The Rise of Content-Based E-Retailing Platforms
The rise of content-based e-retailing platforms such as Douyin and Kuaishou has disrupted the traditional e-commerce model. These platforms create emotional connections between users and influencers through interesting content. Users buy products for engagement and fun, even if they don’t necessarily need them. Douyin has quickly gained popularity and achieved a gross merchandise value (GMV) of 1.2 trillion RMB by 2022. Traditional platforms like Alibaba and JD.com are experiencing declining GMV. As users spend more time on content-based platforms, the time spent on traditional e-commerce platforms decreases. The success of content-based platforms relies on influencers who become product ambassadors and generate direct revenues. By leveraging AI, platforms can increase commission and advertising revenues by providing personalized content. However, content-based platforms must evolve further to manage the relationship between influencers and followers. The rise of these platforms may lead to stricter regulation, but it also presents opportunities for U.S. e-commerce platforms to embrace this new model.