Navigating Product Diversification in Live Streaming E-commerce: Evidence from Douyin Platform

The past decade has witnessed the growing prevalence of live streaming selling (LSS). As streamers serve as a proxy between manufacturers and consumers, product assortment management has been a critical strategic factor for their success. Relying on data collected from Douyin, a prominent Chinese LSS platform, this study aims to investigate the impact of diversification on LSS performance through the lens of adding new categories in live streaming sessions. The results in this study show that product category diversification, in general, has a significant positive effect on sales during live streaming events. However, this effect is alleviated by the semantic similarity between the newly introduced and existing categories. In addition, we find that product diversification has a negative impact on the sales of incumbent categories. This study contributes to the literature on product assortment by providing insights into the role of product diversification in the context of real-time selling. We also discuss the managerial implications for the platform and streamers.