Liu Qiangdong's doppelganger "personally" breaks the deadlock

To promote its live-streaming business, JD.com founder Richard Liu, who had disappeared from the public eye for years, personally stepped into the spotlight.

On April 16, 2024, Richard Liu, founder and chairman of JD.com, appeared as an AI digital avatar named "Procurement Brother Dong" in JD.com's home appliances and supermarket procurement live-streaming sessions, conducting a 40-minute live sales event.

Thanks to Richard Liu's personal appeal and the novelty of the AI avatar, the debut of "Procurement Brother Dong" was a resounding success. According to JD.com's official announcement, the live stream attracted over 20 million viewers and generated more than 50 million yuan in sales.

▲Image: Richard Liu's digital avatar during the live stream

However, it's worth noting that JD.com's live-streaming platform has had several viral moments in recent years, yet it still struggles to secure a strong position in the competitive e-commerce live-streaming market.

This suggests that, beyond relying on gimmicks to attract attention, JD.com Live needs to build differentiated competitiveness to cultivate a loyal audience.

1. The Rise of Live-Streaming E-Commerce: JD.com Falls Behind

Once upon a time, China's e-commerce industry was dominated by the shelf model, where JD.com thrived with its efficient supply chain. However, in recent years, with the rise of short-video platforms, live-streaming e-commerce has gained momentum, and emerging platforms have surged, challenging JD.com's dominance.

According to iResearch, China's live-streaming e-commerce market reached 4.9 trillion yuan in 2023, a 35.2% year-on-year increase. In contrast, online retail sales of physical goods grew by only 8.4% to 13.0 trillion yuan in the same year.

The rapid growth of live-streaming e-commerce is largely due to its interactive and immersive nature, which drives higher conversion rates. Data from People's Daily shows that live-streaming e-commerce achieves a 30% higher conversion rate than traditional e-commerce.

▲Image: Forward Industry Research Institute

This trend indicates that live-streaming e-commerce will continue to grow rapidly. Forward Industry Research Institute predicts that China's live-streaming e-commerce market will reach 19 trillion yuan by 2029, with a compound annual growth rate of 30% from 2024 to 2029.

Against this backdrop, companies in the live-streaming e-commerce sector have seen explosive growth. Official data shows that Douyin E-Commerce's GMV surged by 277% in 2023, with over 600,000 creators achieving GMV exceeding 100,000 yuan. Similarly, Kuaishou E-Commerce's GMV reached 1.18 trillion yuan, up 30.93% year-on-year.

In contrast, JD.com's failure to mature its live-streaming business and the diversion of consumer attention to rival platforms have led to stagnant performance.

Financial reports reveal that JD.com's revenue growth has slowed significantly, from 27.6% in 2021 to 3.7% in 2023, with revenues of 951.6 billion yuan, 1.046 trillion yuan, and 1.085 trillion yuan, respectively.

JD.com's declining growth has raised concerns among investors. Its U.S. stock price has plummeted by approximately 76.43% from its peak of around $108 per share in early 2021 to $25.46 per share.

2. Content Ecosystem Struggles: Live-Streaming Lacks a Breakthrough

As a leading player in China's e-commerce industry, JD.com recognized the importance of video content early on and actively built its content ecosystem.

As early as 2017, JD.com began integrating short videos into its homepage and product pages. Hu Changjian, JD.com's head of product short videos, stated, "Breaking down the barriers between content and consumer behavior and deeply integrating short videos with e-commerce will be key to enhancing user experience and content marketing."

Around 2020, as platforms like Douyin and Kuaishou rose to prominence, the "content-driven sales" model gained traction, prompting JD.com to invest in cultivating live-streamers. During the 2021 618 shopping festival, JD.com launched a content IP matrix featuring one official live-streaming room, 10 category-specific official accounts, and a network of 100 celebrity influencers.

▲Image: Hua Jing Industry Research Institute

Unfortunately, due to insufficient investment in content and a lack of top-tier live-streamers, JD.com Live failed to gain market traction. Guosheng Securities data shows that in 2021, only 4.2% of MCN agencies chose JD.com Live, compared to 95.8% for Douyin and 34.7% for Taobao Live.

Watching JD.com miss out on the live-streaming e-commerce boom and its market value decline, founder Richard Liu couldn't help but feel anxious.

