Bilibili Tests Live Commerce: 'Feeling Our Way Across the River' 84

Singles' Day is here, and Bilibili's livestream e-commerce has arrived as well.

It has taken three actions: first, on October 14, it launched a shopping section in the livestreaming area, providing an entry point in the public domain where users can see livestream commerce; second, it released the "Livestream E-commerce UP-host Recruitment Incentive Program" to attract more UP-hosts to do livestream selling; and third, in September, it rolled out the "Product Selection Plaza" for UP-hosts to choose the goods they sell. The "people, products, and place" trinity—grabbing all three at once.

This doesn't come as a surprise to the outside world.

From a business standpoint, Bilibili began internal testing of the "Little Yellow Cart" at the end of 2021, and even spent 118 million yuan to obtain a payment license, building up infrastructure long ago and having set its sights on livestream e-commerce for quite some time.

From a corporate perspective, Bilibili faces far too many internal and external challenges. Its stock price has plummeted, dropping as much as 90% from its initial listing and hitting a new four-year low; losses have intensified—the latest financial report shows that Bilibili's net loss in the second quarter was RMB 2.01 billion, expanding 79.21% year-over year; affected by the broader environment, its three major business segments—gaming, advertising, and livestreaming—are all under pressure, and Bilibili needs a new story.

So, how is Bilibili's livestream e-commerce doing?

Shenran spoke with several UP-hosts who have tried livestream selling on Bilibili, and the results could be described as a study in contrasts. Some UP-hosts have achieved livestream GMV in the hundreds of millions, while others have gone days without making a single sale. Everything is still in its early stages, and Bilibili's target is relatively cautious. According to a source familiar with the matter, Bilibili's GMV target for this Singles' Day is 300 million yuan, and it has already been achieved ahead of schedule. However, this isn't a large figure either—a single session from a top Taobao livestreamer can reach this scale.

"Having UP-hosts do livestream selling isn't an e-commerce business model; it's more about commercializing UP-hosts and helping them increase their income. Based on current assessments, the overall pie is still very small," said a mid-level executive at Bilibili.

The road ahead for Bilibili's livestream e-commerce is still full of unknowns.

01. Some Have Sold Hundreds of Millions, Others Haven't Made a Single Sale

Currently, the "Shopping" section is placed within Bilibili's livestreaming area, but the entry point is hidden fairly deep. Users need to tap the rightmost tab navigation on the livestream page and scroll to the very end of the first row to find it. Once inside, aside from the promotional text such as "Livestream E-commerce Good Things Festival" on the header image, the page doesn't look very different from other Bilibili pages.

Click into a livestream room, and the styles are rather polarized.

"Just pay with your balance," "Bro, don't worry, leave it to me—your boy guarantees quality and quantity," in one digital products livestream room, the host stares at the screen while responding to user questions. In a small video frame, the host is surrounded by a table of computer model numbers rendered in black text on a white background. Even with a "Clearance Big Sale" banner added, the style doesn't feel out of place—making you forget for a moment that this is Bilibili.

In another selling livestream room, a gaming host finished playing a game and played a girl-group dance video during a break: "Oh right, this is Bilibili—how could I not play some ghost animal editing gibberish videos," so they switched to a trending ghost editing video. If it weren't for the products lining the right side of the page, it'd be hard to imagine this is a selling livestream.

Bilibili's livestream area shopping section interface and the styles of different selling UP-hosts' livestream rooms

Behind the different styles lie two types of selling UP-hosts.

One type has their own supply and is truly going all-in on selling—they're closer to being merchants. Some of them have their own Taobao stores, and the livestream style isn't much different from shopping livestream rooms on other platforms, with categories concentrated in home goods, digital products, beauty, and cosmetics.

The other type has no supply of their own and relies on Bilibili's Product Selection Plaza to sell. The content of their livestreams is closer to Bilibili's traditional style, but also more laid-back—they simply hang product links while doing their regular livestreams, with hardly any specific product explanations, and categories are concentrated in entertainment areas like gaming, music, and lifestyle.

Based on Shenran's conversations with multiple parties, the selling results of the two types of UP-hosts are a study in contrasts.

Some of the first type have reaped the rewards.

Mr. Mideng, a home goods review UP-host with over one million fans, told Shenran that they started livestream selling on Bilibili in March 2022, with a first-session GMV of 20 million yuan. For this Singles' Day, just a few days in, their GMV has already reached 330 million yuan, hitting the target ahead of schedule. A post-90s UP-host who specializes in selling crabs also told Shenran that just one week after starting livestreams, his follower count grew from just over 7,000 to 15,000. Although daily room views are only around 2,000, he can sell several hundred orders a day, with a conversion rate of 70%, and this has become his main e-commerce channel.

