Live streaming is getting famous in China because for some, it's an easy way to fame and make a profit. Achieving popularity is not an easy feat and companies see the potential profit.
For the ambitious online entertainer, fame hits and get paid by the audience. The online host then splits the profits with the app owner.
According to Credit Suisse, projected sales next year will reach $5 billion. The projection is thrice the amount of last year's total.
For the famous live streaming app, Inke, its owner, Beijing Kunlun Technology said last week it had sold a 3 percent stake in Milaiwu for 210 million yuan or $32 million.
The start-up is only 18 months old but its value already hit $1 billion.
Zhu Xiaohu, a managing partner at GSR Ventures Management Co., who invested in Inke, said, "This isn't a fad that will disappear, as the business model has proven to be viable. But the amount of interest in this sector is so high, bubbles could be forming and many will fail."
GSR Ventures invested $750 million in venture capital in Inke.
Other young companies such as Nasdaq-listed YY Inc., an early adopter of streaming, has already risen to 64 percent.
Other investors believe that the cause for China's interest in live streaming shows is triggered by loneliness brought about by living in cities. Many viewers are seeking human connection.
"China's wide adoption of mobile phones and the loneliness brought on by a fast-paced migrating society means people are more willing to connect this way," says Jia Wei, administrator of Momo, Inc.
Online shows are about people doing ordinary things and can be selected from many streams called showrooms. There are about 60,000 people broadcasting at the same time.
Zhou Xiaohu, a 30-year-old safety foreman, said, "It satisfies my needs. Think of it as a substitute for TV shows and games."