Live-shopping channels were invented more than three decades ago – remember QVC? But in 2019 we reported on some of the new companies mimicking TV stations with dedicated live-stream shows accessible through mobile phones, websites and social media channels, allowing you to watch, chat and, most importantly, buy the products on display.
NTWRK was founded in LA in 2018. The following year it raised $10 million with backing from Drake, LeBron James, Foot Locker and Live Nation. It was symbolic of how the new breed of home-shopping networks targeting Gen Z could attract big investment. But while investors were ‘bullish’, we reported, it was still too early to judge the potential size of markets around the world.
The global outlook
While some of the most exciting companies were founded in the US, China leads the way. In March 2020, the number of live-commerce users hit 265 million, accounting for 29% of the country’s total internet users, according to the China Internet Network Information Center. In 2019, China’s live-stream shopping market was worth ¥451.3 billion ($66 billion) and more than doubled to nearly ¥1.2 trillion ($170 billion) last year, according to iResearch, a Shanghai-based research firm.
Hot on its heels is South Korea, where live streaming is growing faster than almost anywhere else. Zooming out, Asia’s live-commerce market is set to grow 46% between 2017 and 2023, according to Research and Markets.
While jewellery, fashion and accessories dominated in China at first, the market has grown to include goods traditionally sold offline, including cars; a live-streamed event in March 2020 featured more than 10,000 dealerships of 40 car makers, including Maserati, Audi and Volvo.
Home appliances and books are also popular, and even farmers have embraced live commerce to sell anything from rice to fresh fish and flowers. Viya Huang, China’s top live salesperson, sold more than $45 million in goods on Singles’ Day in 2019.
The role of influencers
The face of a live-commerce channel is key to its success because people want to buy from people they trust and admire. Studies demonstrate the value of recommendations from friends and family when shopping and, without these, brands must choose a personality who can market products in a way that resonates with their fan base.
‘Consumers are going to see through people that are inauthentic or not sincere,’ says Lauren Beitelspacher, an associate professor in marketing at Babson College, Massachusetts.
The biggest influencers in the future will have their own channels. In China, a new breed known as key opinion leaders (KOLs), has emerged through live commerce, and these have been pivotal in its growth. Unlike most Instagram or YouTube stars, KOLs are trained to engage audiences without losing focus on the product at hand. They’re empowered by apps like JD.com, WeChat and Alibaba’s Taobao, the world’s biggest online sales site, which are tailored for this purpose.
While the west is not short on influencers, few possess this skill set. When Google hired Hélène Heath to create beauty content for Shoploop’s launch, she didn’t make a single sale in nine videos. The technologies popular in the US also need to mature. Instagram, Amazon and Facebook all developed live-stream shopping tools in 2020, while smaller companies like Popshop Live and ShopShops have now joined the party. But while Taobao and WeChat are well-oiled machines, western apps are disorganised and don’t yet offer the best user experience.
‘While many platforms make it easy to launch, the technological capabilities need to be in place to do it well,’ says Beitelspacher.