What they share is that the products they sell are highly relevant to the video content they previously created, and they also have independent supply. However, Bilibili's livestream e-commerce is still in a "wilderness period," and UP-hosts who entered earlier have more exposure opportunities. How long this dividend will last, and whether transaction volume will fluctuate once it fades, remains unknown.

One UP-host who does computer reviews mentioned that he has just over 70,000 followers. By presenting professional analyses in the form of parameters in his livestream room, he achieved a single-session GMV of 3.4 million yuan, but his current headache is that his selling style is constantly being copied.

The second type, on the other hand, is more representative of Bilibili's native ecosystem, but their selling results are not ideal.

A music-focused UP-host with 20,000 followers told Shenran that she has been doing livestream selling for nearly a week, specifically picking easy-to-sell products like data cables. With only a few dozen viewers per day, she hasn't made a single sale. A gaming UP-host with close to 100,000 followers said that when livestreaming games, he hangs links to easy-to-sell snacks, but sometimes the daily sales are only one or two hundred yuan.

They all mentioned in unison that there are still issues with Bilibili's livestream e-commerce infrastructure. "When you're not livestreaming, users can't see the shopping cart, and for many products, you have to jump over to Taobao to place an order—the link is a bit long," one selling UP-host said.

02. Doing Livestream E-commerce: First, Nurture the UP-hosts?

There have already been various interpretations in the outside world about Bilibili's move to ramp up livestream e-commerce on the eve of Singles' Day.

Wang Feng, a former mid-level executive at Bilibili, told Shenran that Bilibili has two intentions. "On one hand, it does want to do e-commerce; on the other, this is a direct way to monetize UP-hosts. For Bilibili, the focus is still on the latter—now, the operation of the UP-host ecosystem is more important than e-commerce monetization."

After all, UP-hosts are the foundation of everything in Bilibili's ecosystem. He revealed that under persistent losses, Bilibili has been cutting costs and improving efficiency, compressing content costs. It started reducing UP-host revenue sharing last year, and in the first half of this year, some UP-hosts revealed on Zhihu that their share had at one point dropped by 80% after the revision of the creation incentive program. According to financial reports, Bilibili's Q2 monthly active UP-host count dropped from 3.8 million in Q1 to 3.6 million—the first decline in UP-host numbers. To prevent further UP-host attrition, Bilibili must find ways to help them make money.

This is a thorny issue.

One source familiar with the matter revealed that Bilibili has considered many other approaches. In the second half of 2021, it discussed having UP-hosts sell products, and at the time, the conclusion was, "the user base is still small compared to Douyin and Kuaishou, the traffic UP-hosts get isn't enough to support selling conversion, and the ROI for many categories is low."

Now that livestream selling has been put on the schedule, in Wang Feng's view, market sentiment has influenced Bilibili's decisions. "Bilibili's focus used to be on growth, but now it definitely needs to find ways to make a profit. Businesses that didn't seem so urgent before also need to be started now."

This can also be gleaned from which department the livestream e-commerce business falls under.

An employee close to Bilibili's livestream business told Shenran that livestream e-commerce is run by a relatively independent project team, with reporting lines and organizational structure within the livestreaming department. As for why it's not in the e-commerce department, Wang Feng explained that this is partly due to the rising position of livestreaming business head Wang Yuyang at Bilibili, and partly related to the goal of helping UP-hosts monetize.

This is also why the threshold for participating in livestream selling this time is extremely low—UP-hosts only need to meet three conditions: real-name authentication, a follower count of ≥1,000, and a streaming record within the past four years. According to Shenran's observations, some UP-hosts direct traffic to their private domains during livestreams, with their main page featuring their own enterprise WeChat QR code, and Bilibili hasn't stepped in much to intervene.

So, can livestream selling help UP-hosts make money?

Based on Shenran's conversations with multiple UP-hosts, those who entered early and solved their supply chain problems have made money, but most of them are disconnected from Bilibili's original content ecosystem and have a stronger merchant identity. The majority of content-focused UP-hosts who truly grew up within Bilibili's ecosystem are still a long way from livestream selling.

In Mr. Mideng's view, Bilibili doing livestream e-commerce isn't without advantages—there are many first- and second-tier city users here, and there's a learning-oriented atmosphere. When selling products with selection thresholds that require users to do their homework, like digital products, home goods, and home appliances, Bilibili is a fitting place. If a UP-host's past video content has demonstrated their expertise to users, then selling related products makes it easier to gain trust.

