Live shopping is far from being a new phenomenon. Home live shopping through television broadcasting was a multibillion-dollar industry. You may remember those as tell sell channels, amongst others. And, although they do still exist, with the rise of ecommerce, live shopping has developed into something called live commerce.
So, what is live commerce? Essentially, it refers to the use of live streaming within ecommerce or social commerce channels. Products are presented and sold online through live broadcasting and customers can interact or engage in real time. It is a more integrated version of live shopping into the current digital landscape. The popularity of live commerce can be highlighted by the rapid developments it has made in the China market in recent years. Currently, it is already unthinkable not to incorporate live commerce in any marketing and sales strategy in China. Recent statistics indicate that 10% of total ecommerce GMV is generated by live commerce, 90% of the biggest brands hosted live commerce events during Singles’ Day (the biggest ecommerce festival), and 300 million of the platform users (Tmall / Taobao) watched these live streams during the festival. Commonly, these live commerce events are done using so-called Key Opinion Leaders (KOLs).
Live commerce is also becoming bigger in the rest of the world. Amazon, Shopify, Facebook/Instagram, and YouTube provide an experience that combines social networks with ecommerce through live streaming. However, the pace of development may not be as fast in China. Nevertheless, the live commerce market in the US is expected to surpass USD 25 billion in sales by 2023, whereas a couple of years ago, in 2020, it constituted USD 5.6 billion. McKinsey even estimates that, based on China’s developments, live commerce sales could even account for 20% of all ecommerce sales by 2026.
Key Opinion Customers (KOCs), although the use of Key Opinion Leaders (KOCs) is commonly implemented, it is also very costly. The use of celebrities does get a lot of traffic and engagement, but it does not always outweigh the investment needed. In addition, as live commerce will become increasingly important, it will probably not be limited by certain campaigns only. KOCs are customers that can share their experiences with the brand and products, which can also provide a more grounded approach and more sustainable in terms of costs.
Product demonstrations and interactive Q&A. Fashion and cosmetics are markets in which live commerce has seen great integration. The brand and products can be presented and demonstrated live and customers can engage directly by asking questions during the live shopping session, for example. Other industries that will increasingly implement live commerce are the automobile and real estate markets.
Omnichannel integration. At the moment, live commerce is usually platform-specific. In order to maximise results, implementation across different platforms and channels will become increasingly interesting. In addition, providing an integrated offline-to-online or online-to-offline experience will be an important factor in which we could see developments.
One-on-one interactions – a personal online shopping assistant. Especially the luxury segment will be looking into implementing creative iterations of this. It will provide the online exclusivity that this audience is frequently used to in brick-and-mortar boutiques. But in the long term, even for a broader audience, it can become interesting. Effective time management and scheduling of these roles could increase engagement and subsequently sales conversion.
Metaverse, VR & AR integrations – especially interesting in the before mentioned automobile and real estate markets for example. The Metaverse, Virtual Reality and Augmented Reality will enable the presentation of more products in an interactive way. In addition, the pandemic has imposed ongoing travel restrictions, so creative integrations for the travel industry could also be an interesting trend going forward.
Group/bulk buying. Most of the world has more or less accepted living with the new Omicron variant of COVID-19 and has returned to ‘normal’. However, in China, the policy around ‘dynamic 0 covid’ has put strict lockdowns around the country, with the one in Shanghai being the most dramatic of all. As this has put constraints on the domestic ecommerce and logistics infrastructure, a new phenomenon has arisen: the ‘group buy’ initiatives. Although currently developed out of necessity, it has the potential of becoming a remaining trend. It can provide businesses with bigger orders, and, simultaneously, time convenience and a better deal for the customers.
There is, of course, a lot to take into account for an effective ecommerce strategy. Different platforms, different channels, different audiences, different technology and functionality, and different regulatory frameworks are all important factors to navigate around for different markets. But, as live commerce is becoming increasingly popular, there will be developments that see these elements moving towards each other, no matter the location. And, if there is one thing that the recent pandemic has thought us, a life without ecommerce is unthinkable, where live commerce developments and trends will be an exciting area to keep our eyes on.
Some additional sources:
https://time.com/6115848/singles-day-2021/
https://jingdaily.com/viya-austin-li-singles-day-alibaba/
https://www.weforum.org/agenda/2021/05/china-future-social-commerce-content/
https://www.digitalcommerce360.com/article/us-ecommerce-sales/
This article was first published in Payment Methods Report 2022, the most updated overview of trends and developments in the payment methods space and the innovative technologies that these methods work upon, emerging consumers habits, and strategies on how to win at conversion and retention.
Li-Xiong Chu is a Dutch-born Chinese, who can communicate in English, Dutch and Chinese. Focusing on the global sustainability dialogue to create more understanding, he advises companies on how to navigate the China market in this regard. Specific interest in digital marketing and ecommerce related projects.
About Dr2 Consultants
Dr2 Consultants is a strategic consultancy network that operates at the intersection of corporate communication and public affairs, with offices in The Hague, Brussels, Copenhagen, New York, and Shanghai. All offices within the network facilitate public-private cooperation in sustainability-related areas such as the energy transition and green commerce & logistics.
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