Livestreaming as a way to sell items online has been gaining significant traction over the last few years.
There are many factors contributing to the emergence of this novel way to sell. One example is the coronavirus (COVID-19) pandemic has been one of the major catalysts for livestreaming.
The pandemic changed nearly everything and caused a permanent shift in how people do common tasks such as shopping. The COVID-19 pandemic essentially caused retail stores—and the physical component of shopping—to crash. The global COVID-19 situation may no longer be as dire or serious as it was a few years ago, but livestreaming still continues to thrive.
The increased use of mobile devices also contributed significantly to livestream. The convenience of shopping on a mobile phone and being able to watch livestreams have been major contributors to the growth of this trend. Increasing mobile internet speeds such as the emergence of 5G (or fifth generation) mobile access technologies further made viewing livestreams more enjoyable.
To say that livestreaming has impacted e-commerce is a huge understatement. In fact, many industry insiders firmly believe that livestreaming is “the future” of e-commerce.
Let’s rattle off some industry figures:
- Across the globe, it is predicted that revenues from livestreaming shopping sales is expected to hit $500 billion by 2023.
- It was earlier projected that global e-commerce livestreaming may reach $11 billion by the end of 2021 and nearly $25 billion by 2023.
- Live selling has been observed to grow by 76 percent since the start of the COVID-19 pandemic, and the demand for livestreaming is directly related to the fact that people are spending more time on social media.
- In China, livestreaming is said to be a multibillion-dollar industry. livestreaming in China has such a huge impact on e-commerce conversion rates that sellers can reportedly sell $20 million worth of products in just one hour.
- Influencers are mostly followed for their e-commerce livestreams in China, and customers are seen splurging as much as 1.2 trillion yuan in 2020, or as much as a whopping 50 times more than that of 2017.
- Based on what is happening in China, it is expected that live commerce sales can contribute to as much as 20 percent of all e-commerce businesses by 2026.
- In the US, year-on-year growth of 32 percent of e-commerce has been attributed to livestreaming.
- Apparel and fashion are the most popular products sold via livestream followed by beauty products and food. Consumer electronics and home decor are also very popular, but as popular as the aforementioned items.
IN THIS ARTICLE:
What is livestreaming and why is it popular?
At first glance, livestreaming seems to be very similar to home TV shopping, a very popular way for people to shop back in the day. Home TV shopping allows viewers to watch a demo of a product, listen to testimonials, etc. all as part of selling.
The biggest difference, however, is that TV home shopping is usually pre-recorded videos of product demonstrations and testimonials. Home TV shopping videos are also limited, and one video is usually devoted to just one or very few related products. These videos are often repeated regularly.
There are even TV channels devoted solely to these kinds of videos. Pre-recorded videos do not allow for interaction between the seller and potential buyers. Back in the day, customers can dial a hotline number to get more information and to buy the product. Pre-recorded product videos also come with catalogs. These catalogs often display the “As Seen on TV!” tag to convey the message that these products are authentic.
Livestreaming or live commerce took home TV shopping to a whole new level.
It is widely believed that Alibaba, the Chinese technology giant, was one of the first to popularize livestreaming as a way to sell to online customers. It is said that Alibaba’s Taobao Live went “live” in 2016, and immediately changed the e-commerce landscape as far as online selling is concerned.
This is how Alibaba did it: First, the Chinese technology giant linked an online broadcast or a livestream with an e-commerce store which allowed viewers to watch the stream and shop at the same time.
The “experiment” immediately paid off and was an instant hit among customers. Alibaba upped the ante by conducting the livestreaming e-commerce on Single’s Day, known as one of the biggest—if not the biggest—shopping event in China.
The Single’s Day livestreaming event generated a whopping $7.5 billion in total transaction value.
Further, it is said that two-thirds (or a whopping 66 percent) of Chinese buyers purchased items via live commerce in the past year.
For many, live commerce or livestreaming on an e-commerce platform, combines product demonstrations and high interactivity between seller and buyer. Chat buttons, comments, reaction buttons, etc. allow a customer to instantaneously interact with the seller.
Live commerce thus skipped past being just a “fad” into a full-blown sales channel for the global retail industry.
Advantages of livestreaming for e-commerce sites
- Virtual touch
We often read about improving the shopping experience, and one of the advantages of visiting an actual retail store is that it allows the buyer to touch, inspect, and try on the merchandise before making that decision. This “tactile” experience is not possible through an e-commerce or online storefront, and not being able to touch the item is one of the downsides of online shopping.
