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Alibaba Pushes Into Growing Livestreaming Trend

Alibaba Pushes Into Growing Livestreaming Trend

June 09, 2021 at 08:00PM
by PYMNTS

Among a host of announcements pertaining to its expanding menu of cloud computing products on Tuesday (June 8), Alibaba pushed further into the rapidly expanding world of eCommerce livestreaming with the launch of a new cloud-based product designed for online shopping. The tool will allow eCommerce players to design and launch their own livestream shopping experiences for their websites or apps, which will be hosted on Alibaba’s cloud.

The move comes as Alibaba looks to expand its cloud computing offering, which is increasingly seen as a critical profit driver — logging 37 percent growth in the firm’s last quarterly earnings report — and as the firm has worked aggressively to expand its services outside of China.

In addition to its livestreaming expansion, Alibaba also announced a planned data center for the Philippines, which is expected to launch before the end of 2021, alongside a third data center in Indonesia.

But as Alibaba looks to expand its cloud services in the Asia-Pacific region, it faces growing competition from U.S.- based rivals Microsoft and Amazon. Alibaba is the biggest public cloud player in the market with a 19 percent share, according to reports, followed by Amazon with a 10.5 percent share.`

Following the Global Trend

Livestreaming eCommerce has been a growing global trend — particularly over the last 16 months, as consumers sharply curtailed their shopping in physical stores.

“At a time with stores across America closed, we help provide people with their live digital storefront and be the digital Main Street where people can tell the story behind their product,” Bryan Moore, founder and CEO of livestream eCommerce startup TalkShopLive, told PYMNTS earlier this year.

And livestreaming eCommerce hasn’t just been for startups — earlier this year, Walmart hosted two shopping events on TikTok, looking to tap into the rising social commerce trend that is estimated to reach a value of $604.5 billion by 2027, according to some estimates — a 31.4 percent increase from last year’s $89.4 billion.

And U.S. livestreaming is still considered nascent in development when compared to China’s market, where the sector is estimated to have brought in $61 billion in revenue last year — a figure that is expected to double to $136 billion, pushed by increased usage due to the pandemic.

In fact, the trend has grown so large in China that it has attracted regulatory attention, with the State Administration of Market Regulation (SAMR), China’s market regulator, pushing for increased scrutiny of livestreaming eCommerce platforms amid concerns about poor quality and misleading advertising. According to Reuters reports, SAMR stands ready to “adopt more powerful supervision methods this year and deploy a series of actions” to clear up “prominent problems in the online market.”

Going Forward

Whether Alibaba’s latest livestreaming expansion will end up a bump in the road or a major snag in the market will likely determine how powerful Alibaba’s latest video-streaming add-on will be on its home turf in China.

But Alibaba’s cloud ambitions are bigger than its massive home market — it is increasingly focused on the world stage, where it still trails Microsoft, Google and Amazon. And given the larger global streaming trend, cloud-hosted eCommerce streaming might ultimately boost Alibaba’s global ambitions, no matter what SAMR decides.

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