This column was previously published in L’Opinion on 23rd december2020
With the explosion of live streaming and its unique business model, China shows that it is modernizing without Westernizing.
For the rest of the world, China in 2020 will always be associated with finding out about the pangolin, whereas young people in China will remember the year as marking the explosion of live streaming, which has profoundly changed their way of life. The phenomenal success of this new medium derives from its main originality: it makes video interaction possible in real time, creating a new form of sociability that covers many sectors — gaming, music, and cultural and social activities. According to the iResearch company, the 300-million-strong community of Chinese live streamers will reach 500 million users within five years and average daily viewing time will increase from 35 to 50 minutes. To the delight of the duopoly of ByteDance and its platform Douying — better known in the West under the name of TikTok — and of the giant Tencent and its platform Kuaishou.
These two names, which are still relatively unknown in the West, should become increasingly familiar in 2021. Despite short-term losses, their stock market flotation — with an estimated valuation of $50 billion for Kuaishou and $150 billion for ByteDance — will enable them to compete with the largest Western media incumbents.
The first reason for the incredible success of this new medium is the new sociology of young people in China. This age group is essentially made up of only-children who have been deprived of the family values so dear to their parents and who have had to grow up in urban areas with the highest population density in the world. Surrounded by material and social constraints in the real world, these young people see live streaming as the virtual expression of the “Chinese dream” promised by Xi Jinping’s government.
Virtual gifts made to influential live streamers in China already amounted to $30 billion in 2020, with an expected growth rate of almost 20% over the next five years.
The second reason for this explosion is the innate business acumen of the Chinese, who have managed to replicate the fun of shopping into a digital experience via live streaming — including its social function — whereas e-commerce continues to prosper in the West simply because of its practical advantages. Virtual gifts made to influential live streamers in China already amounted to $30 billion in 2020, with an expected growth rate of almost 20% over the next five years. “Social commerce” generated in this way has already enabled live streaming to conquer 20% of mobile advertising — over $20 billion in 2020 — with an expected annual growth rate of over 30% over the next five years.
The final reason for its success is the approval by the government, who sees the digitalization of these new services as new triggers of productivity, which is the only way of avoiding the “middle-income trap” — the syndrome of developing countries that undergo the transition from an economy based on the export of manufactured goods to one based on tertiary services.
The success that has come from the invention of a new business model “with Chinese characteristics” without equivalent in the West, is emblematic of China’s intention to modernize without becoming Westernized. In 2020, stock market flotations in Greater China will account for almost half the value of all IPOs worldwide. This tends to prove that global investors are now ready to grant China the financial resources it requires…