Since late 2022, Richard Liu has returned to JD.com, first stabilizing the company by "re-emphasizing low prices" and recently doubling down on live-streaming content.

In March 2024, LatePost reported that JD.com Retail identified three key battles for 2024: content ecosystem, open ecosystem, and instant retail. On April 10, JD.com announced a 1 billion yuan cash incentive and 1 billion yuan in traffic support to attract original short-video creators and high-quality content agencies to its platform.

Clearly, Richard Liu's appearance as the AI avatar "Procurement Brother Dong" is not just about driving sales but also about proving JD.com's content value to the market and attracting creators and consumers to its live-streaming platform.

3. AI + Procurement: Can JD.com Tell a "New Story"?

Undeniably, the debut of "Procurement Brother Dong" successfully went viral and captured market attention, but this alone may not propel JD.com Live to industry leadership.

Looking back at JD.com Live's history, it has had several viral moments, but the hype often fades quickly. For example, during the 2023 618 festival, JD.com partnered with "Friends Who Chat," and Luo Yonghao made a guest appearance in their JD.com live stream. The event was a hit, with sales exceeding 150 million yuan and over 17 million cumulative views.

▲Image: Friends Who Chat

However, Luo Yonghao has gradually stepped back from live-streaming sales, and "Friends Who Chat" primarily operates on Douyin and Taobao. After the 618 festival, the popularity of their JD.com live stream waned. Official data shows that their most recent JD.com live stream replay, posted in late 2023, attracted only 1.939 million views.

Similarly, during the 2023 Double 11 festival, JD.com Procurement gained unexpected fame by challenging Li Jiaqi. JD.com reported that its procurement live streams accumulated over 320 million views by the end of the event.

However, without top live-streamers to sustain momentum, JD.com Procurement's traffic plummeted after Double 11, with some streams now attracting viewership comparable to "Friends Who Chat." In this context, Richard Liu's appearance as "Procurement Brother Dong" is largely aimed at promoting JD.com Procurement as a brand. During the live stream, "Procurement Brother Dong" repeatedly emphasized JD.com Procurement's advantages, such as "low prices," "professional supply chain," and "excellent service."

The decision not to appear in person may stem from lingering fallout from the "Mingzhou incident" and JD.com's recognition that it faces an uphill battle in the crowded interest-based e-commerce space. The company hopes to leverage AI technology to carve out a unique path.

▲Image: JD.com

According to financial reports, in 2023, JD.com's Yanxi digital avatars were deployed in over 4,000 brand live streams, boosting off-peak conversion rates by more than 30%. Its AI customer service tool, Jing Xiaozhi, was used by over 360,000 merchants, with small and medium-sized merchants increasing by 102% year-on-year. This suggests JD.com aims to use "AI + Procurement" to serve as many merchants as possible, trading efficiency for scale to expand its live-streaming e-commerce influence.

However, this doesn't guarantee the success of JD.com's "AI + Procurement" strategy. The debut of "Procurement Brother Dong" revealed issues like stiff expressions, robotic lip-syncing, and limited interaction.

It's important to note that consumers choose live-streaming shopping not only for discounts but also for the appeal of the live-streamers. A Beijing Consumers Association survey of over 5,400 consumers found that 44.56% chose live-streaming shopping for its engaging presentations, while 21.05% followed live-streamers' recommendations.

This raises the question: Without Richard Liu's star power, could "Procurement Brother Dong" have achieved such impressive results?

In summary, as JD.com faces slowing growth in its traditional shelf-based e-commerce business, live-streaming e-commerce represents one of the few remaining growth opportunities in the industry. It makes sense for JD.com to invest heavily in this area.

However, JD.com Live's biggest challenge is its inability to sustain momentum beyond viral moments, lacking both influential live-streamers and a loyal consumer base.

In this context, Richard Liu's appearance as the AI avatar "Procurement Brother Dong" and the "AI + Procurement" strategy are logical attempts to efficiently capture audience attention. But improving the realism of AI avatars remains a critical hurdle.

Author｜Zhang Yao

Editor｜Hu Zhanjia

Operations｜Chen Jiahui

Produced by｜LingTai LT (ID: LingTai_LT)