$Alibaba(BABA.US) Some thoughts on live-streaming e-commerce, seeking advice from experts.

After three years, I've reinvested in e-commerce stocks, but I have more and more doubts about this industry, especially live-streaming e-commerce. It's said that Douyin's live-streaming e-commerce GMV exceeded 4 trillion last year, which seems exaggerated. However, it's also reported that Douyin's e-commerce growth rate has fallen to around 20%. I have significant doubts about the sustainability of this model.

First, from the model perspective, I browsed Douyin and noticed that many products in live-streaming rooms are indeed priced very low, even lower than Taobao and Pinduoduo. I don't understand how they achieve such low costs.

Theoretically, in the live-streaming e-commerce model, influencers charge slotting fees, platforms take service fees, and there are advertising costs. Additionally, public information shows that the return rate for live-streaming e-commerce is much higher than for traditional e-commerce, which also increases costs. From the model and supply chain perspective, theoretically, there are more steps from product manufacturing to the consumer's hands, more fees involved, so profits shouldn't be higher than Taobao or Pinduoduo, and prices shouldn't be lower either. Yet Douyin e-commerce manages it—is there some magical trick?

Second, the quality of influencers varies greatly. Of course, there are high-quality influencer companies like Oriental Selection, but most seem quite low-end. Anyone can sell products, even Xinba and Xiaoyangge, the top influencers on Kuaishou and Douyin—one has a bad temper, often cursing, smashing things, and ranting in live streams; the other acts like a clown, creating vulgar content. It reminds me of TV shopping from years ago: "Originally 888, now 88, don't miss out!"

Lastly, there's the issue of product authenticity and quality. It seems the platform's role in live-streaming e-commerce differs from traditional e-commerce. Traditional e-commerce platforms crack down on counterfeits and enforce strict rules against fake products, but this doesn't seem to apply to live-streaming platforms. Recent online incidents show that even if influencers sell fake products, there's no strong enforcement for refunds or compensation. If counterfeit goods are hard to avoid on strictly regulated traditional e-commerce platforms, it's hard to imagine how rampant they might be on loosely regulated live-streaming platforms.

In short, I don't fully understand this model. After some research, I doubt the sustainability of live-streaming e-commerce if it continues in its current form. Of course, if the model evolves, that's another matter.$JD.com(JD.US) $PDD(PDD.US)