Will Livestream Shopping Be The Next Battleground In E-Commerce?
What is Livestream Shopping?
Livestream shopping combines live streaming with the ability to buy products directly via the Livestream. It is an emerging trend that offers consumers a more engaging experience than simply clicking and filling a virtual shopping cart. Similar to shopping in person, potential shoppers can interact with the host via comments. This way, they can ask questions about the product and request to see the product from a different angle.
Payment systems are included in the super app, which makes conversion rates even higher. In this way, the entire shopping funnel is located in one place.
Livestream shopping allows the merchants to provide unique, creative content supported by celebrity and micro-influencer endorsement. Any merchant, aside from being a celebrity or not, a farmer or a manufacturer can Livestream and sell their products.
From a customer point of view, Livestream shopping offers more information on how to use the product, real-time insights by other viewers, interaction with the host, special real-time offers. Microblogging, messaging, and online shopping are served in one place, making it easier for the customer to shop online.
The Rapid Growth of Livestream Shopping in China
The isolation feeling under Pandemic, the search for interaction, social commerce content served engagingly, has boomed Livestream shopping. The trend has first emerged in China and seems to spread throughout the world.
Livestream shopping did not boom in China by luck. China is currently the global leader in eCommerce, has the 5G infrastructure and superior logistics backbone, and SuperApp user penetration is already high in the market.
Chinese e-commerce was projected to be $1 trillion in 2020, up from $862 billion in 2019. CNN Business reports that In 2019, the Livestream eCommerce revenue from China alone accounted for 66 billion dollars. By the end of 2020, Livestream revenue is expected to grow 170 billion dollars, according to the business news outlet. Sales from live streams were expected to grow more than 100% in 2020 vs. 2019.
In 2019, over 430 million people, about 30% of China’s population, viewed live streams, and in 2020, it is projected to reach 560 million, or around 39%.
On average, more than 50,000 live streaming e-commerce shows were held in China in 2020 per day, garnering 260 million views.
Taobao Live
Taobao Live, the dedicated live streaming channel launched by E-commerce giant Alibaba in 2016, sold $1.1 billion in merchandise in 30 minutes through its Taobao Live video service on Singles Day, the annual Chinese shopping festival. That’s $36.7 million in sales happening every minute through live video shopping streams from internet celebrity influencers. Alibaba has 79% of the market share in live streaming. Taobao says that their live broadcasting platform has resulted in a 50% conversion rate. Their top seller has a following of over two million viewers and earns about $4 million per year!!
Douyin (TikTok)
Douyin, China’s counterpart to TikTok, is currently the hottest short video app in China, with more than 400 million daily active users. Despite trailing behind Taobao Live in e-commerce live streaming, Douyin takes second place in China with 13% of the market. With its massive users-base, Douyin has the potential to become the next big thing in China’s e-commerce.
Kuaishou (Kwai)
China’s second hottest short video app Kuaishou has more than 200 million daily active users and holds an 8% share of China’s e-commerce live streaming market.
HOW ABOUT THE WESTERNS?
Amazon
Forbes claims Amazon Live as the “Future of E-Commerce”. Amazon already has its live streaming service, Amazon Live, which allows brands to showcase products via live streaming 7/24. As early as February 2019 launched its Live Shopping channel, and, more recently, Amazon launched Amazon Live for influencers in July 2020.
Facebook & Instagram
Instagram has added shopping capabilities throughout its apps, including Instagram Live.
Facebook announced Shopping was available on its long-form video platform IGT in October 2020.
Shopify
In December 2020, Shopify launched the Live Stream Shopping App on AppStore to empower store owners to engage in real-time online video streaming.
Google’s Shoploop offers shoppable stories. The experience on Shoploop is more interactive than just scrolling through images, titles, and descriptions on a traditional e-commerce site. All Shoploop videos are shorter than 90 seconds and help you entertainingly discover new products.
What is next to come?
Livestream shopping is not only about technology to build an app with live video streaming options and quick check-out features. It is shoptainment. The human side of shopping, fun, trust, experience, logistics, consultancy, celebrity and micro-influencer endorsements, creativity, reviews, and for sure reasonable offers will make eCommerce fun again. On the merchant side of the story, pieces of training, an ecosystem build to make Livestream shopping easy and accessible for all merchants, commission rates, and aftersales services might be the milestones of a winning game.
Yet, new players seem to jump into the emerging market to challenge the giants and, AR and VR features might expand the experience to new realities. The relationship between brands and customers to stay connected and keep up with the technology will remain challenging.
If you liked this article, you can check my article on Augmented Reality in Retail https://nurchino.medium.com/can-augmented-reality-ar-help-retails-bounce-back-under-pandemic-9871329f338a
About this article
This article has been written by a student on the Grenoble Ecole de Management’s Advanced Masters in Digital Strategy Management. As part of a content creation assignment, students are given the task of writing articles based on their digital interests and disseminate the articles online. Articles are marked but we make minimal changes to the content. Thanks for reading! James Barisic, Programme Director, MS DSM.
