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Take Your E-Commerce to The Next Level with Livestream Shopping
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Live commerce, a blend of entertainment and instant purchasing, gives a modern twist to savvy startups.

What You Need to Know:

  • The benefits of livestream shopping for ecommerce include less consideration time, increased audience engagement, and higher sales.
  • As per Coresight Research, the US livestream shopping market would reach 11 billion USD by the end of 2021 and 25 billion USD by 2023 (1). 
  • According to iResearch, a China-based market research firm, lifestream shopping surged from 66 billion USD in 2019 to 150 billion USD in 2020. 
  • There are expectations that livestream shopping sales in China would reach 300 billion USD by the end of 2021 (2).

 

Livestream Shopping: A Modern Twist for Savvy Brands and Startups

The inception of Alibaba’s Taobao Live back in May 2016 opened a new chapter in sales. The China-based retail paved the way for a powerful new e-commerce approach: linking online livestream broadcasts with an e-commerce store to enable the audience to watch, interact, and shop simultaneously.  

Live e-commerce quickly fastened itself as a fixture in sales campaigns for Single’s Day, a big shopping event in China, and more blatantly, a reliable digital tool to boost consumer engagement and sales. Notably, Taobao Live made an impressive 7.5 billion USD in total transaction value in the first 30 minutes of Alibaba’s Singles’ Day presale event in 2020 (3). The next wave of online commerce revolution!

Live commerce is a blend of instant buying of featured products and audience participation via a chat function or reaction buttons. Live commerce has reformed the retail industry in China and has solidified itself as a hit sales channel within five years. As per a survey conducted in 2020, two-thirds of consumers in China stated they had purchased products through livestream in the last year (4).

Even though retailers worldwide are still behind China regarding live commerce, early adopters are racking up huge sales (5). 

We are yet to see how this new channel will evolve. However, we are sure that it has enormous long-term potential for e-commerce companies and brands. And according to a McKinsey report, live commerce-initiated sales can account for as much as 10 to 20% of all e-commerce by 2026. 

 

Live-streaming Market in China

China Live Commerce Market

The ecosystem revolves around big-name celebrities, influencers, and KOLs, key opinion leaders with impressive selling powers, supported via hundreds of millions of live-stream viewers. 

These influencers display purchase items for three to five hours during each show. People can visit the link on their phone screen to purchase as they watch their favorite shopping guides trying out products. 

Read Also: Essentials Project Tools You Need in 2021

 

Why is Live Commerce So Valuable? 

According to the McKinsey report (6), live commerce can help companies and brands in two key areas: accelerating conversion and improving brand appeal and differentiation. 

Since live commerce is immersive and entertaining, it keeps viewers watching longer. It also allows shortening customer decision journeys: from brand awareness to purchase. Businesses can also use time-limited strategies like one-off coupons to create a sense of urgency. With live commerce, businesses can make about a 30% conversion rate, up to 10x higher than traditional e-commerce. 

And when performed well, live commerce can also increase a brand’s appeal and pull in additional web traffic. It can strengthen positioning among existing customers while also attracting new ones, especially young generations keen on innovative shopping experiences. Some businesses are witnessing their share of young audiences surge by up to 20%. 

 

A Billion-dollar Market

Live commerce has witnessed a rapid evolution in China within five years and has developed into an innovative sales channel with about 10% penetration (7). Between 2017 to 2020, the value of the Chinese live commerce market has surged at over 280% CAGR, the compound annual growth rate and reached more than 171 billion USD last year. The COVID-19 pandemic has further intensified the spurt, and McKinsey’s analysis suggests that Chinese sales would reach over 423 billion USD by 2022.  

In terms of product categories, apparel and fashion lead live commerce with over 35.6% market share, followed by beauty and cosmetics at 7.6%, fresh food; 7.4%, consumer electronics; 4.6%, home decor, and furnishing; 3.6%, and automobile and local online to offline sales such as experiences and tickets at 0.2% market share.  

When it comes to demographics, millennials and Gen Z are in a dominating position. Notably, live commerce has also started to attract middle-aged and senior consumers. More than 265 million people, about 30% of Chinese internet users, had used live commerce by March 2020 (8). As of now, Taobao is the world’s most prominent live commerce player, with a market share of 35%.

Western brands and companies, following the Chinese lead, have also started establishing their live e-commerce ventures to promote their offerings. The live streaming trend has been going global since 2017 (9), with countries like Thailand, South Korea, Russia, Sweden (10), Japan, and Singapore (11) being the first to follow suit. The 2019 launch of Amazon Live and the 2020 rollout of Instagram shopping indicates that the West fully embraces live commerce. 

