About Mogujie Live

Mogujie Live

Mogujie Live is the live broadcast service of Mogujie, operated by MOGU Inc., the Hangzhou-based fashion social commerce platform founded in 2011 by former Alibaba engineer Chen Qi. Mogujie was the first mainstream e-commerce platform in China to launch a live broadcasting business, in March 2016, building a format in which hosts show fashion samples to a mainly young female audience, aggregate orders in real time and pass demand signals directly back to factories. Live video broadcast grew from an experiment into the centre of the company: it accounted for about 30 percent of gross merchandise volume in the first half of fiscal 2019, a majority share by fiscal 2021, and 72.6 percent of total GMV in the first quarter of fiscal 2021 alone. Mary Meeker's 2017 Internet Trends report cited Mogu as a top destination in China's live streaming industry, giving the Hangzhou service an international profile far beyond its size.

The Mogujie platform before live streaming

Mogu was founded in 2011 in Hangzhou, China, by former Alibaba engineer Chen Qi, together with Xue Yuqiang and Wei Yibo. Chen, a former engineer at Alibaba-owned shopping portal Taobao, sold his house in Hangzhou for 1 million yuan, about 140,000 US dollars, to seed the company. Mogujie, whose name means mushroom street, began as a fashion content and social commerce platform aimed at young women, offering live broadcasts, short videos, photos, reviews and articles generated by users, professional fashion influencers and an in-house editorial team. It first served as an open portal directing traffic to third-party platforms, but was later banned by Taobao, one of its largest revenue generators, after Taobao failed to persuade Mogujie into an exclusive partnership. Mogujie responded by rebranding itself as a fashion e-retailer with its own transaction system, a reinvention that set the stage for live commerce: a platform that both showed products and sold them could turn viewing directly into orders.

Merger with Meilishuo and the road to listing

In January 2016 Mogu acquired its rival fashion platform Meilishuo, in a merger that formed a business valued at an estimated 3 billion US dollars and backed in part by Tencent through Meilishuo. The combined company, later renamed Mogu, gave the future live service a larger audience of young female shoppers. Mogu Inc. went public on the New York Stock Exchange on 6 December 2018 under the ticker symbol MOGU, offering 4,750,000 shares at 14 dollars per share and raising a total of 66.5 million US dollars. The listing made Mogu's live broadcasting business a matter of public financial record, reported quarter by quarter, which is why Mogujie Live is among the best-documented live commerce services in China. Within eight months of listing, however, its market capitalisation had shrunk to around 390 million dollars by late August 2019, versus about 1.3 billion when it went public, as revenue declined and losses continued.

Launch of live broadcasting in March 2016

Mogujie launched its live broadcast business in March 2016, and company executives later dated the whole transformation of the firm from that decision, saying in 2021 that after establishing the live e-commerce business in 2016 it had taken years of experience and constant improvement to reach its mature state. Some secondary market commentary dates Mogujie's first experiments with live commerce to 2014, but the company's own reporting, its Wikipedia history and its securities filings consistently treat March 2016 as the launch of the live broadcasting business, and this profile follows the company record. The timing still placed Mogujie ahead of the market: Taobao Live launched in the same period, and the large short video platforms entered live selling later. Mogujie's claim, reflected in the clean-file record for this profile, is that it was the first mainstream e-commerce platform in China to launch a live broadcasting business.

How a Mogujie Live broadcast works

The format was designed around fashion supply chains rather than entertainment. As Mogu described it in material quoted in its filings, a live broadcast host shows a sample to her audience, aggregates orders and tells the factory how many to make and in what sizes. This significantly speeds up the production process and lowers prices for consumers, because garments are produced against demonstrated demand instead of speculative inventory. The hosts, many of them fashion influencers, present samples to viewers who are primarily young women, and the platform takes the aggregated orders to bargain over prices with vendors, as Chen Qi explained in a 2019 interview. The model turned live video into a market research and pre-sales system: popularity of a design could be measured in real time through the live broadcast feature, and unpopular designs could be dropped before fabric was cut. That supply-chain function is what distinguished Mogujie Live from pure entertainment streaming and from celebrity-led selling on larger platforms.

Audience: young women and monthly actives

Mogu's audience was unusually well defined. As of 30 September 2018, monthly active mobile users on the Mogu platform were 62.6 million, consisting primarily of young women between the ages of 15 and 30 residing in China. That demographic focus, fashion shoppers in their teens and twenties, shaped everything about Mogujie Live, from the hosts recruited to the price points offered. The audience was loyal but slow-growing in the platform's later years: in the fourth quarter of fiscal 2019 the number of active buyers was 34.5 million, an increase of only 1.8 percent from 33.9 million a year earlier, even as live broadcasting drove a growing share of transactions. Live-specific buyer numbers later became the metric the company emphasised: as of the end of September 2020 the number of active buyers of products sold via live streaming stood at 3.5 million, an increase of 20.7 percent compared with a year earlier, according to Mogu's quarterly report.

