On July 25, Dong Yuhui, one of China's most popular livestreamers, announced his resignation as a senior partner at Easy Buy, a live-commerce platform. He said he will run his namesake venture Time With Yuhui independently.

Dong made the decision due to his own career aspirations, commitment to his other pursuits and personal time arrangements, Hong Kong-listed East Buy said in a filing with the Hong Kong Stock Exchange.

The breakup was not entirely unexpected. Throughout this year, Dong's livestream appearances had been dwindling as he had begun accepting more roles as a guest speaker and variety show host.

Dong's departure is part of a recent trend of top influencers gradually decreasing the frequency of their livestreams before fading from the public eye. This trend inevitably raises the question: Is live-commerce, the combination of streaming video and e-commerce, losing its momentum?

In 2023, China's live-commerce achieved a transaction volume of 4.9 trillion yuan ($685.2 billion), with a growth rate of 35.2 percent, according to a research report released by iResearch, a market research and data analysis platform.

Although the growth of the sector has slowed down compared to its initial explosive surge, it has not yet reached its ceiling, the report said. It added that the compound annual growth rate for China's live-commerce market is projected to be 18 percent from 2024 to 2026 and the industry is expected to see steady growth and refined development.

So given that the industry is still in a growth phase, why are these leading livestreamers opting to step back?

Behind the choices

Professional burnout appears to be a common challenge currently faced by top livestreamers.

Thanks to his humorous and entertaining style, Crazy Little Brother Yang, whose real name is Zhang Qingyang, became the first person to amass 100 million followers on Douyin, the Chinese version of TikTok. He vented his frustrations during a livestream last year, saying, "The pressure is overwhelming. I no longer want to be an influencer. Even attending a parent-teacher meeting at kindergarten makes headlines. I have no personal space and can't even enjoy street food."

"Sustained high-intensity work pressure and new personal career development plans are important reasons for their departure," Hong Yong, an associate researcher at the E-Commerce Institute of the Chinese Academy of International Trade and Economic Cooperation, told Beijing Review.

The reliance of brands and platforms on super livestreamers is diminishing, according to Wang Peng, a researcher at the Beijing Academy of Social Sciences.

He told Beijing Review that brands need to pay influencers to endorse their products in livestreams, with the fee directly tied to the livestreamers' follower numbers. As top livestreamers are used to attracting potential buyers by claiming that they offer the lowest prices across online platforms, they often leverage their influence to control pricing, leaving most brands with little to no bargaining power. While the livestreams may result in skyrocketing sales, the profits are often minimal, and sometimes even lead to losses, making it unsuitable as a long-term sales channel.

Consequently, brands are increasingly focusing on establishing their own livestreaming outlets. "For brands, self-operated livestreaming has the potential to reduce their dependence on super livestreamers and offers greater flexibility and control," Wang Yalei, an industry analyst at Ctrip Research Institute, told Xinhua News Agency.

Wang Yalei said he believes self-operated livestreaming has evolved beyond just a sales role. "It is now one of the most direct and efficient sales channels and an important means for building brand image. It helps brands accumulate loyal customers," he said.

In recent years, an increasing number of brands have begun establishing their own livestream stores. According to the report by iResearch, in 2023, the proportion of self-operated livestreaming by brands reached 51.8 percent, surpassing influencer livestreaming for the first time.

Hong said as the live-commerce market becomes increasingly mature, consumers are focusing more on greater cost-effectiveness and higher quality products. This has led to rising costs for livestreamers to attract traffic, without a corresponding increase in conversion rates. This also contributes to the withdrawal of super live hosts.

"The live-commerce industry is undergoing a transformation, shifting from a model dominated by super livestreamers to one that features diversified sales approaches," Hong said.

He said platforms are beginning to support mid-tier and emerging livestreamers, aiming to build a healthier ecosystem, and that advancements in technology, such as artificial intelligence, are also reshaping the industry.

While top influencers are no longer the sole focus, they will still play a significant role in the industry. However, they will pay more attention to higher content quality and personal brand development, he added.

Navigating a new track

Wang Yalei said the underlying reason for both the retreat of top livestreamers and the rise of self-operated livestreaming is a shift in the industry's fundamental logic. The marginal benefits of attracting traffic are diminishing, with rising costs of traffic acquisition not translating into higher user conversion rates.

This has prompted brands and platforms to seek new growth drivers and sources of traffic, placing greater emphasis on content innovation and user experience to attract and retain users.

At the end of 2023, tech giant Alibaba further integrated its content e-commerce sector by merging Taobao Live and the Guangguang, Taobao's built-in social platform, to form the Content E-commerce Division. This move aims to deepen the integration of livestreaming, short videos, articles, and other content forms with e-commerce.

In April, e-commerce giant JD.com announced a plan to increase cash and traffic subsidies to support its content ecosystem.

Douyin and Kuaishou, another leading short video platform in China, recently announced policies to incentivize institutions and creators to produce more high-quality micro-dramas, a new video entertainment format with episodes lasting just a few minutes each but sometimes numbering over 100 in total, through cash subsidies and traffic channeling.

These moves reflect the live-commerce industry's desire to create new growth drivers by enhancing content quality, Wang Yalei said.

The underdeveloped overseas market is also seen by industry insiders as a new gold mine. According to the report by iResearch, China's cross-border live-commerce market is projected to reach 828.7 billion yuan ($115.4 billion) by 2025.

In July 2023, the Three Sheep Group, founded by Crazy Little Brother Yang, began exploring overseas markets. On January 10, the company collaborated with a local influencer in Singapore for its first overseas livestreaming sales event. This livestream successfully reached the top of TikTok Singapore's sales leaderboard.

Wang Yalei said the continuous expansion of the global e-commerce market and the diversification of consumer demand provide Chinese brands with a broad market to explore through live-commerce. This helps Chinese brands expand their overseas presence and enhance their international influence by making use of their advanced experience and technological advantages in livestreaming and e-commerce.

However, laws and regulations regarding live-commerce vary in different countries and regions, and consumers in different markets have diverse cultural habits and consumption preferences. Additionally, issues in cross-border trade, such as logistics, delivery and after-sales service, as well as local competition in target markets, all pose challenges for Chinese live-commerce platforms going global. Overcoming these issues will be a key challenge to address for the market players, Wang Yalei added. BR

(Print Edition: Post-Superstar Era)

Copyedited by G.P. Wilson

Comments to zhangshsh@cicgamericas.com