The Blend of Entertainment and Purchasing – Live Commerce is the Next Big Thing
For e-commerce, the next big thing has officially arrived, and its name is live commerce. This new channel combines the instant purchasing of e-commerce with a Livestream to provide users the power to watch their favorite influencers simultaneously as they shop. This new platform has transformed the Chinese retail sector in less than five years, and though western e-commerce companies have been slow to follow, the few who have are already reaping the benefits. Analysts predict that this new sales channel could amount to more than 10% of all e-commerce within five years. So, let’s take a closer look at this powerful new sales approach and why it is so successful.
Live Commerce Creates More Value
Live commerce can add value for retailers, brands, and marketplaces alike in several ways, but two particularly stand out.
- Faster Conversions: Live commerce keeps viewers engaged and immersed in the sales experience and accelerates the transition from awareness to purchase. Through additional tactics such as giving time-limited coupons, a sense of urgency can be added, further accelerating the purchase decision.
- Increased Brand Appeal and Distinction: When performed well, live commerce can set a brand apart and strengthen its market position. This fact is particularly true amongst younger viewers who are more interested in innovative online shopping platforms; however, general web traffic has increased significantly across the board.
Live Commerce Is Growing Rapidly
Live commerce has grown at an unprecedented rate in China, moving in five years from its birth to becoming one of the most significant segments of e-commerce in the country. The Chinese live commerce market had already grown to an estimated $171 billion in 2020, and due to the effects of the COVID-19 pandemic, it has grown even faster. It is estimated that by 2022 the Chinese live commerce market will have achieved sales of $423 billion.
This growth is partially attributable to its immense popularity among millennials and Generation Z customers, gradually becoming the largest market consumers. In fact, by 2030, it is estimated that millennials will make up half of the global population. This makes them an extremely desirable starter segment, though live commerce is beginning to attract middle-aged and older buyers as well.
Western retailers, brands, and marketplaces have been slow to get on board so far; they have begun following China’s wake and establishing their live commerce ventures. One of the most successful of these is the clothing brand Tommy Hilfiger which reported one show achieving an audience of 14 million. The retail giant Walmart has also hosted their Livestream event through TikTok, which resulted in a 25% increase in its followers on the platform. Though China’s Taobao has remained the largest player in the market, these western competitors are quickly growing.
Live Commerce has already grown to become the main focus for e-commerce companies in China, and this is quickly becoming the case for the rest of the world as well. In Europe and the U.S., some early adopters have already managed extraordinary impacts on their followings and sales. Other countries will need to move fast to gain the most from adopting this new and exciting sales channel.