streaming e-commerce is fraught with danger.
“Maybe you won’t earn a single cent this month, and the situation might be the same next month,” said Wang, a man in his late 30s who sells small commodities like garbage bags and towels.
“But when you are about to go home for Lunar New Year, you might earn an amount of money that would usually take you one or two years to earn.”
Wang compared seeking riches via live streaming to playing the lottery, adding that live-streaming e-commerce has better chances.
“People are buying lottery tickets every day despite the low chance of winning,” he said.
Zheng and Wang have yet to win the live-streaming lottery. Wang said his live-streaming room only has a limited audience, while Zheng said the money he raised is just about enough to cover his costs in Yiwu.
Yiwu, according to Zheng, who has a seven-year-old daughter, provides several opportunities to start over.
“Yiwu has a lot of opportunities,” he said. “Even though I’m not doing live-streaming any more, packing up parcels for merchants could earn 700 to 800 yuan one day if I am nimble enough. I don’t think there is another place for you to earn money in such a way.”
“Yiwu will never go downhill,” he added. “The stories about going downhill only concern individuals.”
Taobao Live is the most profitable live-streaming e-commerce platform, according to sales, and is owned by Alibaba Group Holding, which also owns the South China Morning Post. According to the group, it will generate more than 400 billion yuan in gross merchandise value (GMV) in 2020.
To communicate directly with customers, brands and retailers are constantly holding live-streaming sessions on these sites.
According to Alibaba, live-streaming sessions hosted by merchants accounted for about 60% of Taobao Live GMV in the second quarter of 2020, with the number of live-streaming merchants increasing by 220 percent year on year.
Source: South China Morning Post