Live commerce Is live shopping the future of e-commerce?

Already huge in China, ‘live shopping’ is like QVC for the Instagram and TikTok generation. And with online shopping booming during the pandemic, the trend could be about to go global.

(Photo: Qilai Shen/Bloomberg via Getty Images)

Five years ago, Li Jiaqi was an unknown sales assistant behind the beauty counter in his local mall. Today, Austin Li, as he’s now known, is one of China’s most recognisable faces. But he doesn’t sing or star in a TV show. Li is one of a new generation of livestreaming influencers. Every day, millions tune in to his channel to watch him review the latest beauty products. If they like what they see, they can buy them instantly, often at a discounted rate. He once sold 15,000 lipsticks in just five minutes.

Like QVC for the Instagram and TikTok generation, the new trend of ‘live-shopping’ enables consumers to discover new products, view live demonstrations and buy anything from blenders to clothes or even cars – all in a single app. Alibaba’s Taobao Live is the most popular, but others include Douyin (China’s version of TikTok), Pinduoduo and JD.com.

Some brands have their own channels, where they can grow awareness and even shift excess stock. It can also be a valuable tool for small local businesses to reach customers. But it’s influencers like Austin Li who have become particularly successful (and well-paid thanks to commissions) because they’re authentic.

“It’s like shopping with a trusted friend or someone you want to be like. Viewers can ask questions about the products on the screen,” explains Savvas Papagiannidis, professor of innovation and enterprise at the University of Newcastle. “Most e-commerce has no interaction to it, but live-shopping is more emotional and social. That’s important – particularly during Covid lockdowns.”

Live shopping increases conversion rates

Creating an emotional connection can increase loyalty and sell more products. According to Chinese researcher iiMedia, 71% of consumers now watch a live commerce event every week, sometimes tuning in for hours at a time. Because the format contains more information than traditional advertising, live shopping has been shown to increase how often a purchase is made.

The popularity of live shopping in China is growing fast. During Singles’ Day, China’s annual online shopping extravaganza, the figures are particularly impressive. Taobao, Alibaba’s e-commerce business, said sales volume driven by live streaming grew 100% in 2020 versus 2019. Nearly 500 different live streaming channels each reached sales of 10 million RMB (€1.275 million) over the 11-day period.

But for now, live-shopping remains mostly a Chinese phenomenon. That’s mostly down to the country’s willingness to embrace digital technology and the fact that the likes of Taobao and JD.com have already integrated retail, streaming and chat in one platform, removing any friction between entertainment and buying.

Live shopping outside China

The format’s success hasn’t escaped the attention of tech companies elsewhere, but Papagiannidis says users, as well as regulators, outside China have a more conservative approach to digital technology and data sharing, particularly for social media platforms.

Nevertheless, in mid-2020, Instagram launched its own e-commerce features, including live shopping streaming and Checkout, so users can buy without leaving the app. TikTok is also piloting similar technology, while in July 2020, Amazon launched Amazon Live, which allows certified Amazon Influencers to create and stream their own content and earn commission on product sales.

A question of if or when?

These are early steps, and while most predictions expect live shopping to take off outside China at some point, nobody seems entirely sure when. One thing is for certain: Covid-19 has made it more likely to happen sooner than later.

According to a 2020 global survey by consultancy Roland Berger, 42% of consumers now shop online more frequently than before the Covid-19 pandemic. They’re also spending more time on social media (59% of respondents reported an increase since the pandemic), where a growing number of users are sharing retail tips and reviewing products.

The era of live shopping could be about to begin.

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