VERTEX TECHNOLOGY ACQUISTION CORPORATION LTD(Incorporated as an exempted company in the Cayman Islands)(Company Registration No. 378671)

UPDATE ON THE PROPOSED BUSINESS COMBINATIONACQUISITION CORPORATION LTD WITH 17LIVE INC.
-

1.

OF

VERTEXTECHNOLOGY

INTERIM FINANCIAL INFORMATION ON THE TARGET GROUPINTRODUCTION
The board of directors of Vertex Technology Acquisition Corporation Ltd refers to theannouncement made on 2 October 2023 ("First Announcement") in relation to the Proposed
Business Combination.
Unless otherwise defined in this announcement, all capitalised terms used in this announcement
shall have the same meanings as set out in the First Announcement.

2.

HISTORICAL INTERIM FINANCIAL INFORMATION OF THE TARGET GROUP
The information on the Target Group and the Vendor was provided by the Target Company andthe Vendor. In respect of such information, the Company and the Directors have not independently
verified the accuracy and correctness of the same and the Company’s responsibility is limited tothe proper extraction and reproduction herein in the context that the information is being disclosed
in this announcement.
The Company understands that the Target Group had recently completed the preparation of theirfinancial statements for the six-month period ended 30 June 2022. Further to the First
Announcement where a summary of the consolidated financial statements of the Target Group for
FY2020, FY2021 and FY2022 was provided, the Company wishes to provide an update on theTarget Group’s interim unaudited consolidated financial statements for the six-month period ended
30 June 2023 ("1H FY2023"). A comparison against that of the six-month period ended 30 June
2022 ("1H FY2022") and consolidated financial statements of FY2022 is shown in the table below.
A report on the consolidated financial statements of the Target Group for 1H FY2023 will also be
included in the Circular.
Despite a moderate decline in its revenue during 1H FY2023 resulting mainly from the normalisation
and resumption of economic activities after the ease of the COVID-19 pandemic restrictions andits strategic shift to focus on profitability by targeting quality users over scale, the Target Group has
demonstrated improvements in its margin and strong cash flow generating capabilities:(a) Gross profit margin improved from 32.7% in 1H FY2022 to 41.8% in 1H FY2023, which isprimarily attributable to: (i) increasing contribution from its high-margin in-app game revenue,
which is not subject to revenue sharing arrangements; (ii) a decrease in channel costs resulting
from optimised payment methods; and (iii) a decrease in server and bandwidths costs resulting
from improvement in operating efficiency.
(b) Adjusted EBITDA increased from US$4.3 million in 1H FY2022 to US$15.8 million in 1H
FY2023, which is primarily attributable to: (i) a decrease in selling expenses resulting from the1

Target Group’s strategic shift to return-driven marketing strategy; and (ii) a decrease inemployee benefits expenses arising from a more streamlined staffing structure implemented
by the Target Group as part of its cost optimisation initiatives.
(c) Adjusted net profit increased to a profit of US$9.4 million in 1H FY2023 from a loss of US$4.0
million in 1H FY2022.
(d) Strengthened capability in net cash flows from operating activities as demonstrated by apositive cash flow from operations of US$9.4 million in 1H FY2023, primarily attributable to anincrease in operating income and working capital in 1H FY2023 notwithstanding the one-off
retrospective tax paid in Japan in 1H FY2023.

2.1.

Results of Operations of the Target Group
1H FY2023

1H FY2022

FY2022

Operating revenue

151.0

200.4

363.7

Gross profit

63.1

65.5

126.1

Operating income

13.0

1.1

10.1

(118.2)(42.0)(51.0)

Loss for the period / year

(118.2)(42.0)(51.0)

Add: Revaluation loss on financial liabilities(1)

127.6

38.0

55.9

Adjusted profit/(loss)

9.4

(4.0)

4.9

Operating income
Add: Depreciation
Add: Amortisation

13.0
1.1
1.3

1.1
1.6
1.1

10.1
2.6
2.3

EBITDA

15.4

3.8

15.0

Add: Share-based payments

0.4

0.5

0.8

Adjusted EBITDA

15.8

4.3

15.8

(US$ millions)

Loss for the period / year
Non-IFRS Financial Measures

Note:(1) Refers to the revaluation loss on the financial liabilities at fair value through profit or loss (comprising preferredshares and warrants), which are not expected to recur after the Completion.

2

2.2.

Financial Position of the Target Group
30 June 2023

31 December 2022

Cash and cash equivalents

39.9

39.3

Total current assets

63.8

69.0

Total non-current assets

35.6

34.4

Total assets

99.3

103.4

Total current liabilities(2)

61.4

284.6

Total non-current liabilities(3)

340.2

2.0

Total liabilities

401.6

286.6

Total equity(302.3)(183.2)

Total liabilities and equity

99.3

103.4

Net current assets/(liabilities)

2.3(215.6)(US$ millions)

Note:(2) The current liabilities as at 31 December 2022 includes financial liabilities at fair value through profit or loss
(comprising preference shares and warrants) of US$211.1 million. In April 2023, the preference shareholders
have agreed to extend the redemption date of the financial liabilities to 31 December 2025. As such, thefinancial liabilities relating to preference shares have been classified as non-current liabilities in the interim
balance sheet as at 30 June 2023.
(3) The non-current liabilities as at 30 June 2023 includes financial liabilities at fair value through profit or loss
(comprising preference shares) of US$337.7 million.

2.3.

Cash Flows of the Target Group
1H FY2023

1H FY2022

FY2022

Cash flows from/(used in) operations

9.4

(4.6)

3.5

Net cash flows from/(used in) operating
activities

4.0(16.1)(10.5)Net cash flows used in investing activities

(0.8)

(0.6)

(0.8)

Net cash flows used in financing activities

(0.8)

(2.6)

(4.2)

(US$ millions)

3.

UPDATE TO RELATIVE FIGURE UNDER RULE 1006(b)Pursuant to Rule 1015 of the Listing Manual, shareholders’ approval, amongst others, must be
obtained for a "very substantial acquisition" or "reverse takeover" as defined in Chapter 10 of the
Listing Manual. Rule 1006 of the Listing Manual sets out the computations for relative figures, andwhere any of the relative figures is 100% or more, or if the transaction is one which will result in thechange in control of a listed company, such a transaction is a "very substantial acquisition" or"reverse takeover".

3

The relative figures for the Proposed Business Combination using the bases of comparison set out
in Rule 1006 of the Listing Manual are shown in the table below where the relative figure for Rule
1006(b) has been updated based on the 1H FY2023 net profits of the Target Company and theCompany.
Rules

Bases

Relative Figures

Rule 1006(a)Net asset value of the assets to bedisposed of, compared with the Company's
net asset value

Not applicable(1)Rule 1006(b)Net profits attributable to the Target
Company, compared with the Company's
net profits(3,976%)(2)

Rule 1006(c)Aggregate value of the Purchase
Consideration given for the Proposed
Business Combination, compared with theCompany’s market capitalisation based on
the total number of issued shares
excluding treasury shares467%(3)Rule 1006(d)Number of equity securities issued by theCompany as Purchase Consideration for
the Proposed Business Combination,compared with the number of equity
securities of the Company in issue444%(4)Rule 1006(e)Aggregate volume or amount of proved
and probable reserves to be disposed of,compared with the aggregate of theCompany's proved and probable reserves

Not applicable(5)Notes:(1) Rule 1006(a) of the Listing Manual is not applicable to an acquisition of assets.
(2) Computed based on the Target Company’s net loss before tax for 1H FY2023 of approximately US$115.3
million and the Company's unaudited net profit before tax for 1H FY2023 of approximately US$2.9 million(approximately S$4.0 million based on exchange rate of US$1.00 : S$1.356).
(3) Computed based on (i) the Purchase Consideration of approximately S$922.9 million (equivalent toapproximately US$680.6 million), and (ii) the Company’s market capitalisation of approximately S$197.7 million(computed based on the Company’s issued ordinary share capital of 41,606,000 shares and the volume
weighted average price of the shares of S$4.7517 on 29 September 2023, being the last full market day on
which the Company’s shares were traded prior to the date of the SPA). The Company does not have anytreasury shares.
(4) Based on 160,162,651 Consideration Shares and up to 24,408,000 Earnout Shares and the Company’s issued
ordinary share capital of 41,606,000 shares.
(5) Rule 1006(e) of the Listing Manual is not applicable as the Company is not a mineral, oil and gas company.

Notwithstanding the negative relative figure computed under Rule 1006(b) of the Listing Manual,
the relative figures computed under Rules 1006(c) and 1006(d) of the Mainboard Rules exceed
100%. Accordingly, the Proposed Business Combination constitutes a "very substantial acquisition"or "reverse takeover" pursuant to Chapter 10 of the Listing Manual. In addition, as the Vendor
and/or the Vendor Shareholders (if so nominated by the Vendor) will hold a majority of the enlarged
share capital of the Company upon Completion, a change in control of the Company will arise
immediately upon Completion. Accordingly, the Proposed Business Combination is subject to, interalia, the approval of the Shareholders at the EGM and the approval of the SGX-ST pursuant toRule 1015 of the Listing Manual.
The Proposed Transactions (which includes the Proposed Business Combination) will be tabled for4Shareholders’ approval at the EGM in the Circular to the dispatched to Shareholders of theCompany in due course.
4.

INDEPENDENT MARKET RESEARCH REPORTThe Target Company had commissioned Frost & Sullivan (S) Pte Ltd (the “IMR Consultant”) to
conduct an independent study on the industry that the Target Group operates in. To this end, theCompany will be including the report from the IMR Consultant titled “Independent Market Researchon the Media and Entertainment Industry with a Focus on the Interactive Video Streaming Platform,
V-Liver, and Live Commerce Industries” dated 23 October 2023 (the “IMR Report”) as an appendix
to the Circular.
Please refer to Annex A of this announcement for a copy of the IMR Report.

5.

INTERESTS OF DIRECTORS AND CONTROLLING SHAREHOLDERS
As at the date of this announcement, the Company’s Non-Executive Chairman, Mr. Chua Kee Lock(a) has interests as a direct or indirect individual investor in GPs that manage the Vertex Funds,
which are shareholders of the Target Company; and (b) is a member of the investment committees(“ICs”) formed by the fund managers appointed by the GPs which manage the Vertex Funds in his
individual capacity. Mr. Chua's participation in the GPs and ICs of the Vertex Funds is in his
individual capacity and not for and on behalf of the Sponsor Group. There are no representatives
from the Sponsor Group in the GPs and ICs of the Vertex Funds. In addition, Mr. Chua has provided
an undertaking to recuse himself from voting in his capacity as a member of the ICs in the Vertex
Funds, in respect of any decision in relation to an initial business combination with a portfolio
company that is under any of the Vertex Funds.
As at the date of this announcement, the Sponsor has invested in the Target Company throughVertex Legacy Continuation Fund Pte. Ltd., Vertex Ventures SEA Fund III Pte. Ltd. and Vertex
Growth Fund Pte. Ltd.. The Sponsor is a wholly-owned indirect subsidiary of Temasek, being as at
the date of this announcement, a Controlling Shareholder (as defined in the Listing Manual) of theCompany. In addition, as at the date of this announcement, Temasek’s indirect wholly-owned
subsidiary, Pavilion Capital Holdings Pte. Ltd., which wholly-owns Pavilion Capital Fund Holdings
Pte. Ltd. and which in turn wholly-owns Pav Investments Pte. Ltd., has also invested in the Target
Company. As at the date of this announcement, the Target Company has issued existing warrants
to Innoven Capital Singapore Pte. Ltd., which is an affiliate of Temasek. Each of the Sponsor,
Vertex SPV, Pav Investments Pte. Ltd. and Innoven Capital Singapore Pte. Ltd. is anindependently-managed Temasek portfolio company. Temasek is not involved in the business oroperational decisions of these entities, including their decisions in relation to the Target Group andthe Company.
Save as disclosed above, none of the Directors or Controlling Shareholders (as defined in the
Listing Manual) of the Company has any interests, direct or indirect, in the Proposed Transactions.

6.

RESPONSIBILITY STATEMENTThe Directors collectively and individually accept full responsibility for the accuracy of theinformation given in this announcement (save for the information on the Target Group in paragraph
2 above) and confirm after making all reasonable enquiries that to the best of their knowledge andbelief, this announcement constitutes full and true disclosure of all material facts about the
Proposed Transactions and the Company, and the Directors are not aware of any facts theomission of which would make any statement in this announcement misleading (save for the5information on the Target Group in paragraph 2 above). Where information in this announcement
has been extracted from published or otherwise publicly available sources or obtained from a
named source, the sole responsibility of the Directors has been to ensure that such information
has been accurately and correctly extracted from those sources and/or reproduced in thisannouncement in its proper form and context.
7.

CAUTION IN TRADING
Shareholders and potential investors are advised to exercise caution in trading their shares as
there is no certainty or assurance as at the date of this announcement that the Proposed
Transactions (including the Proposed Business Combination) will be completed. The Company
will make the necessary announcements when there are further developments on the Proposed
Transactions (including the Proposed Business Combination). Shareholders are advised to readthis announcement and any further announcements by the Company carefully, and should consult
their stockbrokers, bank managers, solicitors or other professional advisers if they have any doubt
about the actions they should take.

BY ORDER OF THE BOARD
VERTEX TECHNOLOGY ACQUISITION CORPORATION LTD
Jiang Honghui
Executive Director and Chief Executive Officer
24 October 2023

Credit Suisse (Singapore) Limited and DBS Bank Ltd. were the joint issue managers for the Company’s
initial public offering (the "Offering"). Credit Suisse (Singapore) Limited, DBS Bank Ltd. and Morgan
Stanley Asia (Singapore) Pte. were the joint global coordinators, joint bookrunners and joint
underwriters for the Offering.

6

ANNEX A

7

STRICTLY PRIVATE AND CONFIDENTIAL

Independent Market Research on theMedia and Entertainment Industry
with a Focus on the Interactive Video
Streaming Platform, V-Liver, and Live
Commerce Industries

23rd October 2023

© 2023

IMR Report© Frost & Sullivan – 2023

Page 1

3G:

The 3rd generation of cellular network

4G:

The 4th generation of cellular network

5G
ACG
AI
APAC
ARPU
ARPPU
Asia/Asian
AVOD
CAGR
COVID-19
DAU
DLC
FLV
GDP
HEVC IP
ICT
IP
Livers
MAU
Mbps
MENA
OTT
PC
PUGC
QC
RPG
RTMP
SaaS
SEA
SMB
SNS
SVOD
TAM
TVOD
UGC
UI
USA
V-Liver/Vliver
VOD
Vtuber
WebRTC
YoY

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The 5th generation of cellular network
Animation, comics, and games
Artificial intelligence
Asia-PacificAverage revenue per-user
Average revenue per-paying user
Philippines, Singapore, Malaysia, Thailand, Indonesia, Japan, and Taiwan
Advertising-based video-on-demand
Compound annual growth rate
Coronavirus disease 2019
Daily active user
Downloadable content
Flash video format
Gross domestic productHigh-efficiency video coding intellectual property
Information communication technology
Intellectual property
Live streamer
Monthly active user
Megabyte per-second
Middle East and North Africa
Over-the-top
Personal computer
Professionally curated user-generated content
Quality control
Role-playing gameReal-time messaging protocol
Software-as-a-Service
Philippines, Singapore, Malaysia, Thailand, and Indonesia
Small and medium-sized businessSocial networking service
Subscription video-on-demand
Total addressable market
Transactional video-on-demand
User-generated content
User interface
United States of America
Virtual Idol
Video-on-demand
Virtual YouTuberWeb real-time communication
Year-on-year

IMR Report© Frost & Sullivan – 2023

Page 2

Table of Contents
1. MACROECONOMIC OVERVIEW FOR SELECTED COUNTRIES IN ASIA ......................................... 6
1.1.1. GROSS DOMESTIC PRODUCT (GDP) PER CAPITA ................................................................. 6
1.1.2. DEMOGRAPHIC AND SOCIOECONOMIC TRENDS .................................................................. 7
1.1.3. POPULATION AND AGE GROUP......................................................................................................... 7
1.1.4. DIGITAL INDICATORS ................................................................................................................. 9
1.1.5. SMARTPHONE USERS ...................................................................................................................... 9
1.1.6. INTERNET USERS AND PENETRATION RATE .................................................................................... 10
1.1.7. TRENDS ON PERSONAL ENTERTAINMENT SPEND AS A PROPORTION OF TOTAL INCOME
11
1.1.8. OUTLOOK—IMPACT OF COVID-19 AND SHIFT IN CONSUMER ENTERTAINMENT ............ 11
2. OVERVIEW OF ASIA MEDIA AND ENTERTAINMENT INDUSTRY ................................................... 12
2.1.1. INDUSTRY DEFINITION AND SEGMENTATION ...................................................................... 122.1.2. VALUE CHAIN AND ECOSYSTEM ANALYSIS .......................................................................... 14
2.1.3. KEY TRENDS IN THE INDUSTRY ............................................................................................. 15
2.1.4. MARKET SIZING, FORECAST, AND SHARE ESTIMATES....................................................... 17
3. OVERVIEW OF INTERACTIVE VIDEO STREAMING PLATFORM MARKET .................................... 18
3.1.1. INDUSTRY OVERVIEW ............................................................................................................. 18
3.1.2. EVOLUTION OF THE INTERACTIVE VIDEO STREAMING MARKET ......................................................... 18
3.1.3. INDUSTRY VALUE CHAIN ................................................................................................................ 19
3.1.4. KEY DRIVERS................................................................................................................................ 21
3.1.5. GROWTH CHALLENGES.................................................................................................................. 24
3.1.6. KEY TRENDS ................................................................................................................................. 26
3.1.7. KEY METRICS COMPARISON .......................................................................................................... 28
3.1.8. JAPAN ........................................................................................................................................ 29
3.1.9. MARKET SIZE ................................................................................................................................ 29
3.1.10. COMPETITIVE LANDSCAPE AND MARKET SHARE ........................................................................... 30
3.1.11. OPERATIONAL PERFORMANCE ..................................................................................................... 31
3.1.12. TAIWAN .................................................................................................................................... 32
3.1.13. MARKET SIZE.............................................................................................................................. 32
3.1.14. COMPETITIVE LANDSCAPE AND MARKET SHARE ........................................................................... 33
3.1.15. OPERATIONAL PERFORMANCE ..................................................................................................... 34
3.1.16. COMPANY POSITIONING ....................................................................................................... 34
3.1.17. SALES AND MARKET STRATEGY ................................................................................................... 34
3.1.18. OPPORTUNITIES .................................................................................................................... 35
4. OVERVIEW OF INTERACTIVE VIDEO STREAMING PLATFORM MARKET IN MAJOR SOUTHEASTASIAN COUNTRIES ............................................................................................................................ 37
4.1.1. TRENDS (DRIVERS AND RESTRAINTS) .................................................................................. 37
IMR Report© Frost & Sullivan – 2023

Page 3

4.1.2. MARKET SIZE ............................................................................................................................ 38
4.1.3. OUTLOOK .................................................................................................................................. 39
5. BRIEF OVERVIEW OF V-LIVERS LANDSCAPE ................................................................................ 40
5.1.1. INDUSTRY OVERVIEW ............................................................................................................. 40
5.1.2. DRIVERS .................................................................................................................................... 43
5.1.3. MARKET SIZE ............................................................................................................................ 44
5.1.4. DEMOGRAPHICS ...................................................................................................................... 45
5.1.5. GLOBAL OUTLOOK ................................................................................................................... 46
6. BRIEF OVERVIEW OF LIVE COMMERCE .......................................................................................... 47
6.1.1. INDUSTRY OVERVIEW ............................................................................................................. 47
6.1.2. KEY DRIVERS ............................................................................................................................ 48
6.1.3. GROWTH CHALLENGES .......................................................................................................... 49
6.1.4. MARKET SIZE ............................................................................................................................ 50
6.1.5. TRENDS ..................................................................................................................................... 52
7. SUMMARY PROSPECTS AND OUTLOOK ........................................................................................ 53
8. APPENDIX ........................................................................................................................................... 55
8.1.1. HISTORY OF LIVE COMMERCE IN CHINA ............................................................................... 55

IMR Report© Frost & Sullivan – 2023

Page 4© October 2023 Frost & Sullivan
The market research process for this study has been undertaken through secondary/desktop research as well as primaryresearch, which involves discussing the status of the industry with leading participants and experts. The researchmethodology used is the Expert Opinion Consensus Methodology.
Quantitative market information is subject to fluctuations due to possible changes in the business and industry climate.
Frost & Sullivan’s estimates and assumptions are based on varying levels of quantitative and qualitative analyses,
including industry journals, company reports and information in the public domain.
Forecasts, estimates, predictions, and other forward-looking statements contained in this report are inherently
uncertain because of changes in factors underlying their assumptions, or events or combinations of events that cannot
be reasonably foreseen. Actual results and future events could differ materially from such forecasts, estimates,
predictions, or such statements.
This study has been prepared for 17LIVE INC. (“the Company”). No part of this study may be otherwise given, lent,
resold, or disclosed to non-customers without our written permission. Furthermore, no part may be reproduced, stored
in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, orotherwise, without our permission.
Frost & Sullivan has prepared this study in an independent and objective manner, and it has taken adequate care toensure its accuracy and completeness. We believe that this study presents a true and fair view of the industry within
the limitations of, among others, secondary statistics and primary research, and it does not purport to be exhaustive.
Our research has been conducted with an “overall industry” perspective, and it may not necessarily reflect theperformance of individual companies in the industry. Frost & Sullivan shall not be liable for any loss suffered becauseof reliance on the information contained in this study. This study should also not be considered as a recommendation
to buy or not to buy the shares of any company or companies as mentioned in it or otherwise.

