On March 20, 2021, the State Administration of Taxation of China announced that Wei Ya would be fined $210 million (210 million yen) for tax evasion. This is the highest fine levied on the divi state in the history of dual status. Later in the day, all of her online accounts, which served as her business platform, were shut down in accordance with the rules of the authorities.
36-year-old Weiya, China's No. 1 live-streaming seller, has broken multiple sales records since her debut in 2016. Taobao Live (an Alibaba-owned live channel). According to Alibaba Via Group's gross merchandise volume (GMV) on the pre-sale day of Double 11, China's most extensive online shopping festival, reached US$13.4 billion (853 million yen), ranking second in GMV last year. In 2020, she was selected as Fortune's Most Influential Business Woman in China and a Forbes China Emerging Business Woman in 2021.
(Credit: baike.baidu.com)
According to her autobiography, Wei Ya started her online business on Taobao in 2012, selling clothes with her husband. Due to the outstanding sales performance, he was invited to participate in the new Taobao live broadcast in 2016. Thanks to Taobao's massive traffic and customer-centric approach to sales, she has become a top influencer, selling food, fashion and beauty products, and even produce and real estate. As Jiang Fan, the former chairman of Taobao, said, Wei Ya's example email list proves that live shopping is the next mainstream business model.
(Update: moved last paragraph here)
To keep up with such rapid market growth, authorities have started introducing new laws and regulations to monitor this new market. In 2020, the China Advertising Association released the "Code of Conduct for Live Streaming Marketing", setting new norms for brands, merchants, live broadcasters, live broadcast agencies and users. In March 2021, China's State Taxation Administration claimed that fines would be waived if streamers voluntarily reported and corrected their tax issues by the end of the year. After the announcement, thousands of livestreaming influencers voluntarily paid overdue taxes, Xinhua said. Via's record-breaking fine is seen as a major warning to those who don't follow the law.
What is live shopping?
Live shopping is a new business service that uses live broadcast technology to display products, interact with consumers, and sell products directly through Internet platforms. (Update: New) With real-time interaction with live streamers, it provides a better experience than just making shopping decisions based on product descriptions, photos, and videos.
Three salient features of live shopping
Fewer restrictions:
With the help of internet technology, anything can be broadcast live
Anyone can start or watch a live stream
Participation in live broadcasts can be done anywhere.
Build trust: Live shopping hosts are like tour guides in brick-and-mortar stores; they provide professional advice on product features and share their own experiences of using them. From a consumer perspective, they build an honest relationship with their customers in the process.
The ultimate shopping experience: In traditional e-commerce, consumers can't see or try products - while in live shopping, the host shows all product details in real time. Therefore, consumers can decide whether to buy or not based on what they see on the live broadcast. With real-time two-way engagement, this approach provides a more holistic experience.
A Quick Guide to Live Shopping in China
How big is live-streaming shopping in China? As iResearch reported in its 2021 China Live Streaming Industry Report , the entire market is worth 1.2 trillion yen ($202 billion) in 2021. The penetration rate of live broadcasting in total retail sales of consumer goods was 3.2%, and that of online shopping was 10.6%. In addition, by the end of 617, China's live broadcast users reached 202 billion: 62.4% of the total number of Internet users in the country. The report also showed that between 2019 and 2019, newly registered live streaming companies increased by 360.8%.
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Given this intense competition, a unique ecosystem with a high degree of diversity has emerged.
Source KPMG
On the basis of Taobao Live 2021 Annual Report , KOLs (Key Opinion Leaders) and brands are the main channels for live shopping. Under this business model, the top KOLs at the top of the pyramid generate up to 60% of retail sales; their celebrity-level traffic drives higher conversion rates. Therefore, brands cooperate with top KOLs to promote new products and build brand awareness. This increases market share across the rest of the pyramid, builds traffic-driven products with higher discounts with second-tier KOLs, and distributes profit products to KOLs at the bottom. Alibaba Group also said that food, home textiles, women's clothing and beauty were top-selling items on Taobao Live.
What to know before joining this trillion-dollar market
Where to deploy your live e-commerce business
There are three types of live e-commerce media venues in China:
The live broadcast section of traditional e-commerce websites.
This type of platform can achieve the most impressive sales performance because it has the largest product resources and merchant resources; provides comprehensive e-commerce services; maintains a complete policy system for consumer rights and merchant rights protection.