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Livestream Shopping: market opportunities revealed

Don’t miss out on livestream shopping opportunities: everything you need to know about this market trend

Livestream shopping

Livestream Shopping: market opportunities revealed. Source: unsplash.com

Market size

Livestream shopping is a new e-commerce format which combines influencer marketing and social experience in a live shopping show on e-commerce platforms. This marketing strategy involves a celebrity host or an influencer who promotes a product through a live video. They demonstrate how to use a product, describe all benefits and product details, and communicate with the audience in real-time. 

Unlike traditional online shopping, potential customers are not observers but active participants. They may ask questions and interact with the host. Moreover, some brands might perk the stream with giveaways, or offer exclusive merch and content while streaming. 

Blending entertainment with instant purchasing, livestream shopping offers retailers, brands, and digital platforms a new channel for creating value. The concept is most popular in China, which has the highest number of online shoppers in the world. However, it quickly spreads across the globe. Live shopping shows are usually streamed on e-commerce apps, social media platforms, and websites such as Alibaba’s Taobao, Facebook, and recently, Amazon.

At previous estimates, the livestream shopping market was projected to reach $480 billion in China this year, according to eMarketer. There, it accounts for 10% of the whole e-commerce revenue. In 2020, Alibaba’s live streaming campaign for Singles’ Day – a popular Chinese shopping event – generated an astonishing $7.5 billion in total transaction value in the first 30 minutes. 

At the same time, Foresight Research forecast it would rake in only $11 billion in the United States. Nevertheless, with tech giants jumping on board, the fund flow will quickly grow. Retail Touchpoints reported that the US market will be worth $35 billion in sales (3.3% of all US e-commerce) by 2024. 

Use cases

Alibaba’s Taobao Live is a popular live-streaming platform in China integrated within the Taobao app. The platform saw triple-digit growth in its number of daily active users and live-streamers in 2020. The same year, it generated over 400 billion yuan (US$61.7 billion) in gross merchandise volume (GMV). 

Taobao Live combines shopping with entertainment and influencer advice about emerging trends and must-have items. To provide more fan engagement, Taobao Live integrated a live chat livestream technology that allows viewers to chat, interact, and give real-time feedback during live sessions. Besides, it has real-time order tracking and a seller rating system for customers to share their shopping experiences. 

Furthermore, Taobao’s innovative “See Now, Buy Now” fashion show is another exclusive experience. Chinese consumers can watch a real fashion show live on their screens and instantly buy the clothes they see. 

Source: unsplash.com

Canadian retailer Aldo co-hosted its inaugural live shopping event with celeb stylist Mimi Cuttrell and TikToker Nate Wyatt. While the influencers shared fashion tips and showcased their favorite Aldo products, viewers were able to browse the brand’s spring 2021 collection and make purchases. The dedicated website attracted 17,000 page views in five days, showing an impressive engagement rate of 308%.

American luxury department store Nordstrom announced the launch of a dedicated live shopping channel in 2021. The channel has already hosted a dozen thematic events illustrating seasonal trends and gathering real-time feedback. In Q1 2022, the retailer’s earnings exceeded pre-pandemic levels. About 40% of the sales were generated through digital channels. 

Back in 2017, Amazon hosted its first Amazon Live stream, Prime Day Live. Through this all-day livestream, customers saw the day’s top deals in action and were entertained by in-home stress tests, game shows, new deal reveals, and special appearances from celebrities. In 2020, the Prime Day live streaming was produced remotely. Since hosts and influencers interacted with products in their homes, the interactive experience felt more authentic. Amazon Live has a dedicated mobile app with a high-volume real-time analytics dashboard for creators. Brands and influencers can engage with shoppers in real-time, drive sales with interactive livestreams, and build the followers’ customer base. 

Source: shutterstock.com

Bloomingdale’s has hosted more than 50 live shopping events since the dawn of the pandemic. Besides, each of them had a special promotion twist. For example, in a recent livestream with Jimmy Choo’s creative director Sandra Choi, viewers who signed up in advance received cocktails and macaroons in the mail to enjoy during the event. Moreover, the first 50 people to buy a pair of Jimmy Choos during the session received a personalised fashion sketch, while everyone who watched the live-streaming show until the end participated in a gift basket and gift card giveaway.

Forecasts and opportunities

Online shoppers became more accustomed to watching merchants sell goods through live videos during the Covid-19 pandemic. Thus, the potential for livestream shopping is rising, and more e-commerce platforms are starting to support this strategy.

According to McKinsey & Company, live-commerce-initiated sales could account for 20% of all e-commerce by 2026. Looking further into the future, a comprehensive research report by Market Research Future (MRFR) projects that livestream shopping market size will reach USD 534.37 billion, growing at a compound annual growth rate of 29.3% by 2030.

This form of interactive content-driven shopping is perfectly suited for impulse purchases. The sense of purchase urgency in livestreaming is emphasised with gamified content such as limited-time promotions and giveaways. Another benefit is that host influencers and celebrities can be especially effective in marketing products due to the high trust, admiration, and relatability of their fanbase. 

Since livestream shopping only starts to gain global traction, embracing the new e-commerce trend early may become a great competitive advantage for US and European retailers. 

Source: pexels.com

Besides Amazon Live, there are plenty of smaller live shopping platforms such as Whatnot, Flip and NTWRK. Apps of this kind attract both users and venture capital funding. For instance, Whatnot’s recent Series D round brought the startup $260 million and more than doubled the live shopping platform’s valuation. Whatnot’s value grew to $3.7 billion, up from the $1.5 billion valuation in September 2021. 

American Express Ventures invested an undisclosed amount in Firework, a company that enables businesses to host shoppable livestreams across the web, in 2020. 

Meanwhile, Klarna has produced live commerce events with Cosmopolitan and cosmetics brand BeautyCounter. It also acquired startups Hero and Apprl in 2021 to help its 250,000 brand partners create social content with the help of influencers. The BNPL provider also launched the Virtual Shopping feature which is a bridge between traditional online shopping and livestream experience. Although it doesn’t feature influencers, the offering connects online shoppers directly with experts in physical stores through live video and messaging.  Such a highly personalised experience can boost Klarna’s payment volume and revenue potential. 

For those sellers wishing to expand to China, embracing livestream shopping is a must. China makes up a huge portion of the global market for livestream shopping, with live commerce sales making up 20%, or $171 billion, of all sales in the region in 2020. In 2021, livestream shopping events generated $300 billion in China, growing 85%. The market size is projected to reach $623 billion by 2023. 

While Chinese consumers are very well-accustomed to the livestreaming e-commerce experience, they are increasingly using this channel to learn more about emerging brands and to try out new products. Therefore, a livestream shopping event is the best way to launch a new product in China. 

SEE MORE:

70% of European consumers embrace live shopping

Social commerce surpasses $30B in the US

TikTok to eclipse Facebook in influencer marketing spend this year, YouTube by 2024

Nina Bobro

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https://payspacemagazine.com/

Nina is passionate about financial technologies and environmental issues, reporting on the industry news and the most exciting projects that build their offerings around the intersection of fintech and sustainability.