Authorized Signatory

Sanjay Singh
Senior Vice President
Frost & Sullivan (S) Pte Ltd
9 Battery Rd, #15-01,
Singapore 049910

IMR Report© Frost & Sullivan – 2023

Page 5

1

MACROECONOMIC OVERVIEW FOR SELECTED COUNTRIES IN ASIA

1.1

GROSS DOMESTIC PRODUCT (GDP) PER CAPITA

The GDP per capita for 5 selected countries in Southeast Asia (SEA) being Singapore Malaysia, Thailand,
Philippines and Indonesia as well as Japan and Taiwan (collectively ‘selected countries in Asia’ or ‘Asian’)increased from USD 154,806.7 in 2020 to USD 177,305.7 in 2022, growing at a compound annual growthrate (CAGR) of 7.0% during the period, notwithstanding the 32-year plunge of the Japanese yen’s value
against the US dollar. The opening up and growth of the other economies in the wake of the easing of
COVID-19 restrictions largely offset the yen’s decreased value. Frost & Sullivan expects this GDP growth
to moderate in the post-pandemic forecast period (2023-2027), recording a CAGR of 4.8% as consumer
confidence improves in the wake of stabilized economics.
Of the Asian countries, Singapore had the highest GDP per capita at USD 82,807.6 in 2022, followed by
Japan and Taiwan with a GDP per capita of USD 33,853.8 and USD 32,687.4, respectively. The GDP per
capita in Indonesia, Malaysia, Thailand, and the Philippines ranged between USD 3,623.6 and USD
12,465.6 in 2022.
The following chart illustrates the Asian countries’ GDP per capita from 2020 to 2027.
Figure 1-1: GDP per Capita at Current Prices in Selected Countries in Asia, 2020–2027F
120,000.0

Japan

TaiwanPhilippines

2020
40,133.0
28,571.4
3,325.8
61,274.0
10,400.2
7,169.9
3,932.32021
39,933.0
33,186.3
3,576.1
77,710.1
11,475.7
7,227.5
4,362.72022
33,853.8
32,687.4
3,623.6
82,807.6
12,465.6
7,069.6
4,798.1

Singapore

Malaysia

ThailandIndonesia

100,000.0
80,000.0
60,000.0
40,000.0
20,000.0
Japan
TaiwanPhilippines
Singapore
Malaysia
ThailandIndonesia

2023F
33,949.7
32,339.7
3,859.2
87,884.2
13,034.1
7,298.0
5,108.92024F
34,554.9
34,046.2
4,169.0
91,727.9
13,913.2
7,731.3
5,509.1

2025F
36,657.5
36,098.6
4,523.3
95,922.8
14,837.3
8,242.6
5,914.72026F
38,357.9
38,112.0
4,926.3
99,984.5
15,690.9
8,718.0
6,336.52027F
39,899.4
39,929.0
5,373.4
103,993.
16,417.4
9,185.9
6,787.2

Source: IMF World Economic Outlook 2023, Compiled by Frost & Sullivan

IMR Report© Frost & Sullivan – 2023

Page 6

1.2
1.2.1

DEMOGRAPHIC AND SOCIOECONOMIC TRENDS
Population and Age GroupThe rapidly aging population in Asian countries coupled with declining fertility rates are posing significant
challenges to the economies.
Figure 1-2: Total Population of Selected Countries in Asia in Millions, 2020–2027F
Japan

TaiwanPhillipines

2020
125.8
23.6
108.8
5.7
32.4
69.8
270.2

2021
125.5
23.4
110.2
5.5
32.6
70.0
272.2

2022
125.2
23.3
111.6
5.6
32.7
70.1
274.9

Singapore

Malaysia

ThailandIndonesia

300.0
250.0
200.0

150.0
100.0

50.0
Japan
TaiwanPhillipines
Singapore
Malaysia
ThailandIndonesia

2023F
124.6
23.3
112.9
5.7
33.1
70.2
277.4

2024F
124.0
23.3
114.2
5.7
33.5
70.3
280.0

2025F
123.4
23.3
115.4
5.7
33.9
70.3
282.5

2026F
122.8
23.3
116.6
5.7
34.2
70.4
284.9

2027F
122.1
23.3
117.8
5.8
34.6
70.4
287.3

Source: World Bank, Compiled by Frost & Sullivan

This aging population has contributed to an overall shrinking population. Experts forecast Japan’s
population, one of the oldest countries in the world with a median age of 48.6 years, is expected to decline
during the forecast period. Its 2022 population reached 125.2 million people, with individuals under 20 years
old making up approximately 11.8% of the entire population. This decrease in population size could limit
the country’s economic growth because of increasing healthcare costs and the reduced availability of young
people in the workforce. To circumvent this challenge, the government is encouraging the elderly to leadhealthier lifestyles, increasing the age of retirement, and introducing incentives to help young couples inraising children.

IMR Report© Frost & Sullivan – 2023

Page 7

Figure 1-3: Population by Age Group in Selected Countries in Asia, 2020-2027F
2020

2021

2022

2023

2024

2025

2026

2027

0-14
15-64
65+
0-14
15-64
65+
0-14
15-64
65+
0-14
15-64
65+
0-14
15-64
65+
0-14
15-64
65+
0-14
15-64
65+
0-14
15-64
65+

Japan
11.9%
58.5%
29.6%
11.8%
58.4%
29.8%
11.6%
58.5%
29.9%
11.5%
58.5%
30.1%
11.3%
58.5%
30.2%
11.2%
58.4%
30.4%
11.1%
58.4%
30.5%
11.0%
58.4%
30.7%

Taiwan
12.8%
72.0%
15.2%
12.7%
71.4%
16.0%
12.6%
70.7%
16.7%
12.6%
70.0%
17.5%
12.5%
69.3%
18.2%
12.5%
68.6%
18.9%
12.5%
67.9%
19.7%
12.4%
67.2%
20.5%

Phillipines
30.9%
63.8%
5.2%
30.6%
64.0%
5.3%
30.3%
64.2%
5.4%
30.0%
64.4%
5.6%
29.7%
64.5%
5.8%
29.4%
64.7%
6.0%
29.1%
64.8%
6.1%
28.8%
64.9%
6.3%

Singapore
12.2%
74.7%
13.2%
12.0%
73.9%
14.1%
11.8%
73.0%
15.1%
11.7%
72.2%
16.1%
11.6%
71.3%
17.1%
11.5%
70.4%
18.1%
11.4%
69.5%
19.1%
11.3%
68.6%
20.1%

Malaysia
23.3%
69.7%
7.0%
23.0%
69.8%
7.3%
22.7%
69.8%
7.5%
22.4%
69.8%
7.8%
22.2%
69.7%
8.1%
22.0%
69.6%
8.4%
21.8%
69.5%
8.7%
21.6%
69.5%
9.0%

Thailand
16.1%
70.1%
13.9%
15.8%
69.7%
14.5%
15.5%
69.3%
15.2%
15.2%
68.8%
16.0%
14.9%
68.3%
16.7%
14.6%
67.9%
17.5%
14.3%
67.4%
18.3%
14.0%
66.9%
19.0%

Indonesia
25.7%
67.6%
6.7%
25.5%
67.7%
6.8%
25.2%
67.9%
6.9%
24.9%
68.1%
7.0%
24.5%
68.2%
7.3%
24.2%
68.3%
7.5%
23.8%
68.4%
7.8%
23.5%
68.5%
8.1%

Source: UN World Population Prospect; World Bank; Compiled by Frost & Sullivan

Despite having a prominent forward looking technology industry, especially in semiconductor manufacturing,seniors still dominate Taiwan’s population. With its fertility rate declining and life expectancy rate improving,
Taiwan is now facing an aging population with a median age of 41.3 years old, and population numbers
have been shrinking since 2020.
Indonesia, the fourth-most populated country in the world and the most populous country in SEA will havean estimated population of 282.5 million by 2025, a CAGR increase of 1.0% over 2023 to 2027. Although
Indonesia’s total fertility rate has been declining, the United Nations expects the country to have a relatively
young population in upcoming years, as its median age in 2020 was an estimated 29.7 years and will
increase moderately to 31.0 years in 2025.

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1.3

DIGITAL INDICATORS

1.3.1

Smartphone Users

Smartphone penetration in Asian countries has driven economic development and reflects the growing
standard of living among the Asian diasporas. Smartphones elevate living standards by providing easy
access to information, services, and online education. They enhance communication, promote economic
empowerment through digital platforms, improve productivity with various tools, and offer essential services
in emerging markets, all contributing to a better quality of life. All Asian countries registered an increase insmartphone usage as the device became an integral part of life, especially in the wake of the COVID-19
pandemic, during which more people conducted economic transactions online. The following chart depicts
the number of smartphone users in the Asian countries from 2020 until the end of our forecast period in
2027.
Figure 1-4: Number of Smartphone Users in Millions in Selected Countries in Asia, 2020-2027F
Japan

TaiwanPhillipines

2020
77.2
16.5
42.3
5.3
17.4
38.8
193.9

2021
80.7
16.8
69.1
5.4
21.3
45.4
210.8

2022
83.8
16.3
78.5
5.6
23.1
48.7
223.8

Singapore

Malaysia

ThailandIndonesia

300.0
250.0
200.0
150.0
100.0
50.0
Japan
TaiwanPhillipines
Singapore
Malaysia
ThailandIndonesia

2023F
86.6
16.5
80.3
5.7
23.5
49.2
233.5

2024F
88.9
16.7
82.7
5.9
24.1
49.9
242.2

2025F
91.0
17.0
85.1
6.0
24.7
50.7
249.9

2026F
92.8
17.2
87.5
6.1
25.2
51.4
256.9

2027F
94.4
17.5
89.9
6.1
25.8
52.1
263.1

Source: Statista1; Interviews with selected industry participants; Frost & Sullivan

1 1Japan: Statista.(October 5, 2023). Number of smartphone users in Japan from 2019 to 2023 with a forecast until 2028 (in millions)[Graph]. In Statista. Retrieved October 19, 2023, from Japan: number of smartphone users 2028 | Statista; Taiwan: Statista. (August
14, 2023). Number of smartphone users in Taiwan 2017-2028 (in millions) [Graph]. In Statista. Retrieved October 19, 2023, from
Taiwan: number of smartphone users 2017-2028 | Statista; Phil: Statista. (September 26, 2023). Number of smartphone users in thePhilippines from 2019 to 2028 (in millions) [Graph]. In Statista. Retrieved October 19, 2023, from Smartphone users in the Philippines
2028 | Statista; Singapore: Statista. (September 12, 2023). Number of smartphone users in Singapore from 2019 to 2028 (in millions)[Graph]. In Statista. Retrieved October 19, 2023, from Singapore: smartphone users 2028 | Statista; Malaysia: Statista. (August 14,2023). Number of smartphone users in Malaysia from 2013 to 2028 (in millions) [Graph]. In Statista. Retrieved October 19, 2023, from
Malaysia: number of smartphone users 2013-2028 | Statista; Thailand: Statista. (August 14, 2023). Number of smartphone users in
Thailand from 2013 to 2028 (in millions) [Graph]. In Statista. Retrieved October 19, 2023, from Thailand: number of smartphone users
2013-2028 | Statista; Indonesia: Statista. (September 19, 2022). Number of smartphone users in Indonesia from 2018 to 2028 (inmillions) [Graph]. In Statista. Retrieved October 19, 2023, from Indonesia: smartphone users 2028 | Statista.

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1.3.2

Internet Users and Penetration Rate

Internet penetration in the Asian countries has been growing on account of rising demand and associatedefforts by the respective governments in instituting infrastructure projects to provide their populations withinternet access. The Philippines continues to have the lowest penetration, while Malaysia, Japan,
Singapore, and Taiwan have penetration rates of more than 90%. In 2021, Japan spent an estimated record
USD 2.4 billion on information and communications technology (ICT) and internet infrastructure. The focus
on digitization and improving the internet economy has resulted in a robust internet ecosystem with highspeed connectivity. Ookla2 reported Japan’s median fixed internet connection speed at 150.3 megabits per
second (mbps). According to industry sources, the country had an estimated total of 112.8 million internet
users in 2022. As of 2023, Taiwan had 22.3 million internet users, with an internet penetration rate of 93.5%
and with a median fixed internet connection at 124.4 mbps.3
Figure 1-5: Internet Penetration Rate in Selected Countries in Asia, 2020-2027F 4Japan

TaiwanPhillipines

2020
88.3%
87.1%
49.8%
90.4%
87.7%
71.0%
73.7%

2021
90.6%
89.4%
52.8%
92.2%
91.2%
72.8%
81.9%

2022
91.0%
91.6%
55.8%
93.9%
94.5%
74.7%
90.6%

Singapore

Malaysia

ThailandIndonesia

100%
80%
60%
40%

20%
0%
Japan
TaiwanPhillipines
Singapore
Malaysia
ThailandIndonesia

2023F
91.4%
93.5%
58.9%
95.5%
97.6%
76.5%
98.0%

2024F
91.8%
95.3%
61.9%
96.9%
98.0%
78.3%
98.0%

2025F
92.1%
97.0%
64.9%
98.0%
98.0%
80.1%
98.0%

2026F
92.3%
98.0%
67.9%
98.0%
98.0%
81.8%
98.0%

2027F
92.6%
98.0%
70.9%
98.0%
98.0%
83.4%
98.0%

Source: Statista5; Interviews with selected industry participants; Frost & Sullivan

2

Ookla, the company behind Speedtest, is the global leader in fixed broadband and mobile network testing applications, data, andanalysis.( https://www.speedtest.net/about)3
Kemp, Simon. Digital 2023:Taiwan. Digital 2023: Taiwan — DataReportal – Global Digital Insights. 13 February 2023. Date
accessed:13 July 2023.
4
Data for internet and smart phone users and penetration rates are averages and is contingent on the time of capture of this data
which may affect the consistency of such metrics across countries.
5
Internet - Japan. (n.d.). Retrieved October 23, 2023, from https://www.statista.com/outlook/co/digital-connectivityindicators/internet/japan; Internet - Taiwan. (n.d.). Retrieved October 23, 2023, from https://www.statista.com/outlook/co/digitalconnectivity-indicators/internet/taiwan; Statista. (July 25, 2023). Internet penetration rate in the Philippines from 2019 to 2028 [Graph].
In Statista. Retrieved October 23, 2023, from https://www.statista.com/statistics/975072/internet-penetration-rate-in-the-philippines/

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1.4

TRENDS ON PERSONAL ENTERTAINMENT SPEND AS A PROPORTION OF TOTALINCOMEAs each country enters the recovery phase following the pandemic, most nations are readjusting andconcentrating on returning their economies to pre-pandemic states.
On average, all countries in Asia spent less than 5% of their total income on personal entertainment during
the pandemic, with the lowest spenders among them being Indonesia and the Philippines, which spent lessthan 2% of their income on personal entertainment. As the effects of the pandemic declined and theeconomies returned to normalcy, discretionary spending improved, and Asian economies saw an uptick inpersonal entertainment expenses. For instance, Taiwan, one of the nations least affected by the pandemic,
recorded among the lowest decline (6% in 2020 versus Malaysia’s nearly 50% decline) in absoluteentertainment spending among the Asian countries. Asians continue to spend the most on shopping, andmovies/entertainment have grown in popularity, especially after the pandemic, during which all outdoor
entertainment centers closed.
Figure 1-6: Estimated Personal Entertainment Spend as a Proportion of Total Income in Selected
Countries in Asia, 2020, 2022 and 2027F
ThailandIndonesia

1.7%

4.4%

5.2%

3.9%

1.9%

1.3%

3.2%

5.0%

3.6%

2.0%

3.2%
1.2%

1.0%

5.2%

2.0%

3.4%

3.0%

4.2%

4.7%

5.0%
4.0%

Malaysia

1.9%

Singapore

5.2%

Phillipines

5.8%

Taiwan

3.9%

Japan

5.6%

6.0%

0.0%
2020

2022

2027F

Source: Industry sources; Frost & Sullivan

1.5

OUTLOOK—IMPACT OF COVID-19 AND SHIFT IN CONSUMER ENTERTAINMENTThe COVID-19 pandemic significantly impacted the interactive video streaming industry and shifted
consumer entertainment preferences, including causing a surge in viewership demand for online streaming
platforms. With people staying at home because of lockdowns and social distancing measures, more people
consumed digital content, which accelerated the shift from traditional television viewing to online streaming.
Factors such as convenience, the availability of a wide range of content, and the ability to watch on demand
have driven this shift. Furthermore, the entertainment industry adapted to the shift in consumer behavior byembracing live streaming and online platforms. Virtual concerts and live events and performances havebecome popular, allowing artists and entertainers to connect with their audiences remotely. Platforms suchas YouTube Live, 17LIVE, and TikTok are live streaming more events and performances. The interactive
video streaming industry has experienced an emergence of new platforms and technologies catering todifferent forms of content, including gaming, podcasts, and educational content. This diversification
provides consumers with a wide array of options to choose from based on their interests and preferences.
Internet - Singapore. (n.d.). Retrieved October 23, 2023, from https://www.statista.com/outlook/co/digital-connectivityindicators/internet/singapore; Statista. (July 25, 2023). Internet penetration rate in Malaysia 2013-2028 [Graph]. In Statista. Retrieved
October 23, 2023, from https://www.statista.com/statistics/975058/internet-penetration-rate-in-malaysia/; Statista. (July 25, 2023).
Internet penetration rate in Thailand 2019-2028 [Graph]. In Statista. Retrieved October 23, 2023, fromhttps://www.statista.com/statistics/975067/internet-penetration-rate-in-thailand/;https://www.statista.com/outlook/co/digitalconnectivity-indicators/internet/indonesia#internet-penetration

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Frost & Sullivan believes that, while the initial surge in growth that the industry experienced during the
pandemic has receded, many of the shifts in consumer behavior and preferences are likely to continue inthe forecast period.

