Digital platforms, particularly those utilizing short-form video and live streaming, are fundamentally reshaping the landscape for small and micro-sized enterprises (SMEs) in the life services sector. By leveraging these technologies, businesses are overcoming traditional limitations related to geography, information asymmetry, and human resource costs. This digital shift enables SMEs to create new consumption scenarios, gain visibility, and achieve both specialized and scalable growth.
Life services refer to activities that meet residents' final consumption needs. This sector is a major source of employment in China and plays a critical role in driving high-quality economic development and ensuring stable socio-economic operations. A recent study highlights how digital platforms are constructing a nationwide, time-space transcending digital operating environment for these businesses. This represents a qualitative shift from operating in a traditional "three-kilometer business radius" to reaching a much broader geographic area, from passively waiting for customers to actively acquiring them, and from one-off transactions to building long-term customer relationships.
Unleashing the Long-Tail Potential of Small Businesses
For a long time, industries like catering, home services, and repairs have faced a unique challenge: services must be delivered "face-to-face" and "simultaneously in the same location." This inherent characteristic makes it difficult to improve efficiency through standardization and scaled production. Within the ongoing economic restructuring, where the service sector's proportion continues to grow, these labor-intensive fields grapple with rising human resource costs and stagnant real output growth. This dual challenge is particularly severe for the SMEs that constitute over 95% of the market players in the service sector.
The widespread application of digital technology, however, offers these businesses a new path for development. Digital platforms have enabled the emergence of previously undiscovered consumer hotspots. These trends help distinctive small and medium merchants break through local geographical restrictions, with their popularity often spilling over to surrounding areas and spawning new business models, services, and trends.
This transformation occurs because the operational logic of these SMEs changes upon joining a digital platform. Recommendation algorithms match content with user interests, while data feedback helps improve service quality. This process expands the range of products and services and highlights the commercial value of "content + service." The traditional "face-to-face" service consumption process is now deconstructed into online discovery (or "seeding"), offline consumption, and post-experience sharing. This model opens new spaces for small merchants—diverse categories from food and beverage to travel, and from apparel to beauty services are flourishing on platforms. Businesses can use content innovation to turn low seasons into peak seasons and even drive upgrades in their supply chains.
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Reducing Operational Costs and Creating New Digital Jobs
The活跃 (huóyuè - active) presence of small merchants on digital platforms stems from the unique advantages of short videos and live streams in creating commercial scenarios, reducing customer acquisition costs, and resolving information asymmetry.
The medium is the message. Video, unlike text or audio, carries the IP attributes of the publisher. Therefore, both professional influencers and ordinary merchants can use video content to showcase their service features, unique skills, distinctive expression styles, and affinity to quickly accumulate social capital. For building online consumer trust, short video and live streaming media achieve an effect and speed that is difficult to match offline.
The production and sharing of personalized, diversified life service content continuously fosters the convergence of interest hotspots and the dynamic adjustment of interest structures. For consumers, this fluid interest matching effectively reduces search costs and enhances the consumption experience. For small merchants, it allows for rapid user accumulation and the realization of economies of scale. The cumulative demand from multiple niche markets can further stimulate the formation of relevant life service supply chains within a region.
Furthermore, the development of short video and live streaming technology has not only reduced the promotion costs and expanded the reach of life services but has also spawned new digital specializations. These include content production, live streaming, graphic design, video editing, and influencer incubation, creating new growth points in areas beyond the life services sector itself.
Frequently Asked Questions
What are 'life services'?
Life services encompass a broad range of consumer-facing service activities that meet daily life needs, such as dining, hospitality, beauty and personal care, home maintenance, and local entertainment. They are characterized by their direct-to-consumer nature and are a vital component of the domestic economy and job market.
How do digital platforms help small businesses overcome geographical limits?
Platforms use interest-based recommendation algorithms to show a business's content (videos, live streams) to users who are most likely to be interested, regardless of their physical location. This allows a small local shop to gain exposure and attract customers from a much wider area than its immediate neighborhood.
What is the shift from 'passive' to 'active' customer acquisition?
Traditionally, a small business might rely on foot traffic or local advertising. On digital platforms, businesses actively create engaging content to attract and intrigue potential customers, effectively pulling them in rather than waiting for them to arrive. This is a proactive marketing strategy.
Can these platforms really help during a business's off-peak season?
Yes. By creating targeted content—like promoting a cozy indoor dining experience during colder months or a special discount package for weekdays—businesses can stimulate demand during traditionally slower periods, effectively using content to smooth out seasonal fluctuations.
What kind of new jobs are being created by this trend?
The ecosystem around these platforms requires new skillsets, leading to roles such as short video content creators for businesses, live stream hosts, graphic designers for promotional materials, video editors, and agencies focused on nurturing and managing social media influencers.
Is this trend only relevant for specific types of businesses?
While particularly impactful for visually appealing services like food and travel, the model is adaptable. Any service that can be compellingly demonstrated or explained through video—from a skilled plumber showing a quick fix to a tutor offering a lesson preview—can benefit from this increased visibility and trust-building.
Data from a leading life services platform underscores this growth: in 2024, transaction volume from short videos grew significantly, and the number of both short videos and image-text posts published on the platform saw substantial increases. Millions of small and medium-sized businesses utilized the platform to expand their online sales, with order volume growing by a considerable margin year-over-year. This evolution points towards a more interconnected, efficient, and dynamic future for small businesses in the digital economy.