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Nº01

September 2023
Industry News

Live Streaming Commerce – Top or Flop?

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Remember when grandma bought a whole collection of pots and pans because someone on television suggested that she buy now in order to get this amazing, once-in-a-lifetime deal? This thing is back, in a way – except now, it’s mostly about Gen Z buying clothes through live streams on social media.

What is Live Shopping and How Does it Work?

Before we dig deeper into the reasons for the recent rise of live-streaming shopping, let’s cover some basic grounds. What is live shopping and how does live-streaming commerce work?

Combining the accessibility of online shopping with the interactive experience of in-person shopping, live shopping provides customers with an opportunity to make a purchase in real time. Customers get to see the product being presented via live stream and buy it directly – simultaneously while watching the seller demonstrate the product. Sellers, who are usually influencers with an established social media following, earn a commission from the sales.

Live-stream shopping offers the brands the possibility of adding entertainment value to the shopping experience by creating added-value content, which can take different forms – from classic product presentations, through tutorials and interviews, all the way to celebrity appearances and exclusive behind-the-scenes content. Thanks to the interactive element of live shopping, customers can like, comment, share, and participate in Q&As, which makes the whole experience both personalized and engaging. During live-streaming shopping sessions, sellers often offer exclusive discounts, coupons, and limited-time promotions, or announce new product drops. 

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The Rise of Live Streaming Commerce: Trends and Statistics

Having been on the rise in the past few years, live e-commerce blew up during the COVID-19 pandemic, which saw a large chunk of the global population stay home for long periods of time. In China, the estimated value of live-stream shopping jumped by a staggering 280% between 2017 and 2020.

According to the McKinsey report, the categories of products that are featured the most in live commerce are fashion and apparel, which hold over 35% of the market share. Other categories include beauty products, food, consumer electronics, and home decor with between 4 and 7 percent each.

When it comes to the audience demographics, live-stream shopping seems to appeal to different age groups – some of which are old enough to remember the good old-fashion live TV sale channels. However, the first ones to have caught on to the trend were predominantly Gen Z and millennial customers.

If the aforementioned numbers are anything to go by, the share of live-commerce sales in all e-commerce will become as high as 10-20 percent in the next four years. Some projections are a little more reserved, noting that the pandemic years simply don’t offer the real picture and that the European and US markets cannot be expected to behave the same as the Chinese market. 

The categories of products that are featured the most in live commerce are fashion and apparel, which hold over 35% of the market share.

Live-stream shopping seems to appeal to different age groups, however, the first ones to have caught on to the trend were predominantly Gen Z and millennial customers.

Live Streaming Commerce vs Traditional Online Shopping

The main advantage of online shopping compared to conventional online shopping was, simply, that it was convenient: you could choose and order products from the comfort of your home. Live-streaming commerce includes the convenience component, turns it up a notch, and adds several important advantages. 

First of all, the customers get to see a live demonstration of the product. This means they are more likely to know what they’re buying, which in turn produces lower return rates than in traditional online commerce. Live videos – possibly the most engaging content form – create a sense of urgency and the fear of missing out, prompting the customer to instantly complete the purchase. Compared to traditional online commerce, conversion rates in live shopping can be up to ten times higher!

Another essential benefit of live shopping is its interactivity. Customers can participate in the live stream, be it by communicating with the seller or sharing the stream with their friends. Some brands even offer the option of one-to-one video calls for their shoppers, bringing the personalized experience even close to that of traditional in-store shopping.

The level of social engagement in live commerce is significantly higher than that of traditional online commerce – this helps brands gain new followers and better reach the existing ones, improving overall customer engagement. By collaborating with selected influencers and celebrities as sellers, brands can improve their general image and appeal to new customers.

Benefits of live streaming commerce include live demonstration of the product, interactivity, and high social engagement.

Top Live Shopping Platforms

The world’s leading e-commerce platform introduced its own live-streaming service Amazon Live Shopping back in 2016, although Alibaba’s online shopping platform Taobao still holds the biggest share of the live e-commerce market. eBay runs its platform eBay Live, and YouTube launched a partnership with Shopify in 2022.

The social media giants tried to hop on the success wagon, with Facebook Live Shopping and Instagram Live Shopping having launched in 2020. However, it seems like both Facebook and Instagram recently walked out on the live-stream shopping business, while TikTok is still testing the waters of the US and European markets.

A lot of new platforms focused exclusively on live shopping have cropped up in recent years, such as TalkShopLive, Bambuser, Channelize, Firework, Supergreat, Ntwrk, CommentSold, Giosg, and many others.  

As an extremely convenient, highly engaging, and personalized type of online shopping, live shopping as a model of e-commerce has been on the rise in recent years. While there are now a lot of new platforms focused on this model, some of the big players seem to be withdrawing from the race.

Whether live-stream shopping is just a fad or an e-commerce model that is here to stay, one thing is sure: the new, more personalized approach it introduced to online shopping is not likely to go away anytime soon.

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