2

OVERVIEW OF ASIA MEDIA AND ENTERTAINMENT INDUSTRY

2.1

INDUSTRY DEFINITION AND SEGMENTATION

Figure 2-1: Media and Entertainment Industry Definitions and Segmentation, Asia 6

Media and Entertainment

Publishing

Games

Radio

Film

Music

TV
PAY TV AND
FTA TV

VOD

SVOD,TVOD
AVOD

Live online social
entertainment

Internet
AdvertisingInteractive video
streaming
Video gamestreaming

Source: Frost & Sullivan

The following provides the definition and scope of each segment (and related sub-segments) of the media
and entertainment industry:a) Publishing: The publishing segment comprises books (including books targeting the general
consumer, educational publications, and professional books), magazines (including both consumer
magazines and trade magazines) and newspapers (including daily, weekly, and monthly
newspapers).
b) Games: The gaming segment covers mobile, personal computer (PC), and console games,
including physical discs and digital versions of the games, additional downloadable content, gaming
subscription services, and in-app purchases. The segment excludes gaming hardware or devices
themselves (i.e., mobile devices, PCs, and game consoles).
c) Radio: The radio segment includes consumer subscriptions to radio services and advertisements
by radio stations and networks.
d) Film: The film segment comprises box office sales and advertisements in cinemas. However, it
does not include digital film sales, advertisements on digital film media, merchandise related tofilms, or concessions.
e) Music: The music segment comprises physical music discs, digital music, and live music but does
not include merchandise or concessions related to music artists or other musical acts.

6

Asia, for the purpose of this IMR, includes all the countries in Asia with the exception of China, Hong Kong, Afghanistan, North Korea,
Macau, Yemen, and the European and African Nations of Russia, Turkey, Egypt, and Azerbaijan

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Page 12f)

TV (Pay TV and Free to Air (FTA) TV): The pay TV segment comprises basic and premium TV
channel paid subscriptions, including broadcast, network, sports, and/or professional entertainment
content, and the advertisements these channels show. The FTA TV segment refers to video content
broadcasted on FTA television networks, including advertisements.

g) Video on Demand (VOD): This segment refers to an interactive television technology that enables
users to watch long-form video content on demand, unlike video content that users consume
through traditional live linear programming. VOD services consists of 3 categories:o

Subscription VOD (SVOD): This paid model requires consumers to pay a monthly fee toaccess the broad catalog of movies and TV series offerings.

oTransactional VOD (TVOD): Also known as pay-per-view, consumers pay for the video(s)they select.

oAdvertising-based VOD (AVOD): This free model allows consumers to view video content
without paying in exchange for watching advertisements.

h) Live Online Social Entertainment: This segment refers to platforms that allow users to broadcast
live video content through the internet and is not under VOD services. Under this segment, viewers
can watch the content via their own endpoint devices. Some differentiators set this segment apartfrom VOD, such as through the inclusion of more social elements and diversified monetization
methods. This segment does not include platforms such as Facebook Live and Instagram Live, as
their genesis is in social networking platforms, and the live feature is only 1 among the many
features that are present on the main platforms. 17LIVE INC. primarily operates in this segment.
The live online social entertainment can be sub-divided into 2 categories:i)oInteractive Video Streaming: This sub-segment consists of companies that started out
offering live interactive video streaming as their main business, and it also features a virtual
gifting business model, in which viewers buy virtual gifts online and send them to theirpreferred streamer, which the streamer can then cash out at a predetermined rate.
Companies operating in this space include 17Live, Lang Live, Bigo Live, Showroom, andPococha.

oVideo Game Streaming: This sub-segment consists of companies that focus on streaming
video game content. Unlike interactive video streaming, which emphasizes the streamers
and their interaction with their audience, the entertainment content of video gamestreaming emphasizes the gameplay elements, and to a smaller extent the reactions of thevideogame streamer to the game they are playing. Notable platforms include Twitch,
Caffeine, and Mobcrush.

Internet Advertising: The Internet advertising segment comprises advertisements on online
platforms, including paid search, display, and classified advertisements

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2.2

VALUE CHAIN AND ECOSYSTEM ANALYSISThe ensuing information explains the 6 steps that make up the media and entertainment industry value
chain and the typical business models they follow:
Figure 2-2-: Media and Entertainment Industry Value Chain and Ecosystem Analysis, Asia(a) Content
Creation(b) Content
Production(c) Content
Distribution(d) MarketingandPromotion(e) Exhibition
andBroadcasting(f) Consumption
and User
Experience

Source: Frost & Sullivana) Content Creation: Content creators, such as writers, authors, screenwriters, musicians,
filmmakers, and artists generate ideas, develop concepts, and create original content, such as
movies, TV shows, music albums, books, video games, and news articles.
b) Content Production: Once the creators develop their content, it moves into the production phase,in which production companies, studios, and recording labels engage in activities such as filming,
recording, editing, special effects, sound design, and artwork creation.
c) Content Distribution: After the production phase, publishers and distributors make the content
available to the target audience. Distribution channels vary depending on the type of media andinclude cinemas, DVD/Blu-ray sales, CD sales, and VOD and digital platforms.
d) Marketing and Promotion: When the content is available for distribution, marketing agencies,
publicists, and advertising companies create awareness and generate interest among the target
audience using many avenues, such as ad campaigns, public relations, press releases, trailers,and posters.
e) Exhibition and Broadcasting: Theaters, broadcasters, streaming platforms, and event organizers
display or broadcast content to the audience by way of activities such as theatrical screening,
television broadcasts, radio broadcasts, live concerts, and streaming on various platforms.
f) Consumption and User Experience: Finally, the audience consumes the content by attending amovie in the cinema, watching a TV show at home, listening to music on a streaming platform, or
playing a video game. User experience, accessibility, and convenience are important factors at thisstage.
Apart from the core value chain, the media and entertainment industry relies on additional revenue streams,
such as merchandising, licensing, product placements, endorsements, and sponsorships, which contributeto the overall profitability of the content and associated intellectual property.

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2.3

KEY TRENDS IN THE INDUSTRY

Demographic Shift and Social Media’s Contribution Toward the Industry
Millennials 7 account for an estimated 25%, or approximately 1.1 billion people, of Asia’s population.
Researchers refer to them as digital natives because they are the 1st generation to have grown up in aworld of digital technology. They have a comprehensive awareness of digital tools, digital literacy abilities,
and a natural aptitude for interacting with the online environment, and their exposure to and experienceswith digital technology have significantly changed the ways in which they connect with others, communicate,
work, and learn. Gen Z 8 are digital natives and have several traits in common with Millennials. This
generation lives in a time when technologies are in their most advanced stage yet, and Gen Z’s behavior
has significantly altered the way individuals perceive social media.
Both Millennials and Gen Z use social media extensively, as pioneers and fluent users, respectively. As of
July 2023, Thailand, Malaysia, The Philippines and Indonesia reported an above-average9 time spent onsocial media, with The Philippines topping the charts at an average of 3 hours and 44 minutes of time spent
daily. According to industry experts, the country also had the largest number of social media users 10 who
were inclined to follow influencers or other experts on social media. While Millennials experienced thedevelopment of smartphones, Gen Z entered a world where people were already using mobile devices ona wide scale. The Millennials have been at the forefront of social media's explosive growth, with thisgeneration favoring platforms such as Instagram, Snapchat, and TikTok, which provide more interactive
and visual content.
Social media has significantly contributed to the media and entertainment industry’s growth and willcontinue to do so in the forecast period. Frost & Sullivan believes that social media has revolutionized themarketing methods of media and entertainment companies, the impact of influencers and live streamers
on social media, and the means by which the general population engages and perceives entertainment
content today.
Rise of the Digital Platform
Utilization of the internet in the media and entertainment industry has resulted in a significant
interdependence between the two. The internet allows multiple platforms to distribute content—including
over-the-top (OTT) services, such as VOD platforms, live streaming services, and music streaming
platforms.
The evolution of technology affects consumer behavior. Most people want ease-of-use, personalization,
and a hands-on consumer experience, which is becoming more possible as digital platforms apply the latest
technology. For instance, with artificial intelligence (AI) and machine learning, streaming services analyze
user data, such as past viewing patterns and search history, to create personalized content
recommendations, which are more likely to lead to a positive viewing experience. This strategy has helped
them boost engagement and lower churn.

7

Frost & Sullivan defines the millennial population as individuals born between 1981 and 2000 (i.e., people between the ages of 20
and 39 as of 2020).
8
Generation Z, or Gen Z, comes after Millennials and refers to those who were born between the late 1990s and the early 2010s.
9Regional average of Asian countries
10
Approximately, 40-45% of social media users aged 16 to 64 who follow influencers or other experts on social media.

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Awareness Globally Towards the Attractiveness of the Asian Market
Companies and global consumers are becoming increasingly aware of and interested in Asia’s media andentertainment industry. With the significant possibilities of business integration and content creation in Asia,
many big players have already started building their engagement in the Asian market. Netflix and Amazon
Prime, for instance, have invested in creating more Asian-focused content, such as K-drama series andIndonesian action movies, and have introduced Asian representation in their original content.
According to industry sources, Netflix spent an approximately USD 1.9 billion on local content in APAC in
2022. With 47% of their earnings coming from Korea, Japan, India, Australia, and a few SEA nations,experts see this move as a means to capitalize on the growing demand for Asian content.
The Asian market is attracting global audiences, giving it the potential for a much stronger stance in the
global media and entertainment industry. Because of this shift toward Asian content, Frost & Sullivan
believes that a growing trend and potential for the cinema and OTT VOD industry exists in Asia, especiallyin terms of produced content.
Notwithstanding the opening of economies post the pandemic where there has been an uptick inmoviegoers and outdoor activities, Frost & Sullivan believes that the trend of watching one’s favorite icons
and stars on the various interactive video streaming platforms and OTT services will continue, as people
have grown accustomed to the convenience of viewing their chosen video any time of the day. Therefore,
the potential of outdoor entertainment is not likely to affect the OTT and interactive video streaming sectors.
Convergence of OTT Platforms
Increasingly, consumers view OTT services as mainstream market services rather than niche services andare now gravitating towards them, rather than the traditional means of consuming entertainment, becauseof the industry's growth and benefits. The emergence of numerous OTT VOD platforms has upended the
traditional entertainment market, and many traditional companies are gradually offering OTT services as
the market exhibits steady and mature growth. For instance, RCTI, one of Indonesia's largest televisioncompanies, introduced RCTI+ as a means of embracing this new kind of entertainment.
Many people have switched from traditional to OTT platforms because the latter are more engaging,personalized, and mobile-first focused. Approximately 64% of users aged between 16 and 34 and 57% ofusers aged between 35 and 45 use smartphones to access OTT services. The shift in consumer behavior
and the increasing level of internet penetration 11 in Asia are driving this growth in competition for OTT
services. The convergence and disruption of OTT services has affected a variety of media, including
television, music, radio, and movies and is likely to have a greater impact in the forecast period.
Gaming Industry and Interactive Video Streaming—The Future of Media and Entertainment
Asia has contributed significantly to the growth of video games, which has a growing addressable market
and is likely to continue to supply new players and innovative gaming concepts. Japan is well-known for its
console gaming, while South Korea is well-known for its online gaming and eSports scenes. The internet

11

Asia's internet penetration rate was approximately 64.7% in 2022, and it will continue expanding with technology advancements
during the forecast period.

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driven gaming era is forcing traditional console behemoths to rethink their strategies, while new competitorsfrom China and SEA are also gaining traction in the global gaming market.
Frost & Sullivan is optimistic about the gaming industry's potential, especially in combination with theimmersive OTT services that platforms for live streaming video games offer. While Twitch, YouTube Live,and regional Asian streaming services, such as Nimo TV, have given new life to the gaming industry andits adjacent community, these platforms and the emergence of numerous well-funded eSport teams andcompetitions are likely to serve as catalysts for a flourishing eSports industry in SEA. Mobile gaming
breakthroughs, pioneering interactive video streaming platforms, and a strong eSports presence in Asia
can potentially contribute to the growth of Asia's media and entertainment industry.

2.4

MARKET SIZING, FORECAST, AND SHARE ESTIMATES

Driven by the aforementioned factors, the total revenue for the Asian media and entertainment industry
increased from approximately USD 189 billion in 2018 to USD 244 billion in 2022 and is expected to reach
USD 339 billion by 2027 registering a CAGR of 7% in the forecast period (2023-2027).
Figure 2-3: Market Size and Forecast of the Media and Entertainment Industry (USD billion), Asia,
2018–2027F
338.8

USD billions

350.0

315.4
294.4

300.0
250.0
200.0

244.3

229.9

188.8

201.8

203.9

2019

2020

258.8

275.3

150.0
100.0
2018

2021

2022

2023F

2024F

2025F

2026F

2027F

Source: Frost & Sullivan; Other industry sources

Figure 2-4: Market Size and Forecast of the Media and Entertainment Industry (USD billion), Asia,
2018–2027F
Year
TV
Internet Advertising
Publishing
GamingVOD
Music
CinemaLive Online Social
Entertainment
Radio
Total

2018
61.1
32.5
50.7
21.8
6.3
6.0
6.5

2019
60.6
38.6
51.5
23.3
9.6
6.3
7.1

2020
56.3
41.1
50.4
27.8
14.0
6.4
2.4

2021
59.1
50.1
52.7
31.1
19.6
7.3
3.2

2022
61.2
55.9
53.7
32.7
19.6
7.8
5.9

2023F
60.5
62.9
54.7
36.0
21.5
8.4
6.2

2024F
59.7
71.1
55.7
39.7
23.7
8.9
6.6

2025F
58.9
80.6
56.9
44.1
26.0
9.6
7.0

2026F
58.0
91.2
58.2
48.8
28.4
10.2
7.5

2027F
57.2
103.3
59.5
54.0
31.1
10.9
8.0

1.5

2.3

3.6

4.9

5.7

6.9

8.2

9.7

11.3

13.3

2.5
188.9

2.4
201.7

1.9
203.9

1.9
229.9

1.9
244.3

1.9
258.8

1.8
275.3

1.7
294.4

1.6
315.4

1.6
338.8

Source: Frost & Sullivan; Other industry sources.

IMR Report© Frost & Sullivan – 2023

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3

OVERVIEW OF INTERACTIVE VIDEO STREAMING PLATFORM MARKET

3.1

INDUSTRY OVERVIEW

3.1.1

Evolution of the Interactive Video Streaming Market

Interactive video streaming initially began on PC/desktop-based devices because of technical limitations,which primarily confined streamers to fixed, indoor locations and restricted users’ viewing experience totimes when they had access to a PC/desktop. However, technology advancement has changed this,including the availability of higher bandwidth through the implementation of 4G networks, increased
smartphone adoption, improved smartphone capabilities, and a larger number of mobile broadband users.
The emergence of mobile applications has reduced technological barriers in establishing interactive video
streaming platforms and brought greater convenience for both streamers and viewers. Interactive video
streaming platforms globally are now concentrating their efforts on enhancing their mobile applications byintroducing more interactive and engaging features and improving user interface (UI) design.
Figure 3-1: Evolution of Interactive Video Streaming Services, Early 2000s–2027
Live Broadcasting

Interactive Video Streaming

Early 2000s- UGC

2010–2014- UGC withenhanced
content
quality- Emergence ofgaming-only
live stream
platforms

2015–2018- UGC withincreased
content
diversity andmore powerfultools forcontent
control- PUGC- Strengthened
content
control andmonitoring

Access- Web-based
online access- Mobile apps
- Web-based
online access- Exponential
growth ofmobile users
with mobile
broadband- Web-based
online accessTechnology- Web-based
broadcasting
technology- Developmentof mobile
apps- Video quality
enhancement- UI
enhancement

Revenue
Streams- Advertising(e.g., ad-roll)- Emergence of
virtual gifting/reward model- Enhancementof interaction
channels andpayment
methods- Quality
control &monitoring- Beautification
tools- Virtual gifts- Subscriptions

Content

IMR Report© Frost & Sullivan – 2023

2019–2022- UGC withincreased
content
diversity andmore powerfultools forcontent control- PUGC- Alliances withfunctional
applications,such asgaming, online
shopping, andhealthcare- Mobile apps
expected to bethemainstream
while online
access iscomplementary- Augmented
reality/mixed
reality/
artificial
intelligence(especiallymachinelearning)
integration- Analytics- Virtual gifts- Subscriptions- Value-added
services

2023–2027- Increasing
popularity ofVliver segment
in interactive
video streaming
industry- Improved online
shopping
experiencethrough livecommerce
platform- Mobile apps
expected to be
the mainstream
while online
access iscomplementary- Augmented
reality/mixed
reality- Artificial
intelligence- Blockchain- Virtual gifts- Subscriptions- In-apppurchases

Page 18

Consumer
Base- Limited

GeographicalPresence- Started inWesterncountries- Millennials(especiallygamers)- Westerncountries- China- Millennials- Generation Z- All
demographics- Northeast
Asia- Southeast
Asia- NorthAmerica- Whole of Asia
- North America- Europe- Middle Eastand North
Africa- Value-added
services- Alldemographics- Whole of Asia
- North America- Europe- Middle East andNorth Africa

Source: Frost & Sullivan Analysis

3.1.2

Industry Value Chain

The interactive video streaming value chain consists of 4 steps. As the graphic below explains, each step
employs various technologies to fulfill the services and enhance users’ experience.
Figure 3-2: Interactive Video Streaming Value Chain and Ecosystem Analysis, Global, 2022

