Livestreaming has become big business in China in recent years, as platforms and brands alike have seized the opportunity to reach consumers and nudge them along the path to seamless online purchases. From its initial roots in entertainment, where it was used by hopeful singers, comedians, and other performers to stream to fans (in exchange for virtual “gifts”), livestreaming has evolved into a critical area of focus and investment for e-commerce giants like Alibaba and JD.com as well as video platforms such as Douyin, Kuaishou, and Bilibili.
In China, the coronavirus pandemic saw e-commerce livestreaming expand its reach as celebrities, CEOs, salespersons, chefs, personal trainers, musicians, and fashion influencers got on the bandwagon. According to data from China’s Ministry of Commerce, more than 10 million livestreaming e-commerce programs were broadcast in the first half of last year alone, attracting more than 50 billion views and promoting more than 20 million products.
This translated to more than just a great deal of consumer attention, driving a flood of spending. A recent report by KPMG and Ali Research projected that China’s e-commerce livestreaming market would reach RMB 1.05 trillion ($154 billion) in 2020, up from RMB 433.8 billion ($66.8 billion) in the previous year. Now, e-commerce giants such as Alibaba and JD.com find themselves competing with nimbler platforms that are popular with China’s millennials and Gen Z.
While it is arguably the most advanced e-commerce livestreaming market in the world, China is not the only place where the format is taking off. The immediacy and spontaneity of livestreaming increasingly appeals to younger consumers who are more resistant to traditional marketing and advertising and may prefer to turn to trusted influencers to discover products and even make purchases. Meanwhile, performing artists who have been denied the ability to do live shows are using livestreaming as a much-needed lifeline to connect with fans, sell merchandise, and make ends meet.
E-commerce livestreaming is still in its relative infancy in Japan, with some of the country’s most digitally savvy brands such as Shiseido using the format to sell products to Chinese consumers using Chinese platforms while taking tentative steps to introduce consumers to the concept back home. A lack of familiarity with e-commerce livestreaming in Japan has led some companies, such as community-powered marketplace Mercari, to put their efforts on ice.
One of the obstacles faced by e-commerce livestreaming in Japan is the lack of trusted influencers in the space. To help develop this area, Dentsu Tec launched an “Influencer Commerce Solution” service in October that supports the growth of e-commerce livestreaming by using influencers to promote brand awareness and sales. Shiseido, which has undoubtedly learned a lot from its experience in China, also launched e-commerce livestreaming in Japan last year. The beauty brand’s spokesperson Mana Koide said, “We will continue to work on live e-commerce in Japan and overseas to meet the purchasing needs of our customers and to locate new customers.”
While e-commerce livestreaming has been slow to take off in North America compared to China, the past year has shown that the market is on the cusp of a “shoppertainment” boom. This is powered by younger consumers who are heavily influenced by social media as well as greater e-commerce integration on a growing number of platforms. Last year, Shopify, which boasts over 800,000 merchants, announced livestreaming as an added feature on its platform and inked a partnership with TikTok to allow brands to create shoppable video ads for the hugely popular platform.
As was the case in China a decade ago, the performing arts are a key area of growth for paid livestreaming in North America. With musicians unable to tour due to the pandemic, platforms have been rushing to capture the opportunity in livestreaming performances. Last year saw the launch of Bandcamp Live, a platform for artists to offer ticketed livestreamed performances, sell merchandise, and chat with fans in real-time. More recently, ticketing company Bandsintown launched a paid livestreaming platform, Bandsintown PLUS, a subscription service that gives users the ability to stream more than 25 performances per month and take part in live discussions and Q&As with artists for a monthly fee of $9.99.
With major players like Amazon, Facebook, and Google rapidly building up their e-commerce livestreaming capabilities, this is an area that is expected to develop at a breakneck pace in North America in 2021. With the Covid-19 pandemic still going strong in the region, look for e-commerce livestreaming to evolve this year from an online version of Home Shopping Network to a more conversational and engaging form of selling that appeals across the consumer spectrum.
With Sino-Indian relations hitting a new low (if not quite rock bottom) in 2020, the Indian government banned dozens of Chinese apps, putting a damper on the expansion plans of platforms such as TikTok, AliExpress, Taobao Live, and many others. But powered by domestic apps like Bulbul and Simsim, e-commerce livestreaming continues to take off in India. Incorporating a diverse array of domestically spoken languages such as Hindi, Marathi, Tamil, and Bengali, India’s e-commerce livestreaming platforms have been able to cater to underserved local markets, filling the vacuum left by Chinese apps.
Much like in North America, e-commerce livestreaming in Europe is at a relatively early stage, with consumers using the same social platforms in more or less the same way, while European brands gradually invest more time and effort into the space. Looking to capture the opportunity, last year Alibaba launched AliExpress Connect, a global effort aimed at attracting influencers to sell via the AliExpress marketplace and matching them with brands looking to sell their products. The company’s ambition is to sign up more than 100,000 content creators worldwide over the course of 2021, with a particular eye on Europe and North America.
Brands and retailers themselves are also taking the lead on incorporating e-commerce livestreaming into their sales and marketing mix, with Sephora, H&M, and Monki experimenting with the format in recent years. The expectation for Europe is that e-commerce livestreaming’s success (or failure) will depend on how social commerce in general (and apps like TikTok in particular) expand and evolve their appeal among millennial and Gen Z consumers. As Maryam Ghahremani, chief executive of Bambuser, told Vogue in 2019, “For the younger generation, online and offline blend together in everything they do. Live video shopping brings all these aspects together and enables the future of retail.”