For the growth potential of social ecommerce in India, read our previous story, The Strategy Behind Youtube Acquiring Simsim.

Douglas, a beauty retailer based in Germany, is among the early adopters of live ecommerce. It streams multiple shows a week in various formats, such as expert talks with influencers and workshops, and has reported up to 40% conversion rates (12). 

Tommy Hilfiger has extended its live stream program to North America and Europe after success in China. Reportedly, one of their shows attracted 14 million audiences and sold more than 1,300 hoodies within two minutes (13). Walmart, in December 2020, also ventured into a livestream fashion event on Tiktok and netted 7x more views than anticipated and added 25% to its TikTok follower base (14). 

Notably, many niche startups have also emerged, including NTWRK, which features shows where guests talk about limited-edition streetwear, and Buywith, where audience watch hosts browsing the e-commerce platform and chat through webcam.  

Meantime, there has also been rising consumer demand. According to a recent survey, almost a quarter of consumers outside China are looking to find new products to livestreams featuring a brand ambassador or influencer (15). 

Read Also: How Has Technology Evolved Influencer Marketing?

 

Winning Players

Here is a list of some interesting live streaming e-commerce companies.

  • Yeay: It is an online video-enabled marketplace allowing the audience to sell products via video. Founded in 2015, the Germany-based startup enables creators to share videos of products of their choice via the in-app tools. The platform users can browse the feed and directly purchase. Since its inception, the company has accumulated over 5 million USD in funding from investors like Olymp Capital, Mountain Partners, K Invest, and others (16). 
  • BulBul: It is an online live streaming e-commerce app based in Gurgaon, India. Founded in 2018, the startup allows users to browse through live interactive videos showing multi-category products. Users can talk to hosts and purchase the stream. It has secured over 25 million USD funding from investors like Leo Capital, Rahul Garg, and others (17).
  • SimSim: A Delhi, India-based platform recently acquired by YouTube, Google enables short video shopping solutions. Users can discover products and shop in-app. Founded in 2018, before its acquisition, Sim Sim had secured 18 million USD from investors like Sunil Kalra, Anupam Mittal, and others (18).
  • talkShopLive: An online live streaming platform was founded in 2018. The US-based startup has secured over 3 million USD funding from Gaingels Syndicate and Spero Ventures (19). 
  • Bolome: It is a Chinese app-based retailer that sells products from cross-border markets like South Korea and Japan to customers in China. Founded in 2015, Bolome offers a personal and interactive shopping experience via live streaming. So far, it has secured over 85 million USD funds from investors like Baidu Ventures, Enlight Growth Partners, Chengwei Capital, and others (20).
  • Pesopie: It is a video-based fashion shopping app led by content creators and influencers. Founded in 2019, this Noida, India-based startup has secured more than 3 million USD from Venture Garage and Yana Korshunova (21).

Read Also: The Best Customer Acquisition Strategies For Startups

 

Livestreaming: Big Opportunity for Niche Brands

The less-known, niche but emerging brands can drive sales through live streaming with a combination of KOL’s style, personality, and growing demand from young people who fall for a style that is subtle and doesn’t call attention to itself. Such live-stream shows that appear on Taobao Live seem to target a mass audience.

Digital marketing agencies can earn a sweet sport in the international live streaming markets by collaborating with retailers, KOLs, and other designers to market their items to a massive audience via live streaming. You can also help designers and retailers create content on social media and handle international shipping and product distribution. 

“It is an entertaining way for brands to tell the story behind their products. It brings buyers closer than ever to their favorite creators and allows them to have a voice in the conversation.” – Facebook when it kicked off Live Shopping (22).

If you are also interested in creating an interactive ecommerce for your brand, read our previous story, Strong Brand Community: A Key to Success, where we have talked about how a brand, The Hundreds, is creating an immersive experience for its audience, which allowed them to make a whopping 32 billion USD in China last year.

 

Key Features of Livestream Ecommerce

Livestream ecommerce has some key characteristics:

  • Integrated into multiple platforms: Most livestream seasons don’t depend on new platforms, services, or apps but take advantage of multiple popular platforms. 
  • Mimics offline shopping experiences through showing products in context: hosts showcase how products look from different angles for customers and request specific models for specific apparel.
  • Highly interactive, playful with gamification and social: In livestreams, users can interact with hosts and other users streaming the same sessions, getting their concerns and questions answered. Hosts often tell jokes which are found as a new form of entertainment among the audience. Brands also giveaways and coupons to increase engagement. 
  • Builds a sense of scarcity and urgency: Customers often feel that they will lose the bargain if they don’t put an order during the livestream because of the good discount offers and limited stock.

