Live Commerce: An upcoming opportunity for brand marketers Share via

It all started in 2016 when Chinese e-commerce giant Alibaba’s Taobao linked up the online live stream broadcast with the e-commerce store to allow consumers to watch the product and shop for it at the same time. This was the beginning of the new sales channel for the brands and an innovative shopping experience for online shoppers, known as live commerce. Live commerce incorporates live video content where the host demonstrates the product to the live viewers over a social network or an e-commerce platform. It is a two-way communication that enables shoppers to buy the product seamlessly during live streaming.

According to a study by McKinsey, live streaming commerce in China has reached a penetration level of 10 percent in around five years. According to the same report, sales in China through live streaming commerce are expected to reach USD 423 billion by 2022, giving a glimpse of the channel’s soaring popularity.

For western brands looking to launch new products in the Chinese market, live streaming commerce has proven to be a game-changer. For example, in 2019, American reality TV star, Kim Kardashian, sold out the entire stock of her KKW perfumes in just a few minutes during the live stream commerce with the help of Chinese mega influencer Viya Huang, who commands a massive following of more than 70 million. In addition, well-known global brands like Burberry, Louis Vuitton, and Tiffany are exploring the opportunity to use live streaming commerce to reach out to a massive consumer base and generate higher sales. Additionally, French luxury house Cartier also jumped onto the live commerce bandwagon.

What started from the world’s second-biggest economy is quickly spreading out to the other parts of the world, and brands are collaborating with the influencers to take this emerging shopping trend to their customers. According to a report by Coresight Research, live streaming shopping in the US market is expected to reach USD 11 billion by the end of 2021 and USD 25 billion by 2023.

Beauty and fashion retailers have taken to live streaming commerce in a big way. While German beauty retailer Douglas relies heavily on this channel, streaming various shows in different content formats, fashion brand Tommy Hilfiger has been doing live streaming in Europe and North America, following its successful stint with the technology in China.

Moreover, the world’s biggest retailer, Walmart, has been experimenting with the live shopping feature for over a year. It first tested the waters on the social media platform TikTok, followed by YouTube. Finally, the retailer debuted on Twitter’s live stream shopping initiative kicking off its Cyber Deal live event last month.

So what is making live commerce so popular with the biggest of brands around the globe?

The ability of live streaming commerce to showcase the products closely from all angles while describing the goods in detail to the viewers is a strong advantage of this medium. Top up the video content with the known face, subject matter expert, or social media influencer, and you have a winner at hand. As discussed earlier, in live commerce, viewers can ask the experts about any doubts they may have related to the product and get it sorted, making the medium highly engaging and aiding in a better conversion rate. Furthermore, the amount of time a user spends on your platform will also increase if the brand engages its shoppers through this medium.

Apart from the benefits mentioned above, this shopping channel has managed to attract the attention of a lot of young consumers. Many reports have found that Gen Z and millennials dominate the live commerce space with decent participation from middle-aged consumers. Therefore, brand marketers should promote products and services that primarily appeal to this consumer demographic and keep their preferences in mind. At present, fashion and beauty products are the fastest-selling items through live commerce, but some brands and retailers have started to live stream products from categories like fresh foods, consumer electronics,  and furnishing & home décor. Brands can use video content formats like tutorials, unboxing, interviews, or behind the scenes to engage the shoppers and generate sales.

Although live commerce is growing by leaps and bounds in China and other Asian countries, other parts of the world have started to warm up to this idea. Some companies are doing exceedingly well to milk this concept and get ahead of the competition, while others weigh in on the pros and cons of the medium and take a slightly conservative approach. But as we move forward, many marketers believe that live commerce will be a sustainable sales channel that will grow at a breakneck pace in the coming time.