Source: Frost & Sullivan Analysis

Infrastructure: Various technologies enable the high-quality live streams that consumers experience
across multiple platforms. Multiple video streaming technologies power the entire value chain, including
streaming protocols that enable the delivery of media across the internet, codecs that convert raw video
files into shareable digital files, and content delivery networks that enable the seamless broadcast of live
stream videos. Additionally, creators employ AI and augmented reality (AR) technologies to make live edits
and enhancements to the captured video and personalized content recommendations to users.
Developments in devices such as smartphones, tablets, and microphones and the increased affordabilityof these devices have made live stream accessible to the average consumer, and the growing penetrationof smartphones and high-speed wireless internet have enabled consumers to live stream anytime,
anywhere.
(a) Content production and development: In the pure-play interactive video streaming market,
streamers generate most of the content. Popular content genres include singing, painting, and animal
streaming. Many streamers generally produce, capture, and stream from their homes. Interactive video
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streaming platform companies may provide their top streamers with the support of operational teams
to help with aspects such as image design, copywriting, business development, and market analysis todeliver high-quality content and generate revenue. Interactive video streaming platforms are
increasingly producing their own unique content programs to capture more users and market base.
(b) Content acquisition and processing: To increase user retention, interactive video stream platforms
acquire (and train) top live streamers by offering them contract agreements. To ensure that the
published content observes local laws and regulations, platforms engage in pre-screening and content
monitoring—typically leveraging AI and manual monitoring. AI-powered filter programs help to spot andfilter illegal and unfriendly content, such as obscene language and sexual content.
(c) Content distribution and delivery: Interactive video streaming platforms have built-in technologies,
such as web real-time communications and real-time messaging protocol, that enable low-latency
streaming of UGC.
(d) Content consumption: The younger population and middle-aged men with relatively higher income
levels largely make up the user base of pure-play interactive video streaming, and users generally
consume live stream content via the platform apps they have installed on their smartphones or tablets
and accessed through wireless internet connections.
Monetization: Content monetization consists of 3 distinct segments. First, the monetization process begins
with viewers of live streams who purchase virtual gifts for their preferred streamers, which the streamers
can sell back to the platforms, thereby initiating a revenue-sharing model based on a mutually agreed-uponratio. Second, interactive video streaming companies derive revenue through sale of user subscription
plans, granting users access to exclusive content and privileges in exchange for a recurring fee. Third,
platforms can effectively monetize their reach by offering digital advertising spaces to brands that align with
their target audience, thus facilitating targeted marketing opportunities.
17LIVE is mainly involved in content acquisition, processing, distribution, and delivery. It has bothcontracted and non-contracted streamers and uses both AI software and a moderation team to filter illegal
and unfriendly content. The majority of 17LIVE’s revenue comes from the sales of virtual gifts andsubscription plans.
Figure 3-3: Interactive Video Streaming Market Business Model Analysis, 2022

Source: Frost & Sullivan Analysis

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3.1.3

Key Drivers

Widespread availability of affordable internet
Since access to live streaming content requires owning a smart device and having access to affordable andstable internet services, the global availability and affordability of internet services, particularly in Taiwan
and Japan, has played a significant role in facilitating the industry’s growth. In Taiwan specifically,smartphone ownership has been increasing. According to industry sources, close to 90% of the population
owned a smartphone in 2022, and this percentage will continue to increase. Among the countries in scopeof this report, the penetration rate of smartphones in Japan is one of the highest, accounting for 91.9% in
2022.2
In addition, the availability and affordability of internet in SEA presents both opportunities and challenges.
Many countries in SEA have made significant strides to promote public access to ICT and improve internet
accessibility. In SEA, Philippines continues to have the lowest penetration, while in Malaysia and Singapore,
penetration rates exceed 90%. According to industry sources, about 20% of SEA residents still do not haveinternet access due to higher price of fixed broadband in countries such as Indonesia, the Philippines, andThailand.12 However, the region is becoming increasingly wireless through devices such as smartphones
and tablets. Smartphone penetration in SEA has been rapidly increasing and will continue to grow. Somecountries, such as Indonesia and the Philippines, report a 100% mobile penetration rate.13
Furthermore, the penetration rate of 5G technology, both in Taiwan and Japan, has grown rapidly,
increasing from 2.3% in 2020 to 19.0% in 2022 in the case of Taiwan, and increasing from 16.5% in 2020
to approximately 94.2% in 2022 in Japan, where it will reach 98% in 2023.14 This significant increase in 5G
coverage has improved network speeds, enabling users in both countries to enjoy higher-quality interactive
video streaming experiences. Additionally, the cost of mobile internet in Taiwan and Japan has become
more affordable. From 2019 to 2022, the price of 1 GB of mobile data in Taiwan significantly decreased,
and in Japan, the cost decreased approximately 15.2% from 2020 to 2022. This affordability factor plays acrucial role in making the internet more accessible in both countries, potentially leading to an expansion of
the customer base in the interactive video streaming industry.
The advancement of mobile payment
The penetration rate of mobile payment in Taiwan has experienced substantial growth, increasing from
21.6% in 2020 to 34.3% in 2022.15 The rapid 12.6% increase during a span of just 2 years represents themost rapid growth among 11 surveyed internet applications. 16 Consumers are preferring mobile payment17
options on interactive interactive video streaming platforms in Taiwan, using payment platforms, such as

12

Aaron Raj. Internet Accessibility and Affordability still a Connectivity Hurdle in Southeast Asia. Internet accessibility and affordability
still a connectivity hurdle in Southeast Asia (techwireasia.com). 7 June 2023. Accessed 13 July 2023.
13
E-ASEAN. Connecting to grow. E-ASEAN | ASEAN Investment. Accessed 13 July 2023.
2
Cabinet Office. Consumer Trends Survey. https://www.esri.cao.go.jp/jp/stat/shouhi/kekkanoyouten2022.pdf.
3
Taiwan Network Information Center. Taiwan Internet Report 2022.
https://report.twnic.tw/2022/en/assets/download/TWNIC_TaiwanInternetReport_2022_EN.pdf. n.d. For Taiwan, the penetration rateof 2020 was calculated based on the population using 5G network above 12 years old and the penetration rate of 2022 was
calculated based on the population using 5G network above 18 years old. If we adjust to the same base, it is expected that thepenetration rate of 5G will be even higher in 2022.
15
Taiwan Network Information Center. Taiwan Internet Report 2022.
https://report.twnic.tw/2022/assets/download/TWNIC_TaiwanInternetReport_2022_CH.pdf. n.d.
16
Ibid. The 11 surveyed applications include online shopping, online sales, mobile payment, crypto currency, reading e-books, online
learning, watching free videos, online games, online apps for making friends, food delivery.
17
Mobile payment refers to the use of mobile phones to make monetary purchases through a credit or debit card or through direct
debit at the bank account or debit a pre-paid wallet.

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Neweb Pay and MyCard. Notably, more than 70% of people in the 30–39 age bracket uses mobile payment
services, which gives them a sense of familiarity when paying through the live streaming application.18
Japan experienced similar adoption of mobile payments, with PayPay dominating the mobile payment
market, followed by RakutenPay and D-harai. The usage of mobile payments has increased from 34.4% in
December 2019 to 51.8% in February 2022 and is likely to reach 80% in 2023. Nearly 75% of Gen Z haveadopted mobile payments, which is 5% more than Millennials. Such high adoption rates are a significant
impetus for the interactive video streaming industry in these countries.19
Similarly, SEA is experiencing an increase in real-time digital payments. In countries such as Singapore
and Malaysia, the volume of real-time online payments is likely to increase significantly in 2024.20 Mobile
payment wallets have become a vital part of the SEA consumer landscape. According to industry sources,
consumers in Indonesia prefer platforms such as GoPay, Dana, and Ovo, while in Malaysia, Touch’nGo
and Grabpay dominate. Frost & Sullivan believes the increase in online payments is significantly impacting
the interactive video streaming industry, facilitating its growth and expanding opportunities for content
creators to monetize their broadcasts.
The growing disposable income and spending in SEA
According to OECD, SEA’s economy is expected to grow by 4.6% in 2023 and 4.8% in 2024.21 This growth
can contribute to higher disposable incomes, giving individuals more funds to spend on entertainment andleisure, including live streaming. The increase in disposable income is also likely to lead to more consumer
spending on virtual gifts, donations, and subscription services on these platforms, directly benefiting live
streamers and platforms alike. The projected growth in the region's economy, coupled with the popularityof gaming and eCommerce, supports the potential for the interactive video streaming industry to thrive in
SEA.
Improvements in the quality of live streaming because of technological advancements
Technological advancements, including the emergence of 5G, AI, and the metaverse, have significantly
contributed to the enhancement of live streaming quality. For instance, the improved network capabilities
that 5G has facilitated, coupled with the implementation of edge computing, have reduced latency, thereby
elevating the overall quality of live streaming experiences. Additionally, the adoption of High-Efficiency
Video Coding Intellectual Property bonding technology has enabled high-quality video coverage during live
events.
Moreover, these technological advancements have improved video quality and made solutions moreaccessible by reducing their implementation costs. AI, machine learning, and deep learning technologies
have played a crucial role in enhancing content-filtering efficiency. Platforms can leverage thesetechnologies to identify and filter out inappropriate content, such as sexual or terrorist-related materials. AI
has enabled live stream applications to efficiently analyze users’ viewing history round-the-clock to provide
personalized content recommendations, improving user retention.
Furthermore, AR and virtual reality (VR) technologies have increased interactivity and immersion in live
streaming. Viewers and live streamers may utilize various filters, and multiple on-site VR panoramic
cameras allow remote audiences to experience the real environment of the venue, without any blind spots,
and independently select their preferred viewing angles. Overall, advancements in technologies, such as
18

Ibid.
Soumu. https://www.soumu.go.jp/main_content/000724576.pdf
20
Finfan. The rise of real-time digital payments in Southeast Asia. The rise of real-time digital payments in Southeast Asia (finfan.vn).
Date accessed: 13 July 2023.
21
OECD. Economic Outlook for Southeast Asia, China and India 2023. Overview-Economic-Outlook-Southeast-Asia-China-India.pdf(oecd.org). 2023.
19

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5G, AI, and the metaverse, have significantly improved the quality, accessibility, interactivity, and immersionof live streaming, enhancing viewers and live streamers experiences and capabilities.
Increasing variety of entertainment programs and better interactive video streaming platforms
The availability of a diverse range of entertainment content has significantly contributed to the attractivenessand therefore, the expansion of interactive video streaming platforms. These platforms offer a wide arrayof content, including live chat shows, music performances, gaming streams, and cooking shows. Thisvariety caters to different interests and preferences, attracting a larger audience base. By offering an
extensive selection of entertainment programs, interactive video streaming platforms can capture theattention of various demographics and engage viewers for longer durations. In addition, interactive video
streaming platforms have increasingly developing their own in-house content, as opposed to relying on
UGC alone, to draw viewership and enhance user retention. For instance, leading pure-play in interactive
video streaming companies are commonly hosting and producing live music shows and/or competitions.
Culture of fandom in Japan and growing popularity of Vlivers
The Japanese fandom culture holds a unique and prominent place, particularly when it comes to anime,
manga, games, and related media. Japanese fans exhibit a deep passion and devotion toward their favorite
franchises, characters, and idols. This fervent fandom culture extends beyond mere appreciation and has
evolved into an immersive subculture that involves cosplay (the practice of dressing up as anime
characters), fan art, fanfiction, merchandise collection, and attending conventions or events. Anime
conventions and events have become popular gathering places for fans to celebrate their favorite shows,cosplay as their beloved characters, and engage in different anime-related activities. These events provide
opportunities for fans to interact, share their love for anime, and showcase their creative talents. In East
Asia, anime is the second-most in-demand genre, behind only the superhero category and just ahead ofscience fiction. Within the region, the popularity of anime is not the same everywhere. Predictably, it is mostpopular in East Asia, followed by SEA. The impact of anime extends beyond entertainment. For example,
to a certain extent, the influence of anime is evident in various aspects of SEA society namely fashion
trends, art, and even tourism.
The intersection of the well-established fandom culture surrounding anime, manga, games, and similarinterests with the emergence of Vlivers presents notable advantages. Fans seek to engage with their
beloved characters or games and desire interaction with fellow enthusiasts. Fans strongly desire others torecognize them as devoted members within the community. The introduction of Vlivers in this context brings
significant benefits. Being digital entities, Vlivers possess an inherent longevity that is advantageous bothfor the companies and the fans themselves. This is especially so for Vlivers that are managed by companies,
as fans need not worry about their idol retiring or any unforeseen circumstances that could alter theirperception or connection, because even if the person behind the Vlivers retires, the company that holds therights to the idol can replace the voice artist behind it. This perpetual availability and stability provide asense of reassurance and continuity for fans, ensuring an enduring bond with their Vlivers and theassociated fandom culture.

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3.1.4Growth Challenges

Concerns about AI and privacy protection
Concerns surrounding AI and privacy protection pose significant challenges to the interactive video
streaming industry. Users are wary of platforms mishandling their personal data or sharing it without theirconsent. Additionally, the use of AI algorithms for content filtering and moderation raises questions about
censorship and the risk of algorithmic bias. Security vulnerabilities and the lack of transparency in AI
decision-making exacerbate these concerns. To overcome these restraints, interactive video streaming
platforms must prioritize privacy protection, transparency, and ethical AI use by implementing robust data
privacy policies, addressing algorithmic biases, and enhancing security measures. Building trust andensuring user confidence in data handling and content moderation are vital for the industry’s growth andsustainability.
Decreasing screen time and declining entertainment expenditure post COVID-19
TaiwanThe interactive video streaming industry experienced significant growth during the COVID-19 pandemic
and social distancing restrictions, as people sought digital content and services amidst limited outdoor
activities. According to industry sources, the global number of hours people spent watching live streams
greatly increased between 2019 and 2020. However, with the pandemic wearing out, people are gradually
returning to physical activities and spending less time consuming digital content, including interactive video
streaming. Daily internet usage has decreased from 2022 levels, indicating a potential decline in live
streaming consumption. Additionally, the economic disruptions from the pandemic have significantly
decreased Taiwanese households’ expenditure on entertainment. The share of recreation, culture, andeducation in household expenditure dropped from 9.53% in 2019 to 6.43% in 2021, with spending
decreasing from NTD 77,322 to NTD 54,700.22 This decline in entertainment expenditure poses a challenge
to the revenue sustainability of interactive video streaming platforms, as it may affect viewer gifting andsubscription fees. As a result, interactive video streaming platforms may face constraints in their revenue
growth and long-term viability.
Japan
The outbreak of the COVID-19 pandemic hindered one’s ability to attend physical events and seek
traditional forms of entertainment, such as nightlife activities, social gathering, and outdoor sports events.
As a result, individuals in Japan turned to virtual entertainment alternatives to fulfill their leisure needs,
leading to an increase in the number of users and a higher penetration rate of live streaming users.
According to Frost & Sullivan, the market experienced a year-on-year (YoY) growth rate of approximately
55% on average between 2019 and 2022. However, it is worth noting that the pace of growth will moderate
during the forecasted period. While the pandemic created favorable conditions for the interactive video
streaming market’s rapid expansion, Frost & Sullivan anticipates that the YoY growth rate will stabilize at
approximately 23% between 2023 and 2027. Despite this moderation, the market size remains substantial,
underscoring its’ resilience and long-term potential.

22

National Statistics, Republic of China (Taiwan)

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SEA
Screen time in SEA, as in other parts of the world, saw a surge during the pandemic because of various
factors, such as remote work, online education, and limited opportunities for social interaction. People spentincreased amounts of time on their screens for entertainment purposes, including watching movies, playing
video games, using social media, and live streaming. According to an industry survey in Singapore, out of
the list of common pandemic leisure activities, Singaporeans intend to reduce spending on video streaming
services along with online shopping and online gaming. 23 Thailand reflects a similar scenario, where theresumption of normalcy following the pandemic has led to a decrease in internet usage and online
purchases among local internet users. Frost & Sullivan believes that the influence of the COVID-19
pandemic on online viewership and spending in SEA overall will decrease as the region moves closer to astate of normalcy and gradually returns to pre-pandemic patterns.
Platforms need to find ways to stand out given heightened competition and saturated market
conditions
Heightened competition and a saturated market pose significant restraints for the interactive video
streaming industry, necessitating platforms to find innovative ways to stand out. As more platforms enter
the market, the competition intensifies and fragments the audience base. With numerous platforms vying
for viewer attention, it becomes challenging to capture and retain a substantial user base. To overcome
these restraints, interactive video streaming platforms must seek innovative strategies to differentiatethemselves. This can include offering unique and exclusive content, implementing novel features orinteractive experiences, fostering a vibrant community, or targeting niche audiences. Platforms need tocontinuously adapt and evolve to stay relevant in a highly competitive environment and stand out from thesaturated market.
In Taiwan, a trend exists among interactive video streaming platforms to recruit top live streamers from one
another by offering more competitive salary packages. However, the sustainability of the high revenue bothlive streamers and platforms generate is questionable as the market returns to normalcy from the peak
lockdown stages. As a reference, according to the China Association of Performing Arts, Mainland China
has approximately 24,000 multi-channel network (MCN) companies, a number that has remained relatively
stable since 2021. However, more than 30% of these companies reported a decrease in profitability in
2022. 24 Additionally, the annual revenue of prominent Chinese platforms, such as Huya and Douyu,
experienced a significant drop of 20%–30% in 2022 compared to 2021.25 This decline is reflected in theearnings of top Chinese live streamers, who used to earn in excess of tens of millions of RMB per year in2020 and 2021 but earned only 1 to 2 million RMB in 2022, representing just one-tenth of their previous
revenue during the COVID-19 pandemic.26
The Japanese interactive video streaming market is competitive and platforms such as 17LIVE, Pococha,
and Showroom are vying for users’ attention, and standing out and attracting a large user base can bechallenging because of limited differentiation in features and content. Pococha’s successful strategy
involves assigning ranks to live streamers, incentivizing popular streamers to use the platform and attract
more viewers. This unique revenue-sharing model helps platforms tap into the influence of top streamersand drive user engagement.

Adobo magazine. Insight: Singaporeans’ spending on leisure expected to increase despite inflation, shifting away from pandemic
activities. Insight: Singaporeans’ spending on leisure expected to increase despite inflation, shifting away from pandemic activities adobo Magazine Online. 11 May 2022. Accessed: 14 July 2023.
24
China Association of Performing Arts. Report on the Development of China's Online Performance (Live Streaming and Short Videos)
Industry (2022-2023). 中国网络表演（直播与短视频）行业发展报告.pdf (capa.com.cn). 30 May 2023.
25
Ibid.
26
Industry sources
23

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3.1.5

Key Trends

Virtual streamers phenomenon
Virtual streamers, known as Vtubers (virtual YouTubers), have become a prominent phenomenon in thestreaming industry. Kizuna AI, often regarded as the first Vtuber, gained significant recognition after startingher virtual streaming journey in 2016. With more than 4 million subscribers across various channels, she
has played a pivotal role in popularizing the Vtuber concept. Vtubers can similarly engage in various
activities, such as gaming, cooking sessions, song performances, and interactive Q&A sessions with theirfans. They have garnered a substantial following on video sharing and social media platforms, withdedicated fan bases and corporate sponsorships. This emerging trend has captured the attention ofcompanies in Japan and China, leading to investments in the creation and management of these virtual
influencers.27
While the market for virtual streamers in Taiwan is still in its early stages, it shows promising growth potential,
especially among Gen Z. The widespread popularity of anime in Taiwan, coupled with the establishment of
the Taiwan Vtuber Association, indicates a growing interest in Vtubers. In contrast, virtual streamers arevery popular in Japan because of a variety of factors, such as the possibility of not showing their faces andthe option of choosing an ideal visual. VLivers make up a large part of the interactive video streaming
market in Japan and present the fastest-growing trend in the industry.
Frost & Sullivan believes that as this trend continues to gain traction, virtual streamers are likely to become
more prevalent in both Taiwan’s and Japan’s streaming landscape, attracting a dedicated fan base andpotentially leading to developments in the industry.
AI-generated streamers
The progress of AI technology has enabled the emergence of AI streamers representing a notableadvancement within the virtual streamers segment. Unlike human-backed virtual streamers, AI andmachine learning algorithms power AI streamers, eliminating the need for human involvement in their live
streams. Prominent examples of AI streamers on platforms such as Twitch include Neoro-sama, the AI
Seinfeld Show, and the Athene AI Show. Live interactions with AI streamers tend to be relatively restricted
for now because of the limitations of technology. However, with AI technology developing so quickly, thequality and capabilities of AI streamers is expected to catch up with those of human-backed virtual
streamers in the forecast period. As AI algorithms continue to advance, the potential for more engaging andinteractive experiences with AI streamers is expected to increase.
Success of nagesen gifting in Japan
Japanese users tend to engage in gifting practices and often expect some form of reciprocity as a gestureof appreciation. They may communicate directly with content creators (referred to as a liver) and makespecific requests. In Japan, numerous apps and services offer gifting capabilities within interactive video
streaming platforms. For example, YouTube’s live streaming feature, YouTube LIVE, enables users to give
gifts to streamers using the Super Chat feature. Other popular interactive video streaming apps with gifting
features include 17LIVE, TwitCasting, Showroom, and NicoNico Live.28
According to industry experts, a small percentage (close to 5%) of viewers have given gifting money(nagesen) to the streamers while a majority watched without ever gifting during live streaming. Most of
those people have gifted between 100 yen and 300 yen in a single instance. Approximately 20% of people
27

City University of Hong Kong. More Kawaii than a Real-Person Live Streamer: Understanding How the Otaku Community Engages
with and Perceives Virtual YouTubers. https://www.cs.cityu.edu.hk/~zhiconlu/assets/pdf/CHI2021Vtuber.pdf. May 2021.
28
Business Insider. TikTok が つ い に ｢ 投 げ 銭 ｣ 機 能 を 2021 年 か ら 開 始 。 ラ イ ブ 配 信 者 の 収 益 化 元 年 に ？ .
https://www.businessinsider.jp/post-225576.