However, livestreaming provides buyers with an almost similar experience. livestreamers can basically mimic the behavior of a typical buyer when looking at an item. Examples of this would be items such as apparel. The livestreamer can touch, stretch, inspect, etc. the fabric of the item, while describing its texture. Thus, buyers can have a “near tactile” experience, particularly if the person on the livestream is knowledgeable about the items being sold.
- Bring additional traffic to the e-commerce site
Many livestreaming e-commerce websites now use influencers to improve their overall market performance. The pulling power of influencers—even celebrities—thus means the website traffic for an e-commerce site is enhanced. With improving traffic, the e-commerce website also improves its “brand.”
The bottom line is that additional traffic and improved brand recognition may mean more visitors, more customers, and more potential revenues.
It is also worth mentioning that e-commerce companies have to review their livestreaming strategies depending on their target markets.
Speaking of target markets, it is said that in terms of demographics, the so-called “Generation Z” and “millennials” dominate online consumers, understandably so because these groups are generally more technology-savvy and more open to unconventional selling than the earlier generations.
However, livestreaming is now no longer confined to the Gen Z and millennials: the older generation, Gen X and baby boomers, are also getting in on the action and have started embracing livestreaming. Knowing this, an e-commerce company thus needs to have the right influencer or celebrity for the target market for a specific product or products to sell.
- Ease of setting up a livestream
Another advantage of livestreaming is the availability of tools or platforms on which to conduct the livestream. Social media platforms—from YouTube, Facebook, Twitch, etc.—can all be used to live sell.
This is particularly useful for individual sellers who may want to carve their own niches and develop their “community” or “audience.”
In the Philippines, Facebook Live is a popular tool used by individual sellers, selling anything from toys, apparel, household items, tools, etc. Again, the ability to interact and respond to the live seller is a sure-fire way to attract customers.
The Philippines is also one of the countries where smartphones are the dominant means to access the Internet and do online shopping. With a phone camera, an inexpensive microphone, and a tripod, an individual seller can offer his or her merchandise. It is said that livestreaming has gained so much popularity in the Philippines that sellers are setting their own rules or dynamics on how to further improve.
Ever heard of “mine,” “grab,” and “steal?” These are just some of the nuances now generally accepted among Filipino customers wanting to avail of online merchandise being offered via livestream.
Impact of livestreaming on e-commerce sites
For a quick recap, we now see that Asia, particularly China, is leading the way when it comes to livestreaming or live commerce. However, e-commerce companies in countries in the West are fast catching up.
Industry reports indicate that globally, e-commerce sales via livestreaming can make up as much as 10 to 20 percent of all e-commerce by 2026.
Following China’s lead, European and American retail giants are also establishing their livestream sales channels. In Germany, for instance, Douglas, a beauty products retailer has conducted theme-based livestreams and the results are encouraging: the company said its conversion rates have gone up as much as 40 percent.
The global brand Tommy Hilfiger has also established livestream programs in Europe and America. The company reported that one of its livestreams attracted around 14 million viewers and sold more than 1,000 hoodies in a mere two minutes. US retail giant Walmart is also jumping into the fray and started a livestream fashion event with TikTok as its platform of choice.
Should you livestream as an e-commerce brand?
The question now is should you use livestream as a sales channel? What are the thing to consider?
We already tackled some of the things you will need to conduct a livestream (camera, tripod, microphone, etc.), as well as the platforms that you can use.
But what about strategy? Industry insiders say because livestreaming is fairly new, rules and strategies are still being written on how to maximize livestreaming.
However, some basic rules apply. These include: starting with a livestream focusing only on a few products and using only social media channels for convenience and simplicity (TikTok, Instagram, and Facebook).
An e-commerce company can also track metrics, and view performance indicators (number of views, conversation rates, product performance, analytics, etc.) For more features, e-commerce companies may also look beyond social media and have their livestreams on online marketplaces.
Eventually, an e-commerce company can further enhance livestreaming through planning and developing content based on information such as audience profile, formats, hosts, and schedules.
It is undeniable that livestream e-commerce is the future of modern shopping and retail. All indications seem to point out that to succeed, an e-commerce company should have a livestream strategy or at least have a look and explore what livestreaming can do.
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