The combination of live streaming and e-commerce has not made it big in the West yet, but it’s already generating huge sales in China. A sneak peek at a trend that marketing professionals should keep a close eye on.
Author Youri Harmsen is Managing Director at Springbok. This article previously appeared on Emerce.
My LinkedIn timeline recently exploded with news on China’s two most famous influencers: Wei Ya and Li Jiaqi. These two online superpowers managed to generate over $3 billion in e-commerce sales in half a day via livestreams on Alibaba's e-commerce platform Taobao. As a Dutch marketing professional, these staggering figures (it wasn’t even on Singles Day) might make you wonder: what’s going on and am I missing something?
Live stream e-commerce has occupied an important place in the Chinese e-commerce landscape for some time now, which was already booming but has managed to accelerate since the outbreak of the pandemic. In fact, the Chinese e-commerce market may hit the 3 trillion dollar mark this year! In 2020, Forbes reported more than 560 million live stream viewers in China, almost 40% of whom made purchases through e-commerce live streams.
The numbers are huge, but what exactly are we talking about? The principle is quite simple: one or more presenters (often celebrities or influencers) present an online live show and showcase products that can be bought on the platform. The shows are usually entertainment-forward and highly interactive, unlike their spiritual predecessor: TV shopping programmes. Viewers don’t just get to buy products right away, but can often chat with each other, the presenter and/or a chat team as well, while other forms of engagement are also possible.
Ultimately, live stream e-commerce marks the convergence of two rising stars in the digital sphere: the growth of e-commerce itself and the growth of video content.
Facebook Live Shopping
The West is still struggling to catch up with China in this area, but it is evident that platforms seem to see its potential value. For example, Amazon (since 2019) and TikTok have already started experimenting with brands and retailers, and Facebook is not sitting still either, offering the option of selling products via live video.
The U.S. market is starting to stir, though, and according to Business Insider this live stream e-commerce market could be worth $25 billion by 2023.
In the Netherlands, live stream e-commerce does not yet seem to be gaining a very firm foothold, but as we now know, that could change. After all, a strong online celebrity/influencer culture has also emerged in the Netherlands in recent years, and this culture has allowed this new form of e-commerce to grow at lightning speed in China. The prerequisites seem to be in place, and it seems only a matter of time before we marketing professionals will have to get to work.
Opportunities for brands and retailers
We’ve known for some time that you have to build a presence where consumers buy your category of products (thanks Byron Sharp!), and this ancient rule of physical availability also applies in the digital domain. We know that social media platforms and marketplaces such as Bol.com and Amazon are teeming with consumers, so it makes sense to look for opportunities here, especially when it comes to mobile traffic.
Companies like TikTok, Amazon and Facebook know an awful lot about consumers and have been able to build mature recommendation systems as a result. By unleashing these clever uses of data on e-commerce, these platforms can make targeted e-commerce offers and serve up relevant live stream content. The Chinese sales figures speak for themselves.
Apart from the sales side, live stream e-commerce can also be a perfect place to build brands. With high-quality, authentic and creative concepts targeting a broad audience, it can be yet another new channel to increase mental availability. Video is a perfect medium for this and the audience found on platforms is often hard to reach through traditional media. Admittedly, the channel will not be an interesting environment for brand building until viewer counts increase, but again: this seems to be a matter of time.
Of all the developments in digital marketing, this is definitely one to keep an eye on. The concept has been proven in China, serving as yet another lesson for us Europeans that we needn’t look solely at the US to see what’s coming our way. Asia it is!