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chose 500 yen to 1,000 yen, and a smaller group of people gave between 1 yen and 100 yen. On thecontrary, approximately 5% of the gifting population gifted more than 10,000 yen. The most common
platform that users mentioned that practiced gifting was YouTube, followed by 17LIVE, TwitCasting, andShowroom.
Otaku and Hikikomori population’s affinity with interactive video streaming
The Ministry of Health, Labor, and Welfare of Japan recognizes Shakaiteki hikikomori, known as social
withdrawal, as a condition in which an individual voluntarily isolates himself within his home for a durationof more than six months and refrains from participating in social activities, such as attending school or work.
Notably, this condition does not involve psychosis, which refers to a severe mental disorder affecting an
individual’s thoughts, emotions, and perception of reality. Instead, feelings of social anxiety, introversion,or other factors lead individuals to retreat from society and limit their interactions with the outside world. 29
According to estimates, the number of individuals who fall under the broader definition of hikikomori inJapan, which includes those who primarily stay at home but venture out for errands related to their hobbies,
is approximately 696,000 nationwide.30
An otaku is typically a young individual who displays a strong interest and extensive knowledge in subjects
such as anime, manga, video games, and related fandoms. An otaku is passionate about a broad range of
popular culture, not just fixated on computers or computer games. Some otaku may find it challenging toengage in face-to-face interactions and socialize with others in real life, preferring online communities.31
However, not all otaku share this difficulty. Some otaku possess well-developed social skills and actively
participate in both virtual and real-life communities related to their interests. While some individuals identify
themselves as both otaku and hikikomori because of shared social difficulties, the terms describe distinct
aspects of behavior and do not necessarily go hand in hand. Otaku may have social difficulties, such as
finding it challenging to engage in face-to-face interactions; however, it is not a defining characteristic of
being an otaku. Many otaku actively participate in fan communities, attend conventions, and engage in bothonline and offline interactions related to their interests.
The engagement of otaku and hikikomori individuals presents opportunities for the interactive video
streaming industry. Their targeted interests and dedicated engagement make them a valuable audience for
specialized content. Interactive video streaming platforms can provide a space for them to gather, interact,and foster a sense of belonging within the community. The online accessibility of live streaming
accommodates their preference for virtual interactions, while the inclusion of Vlivers and charactersenhances their connection and immersion. By recognizing and catering to their interests, the live stream
industry can tap into a passionate and engaged viewer base, contributing to growth and community-building.

29

Saito K. Hikikomori no hyouka: shien ni kansuru gaidorain. Tokyo: Japan's Ministry of Health, Labour and Welfare, 2010.
Japanese Cabinet. 第 2 節 若年無業者，フリーター，ひきこ.
り.https://www8.cao.go.jp/youth/whitepaper/h25honpen/b1_04_02.html
31
Cambridge Dictionary. Otaku. https://dictionary.cambridge.org/pt/dicionario/ingles/otaku
30

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3.1.6

Key Metrics Comparison

TaiwanAccording to a survey conducted by the Taiwan Network Information Center, 77% of Taiwanese internet
users watch live streams and online videos or listen to music during their time on the internet. In addition,
56.6% of Taiwanese internet users indicated live stream as one of their online entertainment activities.
Among them, 61.3% are male and 51.6% are female.32 Live streaming is most popular among people aged
15 to 19 and 35 to 39 where 64.7% and 62.4% of respondents in the respective age groups watch live
streaming.
Japan
According to industry sources, nearly half of Japanese netizens watch live stream videos, and it is mostpopular among people aged between 20 and 30, as more than 60% of such internet users in that age groupwere inclined to watch live streaming videos as of 2022. Industry experts opine that nearly one-fifth ofJapanese internet users have experience as live streamers, making this social activity significantly popularamong all age-groups, especially among Gen Zs.
China
China has a large interactive video streaming market with stable growth. The amount of live stream users
in China reached 751 million, accounting for 70.3% of Chinese netizens as of December 2022, a 7%
increase compared to December 2021.33

32

Taiwan Network Information Center. Taiwan Internet Report 2020. https://www.twnic.tw/doc/twrp/202012e.pdf . n.d.
China Internet Network Information Center. The 51st Statistical Report on China's Internet Development.
https://cnnic.cn/NMediaFile/2023/0322/MAIN16794576367190GBA2HA1KQ.pdf . Mar 2023.
33

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3.2
3.2.1

JAPAN
Market Size

The interactive video streaming market in Japan has witnessed significant growth, attaining a market sizeof approximately USD 1.8 billion in 2022. One of the primary drivers of this expansion is the increasing
popularity of virtual live streaming. Vlivers, with their immersive and interactive experiences, played a pivotal
role in generating approximately 34.4% of the total market size in 2022.
Figure 3-4: Revenue Forecast of Interactive Video Streaming Segments (USD million), Japan, 20182027F
6000
5052.4(USD millions)

5000
4171.84000

3435.02802.33000
2278.41832.02000

1418.81010.9

1000

329.0

582.7

0
2018

2019

2020

2021

2022

2023F

2024F

2025F

2026F

2027F

Source: Frost & Sullivan’s primary interviews, desktop research, and analysis
Note:
1. Sources include a combination of (i) Interviews with industry and in-house experts; (ii) company reports and other presentationmaterials including but not limited to news articles, press releases, and publicly available industry data; (iii) Frost & Sullivan’s
desktop research on sources including but not limited to databases of industry associations, trade bodies, and government
agencies.

The interactive video streaming market in Japan is expected to continue to grow at a CAGR of 22.0% from2023 to 2027, albeit at a gradually decelerating pace. From 2023 to 2025, the expansion of virtual live
streaming is expected to drive market growth at a CAGR of 22.0%. This immersive and interactive form ofcontent consumption is likely to attract a growing audience and stimulate market expansion. In thesubsequent years of 2026 and 2027, the growth rate is likely to stabilize at 21%, indicating a natural
progression toward market maturity and reaching saturation points in certain segments. Frost & Sullivan
believes that this underscores the persistent demand for interactive video streaming services in Japan,
suggesting potential opportunities for market development.

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3.2.2Competitive Landscape and Market ShareIn the Japanese market, the leading platforms in terms of revenue within the interactive video streaming
sector include YouTube, 17LIVE, Pococha, Showroom, Twitcasting, WhoWatch, and Bigo Live. As of 2022,
17LIVE was one of the market leaders, with a market share of 13.7% by revenue. Since entering theJapanese market in August 2017, 17LIVE has experienced consistent YoY growth, surpassing Showroom
to secure its position. When considering virtual livers’ revenue (Figure 3-5a), YouTube Live led the market
in 2022, capturing 33.8% of the market share, because it has adopted a live streaming video system withaccessible entry requirements, attracting prominent companies, particularly those managing Vlivers, since
its start in Japan in 2011. DeNA owns the 3rd- and 5th-largest players, Pococha (with a market share of
11.7%) and Showroom (with a market share of 5.6%). Showroom has consistently reported low YoY
revenue growth since it launched in 2015, whereas Pococha has established itself in the market since its
entry in January 2017.
Twitch and Bigo enjoy market shares of 10.4% and 5.1%, respectively. Twitch, a platform that mainly
focuses on game livestreaming, is still growing in Japan since it started in 2017. Bigo Live, originating fromSingapore, entered the Japanese market in early 2016 and localized its content specifically for Japan in
2018. WhoWatch, which launched in 2015 and operates exclusively in Japan, accounted for 3.5% of themarket share in 2022, and other smaller players collectively accounted for 12.7% of the market share in
2022. Notably, the aggregate value excludes TikTok revenue from the overall market sizing.
Figure 3-5a: Market Share by Revenue, Interactive Video Streaming Market, Japan, 2022E
Others
12.7%

Twitcasting
3.4%

YouTube (Live
Streaming)
33.8%

WhoWatch
3.5%

Bigo Live
5.1%
Showroom
5.6%
17Live
13.7%

Twitch10.4%
Pococha11.7%
Source: Frost & Sullivan’s primary interviews, desktop research, and analysis
Note:
1.

Frost & Sullivan’s estimated market players’ revenue based on 1) Mobile applications’ estimated gross revenue and overall
industry observation of interactive video streaming market, 2) Quarterly financial reporting by public listed companies, 3)Company disclosure. The interactive video streaming market estimates for Japan include Vliver.

2.

In the 3-5a chart, out of YouTube’s 33.8% market share, only approximately 20% corresponds to pure-play live streaming, while
the other 80% is composed of virtual live.

3.

The Others category includes smaller apps that provide only interactive video streaming and do not account for more than 5%of the market share. This includes (but is not limited to Hakuna Live, MixChannel, LiveDreamer, マシェ LIVE, 21Live, and LiveMe.

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Nevertheless, when considering only pure-play interactive video streaming (which disregards the Vlivers
segment, as presented in Figure 3-5b), YouTube is not considered34 as a player in the market, leaving
17LIVE as the top provider with 20.8% of the market share.
Figure 3-5b: Market Share by Revenue, Pure-Play Interactive Video Streaming Market, Japan, 2022E
Others19.2%

17Live20.8%

Twitcasting
5.2%
WhoWatch
5.3%
Pococha17.7%

Bigo Live
7.7%
Showroom
8.5%

Twitch15.7%

Source: Frost & Sullivan’s primary interviews, desktop research, and analysis
Notes:
1. Frost & Sullivan’s estimated market players’ revenue based on 1) Mobile applications’ estimated gross revenue and overall
industry observation of interactive video streaming market, 2) Quarterly financial reporting by public listed companies, 3)Company disclosure. The interactive video stream market estimates for Japan include Vliver.
2. In the 3-5b chart, only pure-play revenue was considered, YouTube is excluded from this analysis.
3. The Others category refers to smaller apps that only provide interactive video streaming and do not account for more than 5%of the market share. This includes (but is not limited to) Hakuna Live, MixChannel, LiveDreamer, マシェ LIVE, 21Live, and Live
Me.

3.2.3

Operational Performance

Among the pure-play interactive video streaming companies, 17LIVE led in revenue and operational
performance35, showcasing a strong gross profit margin, average revenue per user (ARPU), and averageview duration per daily active user (DAU). However, in the overall interactive video streaming landscape,which includes virtual live streaming, YouTube outperforms 17LIVE.
Figure 3-6: Operational Performance for Select Apps, Japan, 2022E
Metrics/App Names

17LIVE

PocochaShowroom

MAU
Gross Profit Margin (%)
Est. ARPPU (USD)
Est. ARPU (USD)
Average View Duration
per DAU (minutes)

350,000
41.6
301.0
59.9

301,311.8
28-32
210-23059.4

144,306.4
26-30
190-220
59.2

YouTube(overall interactive
video streaming)>1,050,000.0
40.0
406.4
49.1

106.0

100.9

92.7

150.0

YouTube(Without
VLiver)~215,000
28%-32%285-32547.9
40-50

Source: Frost & Sullivan’s primary interviews, desktop research and analysis
Note: Sources include a combination of (i) Interviews with industry and in-house experts; (ii) company reports and other presentationmaterials including but not limited to news articles, press releases, and publicly available industry data; (iii) Frost & Sullivan’s desktop
research on sources including but not limited to databases of industry associations, trade bodies, and government agencies.

Virtual livers provide most of YouTube’s live streaming revenue, which explains why their revenue is so much lower when this areaof the market is disregarded (Figure 3-5b).
35
Operational Performance for the purpose of this report comprises MAU Gross Profit Margin, ARPU, ARPPU, Average View Duration
per DAU (in minutes)
34

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3.3

TAIWAN

3.3.1

Market Size

According to Frost & Sullivan’s market forecast, the interactive video streaming segment registered a CAGR
of 17.7% between 2018 and 2022 reaching a market size of USD 322.7 million in 2022. Going forward, themarket is expected to grow at a CAGR of 11.2% reaching a market size of USD 556.1 million in 2027. The
introduction of new segments such as new content and services, to attract and retain viewers strongly
fueled this growth in the pandemic years. However, the market also faced new challenges during the
pandemic, such as the competition for screentime from other modes of entertainment, including OTT
streaming services. Additionally, Taiwan is expected to be a mature market in the interactive video
streaming segment in the forecast period resulting in a slower and normalized growth rate. Hence, its
earning potential will remain strong but without the same levels of growth as in the late 2010s36. Frost &Sullivan estimates that with the growth of the market and the introduction of new technologies and trends,
such as the use of Vlivers, the DAU of interactive video streaming platforms will reach 300,000 by the endof the forecast period.
Figure 3-7: Estimated Revenue Forecast of Interactive Pure-Play Interactive Video Streaming
Segments (USD million), Taiwan, 2018-2027F

600

556.1
503.0

(USD millions)

453.4
406.8
363.3

400

322.7
280.5
245.8
208.8
200

168.0

0
2018

2019

2020

2021

2022

2023F

2024F

2025F

2026F

2027F

Source: Frost & Sullivan’s primary interviews, desktop research, and analysis
Note:
1.

2.

Sources include a combination of (i) Interviews with industry and in-house experts; (ii) company reports and otherpresentation materials including but not limited to news articles, press releases, and publicly available industry data; (iii)
Frost & Sullivan’s desktop research on sources including but not limited to databases of industry associations, tradebodies, and government agencies.
The market size does not include Vlivers live streaming as it remains a nascent market in Taiwan.

36

Interactive video streaming began to grow rapidly in the mid-2010s with the launch of homegrown interactive video streaming
company 17Live in 2015 and other companies, such as Lang Live, UpLive, and Bigo Live, which make up the crucial players in theinteractive live video streaming market in Taiwan.

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3.3.2Competitive Landscape and Market Share

Taiwan's top interactive video streaming apps include 17LIVE, Lang Live, UpLive, and Bigo Live. The
market also consists of smaller players, such as True Love Live, 1024 Live, and PD Live. As of 2022,
17LIVE commanded 26.9% market share by revenue in Taiwan. Since its launch in 2015, 17LIVE has
maintained its position as one of the top two leading companies in the Taiwanese interactive video
streaming market. Together with Lang Live, the Company owns more than half of Taiwan’s interactive video
stream market. 17LIVE further solidified its position by acquiring MeMeLive in 2019. Lang Live, anotherTaiwanese company that was launched in 2016 and owned 29.7% of the market share. Lang Inc. acquired
Lang Live in 2020, bolstering its presence in the market. UpLive, which began operations in China in 2016
and swiftly entered Taiwan in the same year, was the 3rd-largest with a 10.8% market share. Bigo Live,
which started its operations in Singapore and launched in Taiwan, Hong Kong, and Macau in late 2016,
occupied 8.3% of the market share in Taiwan, coming in at 4th place.
Figure 3-8: Estimated Market Share by Revenue, Pure-Play Interactive Video Streaming Market,
Taiwan, 2022E
Others24.3%

Lang Live
29.7%

Bigo Live
8.3%

17Live
UpLive26.9%
10.8%
Source: Frost & Sullivan’s primary interviews, desktop research, and analysis
Note: Frost & Sullivan’s estimated market players’ revenue based on 1) mobile applications estimated gross revenue and overall
industry observation of the interactive video streaming market, 2) Quarterly financial reporting of publicly listed companies, andcompany disclosures 3) The market share allocation does not include Vlivers live streaming as it remains a nascent market in
Taiwan. 4) For both leading companies, 17Live and Lang Live, the reported revenues used for the calculation of respective market
shares are predominantly derived from their pure-play interactive video streaming services in Taiwan; i.e. at least 98% of thereported revenues consist of pure-play live stream revenue.

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3.3.3Operational Performance

Among the major players in Taiwan’s pure-play interactive video streaming market, 17LIVE and Lang Livedominate the market with a combined market share of 56.6% in 2022. These 2 market leaders outperformtheir competitors, UpLive and Bigo Live, in all selected operational metrics (Figure 3-9). Even though Lang
Live has a higher MAU and average view duration per DAU than 17LIVE, the latter has a more effective
monetization strategy and more paying users, outperforming Lang Live in terms of ARPPU and ARPU.
Figure 3-9: Operational Performance for Select Apps, Taiwan, 2022E
Metrics/ App Names

17LIVE

Lang Live

UpLiveBigo LiveMAU

114,000.0

192,480.0

57,744.0

38,496.0

19.9
350.0
63.3

28.0
260.3
41.4

<401
96.9
50.1

<37.61
<4521
58.2

81.0

130.0

120.0

NA

Gross Profit Margin (%)
Est. ARPPU (USD)
Est. ARPU (USD)
Average View Duration
per DAU (minutes)

Source: Frost & Sullivan’s primary interviews, desktop research, and analysis
Note: 1. Figures denote overall Company numbers. Geographical split pertaining to Taiwan was not available as on date of thisreport preparation. Sources include a combination of (i) Interviews with industry and in-house experts; (ii) company reports andother presentation materials including but not limited to news articles, press releases, and publicly available industry data; (iii) Frost& Sullivan’s desktop research on sources including but not limited to databases of industry associations, trade bodies, government
agencies, such as National Development Council (Taiwan), Taiwan Statistical Data Book.

