Livestream shopping, also known as live shopping, is a marketing tactic where a host – often an influencer or celebrity – showcases a product through a live video. It’s akin to the format of home shopping on TV shows, where the host demonstrates product usage, but with the unique aspect that all interactions between the host and audience happen in real time, as the name suggests. Combining entertainment with instant purchasing, live shopping presents a unique avenue for retailers, brands and digital platforms to generate significant value with platforms like Channelize.io, CommentSold Live, Talkshop.live, QVC Live and Facebook Live Shopping being amongst the more prominent ones. In fact, businesses report that livestream shopping conversions are 10 times higher than those delivered by traditional e-commerce avenues. Especially amongst younger generations, live shopping options are becoming increasingly popular, allowing brands to connect directly with consumers and highlight the solutions a great product can offer. Livestream shopping originated in China and the industry there is expanding quickly. According to eCommerceDB, Chinese streaming e-commerce sales hit US $ 352 billion in 2021. Experts predict that live commerce could account for 20 per cent of all e-commerce by as early as 2026.
Live shopping as a platform for selling
Livestreaming is a type of live video shopping that enables companies to provide in-the-moment video material that quickly persuades customers to make a purchase. Even with a sizeable viewership, live shopping strategies prioritise interaction and customisation. Unlike traditional online shopping, livestream shopping offers potential customers the opportunity to ask questions or leave comments, with hosts responding in real-time as they showcase or review a product. Key Opinion Leaders (KOLs) or influencers host live shows through apps, presenting, modelling and testing various products for their audiences. Viewers of these live shows enjoy the interactive entertainment provided by engaging hosts and can have their concerns about the product addressed immediately.
Livestream shopping shows are sometimes utilised to increase visitors to other online stores or websites that handle sales. In order to streamline the buyer journey and accelerate sales, several livestreaming platforms allow consumers to shop products from within the social media network.
Huang Wei, also known as Viya, is one of the most successful Chinese livestream shopping hosts with videos that reach over 37 million viewers. She makes it a point to maintain the high level of trust her audience gives her by ensuring that all products she features are tested by her and her large team of 200. She also dresses in casual clothing when she’s on air to be able to relate better to an audience that’s mostly watching from home.
Chinese live streamer Zheng Xiang Xiang posts live streams to Douyin (China’s version of TikTok) of herself showing off various products for just three seconds each and rakes in 100 million Yuan (US $ 14 million) every week. Gamified content, such as freebies and promotions, is typically made available to viewers during these livestreams, but only for a limited time. This makes livestream buying particularly effective since it emphasises the sense of urgency that comes with scarcity or limited availability. Furthermore, the fear of missing out on a potentially good deal increases with the size of the viewing audience.
Growth of live shopping experience
Every merchant, from one-person shops to multinational conglomerates, can take advantage of live shopping events because they have significantly cheaper production costs than traditional shopping channels and don’t require the purchase of airtime.
According to Econsultancy, well-known brands like QVC, the television home shopping network which introduced Q Anytime, a video shopping app in 2019, are already on board and Amazon Live has also joined them. Additionally, new firms are entering the scene. One such example is PopShop Live, which has raised US $ 4.5 billion in funding and is creating an online community modelled after Etsy, an American e-commerce company focused on handmade or vintage items and craft supplies.
One of the most popular e-commerce sites in China is the Taobao app, while the massive online retailer Amazon has already introduced its livestreaming service, Amazon Live, primarily for US citizens. Developers are beginning to combine social media and e-commerce these days to do away with the necessity for two distinct apps.
Since the livestream audience holds KOLs, influencers and celebrities in high regard and finds them relatable, they can be particularly successful in selling things when they livestream.
The continued growth of live commerce in US retail seems like the closest thing to certainty as is possible, says Bloomberg. In a changing landscape, TalkShopLive, an online platform for live streaming and shopping, saw sales increase seven-fold during the pandemic, according to customer service online research hub CCW Digital. Software as a service (SaaS) company providing a live streaming and shopping platform, BrandLive’s revenues doubled in 2020 and live selling video commerce platform CommentSold’s sales have risen from US $ 326 million to US $ 1 billion, said a report from global news and analysis platform PYMNTS.
Live shopping in numbers
A key trends report from Coresight Research and Bambuser estimated the value of US livestream shopping to hit US $ 32 billion by the end of 2023. That number will more than double to about US $ 68 billion by 2026 and make up more than 5 per cent of total e-commerce sales.
China is the world’s largest livestream shopping market, as evidenced by Coresight Research data showing that virtually all Chinese consumers have watched a livestream selling event, with the number in the US being 32 per cent. Nearly half of retailers that participate in livestream events predict strong growth of 10 per cent – 50 per cent over the next two years, with an additional 16 per cent anticipating growth of greater than 50 per cent.
Coresight Research and Bambuser found that 23 per cent of e-commerce livestream viewers bought products during livestream. Another 34 per cent of viewers made a purchase after the livestream event and 35 per cent began following the brand or host on social media.
According to a McKinsey study, US consumers, along with Europe and Latin America, most often purchase clothing at live shopping events. Around 43 per cent of livestream purchases fall into the clothing category for US consumers.
Companies that use live commerce strategies are seeing conversion rates of up to 30 per cent, said McKinsey. That is 10 times higher than the average e-commerce conversion rate early. 30 per cent of luxury retailers that use livestream shopping have been using the strategy since 2021. That compares to about 20 per cent or less for businesses in non-luxury markets (such as apparel, beauty, grocery and electronics).
According to the World Advertising Research Center (WARC), livestream commerce has a purchase incidence rate of more than 30 per cent. Although that’s significantly below online marketplaces and retailer websites (both at 70 per cent plus), it is now within six percentage points of social commerce.
A study by Global Web Index found that 17 per cent of consumers in the US frequently watch influencer livestream events, with 70 per cent of them likely to buy products from influencers they follow.
Future developments
In live commerce, we can anticipate the following trend: the use of micro- and nano-influencers is growing. Micro- and nano-influencers with a few thousand devoted followers can produce greater performance and more sales at a lesser cost than partnering with mega-celebrities, since the cost to recruit them is less than a bigger, more influential one.
It’s possible that new industries will start utilising livestreaming technologies as live commerce grows, recognising the impact and popularity that livestreaming offers and the various advantages of livestreaming for retail.
