What is livestream shopping?
Digital tools and services have given brands more opportunities to connect with consumers and has fueled growth of the e-commerce sector. Livestream shopping, also known as 'Live Commerce' is the convergence of livestreaming and e-commerce. Livestream shopping combines live video, real-time customer interaction, and online shopping. In livestream shopping, hosts sell their products in real time and the product promotions last as long as the live stream. Hosts act as demonstrator, showing off all the functions and features of the products they’re selling. Users can leave comments or ask questions during livestreaming shopping sessions and hosts address user comments as they arrive. When the users are ready to purchase, they use the embedded link in the video.
Online retailers are turning to live commerce to bring consumers one step closer to the in-person experience. Livestreaming is expected to revolutionize consumer buying behavior and the retail industry over the coming years.
When and where it started and where it is being adopted?
In 2014, Chinese fashion e-commerce platform, Mogujie (MOGU Inc.), was the first to experiment with live commerce, with Alibaba’s Taobao. Livestream shopping soon became popular in China. In China, livestreaming is used to provide entertainment, help customers understand products, and to motivate sales. Teenagers as well as adults are drawn to livestreaming shopping featuring vibrant hosts trying out products and responding to customer queries in real-time.
Livestreaming e-commerce is going global however, it is still in its infancy in North America and Europe. Asia Pacific is leading the live stream revolution. South Korea and Japan are some of the first countries to adopt live commerce. Alibaba has brought the practice to Russia and Southeast Asia. In Russia, Aliexpress launched livestreaming feature in 2017. In the U.S., Amazon.com, Inc. and Wayfair, Inc. are using livestream sessions to attract customers.
Some of the pioneers in the livestreaming market include, Alibaba, JD.com, Wayfair, ShopShops, Streamlist, Shoclef, Livby, Kuaishou, Yizhibo, Douyin, WeChat, Xiaohongshu, Yingke, and Bilibil. In 2019, Taobao Live was the largest player in livestreaming e-commerce market. As livestreaming e-commerce is gaining viewers, e-commerce companies are launching livestream functions or are partnering with livestreaming platform providers. The table shown below represents the list of companies and the list of livestreaming platforms they are using.
| Company Name | Livestreaming Platform |
| Alibaba | Taobao Live |
| JD.com | Kuaishou |
| We Chat | Tencent |
| Louis Vuitton | Xiaohongshu |
| Smartisan Technology | Douyin |
How livestreaming helps companies increase product impressions and sales?
Livestream shopping has numerous advantages over conventional e-commerce. Livestream shopping is more social and interactive medium of shopping which helps consumers better understand product attributes. Livestream shopping illustrate the concept of influencer marketing, as the hosts are a mix of celebrities, models, and major companies. People want to buy from someone they trust and livestream hosts provide assurance of products for consumers. Livestreaming hosts use rewards, discounts, and games to connect with consumers and monetize these connections.
Livestreaming sessions are becoming popular in major markets such as China as consumers crave personalized recommendations. The small and medium enterprises have tremendous opportunity to grow using livestreaming shopping. Some of the leading industries using live commerce include, fashion, accessories, cosmetics, jewelry, agriculture, electrical appliances, and others.
Market Developments
- In December 2016, Livby, a U.S.-based company, launched mobile livestreaming shopping app
- In November 2018, Streamlist, a U.S.-based company, announced the launch of its livestream shopping app for iOS mobile devices. In the same year, Shoclef launched its mobile shopping app.
- In 2018, Taobao Live, Alibaba Group’s livestreaming channel, hosted more than 150,000 agriculture livestreams, which drew over 400 million viewers
- In May 2020, JD.com, an e-commerce Company in China, partnered with Kuaishou, a live streaming platform, to increase sales ahead of its upcoming mid-year shopping festival
- In February 2019, Amazon launched Amazon Live, livestreaming video shows, where hosts demonstrate products available for sale on the platform
- In November 2019, Kim Kardashian West, with the help from Chinese influencer Viya Huang, sold 150,000 bottles of her KKW fragrance perfumes within minutes during a live streaming session on Alibaba’s Tmall
- In March 2020, WeChat, a messaging and social media app, released livestreaming capabilities with the launch of its Kandian livestreaming Mini Program. Beauty startup Perfect Diary was one of the first brands to participate in WeChat’s new livestreaming capabilities.
Impact of COVID-19 pandemic on livestream shopping
As the COVID-19 pandemic continues to spread, retail operations have slowed down across the globe. As most of the countries were under lockdown, shopping from home became the only option for customers. Owing to this, livestreaming shopping gained momentum during the COVID-19 pandemic. In 2020, number of Alibaba’s Taobao livestreaming platform users grew by 719% from January to February. Pinduoduo's livestreaming sessions grew fivefold from February to March in 2020. As the COVID-19 pandemic ends, consumers will be on the lookout for new ways of shopping while still conforming to social distancing norms. In such a situation, livestreaming is expected to gain major response from consumers.
In the current situation, consumers have been forced to use digital video communication platforms. Brands and retailers who were reluctant to take their product offerings online are now trying to stay at technological forefront and create online presence. In March 2020, Shanghai Fashion Week was livestreamed and consumers were able to purchase the clothes that models wore on catwalk, online, during the event. Further, livestreaming also helped China’s farmers survive the pandemic. Farmers have been using livestreaming to sell their crops. Companies such as JD.com and Taobao helped farmers set up online stores, with their rural livestreaming initiatives.
According to Jiang Fan, CEO of TaoBao, a Chinese online shopping website “In the future, live streaming is expected to be the mainstream e-commerce model.”
Livestream shopping is expected to be the best way to reach consumers in a post-Covid-19 period. For ultimate engagement and conversion, live streaming is expected to be the preferred channel in the coming years.