3.4

COMPANY POSITIONING37

3.4.1

Sales and Market Strategy

Japan
17LIVE's strategy for the Japanese market comprises initiatives in various areas. It aims to establish itself
as a prominent Vtuber agency by focusing on Vlivers management, collaborating with establishedcompanies, and nurturing talented V-Livers. This new strategy means that 17LIVE is likely to be the 1st
virtual live platform to manage Vlivers among the players in this report. The company plans to develop
Vliver-related products, incorporating technological advancements and expanding its content portfolio.
Additionally, it is venturing into mobile game development and recognizing the potential of interactive games
that allow users and streamers to play together. The company also integrates live commerce into its
platform, providing an alternative revenue option for streamers and enabling SMB merchants and major
brands to tap into their user base. Furthermore, the company organizes diverse offline events to foster
engagement, support streamers' growth, and create immersive user experiences. It also invests in cuttingedge streaming technology to develop its own technology to optimize the user experience and focus on
talent acquisition and management, training programs for streamers, and in-person gatherings to support
community building. With a focus on customer retention, 17LIVE provides personalized services, incentives,and loyalty programs to enhance user satisfaction.
Streamers generate revenue through virtual gifting and subscriptions, and the company organizes offline
events and festivals for streamers to interact with their fans. Through these initiatives and dedication toquality content, 17LIVE aims to establish a strong presence in the virtual entertainment industry in Japan
while prioritizing user satisfaction, streamer growth, and innovative streaming technology. According to37

Unless otherwise specified, this section on Company positioning (ListCo positioning) has been drafted based on information
provided by the Company/ListCo. Frost & Sullivan has not conducted any independent diligence on the data or information thus
obtained.

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Frost & Sullivan, 17LIVE is the first Vliver agency with its’ own live streaming platform and is poised for asignificantly strong growth in the forecast period.
Taiwan17LIVE adopts a multi-pronged approach to increase brand awareness and market penetration in Taiwan.
The company regularly hosts offline events, such as newbie exclusive programs, to incubate new streamersand music events featuring the 17LIVE’s musician streamers. In addition, 17LIVE participates in various
government events, such as Taiwan Lantern Festival and Creative Expo Taiwan, to increase its brandexposure. On top of building an offline presence, it engages in strategic partnerships to spread brandawareness through different channels. For instance, by sponsoring a professional basketball team,Kaohsiung Steelers, 17LIVE has incorporated its name into its logo and enjoys publicity at each of thebaseball team’s sporting event and press release. Thus far, 17LIVE is the only pure-play interactive video
stream platform with such a co-branding strategy with a leading professional sports club. Additionally, thecompany collaborated with Sanrio, a leading Japanese entertainment company, and Supau, a top
Taiwanese drinks brand, to promote itself.
Offering localized content is a crucial success factor for attracting and retaining live stream users. 17LIVE
has adopted a unique strategy in Taiwan by engaging with politicians from various political parties andinviting them to participate in live streaming on its platform. Some of the Taiwan politicians that haveappeared on 17LIVE’s platform include the Taiwan President, Tsai Ing-Wen, and the former Mayor of Taipei,
Ko Wen-je. The platform’s original content offerings include live singing competitions, fortune telling
programs, and outdoor game shows.

3.5

OPPORTUNITIES

Horizontal and Vertical Integration 38
Taiwan's interactive video streaming market has reached a mature stage and is experiencing consolidation.
Three major players, 17LIVE, Lang Live, and UpLive, hold a combined market share of about 65%, with
17LIVE alone accounting for 26.9% of the market. This dominance has resulted in other players, such as
Bigo Live, gradually fading out of the Taiwanese market. In Japan, the interactive live streaming industry
has also seen significant development and expansion. Several major players, such as 17Live, Pococha
and Twitch, have established a dominant position, holding a combined market share of around 54.1%.
While Taiwan is in a consolidation stage, Japan’s market is well established, with companies adopting
various forms of vertical integration to strengthen their market position. Three of the main vertical integration
approaches are content creation, technology development and monetization.
In the pure-play interactive video streaming industry, quality streamers are a crucial success factor, as
users tend to follow the streamers rather than the platform. However, online celebrities or influencers
typically have a limited lifespan, making it unsustainable for the streaming platforms to rely solely on UGC
for revenue. To address this, interactive video streaming platforms have developed in-house programs toenhance user stickiness and retention. For example, 17LIVE offers unique content, such as fortune-telling
programs and outdoor game shows, as part of its product differentiation strategy, which other leading
players in interactive video streaming market will likely adopt. Similar to Taiwan, having quality streamers
is a key success factor for live streaming platforms in Japan. These platforms focus on attracting andretaining top content creators to appeal to their audiences.
Interactive video streaming companies may also pursue vertical integration, which can offer significant
benefits in Taiwan's relatively mature market. By vertically integrating their operations, interactive video
streaming companies can have more control over the entire production process, from sourcing talent and38

Vertical integration refers to the integration of two firms that are involved in different stages of the supply chain or production process.
Horizontal integration occurs when a company expands its business by acquiring or merging with similar companies in the same
industry and at the same level of the supply chain.

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creating content to delivering it to users. This allows for streamlined operations, increased efficiency, andimproved coordination between different aspects of the business. It reduces reliance on external partners
and platforms, providing greater autonomy and flexibility in decision-making. With inhouse teams for talentmanagement, content production, and marketing, interactive video streaming companies can eliminate
intermediary costs and capture more value their services generate. This can result in higher profit margins
and increased competitiveness in the market.
Live Commerce
Taiwan’s eCommerce penetration rate exceeded 50% in 202239. As the demand for online products andservices continues to increase, retailers in Taiwan are intensifying their efforts to expand their eCommerce
presence. In this regard, many retailers are incorporating live commerce into their overall eCommerce
strategy. Live commerce offers a highly interactive and real-time engagement experience leveraging theurgency created during limited live commerce sessions. Consequently, Frost & Sullivan believes that theconversion rate of live commerce is expected to surpass that of traditional eCommerce.
Live commerce in Japan is still in its early stages but shows growth potential. Only a small percentage of
respondents have made purchases through live commerce platforms, indicating a low adoption rate.
However, owing to enthusiasm and momentum surrounding live commerce, the companies in theeCommerce industry are actively working to enhance its popularity. The market's expansion will require a
shift in Japanese society's online shopping behavior, which may take time owing to cultural reasons.
Nonetheless, the lack of a dominant player in the market presents an opportunity for early entrants toestablish themselves and access potential revenue.

V-Livers
V-Livers present significant opportunities for the interactive video streaming industry. Due to their digitalnature, V-Livers can attract a global fan base, transcending language and cultural barriers. This expands
the reach of interactive video streaming platforms and increases their market presence. Moreover, V-Livers
provide diverse monetization channels through virtual gifting, merchandise sales, and paid subscriptions,generating sustainable revenue streams for both the personalities and the platforms. Collaborations withother content creators, virtual or real, offer cross-promotion opportunities and expand brand exposure. VLivers accelerate technological advancements, utilizing cutting-edge technologies, such as motion captureand AI-generated content. By embracing these virtual personalities, interactive stream platforms can tap
into their innovative potential, attract a wider audience, and stay competitive in the evolving landscape of
online entertainment. According to Frost & Sullivan, V-Livers are a significant revenue source in Japan's
interactive video industry and will positively impact its growth in the forecast period. The industry's size isvisible in the market size section for Japan—accounting for 34.4% of the total market size in 2022. Besides
live streaming, one of the most promising opportunities in this market is virtual talent agencies, such as
AnyColor and Hololive.

39

Taiwan Network Information Center. Service Application Overview.
https://report.twnic.tw/2022/TrendAnalysis_globalCompetitiveness.html. 2022. n.d.

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4

OVERVIEW OF INTERACTIVE VIDEO STREAMING PLATFORM MARKET IN MAJOR
SOUTHEAST ASIAN COUNTRIES

4.1

TRENDS (DRIVERS AND RESTRAINTS)

Following the internet adaptation and development of allied sectors in the region in 2015 and thereafter,
the media and entertainment industry witnessed an increase in the number of content creators who used
live streaming to share snippets of their lives with their followers. Various influencers in different industries,
including beauty bloggers and professional gamers, saw live streaming as an effective way to stayconnected with people. As a result, live blogging platforms, such as Bigo Live, have seen a massive
increase in popularity in Indonesia and Thailand. Social media and eCommerce companies have also
begun offering various live streaming solutions. Countries such as Thailand are at the forefront of live
stream adoption, with many digital consumers making online purchases using live streams.
Indonesia: Interactive video streaming platforms in Indonesia provide localization features, including local
language support, localized content curation, and customer service in the Indonesian language. This
localization strategy enhances user experience and fosters a deeper connection with the local audience.
The Indonesian government has implemented live streaming content regulations to address content
moderation, copyright infringement, and user protection issues. Platforms must comply with theseregulations to operate legally in the country. Social media personalities are also popular live streamers inIndonesia. These personalities often live stream their daily lives, hobbies, ideas, and opinions on various
topics. Some of the most popular social media personalities who live stream in Indonesia include Awkarin,
Jess No Limit, and Raditya Dika. Pure-play interactive video streaming platforms in Indonesia haveintegrated social commerce features, enabling viewers to purchase directly from live streams. For example,
Uplive, a live streaming platform, incorporates eCommerce elements, allowing streamers to sell products
and viewers to make real-time purchases.
The Philippines: Filipino streamers often organize charity streams, donation drives, and fundraising events,
leveraging their live streams to raise awareness and support various social causes. Being the country withthe lowest internet penetration in SEA, it has a smaller fraction of the addressable market. However, withthe 2nd-largest population in SEA, the Philippines market is likely to be a perfect geography for interactive
video streaming companies to expand their operations.
Thailand: Thailand is one of the largest internet consumption countries in the world, with individuals using
it for an average of more than 8 hours per day. Social media platforms have a significant presence inThailand, with platforms such as Facebook, LINE, BIGO, and Instagram enjoying wide usage. Thais use
social media for various purposes, including connecting with friends and family, consuming news andentertainment, and engaging with brands and businesses. With people spending most of such time onsocial activities, online live streaming has a significant opportunity in the country. The Thai government has
been actively promoting digital transformation and internet connectivity across the country. Initiatives suchas the Digital Thailand strategy aim to improve broadband infrastructure, provide internet access to rural
areas, and foster the growth of the digital economy.
Malaysia: Live streaming and eCommerce have started to converge in Malaysia. Brands and retailers
leverage live streaming to showcase and sell products directly to consumers. Live shopping events andproduct demonstrations have become popular, allowing viewers to make real-time purchases during thelive stream. Malaysia has one of the highest internet penetration rates globally, with more than 95% of
individuals using the internet, according to the World Bank in 2021. In line with its high population, Malaysia
is home to one of the largest addressable audiences for live streaming among SEA nations. The Malaysian
government has launched various initiatives to promote digital transformation and internet accessibility.
Programs such as the National Fiberisation and Connectivity Plan aim to improve broadband infrastructureand expand internet connectivity throughout the country. More than 95% of the internet population uses
social media in the country, with platforms such as Facebook, Instagram, and Twitter being popular forsocial networking, content sharing, and communication. The appeal of connecting with friends, sharing
updates, and consuming content has contributed to high internet usage.

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Singapore: Technological advancements in streaming technology have improved Singapore's overall live
streaming experience. These advancements include better video quality, reduced latency, and enhanced
interactivity, making live streams more engaging and accessible. Singapore has one of the highestmonetized customer penetration rates for interactive video streaming platforms, with the average revenue
per user being one of the highest in SEA. This factor contributes to a large market size for Singapore in live
streaming, even with a relatively low population. About 90% of live streaming conversations center around
Millennials and Gen Z or those aged between 18 to 34. This group is also more supportive of live streaming
content and mostly uses these platforms. The Media Development Authority of Singapore provides
guidelines for online content, including live streaming. To ensure responsible content creation anddistribution, these guidelines cover various aspects, such as classification, content ratings, and age
restrictions.

4.2

MARKET SIZE

The interactive video streaming market in SEA recorded revenues of USD 233.3 million in 2018 andreached USD 953.6 million in 2022 at a CAGR of 42.2%. A booming internet market and increasing digitalawareness owing to the COVID-19 pandemic fueled this growth. Going forward, the market is expected toreach USD 2160.9 million, recording a moderated CAGR of 19.2% from 2023 to 2027.
Figure 4-1: Estimated Market size and forecast of Interactive Video Streaming (USD million), SEA,
2018-2027F

Revenue (USD million)

700.0
600.0
500.0

400.0
300.0
200.0
100.0
0.0
Indonesia

2018
46.1

2019
63.4

2020
169.5

2021
242.4

2022E
251.1

2023F
289.2

2024F
348.5

2025F
426.6

2026F
512.7

2027F
618.4

Malaysia

29.4

Singapore

41.1

37.8

91.9

129.6

128.4

141.5

166.2

196.5

227.9

265.5

45.3

101.9

125.9

126.9

142.3

167.3

200.2

235.8

Philippines

274.8

27.4

36.1

99.0

130.7

127.8

148.9

183.9

232.1

291.2

Thailand

356.2

89.4

107.0

242.6

345.7

319.5

349.9

407.6

483.0

561.3

646.0

Source: Frost & Sullivan’s primary interviews, desktop research and analysis

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4.3

OUTLOOK

With increasing internet and smartphone penetration levels, improvements in digital infrastructure, andvarious SEA governments’ digitalization and smart nation efforts, the quality and penetration rate of live
streaming in the region will continue growing. The industry in SEA is expected to benefit from theemergence of new monetization models as live stream adoption increases. Notably, the model of virtual
gifting, as researchers observed in Northeast Asian countries, such as China, Japan, and Taiwan, will notsustain in SEA owing to the lack of super-spending users who are willing to splurge on expensive virtual
gifts for their favorite streamers.40
A crucial area of growth is the continued expansion of live commerce. According to Frost & Sullivan,
Vietnam, Thailand, and Indonesia are the leading markets in live commerce penetration and market sizeby gross merchandise value. Popular platforms in the region for live shopping include major social media
platforms, such as Facebook, Instagram, and TikTok, and leading eCommerce platforms, including Shopeeand Lazada. Despite the dominance of Facebook and Instagram as major social media platforms hosting
live commerce, they lack live shopping engagement tools and integration with eCommerce engines, suchas conversion tools (e.g., a check-out function). As a result, a growth opportunity in the SEA live commerce
ecosystem lies in live commerce enablers, such as enterprises that provide full-stack solutions for hosting
live commerce on multiple channels, streamlining the process of collecting customer orders from thesevarious channels, and promoting products and live events.
Another growth area in SEA's live stream market is game live streaming. Owing to the popularity of eSports
in the region, SEA has 40 million esports viewers according to industry sources, with gaming content fast
becoming mainstream entertainment. According to industry sources, more than 50% of the region’s online
users consume gaming video content, with YouTube Live and Twitch being the region's most populargaming live stream platforms. As the gaming industry continues to expand, more game live streaming apps
will enter the region to capture this fast-growing market.
As live streaming becomes more prevalent in the region, governments will step up regulatory measures forcontent moderation and copyrights. Also, as awareness about potentially harmful social media content
grows, many countries have implemented or are in the process of introducing laws to protect users fromonline harm. For instance, Singapore proposed a new Code of Practice for Online Safety and the Content
Code for Social Media Services that would legally require social media platforms, which most, if not all,interactive video streaming platforms fall under, to implement safety standards and content moderation
processes.41

KrAsia. “Live streaming in Southeast Asia: from ‘in-real-life’ broadcasting to shopping and gaming”. https://kr-asia.com/livestreaming-in-southeast-asia-from-in-real-life-broadcasting-to-shopping-and-gaming. 30 Sep 2019.
41
The Straits Times. “S'pore joins other places that have enacted or proposed laws to regulate online content”.
https://www.straitstimes.com/singapore/spore-joins-other-places-that-have-enacted-or-proposed-laws-to-regulate-online-content. 20
Jun 2022.
40

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5

BRIEF OVERVIEW OF V-LIVERS LANDSCAPE

5.1

INDUSTRY OVERVIEWJapan
The Animation Comic and Games (ACG) culture, which encompasses anime, comics, and games,
originated in Japan and has evolved over time. Various economic and social events, including Manga (aform of Japanese comics) and anime, have influenced the development of ACG. Even during the economiccrisis years in Japan, the ACG industry remained stable and continued to produce influential works. The
emergence of the internet facilitated the promotion of ACG culture globally, and online communities
dedicated to discussing anime and Manga flourished.
The V-Livers concept in Japan deeply connects with ACG. The 1st appearance of a V-Livers in Japan was
in 1982. It started with Lynn Minmay coming from the anime series Super Dimension Fortress Macross.
The songs Lynn Minmay performed as an idol singer became a hit within the series, and she would later
become the 1st fictional singer to garner major real-world success42. In 1989, the radio program All Night
Nippon introduced Yui Haga, where multiple voice actors and singers took on roles as radio personalities,
swimsuit gravure models, and singers 43.
Following Lynn Minmay, Hatsune Miku originated as a character within the Vocaloid software, which
Crypton Future Media (Sapporo) introduced in 2007. Vocaloid is a virtual female vocal (synthetic voice)singing software. The emergence of user-friendly free software for creating 3D character dances gained
immense popularity among the younger generation, who primarily consumed internet content rather than
traditional television. Many consider these 2 characters the beginning of the virtual live concept in Japan
today, although the name was still not coined back then.
Since 2010, the anime industry has experienced significant expansion across various fronts, including
distribution, collaborations, stage performances, and exhibitions. One recent trend of virtual streamers andidols became especially popular with the lockdowns owing to COVID-19. A notable area of growth is thevirtual live music performed by V-Livers. These virtual idol concerts have transformed the music production,
consumption, and performance experience in our digital society. The concerts are known for their uniqueblend of technology, animation, and live music performance.
The COVID-19 pandemic resulted in a temporary suspension of live presentations by real and idols, leading
to the growth of V-Livers owing to their continued availability online. Nevertheless, in Japan real-life
concerts are regularly held for V-Livers, where the idols are displayed on screen or as a hologram. While
the pandemic has temporarily hindered this upward trajectory, a substantial demand remains for immersive
user experiences centering around anime.44 V-Livers, such as Hatsune Miku and KD/A (a virtual girl groupof Riot Games to promote its video game League of Legends and its in-game products), have gained
significant popularity. These V-Livers have garnered massive fan bases and achieved chart-topping
success. The concept has expanded to include virtual avatars similar to real people, for example, Travis
Scott's virtual concert on Fortnite. V-Livers have emerged as a captivating and influential aspect of ACG
culture, engaging fans and pushing the boundaries of multimedia entertainment 45.

42

Kotaku. The Fictional (Yet Amazingly Popular) Singers of Japan. https://kotaku.com/the-fictional-yet-amazingly-popular-singers-ofjapan-5940894
43
RYM.
Japanese
Idol
Compendium.
https://rateyourmusic.com/list/Fyaos/%E2%9C%AFjapanese-idolcompendium%E2%9C%AF/7/
44
Nikkei Asia. "Japan's music industry rises again in new 'age of discovery”. https://asia.nikkei.com/Business/Business-trends/Japans-music-industry-rises-again-in-new-age-of-discovery
45
Rouse. An alternate dimension: Virtual idols. https://rouse.com/insights/news/2020/an-alternate-dimension-virtual-idols.

