In 1979 British entrepreneur Michael Aldrich invented teleshopping. The idea was simple, consumers would sit on their sofas and watch demonstrations of a whole range of products from garden necessities, to kitchen utensils and selections of Tupperware boxes before purchasing them. This concept became known as “ecommerce.”
While very popular until the early 00’s, the invention of the internet sidelined teleshopping to the retail wilderness. However, teleshopping is back under a different name and with a vengeance. Livestream shopping is the next big trend in ecommerce and a trend that retailers would be fools to ignore.
Livestream shopping has gained massive traction in the east, and rapidly, with ecommerce behemoths such as Alibaba, Douyin and JD.com raking in millions of viewers monthly.
The industry in China was reportedly worth 451.3 billion yuan ($66 billion) in 2019 and shows no signs of slowing down with estimates suggesting the industry could double to almost 1.2 trillion yuan ($170 billion) this year.
“You can always look to the East for inspiration in retail. Whether it’s livestream shopping or the ubiquitous WeChat where customers can directly purchase food and clothing, China has always had a very profound, ground-breaking approach to merging digital with retailing,” Jellyfish vice president of ecommerce and retail Stephen Warrington told Charged.
“According to eMarketer, the growth in retail ecommerce sales across the Asia-Pacific region was over a quarter (26 per cent) in 2020. And live shopping is one of the prime examples where influencers, brands and importantly audiences are streets ahead in terms of engagement.”
While the concept is currently far more popular in the east than it is in the west, there are a few leading players in the western market so far, including Popshow Live, an iOS platform that allows sellers to livestream from their mobile devices, upload purchase links and has inventory management software built in.
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Another popular site is Bambuser, which was initially a live streaming platform for journalists however changed its direction and now exists mainly as a livestream shopping platform and has been used by retailer H&M in the past.
Social media platform TikTok, which has seen a giant increase in users in the last 24 months has announced it is moving into the space with a livestream shopping feature later this year.
Rival photo-sharing app Instagram has also shown signs it is interested in the market with its InstagramTV feature which allows creators to broadcast longer-form videos on their pages.
Even Amazon has launched its own service, aptly named “Amazon Live”, where a range of demonstrations for products included household gadgets and kitchen tools can be watched and interacted with, 24 hours a day, seven days a week.
Wunderman Thompson Commerce’s global social media consultant Chloe Cox added: “Currently, Western brands are watching, learning and starting to adapt this highly interactive channel, with retailers in the east already masters of the livestream trade.
“Now, all brands globally are seeing the benefits associated with livestreaming, in part because of the creativity, entertainment value and influencer culture it enables, which is something that has been tricky to monetise in the past.
“Going beyond the traditional hard sell, which no longer resonates with the younger demographic, live streaming will unquestionably be a huge opportunity of growth for retailers in the ‘new normal’”.
There are a number of reasons that brands are switching to livestream shopping, most are intertwined with consumers’ existing social habits. For example, according to a Forrester research report, live videos hold users’ attention 10-20x longer than pre-recorded, on-demand content.
Promotors and creators are also able to interact with shoppers live during the “show” through the chat section and polls, this reduces the possibility of video or image manipulation which increase brand confidence.
Livestream shopping also removes the potential for pushiness, which consumers are famously not fond of. If the consumer isn’t interested in the product they simply close the app.
The numbers speak for themselves and Warrington believes that we are on the verge of huge shift in ecommerce.
“Imagine, if you will, 20,000 people watching a live shopping stream, which have high degrees of purchase intent,” he said.
“Data and insights are coming from analytics about what is happening on conversion rates, around pricing, merchandising, bundling, immediate feedback on what is said and what is seen, metrics on viewer drop-off rates, social amplification and performance media channels adding to the audiences numbers,”
“It’s a real mindset shift versus a relatively static website, which in this route to market now morphs into a live televisual trading platform.”
The success of the trend in the east has prompted questions over whether the format will catch on in the west and while eastern consumers have enthusiastically adopted the livestream shopping format, western consumers may not take to the interactive retail model quite so readily.
Cultural discrepancies may present teething problems for its roll out in the west, but CommerceIQ’s vice president of product and analysis, Himanshu Jain, believes current western technology could also be a major barrier.
“In the US, this is more of an evolution,” he told Charged.
“Today, Amazon does support video and there is a Q&A, but questions don’t get answered immediately. The next phase will be to add the interactive elements and we believe those will pick up steam. We have seen early evidence already with some celebrity spots on Amazon and with Facebook’s new ecommerce shop.”
The livestream commerce model relies heavily on the use of “influencers” to plug products. Something the west doesn’t exactly lack. According to figures from MediaKix, there is any number between three and 38 million.
There are indications that companies in the east are attempting to dip their toes into western markets. For example, Alibaba-owned platform AliExpress held its first virtual cross-market knowledge sharing workshop entitled “When The East Meets The West” on the 29th of June.
The idea behind the workshop was to empower livestreamers from European markets where AliExpress has a strong presence. The workshop saw five livestreamers from China, Poland, Spain and Ukraine exchange learnings and insights into livestreaming.
In a bid to replicate the success of China’s livestreaming model across European markets, AliExpress not only provides the tools and infrastructure but also a platform for knowledge sharing to its European livestreamers.
While its almost a certainty that leading tech companies and ecommerce sites in the west will be keeping a eye on the livestream space, chief executive of Hudson Ecommerce Ryan Findlay believes western consumers mindsets will be the deciding factor in its success outside of Asia.
“In my opinion, the differences in customer mindset and purchase behaviours between the UK and Asian/American markets will determine the potential success of livestream eCommerce in the UK,” he explained.
“With its focus on impulse buys, instant gratification and quick turnarounds to feed the fast fashion market, I can’t help but question the potential backlash UK retailers who adopt this sales style, will receive from a generation of consumers that is increasingly turning towards more sustainable shopping habits.”
Where Amazon treads, others will follow. While Amazon is very vocal about investing in tech that doesn’t always become the next big thing, the livestream space will continue to grow with or without the tech titan as companies across the west recognise the huge opportunity it presents.
With the industry largely on board, livestream shopping’s future now depends on whether western consumers are ready to adopt eastern retail practices.