According to Wang Feng's observations, in terms of doing livestream selling, "UP-hosts in verticals like digital products, those closer to consumer decisions, have an advantage." "With Bilibili's user base, through various support methods, it's not that hard to initially cultivate a few representative selling UP-hosts. But whether a stable group of selling UP-hosts can emerge ultimately depends on how much traffic there is."

This is precisely Bilibili's current weakness in livestream e-commerce.

One UP-host who has been doing livestream selling for over half a year mentioned that on Bilibili, he hasn't really seen any livestream selling sessions with over a million viewers. There's no prominent public domain entry point, and many users who come to watch livestream selling are existing fans. Based on his observations, the click-through rate is between 2% and 3%. In other words, even for a big UP-host with one million followers, only 20,000 to 30,000 fans are interested enough to click into the livestream room. UP-hosts with this kind of follower count are already rare, and compared to Taobao, Douyin, and Kuaishou, such viewership numbers are indeed not high.

"Livestream selling GMV = number of viewers × conversion rate × average order value. On Bilibili, the number of viewers for livestream selling isn't high, and if the latter two numbers are also low, it's bound to sell poorly. UP-hosts need to find breakthroughs in conversion rate and average order value," the UP-host mentioned above said.

In Wang Feng's view, the core issue is still that "all of Bilibili's monetization forms are highly concentrated. Better supply chains and better advertising orders are mostly available only to top UP-hosts. For many small and mid-sized UP-hosts, there aren't that many fans interested in watching their livestreams, let alone buying products."

At this stage, relying on livestream selling to retain UP-hosts isn't easy.

03. Fantasies About Bilibili's E-commerce: Maybe Hold Off for Now

In fact, live-stream shopping is just one form of e-commerce. Before exploring the potential of live-stream shopping, we need to first clarify the logic behind Bilibili's e-commerce strategy.

Drawing on insights shared by former Bilibili e-commerce employees, Bilibili's e-commerce business can be understood as three major segments: one is Membership Purchase (会员购), another is various forms of e-commerce monetization related to UP creators, such as UP creators opening their own stores, and the third is the newly ramped-up live-stream shopping. Each follows a distinct business logic.

Membership Purchase was launched in 2017, primarily selling merchandise derived from ACG (anime, comics, and games) IPs, such as figures and models. Zhang Ye, a former Bilibili e-commerce employee, revealed that its sourcing falls into three categories: Bilibili's own IP merchandise; figures, models, and peripheral products purchased domestically or from Japan; and general ACG-related products sold by merchant partners. Among these, the second category accounts for the largest share, while the third is the smallest.

The e-commerce here is an extension of user service, specifically designed to serve core ACG users. Zhang Ye noted that this is the most important part of Bilibili's e-commerce business.

However, running this kind of IP merchandise business is not a lightweight model. "Speaking purely of e-commerce product sales, Bilibili's front-end and back-end costs are far higher than those of other platforms," said Wei Yun, a former Bilibili employee close to the e-commerce business. "Many of the ACG figure licenses are held in Japan, so Bilibili can't produce them in-house and has to source from Japan. Once the goods arrive at its own warehouse, they still need to be sorted before being shipped out. That's why the slow delivery has even made the news."

Targeting the ACG audience and acting as a middleman doesn't leave much room for imagination. To raise the ceiling of its e-commerce business, Membership Purchase has tried to onboard merchants and expand its categories, but the results have been limited. "It's hard to sell. Even if there are some products that sell well, they're the kind that can't be replicated. For non-ACG products, Bilibili can't compete with Taobao on price, and on delivery speed, it can't beat anyone," Wei Yun said.

The second segment, various forms of e-commerce monetization related to UP creators, is essentially a traffic monetization play.

Specific moves include: in 2018, Bilibili opened up the "Taobao Alliance" product pool to UP creators; in 2019, Alibaba invested in Bilibili, which the outside world interpreted as a signal of strengthened e-commerce cooperation between the two sides; in 2020, Bilibili further upgraded its "Bounty Plan" (悬赏计划), expanding the product pool beyond Taobao to include JD.com, with affiliate links appearing in livestreams, videos, comments, and posts.

A series of moves appeared to push into e-commerce, but in reality, although UP creators opened their own stores with showrooms, the underlying model was still "Taobao affiliate," driving traffic to third-party e-commerce platforms. Bilibili has also stated publicly that the platform does not participate in sourcing, operations, logistics, or other links, and does not take a cut of the corresponding revenue.

