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Shoppable Livestreaming Is The Rage In China. Will It Take Off In The U.S.?

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Last Updated on August 25, 2020
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Selling products by video is not new, Home Shopping Network and QVC QVCA +3.2% have been doing it for decades. But shoppable livestreaming is more than just video, it’s two-way; viewers don’t sit passively, they interact both with the presenter and with each other. Even when the viewers are complete strangers, viewers chat with each other and share opinions about whether to buy products and how to use or wear them. It is an instant community where interested consumers connect and purchases can be made instantaneously. Shoppable livestreaming doesn’t require a studio and any good camera (or almost any mobile device) can make it happen from virtually anywhere.

The pandemic has brought new attention to shoppable livestreaming because it offers the ability for discovery, browsing, sharing of opinions and experiences with friends while still protecting hygiene and safety that consumers care so much about right now. The chart below from Latentview Analytics shows how related Google GOOGL +0.6% search terms, especially “Livestream” and “Facebook Live” have exploded during the Coronavirus shutdown.

Shoppable livestreaming has taken off in China. According to Coresight, it generated $63 billion in 2019 and, according to iResearch, will reach $138 billion in 2020. According to Latentview Analytics, 524 million Chinese viewers will experience shoppable livestream in China this year and over 100 thousand brands have used it there including Ralph Lauren, Clinique, Tommy Hilfiger, Lancome, Levi’s, Louis Vuitton, L’Oreal, Burberry and many others.

Why China Could Be A Guide

The China data is interesting because China is often an indicator for what consumers in the U.S. will do next. Because China was technologically behind for so long, it often skips stages of technology and gets to more advanced levels sooner than western countries. Telephones are a good example of how that works. In the U.S., there were landlines for many years and eventually mobile phones developed and became more important. China never had a large installed base of landlines so when mobile devices were available, they propagated virtually instantly and the country skipped the landline stage completely. Right now, no one knows whether China’s growth in shoppable livestreaming is an indicator of what’s happening next in the U.S. or whether it’s an outlier. But there are indications that the trend in China is not unique to that country. For example, Coresight estimates that the U.S. market will be $25 billion in three years or less and Amazon has started offering shoppable livestreaming to its vendors.

How It Works

The giant Chinese etailer Alibaba owns two businesses, Taobao (most closely similar to eBay) and Tmall (most like Amazon third-party sellers) who are the biggest facilitators of shoppable livestreaming in the world right now. The video below shows how Taobao uses shoppable livestreams to demonstrate products.

There are two types of locations Alibaba uses for shoppable livestreams. One is in stores where consumers get the experience of being in-store virtually. The other is themed, non-store locations like a fresh water pearl farm where different types of pearls are shown or vineyards where multiple wine brands are sold.

Who Does It In The U.S.

In the U.S., shoppable livestreaming is just getting started. Amazon’s system, Amazon Live, is built for brands to create their own shoppable livestreams on Amazon. Amazon Live is one integrated, seamless app with live video including two-way communication, product information/education, customer service, payment, tracking and reviewing.

But you don’t have to be on Amazon to use or provide shoppable livestreaming in the U.S. A company called ShopShops built its business by livestreaming to Chinese consumers from the U.S. during Chinese business hours while the American stores were closed overnight. Starting next month, ShopShops is offering its service to U.S. brands and retailers, even providing hosts where necessary and helping with promotion on social media.

Another company called CommentSold integrates the features of shoppable livestreaming into existing social media platforms like Facebook and Instagram or on brands’ own apps. When you run a live event on one of those apps, CommentSold allows users to purchase, track, interact, comment and review all inside the app. CommentSold expects to handle $1 billion in transaction value in 2020.

Why It Works

Mark Yuan and Zoe Zhang of New York-based consulting firm And Luxe have been advising livestreamers since the technology took off four years ago. They point out some important factors that make shoppable livestreaming work. The first is having a single app with an integrated platform for shopping, paying, tracking shipments, customer service and reviewing. When consumers have to use more than one app, they distracted or discouraged and they drop off.

But as important as having the right technology is, it’s not all that’s needed. Yuan and Zhang say that while “a popular live streamer can sell anything,” the right content is critical. Their key elements for successful shoppable livestreaming are:

  • Entertainment
  • Discovery (new and interesting products)
  • Exclusivity
  • Scarcity
  • Great deal/value

Not all those elements are necessary for a successful livestream but the more there are, the more likely the success.

What’s Next

Yuan and Zhang say that as 5G service rolls out, shoppable livestreaming will grow even more dramatically with better augmented reality, simpler (and less hardware-intensive) virtual reality and a combination of the two (known as mixed reality).

For shoppable livestreaming, we are at the beginning of the beginning. But the growth is moving faster now because of the pandemic-driven desire for in-store experiences without in-store Covid risk. Proponents of shoppable livestreaming say that once consumers experience it, they keep coming back and it’s a better way to shop electronically. We don’t know whether China’s growth in the technology is a prologue to what will happen in the U.S. market. But we do know that that the pandemic is getting consumers to try new modes of shopping. Whether now is the time for shoppable livestreaming to take off is anyone’s guess, but new technologies for shopping, including shoppable livestreaming, are being developed and retailers and brands need to try them to see what works for their consumers.

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