ByteDance platform Douyin tightens its e-commerce policies to compete with Alibaba and JD.com ahead of Singles’ Day festival
- Douyin’s move to build a closed-loop for its e-commerce business and monetise its popular live-streaming platform did not surprise analysts
- Douyin is loosening ties with third-party e-commerce platforms to prepare for the Singles’ Day shopping festival on November 11
Merchants must also use Douyin’s own digital marketing matching service to find key opinion leaders (KOLs) and cannot promote products from third party e-commerce websites through its live streaming service “in order to further protect the rights and interests of consumers,” according to a statement from Douyin’s representative.
The Douyin representative said the measures would not affect accounts that run shops on the platform and products sold through short videos.
The KOL move is effective September 6 while the ban on third party links will take effect after October 9.
Analysts were not surprised at Douyin’s move to build a closed-loop for its e-commerce business and monetise its popular live-streaming platform instead of just being a channel that directs consumers to other platforms.
Why selling stuff through live streams is booming in China
“It’s not unusual for China’s tech companies to create walled gardens as they become huge,” said Mark Tanner, managing director at Shanghai-based consultancy China Skinny. “ByteDance appreciates that the highest income in China comes from clicking the ticket on transactions rather than annoying customers with too much advertising. Given their increasing share of screen time, they are underperforming on this front and have ambitious targets to change that.”
In May, Chinese e-commerce giant JD.com partnered with Douyin’s competitor, the short video platform Kuaishou, to boost its presence in live streaming in time for the country’s annual midyear 618 shopping festival. Consumers made purchases directly from the live streaming platform without being redirected back to JD.com, which provided the delivery and after-sales service.
Douyin is “loosening ties” with third-party e-commerce platforms to prepare for the Singles’ Day shopping festival on November 11 – the largest shopping event in the country, according to Ma Shicong, senior analyst at research firm Analysys.
“Not only does Douyin have a stable audience on the client side, it is also going through the screening process for the merchant side,” said Ma.
JD.com joins video platform Kuaishou in live streaming sales push
But it might be a challenge for the trending platform to compete with mature e-commerce platforms. Alibaba’s Taobao Live has built an established ecosystem with its merchants and consumers and is experienced in providing after-sales service and supply chain management.
Taobao’s gross merchandise volume (GMV) has enjoyed over 100 per cent year-over-year growth and live-streaming sessions hosted by its merchants accounted for around 60 per cent of Taobao Live’s total sales, excluding unpaid orders, according to the company’s June quarter financial result.
Alibaba and JD.com declined to comment on Douyin’s move.
“Douyin will need to guarantee efficiency for merchants and make sure users have a great shopping experience so that they will continue to watch the live streaming promotions,” said Ma.
Alibaba is the parent company of the South China Morning Post.
