Live Commerce Has Captivated China. Here’s How it Will Take Off in the US

Like the Gen Z version of QVC, livestream shopping is bursting in popularity. The trend originally took off in China during the coronavirus pandemic, and is quickly making its way to other parts of the world. While the medium of live shopping demos isn’t new, social channels like TikTok have democratized it and brought it to an entirely new audience. In fact, some online influencers can sell millions, if not billions, of dollars in products in these relatively short live shopping sessions.

For example, 29-year-old livestreamer Austin Li originally gained a following by selling lipstick, and set records by selling approximately $1.8 billion during one 12.5-hour shopping session on Alibaba’s Taobao Live. During the same Single’s Day promotional event for Alibaba, fellow livestreamer Viya sold $1.3 billion in goods in just 14.5 hours. Clearly, I’m in the wrong business, but that’s a story for another day.

While some brands leverage the built-in audiences of influencers, others are training homegrown teams to build their own live commerce experiences. Right now live shopping is done on a variety of platforms, including the retailer’s own website (e.g., Nordstrom), on social media, and within major marketplaces like Alibaba and Amazon.com.

Regardless of a retailer’s home market, the livestream trend could be here to stay. Let’s look more at why live commerce has taken off and what retailers can do to keep up.

Why Has Live Shopping Become So Popular?

As this trend matures, livestreaming is becoming an integral part of e-commerce. According to eMarketer, in 2021, the medium generated $300 billion in China, growing 85 percent year-over-year. Livestreaming is expected to account for 11.7 percent of total retail e-commerce sales in the country.

But why are Gen Z and millennial consumers so interested in live shopping? Many turn to these channels to learn more about emerging commerce trends. Some types of products, such as cosmetics, do well in a livestreaming setting because potential buyers want to see a demonstration — particularly with newer brands that are yet to be discovered. But perhaps most of all, the medium has emerged as pure entertainment for the impulse-buying generation.

The same eMarketer report above cites the most popular products on Taobao Live as women’s fashion, cosmetics, food, home goods, jewelry and accessories. However, judging by gross merchandise volumes, big-ticket items like computers and large home appliances move the most product. Essentially, any product that can be effectively demonstrated could be a prime candidate for live shopping experiences.

Livestreaming’s Rise in the US

As of now live shopping only represents an $11 billion market in the U.S. However, that market share could change quickly, as Facebook, Amazon, TikTok, Twitter, and other tech giants like Pinterest are jumping into the medium. During Prime Day 2020, Amazon hosted over 1,200 live shows with influencers, and the company’s investments in the medium are expected to continue.

Brands like L’Oreal are getting in on the action on TikTok, sponsoring the #TikTokMadeMeBuyIt hashtag. These brands are hoping to capitalize on the nearly one-fifth of buyers who say they purchase on the app all the time. In this and many other cases, live shopping has made merchandising a form of entertainment.

In addition to mainstream social and marketplace adoption, many startups are cropping up in the live shopping category. One example is ShopThing, a startup hoping to capitalize on this market for brands by offering livestreaming services.

This category is an interesting one for retailers to watch because it can build both brand discoverability and revenue. Many progressive brands view livestreaming as an opportunity for consumers to ask questions directly. Engaging with consumers in this way shortens the customer journey, improves loyalty, and gives brands a way to understand their customers’ needs. From there, it’s simpler to tailor content, products and marketing directly to their preferences. For big-ticket items or those that are prone to returns, livestreaming prevents dissatisfaction by creating a conversation with customers up front.

How Brands Can Capitalize

As Gen Z and millennials’ spending power accounts for more of the total addressable commerce market, adapting to trends like livestreaming is crucial. Rather than investing in building these capabilities in-house, there will soon be a wealth of options to integrate with third-party livestreaming platforms via APIs, much like other commerce platform plugins (e.g., Stripe for payments).

For brands that want to capitalize on live shopping, it’s important that the technological underpinnings of the commerce platform are ready for such integrations. Many legacy platforms have rigid, monolithic product catalogs that impose limitations on a merchandiser’s ability to expose products and engage in new channels, including livestreaming. Modern, API-first catalogs give brands the flexibility to capitalize on emerging trends, where technology is the enabler of first-mover advantage rather than the inhibitor to be overcome.

To prevent these types of delays, it’s important to seek out commerce technology with a modern, API-first catalog for merchandisers. Regardless of whether the trend is livestreaming, the metaverse, NFTs, or whatever comes next, these platforms will allow for the flexibility to merchandise every moment and create shoppable experiences everywhere.

Bryan House is the senior vice president of product and customer success at Elastic Path, a headless commerce solution.