External links to China’s two biggest e-commerce platforms Taobao (owned by Alibaba) and JD.com are soon to be removed from the live streaming rooms on Kuaishou, a rival of the Chinese TikTok platform, Douyin, according to a notice published by the video-sharing platform on 22 February.
Taobao’s links will also be taken down from Kuaishou’s shopping cart – a feature that appears in the platform’s normal short video page as well as from users’ homepages. Links to JD.com, however, will still be allowed on Kuaishou’s homepage and short video page.
This means that Taobao will soon lose all access to social commerce channels on the platform that houses more than 410 million monthly active users as of Q4 in 2021. Live streaming events are the biggest online engagement generator, meaning the move will slash this primary source of online traffic for both Taobao and JD.com.
The adjustment is due to “changes in agreement with third-party e-commerce platforms” and “will take effect from 1 March”, the statement added. It is understood that the current agreement between Kuaishou and Alibaba will cease by the end of February. However, the decision is also driven by the ambition to build a closed-loop e-commerce system that has been seen amongst all of China’s major video-sharing platforms.
As early as November 2021, Kuaishou had banned external links to Youzan (a Chinese e-commerce Software-as-a-Service provider) and Mokuai (a Chinese live streaming e-commerce service platform), paving the way for the closed-loop ecosystem. This was a late move compared to its rival Douyin, who had already tapped into this in 2020. This is another example of how social commerce has become another battlefield for video-oriented platforms as China’s short video industry has come to its maturity and users have plateaued.
Therefore, expedition into the new territory comes naturally and necessarily for these platforms’ further growth. Moreover, Kuaishou’s focus on fostering brand users has also been fruitful, allowing it to be more independent from third-party e-commerce platforms to direct traffic.
It is reported that Kuaishou saw its new online merchants grow by 186% in the first 11 months in 2021, and GMV (Gross Merchandise Volume) coming from live broadcasts hosted by brands themselves also soared by more than eightfold during the same period of time. These accumulated assets have also enabled Kuaishou to step up the development of its own social commerce.