China has Won in Social Commerce Live-Streaming that Boots E-commerce Purchases

ByteDance appears to be disrupting Alibaba with Douyin in E-commerce in 2022

The way ByteDance with its app, Douyin (the Chinese version of TikTok) has grown its E-commerce in 2021 is a story for the ages in its disruption of Alibaba. In 2022, ByteDance, Pinduoduo and JD.com put really pressure on Alibaba’s monopoly in E-commerce in China.

What this appears to show however is ByteDance is able to expand into E-commerce to become a giant in a way Facebook failed to do. Monetize social commerce and live-streaming to create more E-commerce traffic among young people. The amount of growth suggests ByteDance will become an E-commerce giant and not just an advertising giant in the 2020s.

For more than a decade, Alibaba Group has been China's undisputed e-commerce king but of late its crown has shown signs of slipping, unsettled by an influx of aggressive competitors into the sector. The rise of Douyin, Pinduoduo, JD.com, Vipshop Holdings and others in China, show just how dynamic E-commerce is and how China is the center of global consumerism.

While Facebook talks about the “Metaverse”, ByteDance has achieved in 2021 and will achieve in 2022 what it was never able to do, diversify its company in multiple ways. It doesn’t matter how good Meta does in advertising, if ByteDance is able to do so much more. This will likely mean China’s global influence will only increase. ByteDance has apps in many countries in the world, and not just TikTok like we sometimes assume.

It’s how good ByteDance is performing at home in China with Douyin though that really raises eyebrows. Alibaba’s Tmall and Taobao are a model that belong to the past. Douyin is now in 2022 going to enroach big-time into that system. You can see this by the slowing CRM growth.

ByteDance’s Douyin analysts say is disrupting the E-commerce sector via live-streaming social commerce, something young consumers can relate to better. Many platforms are growing faster than Alibaba now, Pinduoduo for rural deals, and Douyin for GMV growth of over $155 billion in 2021 alone.

According to the leak, Douyin is further in E-commerce adoption and sales than we ever would have imagined. Douyin in China is approaching 600 million daily active users. That is totally outside of TikTok’s incredibly global popularity. A lot of retailers and brands are moving from Alibaba to Douyin to spend more there, since that’s where the young consumer lives. In many cases Tmall sales are even negative for these retailers and brands now heading into 2022.

For brand growth in China, ByteDance’s Douyin is very key to growth and brand awareness and not just immediate sales. Merchants are increasingly attracted (Reuters) to the time users spend on Douyin (1,871 minutes on average in October, 2021). That’s 31 hours a month.

China is doing social commerce better in a way that American retailers have fallen perhaps years beyond. All of which is because Facebook didn’t understand live-streaming, and Amazon has such a low social media presence. The Chinese consumer is leading the trends, and ByteDance appears to be one of the companies along with JD.com and Pinduoduo who are best positioned to ride the young consumer wave in China.

The irony of course is you don’t even hear this news in America. Most consumers there have no idea what ByteDance, Douyin, Pinduoduo or JD.com even are. They thing WhatsApp introducing crypto via Facebook’s failed Libra experiment is impressive. They trade crypto on Robinhood or Coinbase and think they are participation in the future.

In February, 2021 short video and live streaming app Kuaishou said gross merchandise volume (GMV) for the 11 months through November grew nearly eight times from a year ago to 332.68 billion yuan ($51.44 billion). Douyin and several others have been doing live-streaming to boost E-commerce sales for years in China.

With ByteDance simultaneously disrupting Alibaba and Baidu in advertising and making such E-commerce growth means it’s becoming a more diversified company than Meta. It’s also creating apps better in more different parts of the world. Facebook has seen an exodus of talent in late 2021 after it’s announcement that it would found the Metaverse. Meanwhile ByteDance is growing in ways that Facebook never could even when it was at its peak popularity a few years ago.

The E-commerce competition in China means all of these companies will become more strategic in going global including Alibaba, JD.com and ByteDance in the 2022 to 2025 period. Monopolies like Amazon don’t have the same level of competition in America, so they aren’t as innovative. Amazon has a limited social commerce presence or social media backbone, unless they acquire Pinterest or Snap or many others.