Is Livestreaming the next big eCommerce trend? Why brands need to start experimenting now.
Over the past 6 years, livestreaming has transformed the eCommerce landscape in China becoming the new norm in online shopping. According to a report published by Taobao Livestream and iResearch, more than 464 million users buy products through Live Streams, which accounts for 44.9% of Chinese Netizens. The GMV of the livestreaming eCommerce market in China has grown to a whopping 3.49 trillion yuan which equates to $US480 billion in 2022 according to Statista. Livestreaming now equates to 15% of all eCommerce sales in China, up from 3.5% just 3 years ago.
But just how quickly will this new channel be adopted in western markets? And what long-term potential does it hold for brands? In this article we explore the live streaming phenomenon and key considerations for brands keen to experiment and innovate with the channel.
A closer look at what live commerce is and the benefits of the channel
Live shopping is a virtual experience through a hosted live stream. Customers can view products, ask questions, purchase and interact with the company all from home. Live streams often leverage a key opinion leader or consumer which could be an influencer of sorts (but not always) to engage the audience and trigger sales. Live streams can take several forms but some of the popular formats include;
Tutorials which can demonstrate products like makeup to show how to utilise the product to achieve a desired look
Interviews with influencers or someone well known within an industry to provide a unique perspective on a newly launched product, for example
Behind the scenes video which interviews the product designer of a newly made toy (as an example)
One of the biggest challenges eCommerce has faced since its inception is it lacks theatrics - making live streaming a big draw card to showcase the product and to trigger purchase.
Livestreaming adoption in the US
Whilst live streaming is gathering interest from the major tech platforms, the market shows that live streaming, whilst growing, is still in its infancy. According to CoreSight Research, livestreaming is set to reach $70bn by 2026 in the US up from $20bn today, representing 5% of all eCommerce revenue. In the US, the channel has seen early success in beauty and fashion, however adoption in categories like electronics and home improvement amongst others are in part fueling growth.
In part adoption will also be driven by investment in the space by both major players and startups alike.
Over the past few years Amazon has been increasing its investment in Amazon Live, a platform it quietly launched in 2019. With the most to lose, Amazon is focused on establishing itself as the main destination for live online shopping, competing head-on with the likes of efforts from YouTube, Instagram and TikTok In its pursuit to lead the industry. Amazon this year has doubled down on its endeavours to attract more influencers to its platform, offering up generous bonuses and incentives to stream live on Amazon instead of elsewhere.
Despite Amazon’s eCommerce dominance, however – the arms race is only just beginning.
Whilst to date TikTok has struggled to replicate the success it has seen in China through Douyin (the local version of TikTok), it is now taking a new approach to enter the US market – reportedly partnering with the established live shopping network TalkShopLive to boost awareness of its shopping broadcasts. At the same time, TikTok is too focused on tapping into the influencer network by partnering with various influencer agencies to get more popular creators on board with its live shopping tools in the US, UK and other major markets. Facebook, on the other hand, has discontinued live streaming in the Facebook experience given its focus on short form video – but has maintained that live shopping will remain active and in-development on Instagram. With a recent Salesforce study finding that 61% of consumers are likely to buy more on social media platforms in the coming 3 years – it is only a matter of time before the major platforms crack the market.
However, despite the internet behemoths flexing their live streaming muscles, it is likely that a host of vehicle players and smaller start-ups like Andreessen Horowitz-backed Whatnot will win the arms race. Today there are now over 100 live streaming players with the biggest in the US being Whatnot. Over the past 2 years, it has been the fastest growing independent marketplace - the company grew sales over 20 times year-on-year and more than tripled its monthly sales so far in 2022. Whatnot’s focus is somewhat niche providing live shopping experiences for collectibles categories such as sneakers, trading cards, sports cards and memorabilia, rare toys, and more, and the platform is looking to expand its offering into other collectible categories. Despite its niche focus, its latest round of investment sees the company now valued at $3.7bn.
Starting out with live commerce
Over the past few year's brands from Mattel through to Nordstorm have begun experimenting with live commerce. In March 2022, Barbie partnered with Walmart for a livestream event to launch a new collection. Viewers were able to get behind-the-scenes footage and stories about the creation of each collection from the team who made the dolls, including Mattel product design manager Linda Kyaw. Whilst Nordstrom (after experimenting with livestreaming) launched its dedicated live shopping channel, where it would host live shopping events every several weeks. Since its first livestream, Nordstrom has hosted over 50 virtual streaming events.
For brands just starting out in the space there are a few things to consider getting you started.
First mover advantage; Whilst livestreaming is still in its infancy - the platform innovation and consumer adoption space will evolve dramatically over a few short years. Brands that start experimenting and evolving their approach now stand to benefit from first mover advantage in market.
Experimenting with various platforms and formats; Like anything in the digital space, experimentation is critical to success. Experimenting with formats, length of segments and different platforms will help to determine the optimal approach to drive discovery and sales.
Focus on engagement; Audience engagement must be at the heart of any livestreaming approach. Successful streams feature storytelling and interactive elements such as games, quizzes, and giveaways to keep viewers engaged and entertained.
Looking to re-vamp your eCommerce strategy or drive eCommerce growth? We are working with a number of brands to build and scale their eCommerce channel. Get in touch, we’d love to chat.