Recognition: Mary Meeker and the 2017 Internet Trends report

Mogujie Live received its most famous external endorsement in 2017, when Mary Meeker of Kleiner Perkins Caufield & Byers cited Mogu in her annual Internet Trends report as a leading example of China's live streaming commerce industry. The report's treatment of Mogujie, headed in coverage as Mogu Street, a live streaming example for Mary Meeker's report, presented the Hangzhou platform to a global technology audience as evidence that live video could sell fashion at scale. For a company of Mogu's size, the citation carried weight out of proportion to its revenue: it fixed Mogujie's place in the international narrative of live commerce's invention, alongside Alibaba, years before the format spread to Western retail. Mogu's own filings continued to cite the recognition, describing the company as regarded as a top destination for China's popular live streaming industry on the strength of the 2017 report.

Live GMV growth in the financial record

The filings quantify the takeover of Mogu by its live business. In the first half of fiscal 2019, live streaming contributed 30 percent of the platform's gross merchandise volume, at 198 million US dollars, and Chen Qi told interviewers the company aimed to grow live video broadcast GMV to over 50 percent of the total within 12 months and to 80 percent in the future. The trajectory was met. For the full fiscal year 2019, platform GMV was 17.408 billion yuan, up 18.7 percent year on year. By the first quarter of fiscal 2021, reported in August 2020, GMV from the live video broadcasting business was 2.266 billion yuan, accounting for 72.6 percent of total GMV of 3.12 billion yuan. In the quarter through September 2020, live streaming-related sales jumped 42.2 percent year on year to 2.3 billion yuan, about 341.1 million US dollars, accounting for nearly three-fourths of total GMV even as total GMV fell 25.3 percent to 3.1 billion yuan. In the first quarter of fiscal 2022, live GMV increased a further 14.7 percent year on year to 2.6 billion yuan.

Transformation into a pure-play live broadcaster

By fiscal 2021 Mogu told investors it had successfully completed the transformation of its business and had essentially become a pure-play live video broadcasting e-commerce company. Chen Qi said the company operated a well-established live e-commerce ecosystem that empowered brands and supply partners through integration of its transaction systems, customer service systems and financial system, and that Mogu had helped many traditional brands, manufacturers and supply chains move from offline to online operations and from traditional e-commerce to live e-commerce models. Named customers in its ecosystem included brands such as Li Ning and Zara. The transformation also involved subtraction: Mogu had earlier kicked off a plan to scrap activities unrelated to its live streaming e-commerce business and promised to incentivise live streaming hosts more, even as total revenue fell, dropping 43.1 percent year on year to 112.5 million yuan in the September 2020 quarter, about 60 percent of it from commissions, and the quarterly net loss narrowed to 93.7 million yuan from 326.6 million a year earlier on sharply reduced marketing, research and administration spending. The stock fell 15.69 percent on the day those results were reported, capturing investor doubt about whether a shrinking platform could live on live video alone.

Competition and differentiation

Chen Qi addressed competition directly in his 2019 interview with 36Kr. Asked how Mogu would differentiate against Taobao, its biggest rival, he acknowledged that Taobao had already established a mature live streaming model based on a wide variety of consumer goods and a large pool of vendors in long-term cooperation with the platform. Mogu's differentiation was depth in a single category and control of the supply response behind it: live streaming generated large numbers of orders, which Mogu took to vendors to bargain over prices, and the aggregated demand data fed factory production decisions. In the wider market, Mogujie and Taobao were the two platforms credited in industry histories with refining live commerce operations in the format's second phase, through host training, increasing supply chain control and marketing content upgrades, before Kuaishou, Douyin and others tested live sales of their own. Mogujie Live's niche was therefore defensible on expertise even where it could not match rivals on traffic.

Legacy

Mogujie Live matters to the history of online retail out of proportion to Mogu's later market value. It was, on the company record, the first live broadcasting business launched by a mainstream Chinese e-commerce platform, in March 2016; it was the worked example Mary Meeker showed the world in 2017; and its securities filings provide the clearest public account anywhere of a retailer converting itself, line by line, into a live commerce company, from 30 percent of GMV in 2018 to roughly three-quarters by 2020. The sample-to-factory model, in which a host's audience decides what gets manufactured, remains the most distinctive idea in live commerce, and it was Mogujie's. The service's later years, shrinking total GMV, narrowed losses and a management insisting that slowing numbers were temporary while it banked on live streaming to revive the company's fortunes, are equally part of the record: Mogujie proved the format before almost anyone, and then discovered that proving a format and owning its future are different things.