LIVE STREAM SHOPPING AND THE EVOLUTION OF A RAPIDLY GROWING CHANNEL
Streaming commerce has only taken 5 years to take off in China, with live stream sales set to reach 423 billion dollars in 2022. So what could be next for the rest of the world?
The product categories most often showcased in live commerce are apparel and fashion, with a 36 percent share, followed by beauty products and food, with roughly 7 percent each (Exhibit 2). Consumer electronics account for some 5 percent, and furnishing and home decor for almost 4 percent.
In terms of demographics, Generation Z and millennials dominate, although live commerce is starting to attract middle-aged and more-senior consumers. By March 2020, live commerce was used by 265 million people—almost 30 percent of Chinese Internet users. Taobao remains the world’s biggest player, with a market share of 35 percent.
This movement has not gone unnoticed by Western countries. Huge brands like Levi's, Walmart, Samsung and Chanel have started to try out live stream shopping formats.
Baby steps towards streaming commerce in the US, UK and Europe
Major social media platforms are honing their own in-house platforms. Walmart took to TikTok to trial their first shoppable live stream in December 2020. The event netted seven times more viewers than expected and enabled it to add 25 percent to its TikTok follower base. TikTok's live shopping solution is currently only available to certain brands in the US, but this is gradually being implemented globally.
On the other hand, specialist high-tech start-ups have also emerged onto the playing field. This includes NTWRK an exclusive platform for the hottest street wear brands to talk about limited edition drops and sell them to invite only audiences. As well as Smartzer, an interactive video platform that allows a variety of brands to host their own shoppable streams that give viewers the opportunity to make purchases from popups, chat to hosts. Chanel, Samsung and Levi are the latest to take the plunge with innovative new tech.
It is clear that consumer demand is building: a recent survey performed by Facebook found that almost a quarter of adults outside China would like to discover new products via a live stream featuring an influencer or brand representative.
As U.S. media shifts towards business models outside of advertising (commerce, tipping, subscription), live streaming becomes a more interesting and revenue-generating segment. In addition, with more commerce and entertainment consumption shifting online due to the Covid-19 pandemic, familiarity with streaming and viewership has followed.
It seems that what was old is new again as brands set to destigmatize live selling by moving away from overwhelming and dated QVC style approaches towards more casual, consumer focussed ways of selling via streams.