As China's online shopping bubble bursts

Faced with pay cuts, long working hours and fierce competition, China's livestreaming sellers are pessimistic about their job prospects in a saturated industry.

Salespeople are concerned about their job prospects in an increasingly competitive and saturated sector.

As of March 2023, Hou Chunyu spends four hours a day livestreaming to sell fiber supplements on Douyin, TikTok’s sister app. Sometimes she works past midnight. “This [supplement] contains eight types of fiber, as well as different vitamins and minerals,” the 24-year-old will repeat every few minutes, referring to her imaginary audience as “babies.” “Even astronauts use this amazing stuff. Why don’t you give it a try?”

• Livestream shopping, which has become hugely popular in China due to the pandemic, was once a booming industry – with nearly half of the country’s internet users buying from livestreaming sellers by mid-2023.
• But the live-streaming shopping bubble began to deflate this year. Faced with falling wages, longer hours and increased competition, sellers are questioning their job prospects in the industry.
• E-commerce companies have also begun experimenting with AI livestreamers to cut costs, making the job market even more precarious.

But by the end of March, Hou had not sold a single product. Her live stream had only four viewers—two of whom were her colleagues. Hou said she felt like she was talking to a mirror—trying to get feedback from her audience but only hearing her own voice. Despite being paid 12,000 yuan ($1,642) a month, Hou decided to quit. “I would have a mental breakdown if I continued doing this,” she said.

Dream of changing life...

When Hou first started selling via livestream in mid-2021, the industry was booming—thanks in part to China’s non-Covid-19 lockdown, which forced millions to stay home and shop on their mobile phones. While relatively new to the West, live-streaming was already popular in China, where nearly half of internet users were shopping via livestream by mid-2023. One of China’s most successful “stars” was Austin Li, dubbed the Lipstick King, who once sold billions of dollars worth of products in a single day. The dream of instant fame and fortune has driven many young women into the industry, working for small e-commerce companies in the world’s most populous country.

Competition and pressure

But the e-commerce bubble has shown signs of deflating recently, as the saturated industry faces an economic downturn. Fed up with falling wages, longer hours and growing competition for frugal Chinese consumers, livestreamers are starting to worry about their job prospects in the industry. Hou, a broadcast journalism major, moved to Hangzhou in 2022 to join livestreaming, lured by the lucrative promise of work in a city that is China’s e-commerce hub. She works four hours a day, 26 days a month for a salary of more than 10,000 yuan ($1,390) — double the average income of a recent college graduate. But in 2023, the job market became tougher, with many companies cutting salaries to $821–$1,095 and requiring their employees to work eight hours a day. As companies went bankrupt, Hou changed jobs frequently. A clothing company laid off all its employees six days after she joined. Li Bing, 23, from Zhoushan, who sells toilets and bathroom sinks for a home appliance company, is in a similar situation. Despite earning as much as $2,053 a month in 2022, her income is now just $1,095 a month. He Zi, 26, from Hangzhou, said her monthly income has dropped by 5,000 yuan compared to last year. Livestream sellers’ incomes are set to fall by about 30% from 2022 to 2023 in major cities like Hangzhou, Shanghai and Beijing, according to Chinese consultancy iiMedia Research. As the economy slows, Chinese consumers are becoming more cautious about spending and are more inclined to buy cheaper goods. Unlike a year ago, when customers struggled to place orders whenever a product was listed on a livestreamer’s channel, they are now much more selective, Li said. “You need to convince them with the most sincere tone. The work now is not only physically tiring but also mentally torturous,” she said. As consumers spend less and sales decline, companies are making up for the loss by increasing the workload of employees, making livestream selling more competitive, demanding and stressful. Sharon Zhang, a 23-year-old who just left her livestreaming sales job at a top cosmetics company in Hangzhou, said her working hours were increased in the first half of 2023 and her team’s salaries were drastically cut. Amy Wang, a livestreamer in Dalian, said that sales people at her company were forced to keep talking even when there was no audience watching the channel. They were not allowed to pause for more than five seconds and had to extend their live stream if the viewership reached a certain level — her longest live stream lasted eight hours. “My head was buzzing after saying the same thing over and over all day,” Wang said. “I felt like a lab rat running on a treadmill.” Livestreamers are facing greater pressure and competition due to market saturation, said Rui Ma, a Chinese tech analyst. The number of livestreaming channels on Chinese platforms has increased fivefold from 2020 to 2022, according to Chinese market research firm Zhiyan Consulting. From 2020 to 2021, when livestream shopping was booming in China, retailers were willing to offer deep discounts and pay large sums just to get their products on sales channels, according to Leo Li, a tech headhunter in Hangzhou. Livestreaming companies have mushroomed and are competing for highly paid hosts. But retailers are now offering fewer discounts and paying livestreamers a smaller share of profits, Li said. At the same time, more young college graduates are joining the industry after witnessing its boom, leading to further declines in wages. To cut costs, e-commerce companies have begun experimenting with AI livestreamers, making the job market even more precarious. Nanjing-based startup Silicon Intelligence lets customers create their own custom AI livestreamers or use the company’s pre-trained livestreamers for a monthly subscription of just $753. Livestream sellers say the tough conditions have forced them to leave the industry. Wang worked at four different companies, selling everything from thermos bottles to underwear. Each stint lasted about 1–3 months. After her second month at a company selling pig trotters, Wang and her remaining colleagues were laid off, citing insufficient profits. She is now taking a break from livestreaming, helping out at her parents’ restaurant while looking for other opportunities. But in a tough job market, livestreaming may still be the best option. One in Guangdong, who sells home decor and baby products, said she chose the job because it offered a more flexible schedule and allowed her to dress up for work. “As a fresh graduate, livestreaming actually pays better than many other jobs,” said the 26-year-old, who asked to remain anonymous due to privacy concerns. In August, Hou quit another livestreaming job — this time at an automotive lubricant company — after her employer extended her hours and cut her vacation days. She said she wasn’t sure whether she should look for another job in the industry: Her current job paid more than her others, but she was exhausted. Hou said she suffered hair loss and insomnia from the stress of failing to meet her sales goals; even when she could sleep, she would repeat the sales pitch in her dreams. “Before I took this job, I thought it would feel like I was performing on stage, under the spotlight,” she said. “After I started working, I realized it was really robotic, boring and dull.”

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