It’s a surprise to precisely no one that, this year, the e-commerce behemoths of this world – we’re talking Amazon, Alibaba and JD.com – have gone from strength to strength. Online shopping is booming. At the end of July, Amazon announced that its quarterly profits had doubled compared to the same period in 2019 (US$5.2 billion versus US$2.6 billion). JD’s net income in 3Q 2020 hit RMB7.6 billion, versus the RMB0.6 billion recorded in the same three months last year, while it took Alibaba just 30 minutes to smash last year’s Singles’ Day sales record. The Chinese e-commerce behemoth saw revenue swell 30 percent to hit RMB155,059 million in the quarter ended September 30, 2020 with active customers up 15 million on last year’s count and EBITDA up 28 percent year-on-year.
Alibaba has succeeded where Amazon has up until now failed; it has wooed the beauty industry’s biggest players and convinced them to sell online. While luxury players have fought to stay off Amazon, they’re positively jostling for a flagship on Tmall.
It’s no coincidence that Alibaba has been investing heavily in all corners of the cosmetics industry. To wit, it’s teamed up with Richemont and Farfetch to expand its luxury retail offer, partnered with the industry’s major trade shows to facilitate meets between buyers and suppliers, livestreamed fashion weeks, purchased an in to the world’s largest duty free group, Dufry and is even managing warehousing via a tie-in with Japan’s istyle and recycling in conjunction with Unilever.
Meanwhile, the livestreaming trend is building apace and Alibaba is front and center of this tech. Coresight research has estimated that the Chinese livestreaming market will bring in some US$125 billion in sales this year, versus the US$63 billion racked up in 2019. And it’s catching on elsewhere too – in the US it’s valued at US$5 billion and counting.
As Mark Yuan, one of Taobao’s original livestreamers and now Co-founder of livestream consultancy And Luxe, told CNBC, “Within five years in America, if you don’t do livestreaming, your company will just disappear and get left behind. Right now, if you’re a business, you have a website. In the future, if you’re a company in retail, you will do livestreaming.”
However, the Chinese government’s recent move to regulate the livestreaming industry could well slam on the brakes for KOL-led e-commerce. In the dual marriage ceremony between beauty and Alibaba, livestreaming and e-commerce, the vows have already been read. Will the honeymoon period last?