Austin Li was an ordinary Chinese guy working as a shop assistant at L’Oréal. But everything changed when he began streaming on Taobao Live, a Chinese live commerce platform, where he managed to earn an estimated $1.53 million in 2017 selling beauty and cosmetics products during livestreams. Having focused on long shoppable shows, in which he would review numerous lipstick brands, he quickly became one of the most famous Chinese eCommerce streamers and influencers known as the Lipstick King.
Three years later he was already doing 389 live selling broadcasts in 365 days. By March 2021, he was earning an estimated $10-20 million per month, and gathered an army of 35+ million TikTok and 7+ million Sina Weibo followers. And at the 2021 November Singles' Day shopping festival, Li alone managed to generate $1.7 billion in sales for Taobao in a single 12-hour livestream. You may wonder how it ever became possible. Apart from his style, charisma, and vivid product descriptions, Li owes his success to the right tool for boosting sales – live commerce.
Live commerce as a new normal
Combining the best elements of eCommerce and livestreaming, livestream shopping aka shoppable livestreaming offers viewers the ability to buy various goods and services while watching interactive hosted live videos. During the stream the host demonstrates the featured products in real time, and the viewers may ask the host questions in the live chat, communicate with each other, and easily make purchases without leaving the broadcast.
Live shopping originated in China and, apart from its motherland, is already extremely popular in Asian countries like South Korea and Indonesia. The COVID-19 pandemic pushed the format further west, and now it is successfully making its way to Europe and the US. Forrester states that 59% of European consumers are most interested in livestreaming on eCommerce platforms or have purchased through it. According to the Influencer Marketing Factory, 57% of US customers have made purchases during a livestream shopping event, and 39% strongly like to discover new products during such events. Germany expects a €14 billion live commerce market in five years, while the respective 2023 US sales are already estimated at $25 billion. Based on McKinsey's predictions, up to 20% of all global eCommerce sales will be done via live shopping by 2026.
Companies from various industries are actively experimenting with this new exciting shopping concept to supercharge their sales. H&M Group has been offering livestream shopping since 2019. Douglas attracted 1.2 million viewers to their live shopping shows in 2021 offering regular streams to sell beauty products, jewelry, furniture, housewares, and consumer electronics. Walmart hosted their first shoppable livestream on Twitter in November 2021 and now is expanding efforts with a dedicated shoppable livestreaming solution. What makes live commerce such a successful tool for online retailers from all over the world? Let’s take a closer look at its benefits.
One of the most significant advantages of shoppable livestreaming in comparison to traditional eCommerce is making the online shopping experience similar to what customers get in-store.
First, hosted live commerce shows and live chat discussions provide a human connection between the seller and the clients. Such a connection not only makes online shopping interactions more personal, but also proves to be very informative for all parties concerned. Viewers can ask the host for detailed product descriptions or demonstrations from various perspectives – and get answers in real time. Moreover, customers can communicate with each other to discuss the merchandise and exchange insights. Hosts, in their turn, receive immediate feedback from the audience and are able to adjust their sales efforts accordingly.
Second, a well-prepared live shopping event captures the viewers’ attention and keeps them occupied and entertained. The greatest effects here are achieved with a combination of a charismatic host, a show concept relevant for the audience, unique storytelling, constant real-time communications, and extensive event promotion. Exclusive drops, limited time offers, discounts, raffles, auctions, and other appealing reasons for the viewers to join the stream make such events even more engaging – and engaged viewers tend to buy more.
Try to guess how long an average user watches a shoppable livestream. Up to 10-15 minutes! These numbers are incredible, especially in times of short 15-sec videos, and they are three-five times higher than the usual time spent on an eCom website. In the end, customers stay longer, which means they are more likely to make a purchase.
Broader reach and greater loyalty
Using live commerce tools is a great way to establish direct immediate contact with the global audience of an online selling platform. The format allows a single sales representative or influencer to engage with multiple viewers at once in a cost-efficient manner, which cannot be achieved in-store. Stats show that 60-90% of viewers join the chat and/ or like the products for sale, so a single live selling show may reach and engage hundreds and even thousands of potential clients. In addition, live commerce is a great way to gain a new audience, i.a. Gen Z shoppers. Companies selling live point out the increase of their younger customer base by up to 20%.
Another reason to launch shoppable livestreaming is its huge potential for building better relationships with clients. Direct authentic real-time connections and communications between the influencers, shop owners, subject matter experts, and viewers result in greater levels of trust and loyalty towards brands and retailers. In addition, live recommendations and detailed product reviews provide lots of social proof, which removes many obstacles to capturing an online sale. Klarna states that 60% of consumers who had tried live shopping improved their buying experience.
Results: Higher conversions and lower returns
The synergy of all above mentioned live commerce effects may greatly drive transactions and improve sales performance. As the format merges the discover, explore, and buy stages, it significantly shortens the path to making a purchase. According to McKinsey, shoppable livestreaming may provide conversion rates of up to 30%, which is ca. ten times higher than in conventional eCom, as well as result in four times more products in the cart.
Coresight Research also indicates that customers shopping live are 40% less likely to return products than traditional online shoppers. In fashion, for example, almost 72% of product returns are preference-based. Live commerce’s informative and educational components prove to mitigate a lot of the related risks, as the customers have a better understanding of the products they are buying.
Benefits for any industry
Despite the fact that fashion and beauty are the most common examples of live commerce applications, they are far from being the only categories suitable for it. One can say that the format is generally product-agnostic, as anything can be sold live with a unique approach to the right buyer. Asian farmers stream from their gardens and allow viewers to choose the crops to purchase. Viya, another famous Chinese live commerce influencer, once managed to sell a $6 million commercial rocket launch. Even NFTs can be sold during live broadcasts!
Coresight revealed that 41.2% of viewers attend live events to shop for home products, and 37.5% – for consumer electronics. And according to McKinsey, fresh food (7.4%) is one of the top product categories in such events after clothing and apparel (35.6%), and beauty (7.6%).
Examples of successful live commerce launches in various industries can be found all over the globe. Fnac, a large French retail chain focusing on electronics, audio, books, and games, started to use livestream sales in 2020. In one year it produced 47 shows with 85 hours of content generating over 2.7 million views. Launching the latest Xbox, the company managed to achieve 1 million views, and the corresponding sales grew by 400%.
Aldo, a famous Canadian shoe and accessory retailer, registered a 308% engagement rate, 17,000 website page views, and an average viewing time of 12+ minutes in the first five days after a 2021 live shopping event.
Bobochik, a French furniture company, managed to grow their live commerce customer base from 500 during their first show in 2021 to 3,000 during the second, with the latter resulting in € 115,000 in sales.
And Germany’s largest strawberry farm Karls that launched its own live commerce experiences in 2020 focusing on a variety of goods, now hosts up to ten events every day attracting around 70,000 unique viewers per week. The company reports an average of 500-1,000 viewers per show and a 40% sales increase thanks to live sales.
According to Forrester, the live shopping adoption is going to further expand in 2022. 49% of the brands surveyed by the company plan to increase their investments in social commerce this year, with 81% intending to either increase or maintain live shopping investments.