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TaiwanTaiwan's V-Liver concept is nascent and is significantly different from the North Asian market, which is moredeveloped. The animation industry started developing in recent years because of the sharp increase inmobile device usage in the country and the development of new media platforms, such as the interactive
video streaming industry, from 2016 onward46. This resulted in new opportunities and markets for content
creators to leverage. The concept of V-Liver became popular as technology advanced in areas such as
motion capture and gesture control.
Moreover, Taiwan has also experienced the development of the ACG sub-culture since the 1990s, whenmost of the fan population were adolescents 47. This translated into physical conventions, such as ComicWorld, a quarterly event Taiwan has held since 1997, with turnouts of approximately 5000 participants ateach event48. The popularity of the ACG sub-culture has grown tremendously during the past decade, with
events, such as the 2023 Taichung International ACG Expo in Taiwan, continuing to see many visitors 49.
The growth of the ACG sub-culture has the potential to spill over to the V-Liver concept in Taiwan, which
Vtubers are driving from the Japanese market. Momosuze Nene is a Vtuber from Japan with a strong
following outside of Japan in countries such as Taiwan and Hong Kong, with an average fan gifting between
30,000 to 50,000 Taiwan dollars50. The adoption of V-Liver in Taiwan is likely to increase in the forecast
period owing to the existing Japanese Vtubers and the ACG culture that has established itself within the
country.
SEA
The ACG culture has flourished in SEA during the past decade, with animation titles taking up a sizable
proportion of the total share of minutes watched in the media and entertainment industry. On Netflix inIndonesia, about 18% of the total minutes watched were anime titles, lagging behind only more establishedcontent, such as Korean (31%) and American titles (29%) 51. Frost & Sullivan estimates that this preferenceis likely to be consistent among most SEA countries because of the cultural and geographical proximity to
Japan, which has seen a significant expansion of anime during the past few decades.
V-Livers in SEA are still nascent entities with only a handful of use cases. One such case was the launchof Project Kavvai, a program to identify and develop V-Livers in ASEAN52. Aozora Kurumi was the 1st VLivers under this program and was going to generate online content in areas such as gaming and lifestyle 53.
However, Kurumi was only active for 1 year and retired from the space in 2022. Kurumi would remain in
the broader ecosystem of V-Livers as part of Project Kavvai, as the region continued to embrace theconcept of a V-Livers54.
From these experiences, the region has increasingly noticed the potential of V-Livers in areas such asbrand and marketing, which drives the acceptance and usage of V-Livers in SEA. The increased
accessibility of animation titles and collaborations with mainstream media are crucial drivers that is likely to
improve the general acceptance of anime in SEA 55 and generate a second-order effect to boost the46

Animation and Visual Effects Association. https://www.avataiwan.org/簡介與緣起?lang=en. Date accessed: 13 June 2023
Jin-shiow, Chen. The Comic/anime Fan Culture in Taiwan: With a Focus on Adolescents’ Experiences.
https://core.ac.uk/download/pdf/51288538.pdf. 1 January 2003. Date accessed: 11 July 2023.
48
Ibid pp 3
49
Sean, Lin. Taichung International ACG Expo kicks off. FocusTaiwan. https://focustaiwan.tw/culture/202304010008. 4 January 2023.
Date accessed: 11 July 2023.
50
Ching-hsuan, Hung. Japanese Vtuber, a virtual anime pop idol and show host sets Taiwan alight. Radio Free Asia.
https://www.rfa.org/english/news/china/taiwan-vtuber-08062022083451.html. 6 August 2022. Date accessed: 11 July 2023
51
Culture Group. 2023 Culture Drop | The Anime Impact. https://culturegroup.asia/content/culture-drop/2023-culture-drop-the-animeimpact/. 8 June 2023. Date accessed: 18 July 2023.
52
Sivakumar, Yoganeetha. airasia retires first virtual idol Kurumi after one year. https://www.marketing-interactive.com/airasia-retiresfirst-virtual-idol-kurumi-after-one-year. 5 July 2022. Date accessed: 18 July 2023.
53
Lai, Adrian. Malaysian Airline AirAsia is Debuting A Virtual Idol in Southeast Asia. https://sea.ign.com/airasia/171710/news/amalaysian-airline-is-debuting-a-virtual-idol-for-gaming-in-southeast-asia. 6 May 2021. Date accessed: 18 July 2023.
54
Sivakumar, Yoganeetha. airasia retires first virtual idol Kurumi after one year. https://www.marketing-interactive.com/airasia-retiresfirst-virtual-idol-kurumi-after-one-year. 5 July 2022. Date accessed: 18 July 2023.
55
Cameron, Robert. Brands Should Harness the Power of Anime in Their Marketing Strategy in Southeast Asia.
https://www.brandinginasia.com/brands-should-harness-the-power-of-anime-in-their-marketing-strategy-in-southeast-asia/. 13 June
2023. Date accessed: 18 July 2023.
47

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popularity of V-Livers in the region. Furthermore, the current crop of V-Livers has already embraced
localization where the idol is fluent and can converse in languages and dialects familiar to the region 56. This
would be an important driver for the acceptance of V-Livers within the region, as viewers will be able todirectly relate to and connect with the V-Livers.
United States of America (USA)The V-Liver concept in the USA is part of the broader global trend of interactive entertainment. With the
emergence of the interactive entertainment industry, comprising virtual idols, virtual streamers, virtualhumans, and digital personalities, the concept is likely to unlock its’ growth potential in the forecast period.
The USA, Japan, Indonesia, and China have a significant user base for V-Livers.57 The USA, in particular,
is the largest entertainment consumer and media market globally. Internet users in the USA spend asignificant amount of time with various sources of entertainment, making it an attractive consumer market
for V-Liver. Moreover, the pervasive influence of Japanese anime and games in the USA is also increasing,with Japanese companies such as Nintendo playing a significant role in increasing the popularity of ACG
among North American fans. Further, akin to Japan, North American countries place significant emphasison copyright protection, encompassing software and virtual character design copyright making it suitablefor IP virtual live development.58
The development of digital characters or personas in the USA is trending toward virtual influencers. Whilea V-Liver is a character or persona primarily associated with the field of music and entertainment, virtual
influencers are used for marketing and promotional purposes. They often resemble real-life humans thatprofessionals make using advanced technology such as computer-generated imagery. Virtual influencers
are present on social media platforms and collaborate with brands to reach a wider audience. Virtual
influencers have gained popularity in recent years, particularly in the fashion and beauty industry. In theUSA, virtual influencers can have a substantial following on social media platforms, engaging millions ofusers. For example, virtual influencers, such as Lu Do Magalu, have gained 6.4 million Instagram followers,
while Lil Miquela has 2.7 million Instagram followers. These numbers showcase the influence and impactthat virtual influencers have on their audience. Brands have recognized the power of virtual influencers inreaching and engaging with consumers, due to the unique opportunity accorded to brands to createcustomized digital characters representing their values and brand identity. Quality of content is a major
reason for a virtual influencer’s fan following. According to an industry survey 59 among consumers in the
USA who followed at least 1 virtual influencer, content dominated with 26.6%, 18.6% of respondents cited
virtual influencer storytelling, and 15.5% said they found virtual influencers to be inspirational.
Frost & Sullivan is of the opinion that both virtual influencers and V-Liver have emerged as a new trend insocial media and influencer marketing owing to their ability to effectively promote products and services
and facilitate collaborations with their dedicated fan base, offering promising prospects globally and in the
USA.

56

Lai, Adrian. Malaysian Airline AirAsia is Debuting A Virtual Idol in Southeast Asia. https://sea.ign.com/airasia/171710/news/amalaysian-airline-is-debuting-a-virtual-idol-for-gaming-in-southeast-asia. 6 May 2021. Date accessed: 18 July 2023.
57
Sun Lei and Sun Jiashan. China Daily. Time to unlock growth potential of ‘virtual idol’ sector. Time to unlock growth potential of'virtual idol' sector - Chinadaily.com.cn. 22 July 2023. Date accessed: 25 July 2023.
58
Ibid.
59
The Influencer Marketing Factory. (March 29, 2022). Reasons why consumers follow virtual influencers in the United States as ofMarch 2022 [Graph]. In Statista. Retrieved August 02, 2023, from https://www.statista.com/statistics/1302739/reasons-consumersfollow-virtual-influencers-us/

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5.2

DRIVERS

Transformative technologies fuel the increase of V-Livers
The rise of V-Livers in the late 2010s, particularly in countries such as China, can be attributed to significant
investments in this area and the advancements in modern technologies, such as voice and motion captureand AR. 60 These investments have paved the way for notable developments in motion capture
technologies, leveraging ML and AI. Consequently, the visual effects of V-Livers have become moreaccurate and can now be produced faster. 61 The enhanced motion capture capabilities are crucial for VLivers, as they enable a more realistic experience, capturing many actions with greater detail throughvarious sensors tracking the movements of the streamer in real time. Furthermore, the availability of fasterinternet connections has played a vital role in supporting the utilization of bandwidth-intensive technologies,
improving the overall quality of V-Livers and live performances. This attracts a larger user base to participate
in virtual live events, creating a more engaging and immersive experience for the audience.
Immersive collaborative platforms facilitate growth of V-Livers, revolutionizing fan engagement
Collaborative platforms have facilitated the emergence of V-Livers by providing a global reach, enabling
UGC, and fostering interaction and engagement between fans and V-Livers. These platforms have allowedfans to actively contribute to the V-Liver ecosystem while facilitating direct interaction and a sense ofownership. According to Frost & Sullivan, combining technology and fan engagement has transformed VLivers into a cultural phenomenon, shaping new entertainment trends and monetization opportunities. Frost& Sullivan believes that such user-engagement for the audience and additional revenue for V-Livers arelikely to serve as an impetus for future growth of V-Livers in the country.
V-Livers provide reliable monetizable assets
V-Livers, whether based on AI or personified by individuals behind avatars, offer unique opportunities formonetization and asset reliability. 62 AI-based V-Livers are seen as reliable assets owing to their consistent
performance and lack of personal life issues that could impact their popularity. 63 This reliability attracts
investors and donors interested in supporting these V-Livers. Additionally, the anonymity and separation of
their virtual and real lives make them appealing from a branding perspective, allowing their identities toremain hidden and focusing solely on their work as V-Livers.
V-Livers may also contribute to increased merchandise sales in 2 main ways. Firstly, they possess a
dedicated and passionate fan base that eagerly purchases merchandise related to their favorite idols,
including clothing, accessories, and collectibles. Brands can capitalize on this by collaborating with V-Livers
to offer exclusive merchandise and customized products, tapping into the existing fan base's enthusiasm.
Secondly, V-Livers enable brands to explore virtual selling, leveraging technology to connect withcustomers and sell products or services remotely. This approach proves valuable in instances where there
are limited physical sales channels, as brands can engage with fans through virtual events, live streams,
social media, and VR experiences, creating interactive and immersive shopping opportunities.

60

Y. Q. Wang. A Brief Analysis of the Development of Chinese Virtual Idol Industry Empowered by 5G+Motion Capture TechnologyTaking
theVirtualIdol
GroupA-SOULasan
Example.
JournalofPhysics:
Conference
Series.
https://iopscience.iop.org/article/10.1088/1742-6596/2278/1/012011/pdf. 2022. Date accessed: 14 June 2023
61
Salvi, Nikhil. Machine Learning for Motion Capture: How AI is transforming the accuracy and speed of motion capture in visual
effects production. 22 March 2023. Date accessed: 15 June 2023.
62
Phuc, Dang. Virtual Idol: A Product of Advanced Technology You Need to Know. https://animost.com/ideas-inspirations/virtual-idol/.
16 January 2023. Date accessed: 15 June 2023
63
Shen, Lu. Why China’s falling in love with virtual idols. Protocol. https://www.protocol.com/china/virtual-idols-metaverse-china. 12
October 2021. Date accessed: 13 June 2023

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5.3

MARKET SIZE

TaiwanFrost & Sullivan estimates that the market for V-Livers in Taiwan will grow from USD 0.6 million in 2023 to
USD 1.8 million in 2027, with a CAGR of 30.6% for the period. The current market size of V-Livers in Taiwan
is much smaller than in Japan. The existing Vtubers from Taiwan are driven by individuals as opposed to
Vtuber agencies which are lacking in Taiwan. The adoption of advanced technology, which already exists
in the Japanese market, will drive future growth of V-Livers. These technologies are likely to enable moresophisticated motion capture and facilitate the development of new content for V-Livers. The recognition of
the reliability and effectiveness of V-Livers in the interactive video streaming industry is also likely to attract
more investors driving it further. Additionally, enterprises targeting Gen Z consumers will show increased
interest in leveraging V-Livers as a crucial marketing strategy to engage with this younger demographic.

(USD thousand)Figure 5-1: Estimated Revenue Forecast of V-Liver Livestreaming (USD thousand), Taiwan, 20222027F
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0

1,831.1
1,372.5
1,044.1
805.4
397.6

2021

497.9

2022

629.5

2023F

2024F

2025F

2026F

2027F

Source: Frost & Sullivan’s primary interviews, desktop research and analysis
Note:
1. Sources include a combination of (i) Interviews with industry and in-house experts; (ii) company reports and other presentationmaterials including but not limited to news articles, press releases, and publicly available industry data; (iii) Frost & Sullivan’s
desktop research on sources including but not limited to databases of industry associations, trade bodies, and government
agencies.
2.

The market size is estimated as total addressable market (TAM), calculated based on the estimation of the total revenue fromthe V-Liver market which consists of Vtubers (virtual idols on YouTube) and idols on the interactive video streaming platforms
who use virtual avatars.

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JapanFrost & Sullivan estimates that the market for V-Livers in Japan is expected to grow from USD 973.3 million
in 2023 to approximately USD 3,864.8 million in 2027, at a CAGR of 41.2% for the period. The current
market size of V-Livers64 in Japan largely comprises Vtubers created by individuals which makes up the
majority of Vlivers in terms of numbers of creators, however, in terms of monetary value, the bigger shareof revenue still originated from those created by the Vliver companies. The introduction of new technologies
and better internet connection is expected to drive future growth, improving the experience of virtual live
streaming.
Figure 5-2: Estimated Revenue Forecast of V-Liver Livestreaming (USD Million), Japan, 2021-2027F
4500

3,864.8(USD millions)

4000

3500

2,868.7

3000

2500

2,077.3

2000

1,441.6

1500

973.3

1000

500

630.7
262.3

0
2021

2022

2023F

2024F

2025F

2026F

2027F

Note:
1. Sources include a combination of (i) Interviews with industry and in-house experts; (ii) company reports and other presentationmaterials including but not limited to news articles, press releases, and publicly available industry data; (iii) Frost & Sullivan’s
desktop research on sources including but not limited to databases of industry associations, trade bodies, government agencies.

5.4

DEMOGRAPHICS

According to Frost & Sullivan, most V-Liver followers belong to the Gen Z. This trend is global, including inmarkets such as Taiwan and Japan. In Taiwan, more than 75% of V-Liver viewers fall within the age rangeof 16 to 23. Whereas, in Japan, Holo Live and NIJISANJI, to which the majority of popular Vtubers belong,state that about 45% of their viewers are between the ages of 18 and 24 and about 30% between the agesof 25 and 34 65 . These age groups represent a significant consumer segment owing to its strong
technological exposure and awareness of the latest trends within the entertainment industry. In contrast,fans of traditional idols encompass a more diverse range of age groups. This diversity stems from V-Liverfollowers' exposure to technology from a young age, fostering a greater appreciation and acceptance ofanimated content. On the other hand, the followers of in-person idols seek companionship and, therefore,prioritize interactions with real individuals. This preference for genuine human interaction contributes to thediverse nature of in-person idol consumers.

64

There were approximately 20,000 V-Livers in Japan at the end of 2022.
PIA. 【設計者が解説】なぜ課金する？若者人気拡大中の「VTuber・バーチャルアイドル」の押さえておきたいポイントと、セグ
メント活用方法. https://data.pia.co.jp/news/pia-segments/5362/
65

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5.5

GLOBAL OUTLOOK

V-Livers are expected to achieve significant growth in the upcoming decade, primarily in East Asia,
particularly China and Japan. Taiwan, owing to its proximity to these countries, is likely to benefit from aspill-over effect. The technological advancements within the V-Liver landscape is expected to drive thisanticipated growth, resulting in faster response speeds and shorter development cycles for new idols owing
to improvements in AI. Furthermore, this growth is likely to generate new opportunities in marketing andadvertising, as brands recognize V-Livers as valuable collaborators that offer improved access to the target
demographic of 16 to 23-year-olds66. Frost & Sullivan believes that as these developments gain traction,
global brands will take notice, potentially expanding the wave of V-Liver adoption beyond East Asia andinto Western markets. This in-turn is likely to create new revenue streams for the V-Livers and catalyze
sustained growth.

Mengyuan Ge. China’s virtual idols are reshaping the ways brands reach Gen Z consumers. KrAsia. https://kr-asia.com/chinasvirtual-idols-are-reshaping-the-ways-brands-reach-gen-z-consumers. 29 January 2022. Date accessed: 4 July 2023.
66

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6

BRIEF OVERVIEW OF LIVE COMMERCE

6.1

INDUSTRY OVERVIEWLive commerce, or livestream shopping, is an eCommerce model that integrates online shopping withinteractive video streaming. It entails a live broadcast in which a host or influencer showcases anddemonstrates products in real time to an audience virtually, allowing viewers to interact, ask questions, andmake purchases directly through the live stream. Live commerce has gained popularity owing to its ability
to create engaging, interactive, and entertaining shopping experiences. It bridges the gap between
traditional retail and online shopping by providing a unique blend of entertainment, social interaction, andproduct discovery.
Live commerce typically takes place on eCommerce websites and social media platforms. Brands andresellers would partner with influencers or individual creators to conduct live shopping events on theseplatforms. These influencers and individual creators would develop the content for live streams, likely incollaboration with the retailers and brands, including the products they plan to promote, the storylines, andthe scripts. Many live commerce hosts produce, record, and stream live shopping events from their homes
or at retail storefronts. Users usually consume live commerce content via the platform apps they install on
their smartphones or tablets and access through wireless internet. Platforms publishing these live shopping
events usually allow viewers to interact with live commerce hosts through chat functions and reactions.
Retailers and platforms are responsible for ensuring a seamless customer journey on the sites of livecommerce, especially the checkout processes. Typically, a link for live shopping viewers to purchase theitems would appear on-screen. To ensure a frictionless customer journey, retailers and live commerce
platforms must ensure their systems are well-integrated.
China
In recent years, the live commerce market in China has rapidly expanded, and China is now one of themost important participants in the global live commerce market. The COVID-19 lockdown has shifted
consumption from offline to online, stimulating the live commerce market to expand on both the demandand supply sides. Mass consumer goods, including apparel, food and beverages, cosmetic products, andconsumer electronics, initially contributed to the market expansion in China.
According to the China Internet Network Information Center, the users of live commerce in China
experienced significant growth from 220 million in 2018 to 372 million in 2020 and 515 million in 2022,
representing a five-year CAGR of 23.7%. As of December 2022, 68.6% of domestic live-streaming users
use live commerce on domestic live commerce platforms (led by Taobao, Douyin, and Kuaishou), which
are continuously improving their business operations and infrastructures to enhance merchants’ and users’
experiences.
Going forward, Frost & Sullivan believes that the live commerce market in China is expected to continue
its’ growth momentum, with a greater variety of product categories and types and enhanced product andservice quality. Nevertheless, it is forecasted that user scale and penetration growth in China may slow
down in the forecast period given the existing high-base. Taobao, Douyin, Kuaishou, and other domestic
live commerce platforms will continue establishing differentiated competitive advantages to drive user traffic
and revenue.
TaiwanTaiwan's live commerce market follows China's model, incorporating live streaming on comprehensive
eCommerce sites, short video platforms, and social media. Facebook and YouTube are the most popular
platforms for social media live commerce, while Line entered the market in 2018 but remains smaller. Momo
and Shopee are the top choices for eCommerce platforms with live stream functions. Brands are
considering developing their own live stream channels on their official websites to avoid processing feeson social media or eCommerce platforms. According to industry sources, more than 70% of internet users
in Taiwan have participated in live commerce streams, indicating a significantly high penetration rate forlive commerce. Moreover, more than 25% of internet users make purchases during live stream sessions.
Owing to the relatively high conversion rate of live commerce, retailers are increasingly emphasizing live
streaming as a crucial marketing strategy.
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JapanThe live commerce market in Japan is still in its relatively early stages, showing slower progress despite
the COVID-19 pandemic acting as a catalyst. The slow growth may be due to the preference for in-person
shopping experiences and the dominance of established eCommerce platforms. However, consistent YoY
growth has indicated the market's potential. The future trajectory of the live commerce market in Japan
heavily relies on the platforms that facilitate its integration. Live commerce predominantly occurs on popularsocial media platforms, such as Instagram and YouTube Live. Influencers and sellers conduct live sessions
on these platforms and separate websites, announcing product availability and details. These interactive
live sessions generate high levels of engagement, resulting in sold-out products and significant shopping
activity. However, a notable constraint in the Japanese market is the lack of integrated platforms seamlessly
combining live commerce and social media. Existing platforms provide separate services rather than aunified live commerce experience. This limitation hampers the widespread integration of live commerce into
popular platforms and presents a hurdle to this practice's overall growth and adoption. Several players
contribute to the live commerce market in Japan, with SHOWROOM holding the largest market share,
followed by platforms such as Base and Mirrativ.