This hasn't brought much benefit to Bilibili's e-commerce. Zhang Ye explained that unlike Membership Purchase, which is an independent business under the e-commerce department, UP creators opening stores depends on the Bilibili ecosystem on one hand and requires UP creator agency support on the other, while also involving e-commerce. "It requires cross-department collaboration, but at the time there was some dispute over which department this business actually belonged to, so in the end there was no core department to drive it forward."

But on the other hand, there's also a problem with the model itself. "Users come for the UP creator's content abilities, but what the showrooms mostly sell are products unrelated to that content, with no price advantage either. For users, there's no motivation to buy," said an investor who follows Bilibili.

The third segment is the recently ramped-up live-stream shopping. The platform hasn't built its own supply chain, and at its core, this is also a traffic monetization business.

Having UP creators do live-stream shopping is likely to face even more challenges than having them open stores.

Live-stream shopping cannot do without the three elements of people, products, and venue. To get users to actually pay with real money, you need good product sourcing and price advantages—two things that a large number of UP creators lack. A UP creator in the gaming section said he himself was a novice: "If live-stream shopping just means moving shopping platform links verbatim into the livestream room with no attractive discounts, the results won't be good."

Mr. Mideng (Mr迷瞪) summarized that doing live-stream e-commerce on Bilibili has its barriers. First, UP creators need a fan base and product expertise; second, although the platform provides a product selection-gateway, the categories are limited and prices aren't competitive compared to other platforms, so UP creators still need their own supply chain capabilities—which rules out many people. "A lot of UP creators don't have relevant work experience and find it very painful when it comes to resources and putting together product assortments. This requires external agencies and service providers to step in to make it work."

Here, the supply chain for Bilibili's Membership Purchase can't offer much advantage either. "Figures are the most important product for Membership Purchase, and they're sold on a pre-order basis. Many products come from overseas, and these channels aren't really suited to offering deep discounts on pre-orders. There can also be situations where pre-orders sell well but the goods can't actually be obtained in the end. It's inherently a poor fit with live-stream shopping," Zhang Ye said, noting that while the Membership Purchase business had been growing quickly, its foray into live-stream shopping only scratched the surface.

Whether UP creators can make live-stream shopping work is one question, but the impact on the platform's ecosystem can't be ignored either. Bilibili's users have value and can attract some UP creators with stronger commercial attributes to do live-stream shopping, but many of them aren't UP creators who are actually contributing to Bilibili's content. Meanwhile, UP creators focused purely on content who start selling goods may also lose some of their fans. One UP creator mentioned that after starting live-stream shopping, they lost many of their original young fans and gained new e-commerce-only fans aged 25-35 who came for the deals.

Taking the next step into e-commerce—supply chain, logistics, quality control...—only piles on more challenges for Bilibili.

If Bilibili doesn't build a closed-loop transaction system and only drives traffic for third-party e-commerce platforms, its returns will be limited. But once it builds a closed loop, that requires enormous investment in人力物力 (human and material resources). This puts Bilibili's management's resolve and organizational management capabilities to yet another test.

Wang Feng revealed, "As far as I know, the approach of building its own supply chain like Douyin and Kuaishou is unlikely to appear at Bilibili in the short term."

Although Bilibili set its sights on e-commerce long ago, according to its Q2财报 (financial report), Bilibili's "e-commerce and other" business posted revenue of 600 million yuan, and growth has gradually slowed from last year's rapid pace—year-over-year growth dropped from 195.2% in Q2 2021 to 4.0%. Bilibili's e-commerce potential remains to be seen.

04. Summary

Bilibili's venture into live-stream shopping is also a case of "crossing the river by feeling the stones."

One UP creator mentioned that during the half-year of working with Bilibili's live-stream shopping department, the number of staff on that team visibly increased, reflecting the platform's emphasis on this business. However, many features and links still need to be developed and refined. "This requires UP creators on the front end to give back through their带货 (sales efforts), so that Bilibili feels it's viable and there's a better chance."

The above-mentioned entertainment investor who follows Bilibili said that a platform's traffic and resources are limited and need to be monetized as precisely as possible. "Bilibili already has traffic. To convert it commercially—whether through advertising or e-commerce—you need to weigh short-term and long-term benefits, and it may even involve some trade-offs between business models. The platform will need to explore this slowly."

Similar to its core businesses of gaming, livestreaming, and advertising, Bilibili has been寄托 (entrusted with) great expectations, only to fall into controversy afterward. Its e-commerce business looks promising from the outside, but whether it can be done well remains a question mark—especially since e-commerce is a business that thoroughly tests organizational capabilities, which is precisely the area multiple former Bilibili employees pointed out to Shenran (深燃) that Bilibili's management needs to strengthen.

Bilibili has just set out on the road of live-stream shopping—everything is only beginning.