From bustling downtown to ghost town: the heart of China’s e-commerce sector is feeling the pain of a price war

To the unsuspecting outsider, Beixiazhu looks like an ordinary Chinese village. But for years it was a place for ambitious merchants who hoped to strike gold as the country flourished live e-commerce industry – until competition kicked in, driving out sellers as quickly as they arrived.

The craze started around 2019, when live-streaming e-commerce took off on short-video platforms like Kuaishou Technology AND ByteDanceis Douyin. Beixiazhu, located on the outskirts of the city of Yiwu in eastern Zhejiang province, the world’s wholesale capital, became an ideal launching point for blockbusters looking to capitalize on a burgeoning industry that promised fame and fortune within the reach of live broadcasts.

Today, legacy from this period can still be seen in 99 Beixiazh houses once occupied by live-streaming vendors. Signs advertising “super supply chains” and “viral, hot-selling, live-streamed products” still appear in store windows. A faded, painted slogan can still be seen on the faded wall: “Without dreams, why come to Yiwu?”

But the bustling crowds were gone. Store owners, once hastily packing orders, have slowed down.

Ads on Beixiazh promoting classes for aspiring live streamers and “super supply chains” for sellers. Photo: Wency Chen

Pointing to the narrow path in front of his store, the business owner said it used to be full of cars and live broadcasts. If one product went viral, everyone would jump on it, selling it at a lower price to scam each other. Finally, there came a point when no one was making any money and everything fell apart, he said.

This type of fierce competition is locally known as Juansuch a word has entered the Chinese cultural lexicon in recent years. It comes from the Chinese term for involution and describes a society or industry caught in an unrelenting rat race with no real progress, in which people undercut each other until all resources are exhausted.