Is This the Next Big Thing for E-Commerce?

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One of the hottest trends in retail is currently being overlooked by many US brands. But that may be about to change.

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Livestreaming commerce has been exploding in popularity in China over the last few years. For perspective, China’s 265 million livestream commerce users are on par with live game streamers (260 million) and represent about one-third of China’s total internet users. From a sales perspective, the livestreaming commerce market has soared from US$29 billion in 2018 to a projected $129 billion for 2020. 

What exactly is livestreaming commerce?

To understand livestreaming commerce, think QVC meets Twitch. The format typically consists of a social media influencer (or “Key Opinion Leader”) demonstrating merchandise for a limited time while interacting directly with viewers. Viewers comment in real time and can make purchases without leaving the app/site. 

Common product categories include fashion, beauty, electronics and housewares. In China, livestreaming commerce is also used by rural farmers to sell fresh produce and is cited as a key strategy for alleviating poverty.

Taobao Live is China’s leading livestreaming commerce platform, but Pinduoduo, Douyin (TikTok), JD.com and others are also growing rapidly.

What about the US?

Some American brands and social media influencers are already taking notice. Last year, Kim Kardashian collaborated with Viya, one of China’s top livestreamers, to promote her KKW fragrance line. With minutes, the duo sold out of 15,000 bottles. This year, Tmall Global has partnered with other US celebrities including Magic Johnson and Taylor Swift.

Although livestreaming in the US is often associated with video games rather than shopping, major platforms are investing to capitalize on the livestream commerce trend.

Amazon quietly introduced its Amazon Live service last year and both Facebook and Instagram have recently added livestream commerce capabilities.  Notably, Amazon Live received prominent placement on Amazon’s landing page during Cyber Monday.

What does this mean for brands?

The global pandemic has accelerated consumers’ comfort with e-commerce, setting the stage for broad adoption of livestreaming commerce. 

Whether it’s the QVC-inspired bargain hunter or the Millennial who can’t get enough of social media celebrities, livestreaming commerce offers consumer-facing brands another way to engage with customers and drive revenue.

Brands already engaged in influencer marketing should consider adding livestreaming commerce to their arsenal —especially global brands with a significant presence in China. Although relatively small in the US currently, the trend is gaining momentum thanks to investments by Amazon, Facebook and others. Before long, it could very well become the next big thing.

Sources:xinhuanet.com, wearerockwater.com, china.org, jingdaily.com, techcrunch.com