6.2

KEY DRIVERS

Increasing shift in consumer preference toward mobile-first shopping
A notable increase in consumer preference for mobile-first shopping reflects a shift in shopping habits. With
smartphones' widespread availability and convenience, more consumers rely on mobile devices for
shopping. Several factors drive this trend, including the ease of browsing and purchasing products onmobile apps, the ability to shop on the go, and the seamless integration of mobile wallets and payment
options. The trend of mobile-first shopping will continue, and as technology advances and mobile devices
become more sophisticated, consumers will increasingly rely on their smartphones for shopping, prompting
retailers to prioritize mobile optimization and create seamless experiences across devices.
Growth of influencer marketing
The exponential growth of social media usage has led to the emergence of influencers or microcelebrities 67.
A research study revealed that young consumers often refer to social media platforms, such as Instagram
or YouTube, to gather information from product reviews before making purchases. Social influencers’
recommendations on these platforms often shape consumers’ buying decisions. Younger social media
users perceive endorsements by these online celebrities as more credible and relatable. 68 As a result,retailers increasingly employ influencers to market products on social media live streams as a crucial
marketing strategy.
Integration of live stream and eCommerce platform to create interactive and engaging shopping
experiences
Advancements in live commerce technology have integrated live stream features with eCommerce
platforms, enabling accessible checkout options during live streams and real-time interactions between
buyers and hosts. This seamless combination of audience engagement and instant purchase is a crucial
enabler of social media commerce. The increasing consumer demand for interactive and engaging
shopping experiences in Japan drives live commerce, which allows consumers to participate in real-time
product demonstrations, ask questions, and receive immediate responses, creating a personalized andimmersive shopping journey that appeals to Japanese consumers.

Croes & Bartels. Young adults’ motivations for following social influencers and their relationship to identification and buying
behaviour. https://www.sciencedirect.com/science/article/pii/S0747563221002338. Nov 2021.
68
Ibid.
67

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6.3

GROWTH CHALLENGES

Efficiently scaling and streamlining logistical operations is crucial for the successful expansion oflive commerce
Effective logistics and distribution channels are crucial in ensuring a smooth last mile user journey in livecommerce. Uncertainty in parcel arrival time is a common pain point for online shoppers, highlighting theimportance of flexible logistics services. However, for interactive video streaming companies primarily
focused on live commerce, establishing an efficient logistics network can be challenging, as they may lackexpertise in eCommerce logistics. For example in Japan, a crucial challenge is the availability of products
to meet the demand that live commerce sessions generate. The success of live commerce campaigns often
exceeds expectations, resulting in inventory shortages and difficulties in fulfilling customer orders promptly.
Technical problems, particularly server-related issues, also challenge the smooth functioning of livecommerce in Japan. Robust server infrastructure is necessary to handle the high traffic volume and realtime interactions during live sessions. Any technical glitches or server failures can disrupt the live commerce
experience, leading to customer dissatisfaction and missed sales opportunities. Therefore, investing in thenecessary technical infrastructure is crucial to ensure live commerce operations run smoothly.
The risk of fraud can pose a challenge to the live commerce industry
The risk of fraud poses a significant challenge in the live commerce industry, as the real-time nature oftransactions and the lack of physical interaction make it harder to verify the authenticity of sellers andproducts, requiring stringent measures to ensure consumer trust and mitigate fraudulent activities. In
Taiwan, for example, regulations on online businesses are lacking, contributing to a lack of trust in online
sellers, including live commerce hosts. Consumers remain vulnerable to online fraud and consider buying
from individual influencers riskier than purchasing from an established brand or retailer. The perceived riskof not receiving the agreed products (or that products will be below expectations) restrains consumers frompurchasing through live stream shopping channels. Hence, effective regulation to ensure consumer safety
when engaging in online transactions is a crucial enabler for live commerce’s future growth.

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6.4

MARKET SIZE

TaiwanFrost & Sullivan forecasts that Taiwan's social media live commerce market is expected to grow from USD
2,229.0 million in 2023 to USD 5,047.6 million in 2027, at a CAGR of 22.7%. The COVID-19 pandemic andlockdowns have greatly accelerated the growth of online retail, including social media live commerce. The
closure of physical stores fueled this trend, prompting consumers to turn to online platforms, including
Facebook and YouTube, for purchases. Group bulk purchases, especially among middle-aged consumers
with limited access to overseas products, have become popular in Taiwan. While growth will remain strong
post-pandemic, it may moderate as the initial surge in online shopping subsides.
Figure 6-1: Estimated Revenue Forecast of Social Media Live Commerce (USD million), Taiwan,
2020-2027F
5,047.6
5,000.0(USD millions)

4,157.8
4,000.0

3,399.7

2,761.7

3,000.0
2,229.0
1,788.9

2,000.0
1,149.0

1,430.0

1,000.0
2020

2021

2022

2023F

2024F

2025F

2026F

2027F

Source: Frost & Sullivan’s primary interviews, desktop research, and analysis
Note:
1. Sources include a combination of (i) Interviews with industry and in-house experts; (ii) company reports and other presentationmaterials including but not limited to news articles, press releases, and publicly available industry data; (iii) Frost & Sullivan’s
desktop research on sources including but not limited to databases of industry associations, trade bodies, government agencies.
2.

The market size is estimated as TAM, calculated based on the estimation of total revenue from live commerce sales on social
media platforms in Taiwan; i.e., it does not include live commerce sales on eCommerce platforms or revenue of companies thatoffer live commerce as software-as-a-service

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Page 50JapanWhile currently small, the live commerce market in Japan shows significant potential. As platforms andbrands invest in expanding and improving live commerce offerings, companies can tap into untappedmarket segments and drive growth. The market size of live commerce in Japan was about USD 201.8
million in 2022 registering a historical CAGR of 10.2% over 2020-2022. Going forward, it is expected to
grow from USD 236.9 million in 2023 to USD 1.0 billion in 2027 at a CAGR of 43.6%. The market size
includes social networking services (SNS), Software-as-a-Service (SaaS),and dedicated mobile
applications. Among the different segments, SNS platforms dominate the market, accounting for
approximately 60% of the market share in 2022. SaaS solutions comprise a 10% share, while dedicatedlive commerce apps, such as Showroom and Base, make up the remaining 30%.
In Japan, industries often use live commerce as a marketing tool and promote collaborations between
influencers and brands or live stream events featuring popular personalities. Live streaming activities
typically take place on platforms such as YouTube, Instagram, or Facebook, while sales happen on
separate dedicated websites.
Frost & Sullivan believes Japan's live commerce market experienced a slower onset of growth in thehistorical period, and is likely to register a faster growth rate starting in 2024. This is because major retailplayers in Japan, such as Shiseido, Isetan, and LaLaport, are currently entering the live commerce market
and leveraging their already established brand name for sales and engagement with customers. Theseestablished brands' entry in the market is likely to contribute to the expansion and accelerated growth oflive commerce in Japan.
Figure 6-2: Estimated Revenue Forecast of Live Commerce (USD million), Japan, 2020-2027F
1,200
1,008.6(USD million)

1,000
800
655.2
600
438.6
400
200

306.5
166.2

180.4

201.8

2020

2021

2022

236.9

2023F

0
2024F

2025F

2026F

2027F

Source: Frost & Sullivan’s primary interviews, desktop research and analysis
Note:
1. Sources include a combination of (i) Interviews with industry and in-house experts; (ii) company reports and other presentationmaterials including but not limited to news articles, press releases, publicly available industry data; (iii) Frost & Sullivan’s desktop
research on sources including but not limited to databases of industry associations, trade bodies, government agencies.
2. The market size is estimated as TAM, calculated based on the estimation of total revenue from live commerce sales on social
media platforms in Japan.
3. The market size reflects the live commerce conducted through SNS, SaaS and platforms.

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ChinaChina's live commerce market has significantly expanded during the last 5 years because of multiple factors
related to supply and demand. According to Frost & Sullivan, the market size of the live commerce industry
in China, in terms of revenue, has increased from RMB 33.7 billion (USD 4,718 million) in 2020 to RMB
126.4 billion (USD 17,696 million) in 2022 at a CAGR of 93.7%. On the supply side, the primary market
drivers are the massive investments in manpower, capital, and traffic by major live commerce platforms,
the increasing diversity of product categories and types, the development of live streaming and relevant
technologies, the improvement of streamers’ professionalism, and the expansion of MCN live streaming
process management services.
Going forward, China's live commerce market is likely to maintain its growth momentum, albeit at a lower
rate, owing to the market maturity of the live commerce sector. According to Frost & Sullivan, the market
size of the live commerce industry in China, in terms of revenue, will reach RMB 201.6 billion (USD 28,224
million) in 2027 at a CAGR of 10.2% during 2023–2027. In parallel, the user base of live commerce in China
is also expected to grow from 515 million in 2022 to 607 million in 2027.
Figure 6-3: Estimated Revenue Forecast of Live Commerce (USD million), China, 2020-2027F

28,224.0(USD million)

30,00024,052.0

25,00026,054.0

21,630.0
17,696.0

20,00019,166.0

15,0009,506.0

10,0004,718.0
5,000
0
2020

2021

2022

2023F

2024F

2025F

2026F

2027F

Source: Frost & Sullivan’s primary interviews, desktop research and analysis

6.5

TRENDS

Collaboration with global and local brands
Live commerce in Japan is characterized by collaborations between global companies, local entities, andinfluencer-driven brands. Industry leaders, including Uniqlo, Shiseido, and Nike, have explored livecommerce through platforms such as Instagram and are experimenting with SaaS services on theirwebsites. This indicates a growing interest from established brands to leverage the interactive nature of livecommerce and engage with consumers in real time. The trend extends beyond fashion to include various
sectors, such as beauty and makeup.
Increased use of immersive technologies
Features such as AR/VR in product demonstrations, enhancements, advertising, and customer service are
emerging. AR allows consumers to visualize products in real-world environments, giving them a better
sense of how they will look or fit in their own space. VR, on the other hand, creates virtual environmentsthat users can explore, enabling a more interactive and engaging shopping experience These technologies
are likely to enable an immersive and personalized social shopping experience. In the future, consumers
will directly interact with a live commerce host in a virtual shop through avatars. Several social VR start-ups

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have received more funding, as investors have started to see social VR’s potential. 69 Social media giants,
such as Meta, have also made tangible investments in metaverse technology. The company acquired
Oculus VR, Inc., a leading company in immersive VR technology, for USD 2 billion in 2014.70

7

SUMMARY PROSPECTS AND OUTLOOKThe Asian interactive video streaming industry is likely to continue its’ growth trajectory in the forecast
period reaching a cumulative market value of USD 7.7 billion in 2027. V-Liver and Live Commerce are also
expected to register considerable growth in the forecast period reaching market sizes of approximately USD
3.8 billion and USD 6 billion respectively.
Japan is likely to be a key contributor to this growth in growth and is expected to attract more entrants andcompetition among streaming services. This trend reflects the increasing popularity and demand for
streaming content in Japan. The market is expected to continue to grow also owing to the increasing
popularity of virtual live streaming, particularly V-Liver experiences. This immersive and interactive form ofcontent consumption is likely to attract a growing audience, indicating potential opportunities for market
development, such as in live commerce. While live commerce in Japan is still in its early stage, its’ future
depends on integrating live commerce into platforms such as 17LIVE, where influencers and sellers canconduct interactive sessions to promote and sell products.
17LIVE’s strategy for expansion in the Japanese market comprises initiatives in different areas. These
initiatives include a V-Liver (as 17LIVE’s main strategy in the Japanese market is to establish itself as aprominent Vtuber agency), a mobile game (as 17LIVE is venturing into the development of a mobile gamethat encompasses a diverse range of genres to cater to various player preferences), real-time and game interaction (with the Live x Game project merging live streaming interactions with immersive gameplay,
aiming to create an engaging and interactive experience), live commerce (with 17LIVE’s live commerce
strategy involving integrating HandsUp, a live commerce system solution, into the 17LIVE platform), andevents (with 17LIVE organizing a diverse range of events that offer streamers and users unique andimmersive experiences).
In Taiwan, the interactive video streaming market has seen rapid growth in the past decades because of
the introduction of new programs and services during the pandemic. While Taiwan is a mature market in
the interactive video streaming segment, the introduction of new technologies and trends, such as the useof V-Livers, is expected to contribute to the industry's overall growth. The V-Liver industry in Taiwan is stillin its early stages compared to the more developed North Asian markets.
However, recent years have seen increased mobile device usage and the emergence of interactive live
video streaming platforms drive the animation industry’s growth. Additionally, the ACG sub-culture in
Taiwan, which has seen significant growth over the past decade, has the potential to influence the V-Livers.
In Taiwan, live commerce has become a thriving trend in the eCommerce market, and social media has
played a crucial role in driving the growth of live commerce, with Facebook and YouTube being the mostpopular platforms for social media live commerce. A crucial competitive advantage that 17LIVE has over
popular social media live commerce platforms in Taiwan, such as Facebook and YouTube, is strong
relationships with Japanese merchants owing to its existing HandsUp customer base in Japan. This is likely
to allow 17LIVE to facilitate the export of Japanese products to the Taiwan market. Such cross-border traderemains limited to Taiwanese eCommerce platforms. In addition, the company has a ready pool of live
streamers who are well-versed in hosting live stream sessions, a skill required for effective and engaging
live commerce. The company also has a wide pool of existing users that retailers can tap into to expand
69

BeyondGames.biz. Metaverse Startup Raises Funding From Oculus Investors. https://www.beyondgames.biz/21848/metaversestartup-raises-funding-from-oculus-investors/. 26 April 2022.
70
Meta. Facebook to Acquire Oculus. https://about.fb.com/news/2014/03/facebook-to-acquire-oculus/. 25 March 2014.

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the reach of their products. Given that 17LIVE’s target audience is generally middle-aged males withrelatively high income levels, retailers should curate their products and brands to cater to such an audience.
SEA has seen a surge in the popularity of live streaming platforms, with social media and eCommercecompanies offering their own live streaming solutions. The implementation of localized features andregulations in these countries has enhanced the user experience and compliance. Live streaming andeCommerce are converging, allowing brands and retailers to showcase and sell products directly to
consumers. The main area of growth is the continued expansion of live commerce, particularly with livecommerce enablers that provide full-stack solutions, streamlining customer orders and promoting products
and live events across multiple channels. Given 17LIVE’s experience with HandsUP as a live commerce
system solution, the company is likely to tap into this growth opportunity in SEA's live commerce ecosystem.
In addition, the company’s expertise in managing live streamers is expected to enable it to offer talentmanagement services, which could differentiate it from other solution providers.

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8

APPENDIX

8.1

HISTORY OF LIVE COMMERCE IN CHINA

Stage I: Emergence (2016)Live streaming has an early origin in China, and domestic PC-based entertainment websites (e.g., games
and live shows) were the ones that first employed this format. Later on, the ecology of the interactive
streaming industry gradually matured as well-known gaming platforms, such as Huya and Douyu, shifted
their focus to mobile live streaming.
For China, 2016 was the 1st year of live commerce. Taobao officially introduced its live streaming toeCommerce in May after a three-month trial run, while JD launched its live streaming function 4 months
later that year. In 2016, China had 325 million users of live streaming, with more than 300 platforms
providing internet live streaming services and a market size of more than RMB 25 billion in terms of grossmerchandise volume (GMV).
Stage II: Rapid Development (2017–2020)
During this period, Taobao started to develop its influencer system (红人体系) and successfully spread theconcept of live commerce to broader consumer groups during the Double 11 shopping festival. Livestreaming has become the highlight of its major promotions. Taobao also launched its standalone livecommerce app, Taobao Live (later renamed DianTao), before the Chinese New Year in 2019. Meanwhile,leading short video and social content platforms, including Douyin and Kuaishou, started to enter the live
eCommerce market in March and June of 2018, respectively. They have also gradually launched andenhanced their key eCommerce functions and tools, such as shopping carts and shop entrances, tostrengthen their capabilities and competitiveness during these years. Overall, leading live commerce
platforms in China progressed toward integrating upstream and downstream resources at this stage.
Around this time, the live commerce market also made refinement, with the rapid emergence of professional
market participants, such as MCNs. Most of China's leading live commerce platforms have cultivated theirown super streamers with an annual GMV of more than 10 billion, or even over a billion, in a single live
streaming session. For instance, the 2 largest live commerce streamers in China, Viya and Li Jiaqi,
generated RMB 31.1 billion and RMB 21.9 billion of GMV in 2020, respectively. In addition to professional
and amateur streamers, many celebrities and major open leaders became important participants in the livecommerce broadcast rooms. Factory and shop hosts also began to make an impact, demonstrating a
distinct trend toward popularization.
By the end of 2020, China had registered 8,862 live commerce-related enterprises with 1.23 million
registered streamers. The GMV and revenue of the live commerce market in China reached RMB 1.3 trillion
and RMB 33.7 billion, respectively, in 2020.
Stage III: Standardization (2021-2023)
With approximately 430 million users and a GMV of RMB 2.4 trillion in 2021, the live commerce industry
has become one of the main sectors of the Chinese internet economy. China's live commerce industry has
become increasingly normalized while embracing standardized reform.
Between 2021 and 2023, the Ministry of Commerce, the Cyberspace Administration of China, and otherrelevant departments have successively issued a series of supportive policies encouraging the deep
integration of live commerce with the domestic offline economy and regulatory policies to guide the livecommerce platforms, streamers, service providers, and other market participants in implementing partial
corrections and stabilizing the market.
It is worth noting that Douyin, Taobao, and Kuaishou are all able to provide their users with a differentiatedexperience based on their own competitive advantages and remain the 3 most dominant live eCommerce
platforms in China, accounting for more than 80% of the market in terms of GMV. However, the user trafficof top-tier streamers is gradually being shared with mid-tier streamers and corporate-owned streamers
simultaneously.
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