Why Is Live Commerce Important For Brands?

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Venkatragavan Srinivasan · Mon Dec 19 2022

E-commerce happens to be a prominent sales and customer engagement channel and has revolutionized the industry by positioning itself as an effective medium for communication between brands and customers while driving up sales.

Now, we have live commerce, an amalgam of live streaming and eCommerce. Although a relatively new concept, it contains the potential to entirely change the industry.

China is pretty much the first country to implement live commerce and within 5 years, brands there have witnessed an incredulous increase in their sales as well as their customer engagement rates and now we are seeing the same for brands in the US.

Consumers have collectively welcomed eCommerce into their lives, enabling them to purchase products of various kinds with just a click. Additionally, the incorporation of social media for sales just skyrocketed the entire industry. Since then, eCommerce has been on a juggernaut-like rampage to take over the business world.

The live commerce industry has​​ increased by 76% since 2020, in fact, the global live commerce industry is expected to reach almost $200 billion dollars by 2027

Live Commerce

The concept and the application of live commerce have been around for a while but it got the boost it needed during the COVID-19 pandemic.

Chinese brands, as mentioned earlier, were the first of many to try out live shopping, and reportedly they saw an increase of 20% in their sales and engagement.

In 2020, out of all the purchases made in China, two-thirds of it was from live commerce and live streams and this is per a survey that was conducted.

If effectively implemented it has the potential to account for around 20% of all sales in the future and even more. Furthermore, according to eMarketer, live commerce is anticipated to be worth $480 billion in China.

To further add to it, people have reduced reading blogs/reviews. As per Woosuite, almost 80% of the global internet population prefers watching videos.

After China’s success with live commerce, brands of almost every nature around the world are trying to implement the concept of live commerce to increase their sales and engagement rates.

First, let us take a look at China and how they found success with live shopping

Live Commerce In China

Livestreaming commerce was a concept first introduced in 2016 by the Chinese eCommerce platform Mogujie. It so happened that this move was welcomed by the public as well, as it made online shopping seem like an in-store shopping experience.

After Mgojiu’s success with Livestreaming commerce, yet another Chinese eCommerce platform, Alibaba also implemented live commerce and made it popular during the same year.

In 2019, 4 years after live commerce was first introduced, it became extremely popular and as of 2020, live commerce accounted for more than 8000 businesses/brands and had over 1.23 million live hosts who are also referred to as the KOL, Key Opinion Leaders.

Additionally, as per China’s 47th report on China’s internet development, the number of people using live commerce sky-rocketed to a staggering 388 million (2020). This accounts for nearly 40% of China’s internet users.

But it doesn’t stop there, towards the end of 2020, China’s live commerce industry had exceeded $1 trillion.

Live Commerce In The US

Following the success of China’s live commerce, brands everywhere started to implement the concept of live commerce. Let’s take a look at a few US-based brands that implemented live commerce early with different strategies and see how it worked out for them.

Nordstrom - Content Matters

China is the current leader in live commerce, but the US brand Nordstrom is definitely on its way to raking up a lot of sales and engagement rates. Nordstrom happened to release a dedicated channel meant only for live shopping.

With its introduction came a slew of events with various themes.

  • Beauty trends

  • Fashion for a special occasion

  • Dressing up for different seasons (fall, spring)

  • Simple yet trendy holiday gifts

Nordstrom always chooses topics that are typically preferred and loved by the general populous, this helps them garner more viewers which then positively drives up engagement rates and subsequently the sales as well.

This has allowed Nordstrom to effectively engage with their audience. With the help of video commerce, it becomes possible to answer questions/address concerns in real time and this is a major factor for engagement. Customers prefer real-time answers rather than having to wait for an answer on regular social media posts.

When customers are able to purchase products that are being displayed on live streams, it exponentially enhances their shopping experience by making it all the more interactive.

Quivr - Choose The Best Platform For Your Brand

Yet another US-based brand implementing the concept of live commerce. Quivr didn't just choose any platform for the purpose of live streaming eCommerce, they were quite meticulous in their choice.