Read Also: GenZ Marketing: Brands Need to Go Beyond Advertising

 

There are Risks Too!

Even though we don’t know the exact expense of KOL packages and directly hiring multiple influencers since the price varies; However, as per our sources, it is more cost-effective to hire agencies offering a package of live streaming show broadcasting, social media content creation, and product distribution than paying influencers for mentioning your brand in their social media postings.

Yet, live streaming marketing is not a risk-free business. It has become more competitive after its past few years of explosive growth.

For any business to succeed, KOL and celebrity endorsements are inevitable. However, KOLs with devoted fan followings and impressive selling powers are demanding more than ever.

As per Parklu (23), a KOL monitoring service that tracks the performance of more than 40k Chinese influencers, if a brand wishes KOLs to promote their offerings in their broadcast videos, articles, or social media, the prices can reach as much as 7k USD for KOLs over 800k followers, 4k USD for KOLs with 400k followers, and 1k USD for influencers with 100k followers, and 500 USD for those with 50k followers.   

And since KOLs are charging higher commissions, the return on investment for businesses is not as good as it used to be. 

If you are going to invest in the live-stream market, remember that top KOLs with huge fan followings don’t always work. If done incorrectly, businesses risk posing for a negative brand impression or experience a disappointing return on investment. 

In addition, if the product is presented to the wrong demographics, it could be a flopped campaign. Venturing into live streaming needs a huge investment, and if you are going to do it, make sure you do it right. 

Read Also: Rising Trends in Beauty Industry and How to Leverage Them

 

The Opportunities

Live shopping offers several opportunities for entrepreneurs and companies to sell all types of products, from fresh produce to cosmetics. 

Competing with Instagram, Facebook, and Amazon would be challenging for businesses looking to capitalize directly on the emerging industry. Simultaneously, some may also argue that rising disillusions with these incumbents build opportunities for challengers (24). However, there is an entire social shopping ecosystem opportunities businesses can explore:

Influencer Incubators

Creating influencers and offering them the infrastructure and resources to sell products is a big business. Rugnn, a China-based startup that makes influencers, or KOLs as they are called in China. Talent managers can jostle to sign the best influencers. 

Shopping Parties

The coronavirus pandemic has accelerated the online group activities trend, Netflix Party for instance, and companies such as Squadded Shopping Party, which allow users to go shopping together on ecommerce, are looking to capitalize by bringing the shopping parties concept to the mainstream.

Niche Streaming Platforms

The fact that live-stream shopping helped farmers in China survive the pandemic indicates opportunities to build more niche platforms for verticals that do not typically operate or advertise on social media. There is an opportunity to create a niche platform custom-made to service traditional markets like agriculture, ceramics, flowers, textiles, etc. 

Read Also: Proxgy Launches its Virtual Commerce Platform in India

 

The Future Outlook for Live Commerce

There are expectations for the following developments in the upcoming few years in the live commerce industry.

  • Micro and Nano-Influencers: Celebrities and bog name influencers with millions of followers can be pretty expensive and do not always make the best hosts. Instead, brands can use influencers with a few thousand loyal followers can make more trusted and intimate connections with audiences at a lower expense. As per a survey, the engagement rates of nano-influencers on Instagram are 10x times more than mega and macro-influencers (25). 
  • Expansion into New Markets: As live commerce becomes more prominent, industries like engineering, healthcare, finance, and in time, B2B sectors would also follow. For instance, a leading tech company plans to use its live-streaming platform to offer health-related content and services like appointment scheduling and consultations. 
  • Innovative Formats: Virtual Reality and Augmented Reality can make shopping experiences immersive and allow customers to see a product from every angle, something conventional ecommerce platforms don’t offer. In an early instance, Ulta Beauty teamed up with AR developer Perfect Corp to include virtual try-on in its “Beauty School” livestream. In the future, people may have virtual face-to-face conversations with a show host as if they were speaking in a store. 
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Rucha Joshi, currently managing a team of over 20 content writers at TimesNext is fueled by her passion for creative writing. She is eager to turn information into action. With her hunger for knowledge, she considers herself a forever student and a passionate leader.

Disclaimer: The views, thoughts, and opinions expressed in the article have been curated for our audience and does not warrant a 100% accuracy. All the information mentioned in the article is subject to change according to the changing viewpoints. Feel free to reach us at [email protected] for any change or copyright issues.

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Team Rucha Joshi
Team Rucha Joshi
Rucha Joshi, currently managing a team of over 20 content writers at TimesNext is fueled by her passion for creative writing. She is eager to turn information into action. With her hunger for knowledge, she considers herself a forever student and a passionate leader.

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