They first started implementing video commerce in 2020 and tried out various platforms such as Instagram, TikTok, and similar other social media platforms to talk about their products (Tea/Energy drinks).

After this they chose Amazon live as their primary live streaming platform.

But why did Amazon live work better than social media platforms even though there are more people using social media platforms?

Well, it depends on who your target audience is. Even though Instagram and other similar platforms have a lot of people and they're there for the purpose of entertainment. Hence, if you’re selling something that can be deemed as entertaining or offer the element of entertainment, it would make sense to use these platforms.

But if you’re looking for a qualified audience, in other words, an audience who want just more than entertainment and are looking for in-depth knowledge on the product they’d like to buy then Amazon works the best. This is exactly why Quivr worked extremely well on Amazon live and not on social media platforms.

Kiehl’s - Promotional Strategy Matters A Lot

An American cosmetics brand that hopped on the Livestreaming commerce brandwagon found success with the help of great promotional strategies.

The key was to let people know about the live event and they did exactly the same, they invested quite a bit into their promotional strategy. For instance, they invested in promoting the live event with a lot of posts, and stories, to make people aware of the soon-to-happen live event.

Their promotional strategy doesn’t stop there, they also offer gifts of various nature to people who sign-up for their live event. On top of that, they increased their engagement rates with the help of interactive games on their website.

This strategy worked out beautifully for them, by the end of July 2021 they had several new customers who signed up and they also got amazing ROI on ads.

Petco - Entertainment Is Key

An American pet retailer figured out that people would prefer to watch live streams if they were fun and entertaining.

This is why they started live canine fashion shows and the response they received was quite unprecedented in their history. Millions of people signed up to watch the live canine fashion shows and it ended up generating a substantial amount of sales.

Here’s the amazing part, almost every dog, at the end of the live shows, ends up getting adopted.

Live Commerce - Statistics You Should Be Aware Of

Livestreaming commerce is on its way to being the best and most prominent sales channel, here are a few stats and explanations for the same to solidify the above statement:

  • The Live commerce industry in China grew over 280% within a span of mere 3 years (2017 - 2020) and is now expected to grow over $400 billion by 2022 end. (McKinsey)

  • The engagement for live streaming videos on a global scale was expected to grow by 14% in 2021 and a prediction of 158 million users (US) by 2022.

In the very stat report, it was stated that internet users spent about 480 billion hours (2020) on live videos and this is a whopping 35% more than in 2019. (Statista.com)

  • The exponential growth of livestreaming commerce cannot be denied. The industry which was valued at $30.29 billion (2016), was valued at $70.05 billion (2021). Moreover, there was a recorded growth of 18.3% in the same year (2021). (prnewswire)

  • Although live commerce is used to sell products of every nature, the most products displayed/sold are fashion apparel and accessories (36%) followed by food and beverages (7%), consumer electronics(5%), and subsequently home decor(4%). (McKinsey)

Additionally stats you should be aware of:

  • Over 75% of brands use live commerce to strengthen their customer relationships.

  • Over 60% of people who livestream shopped loved the new experience and 66% of consumers would prefer retailers who are innovative with online shopping.

  • Over 25% of online shoppers stated that live commerce definitely prompts and helps them make purchases.

  • YouTube, hands down, is the most used live commerce platform in America.

How Does Live Commerce Benefit Consumers?

Well, for starters, it eliminates most of the problems associated with in-store shopping, like travel time and queues while retaining the element of personal touch. It makes it easier for them to go through products to find the one they want!

Real-time interactions replicate the experience of in-store shopping and they have their questions answered on the spot and can reserve/buy the product during the live stream. This makes online shopping almost similar to physical shopping and this is why consumers are leaning more towards digital shopping a.k.a. live shopping.

Final Thoughts

It is quite undeniable that live shopping is here to take over and there is no turning back. There are several plus sides to it, it can eliminate travel time, queues, and trying out different stores to get the product you want.

Live shopping eliminates all of the above-mentioned problems and further enhances customers’ shopping experience. Live commerce is now an essential part of eCommerce and the future looks bright with it.

live commercelive streaminglive shoppinglive stream shopping

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