Livestream E-commerce: A Guide for Brands & Companies

The Rise of Livestream Shopping

When considering livestreaming, many in the United States immediately envision celebrities hosting Q&A sessions on Instagram or gamers showcasing speedruns on Twitch.

However, in China, the primary association with livestreaming is decidedly different: it's centered around live-streamed shopping experiences.

Explosive Growth in China

Livestream e-commerce has experienced remarkable growth within China over the past several years. Projections indicate that this sector will generate over $60 billion in revenue this year.

In 2019, a significant 37% of Chinese online shoppers – approximately 265 million individuals – completed purchases through livestreams. This figure was recorded before the widespread impact of pandemic-related quarantines.

By 2020, the estimated reach of livestream shopping had expanded to around 560 million people.

Single’s Day and Beyond

During Taobao’s 2020 Single’s Day Global Shopping Festival, often referred to as China’s Black Friday, livestreams facilitated $6 billion in sales. This represented nearly a doubling of sales compared to the previous year.

A clear pattern is emerging. Major U.S. corporations have taken notice and are rapidly adopting this trend.

U.S. Companies Embrace the Trend

Last December, Walmart initiated livestream shopping events on TikTok. Amazon introduced a live platform enabling influencers to promote products and engage with customers in real-time.

Instagram launched a Shop feature designed to encourage in-app browsing and purchasing. Facebook also began hosting Live Shopping Fridays, specifically focusing on the beauty and fashion sectors.

Startup Innovation and Infrastructure

Numerous startups are experiencing rapid growth to meet the increasing demand. PopShop.Live secured $20 million in funding to facilitate the sale of diverse products – from books and toys to jewelry – through livestreamed seller presentations.

Whatnot raised a $50 million Series B round, primarily to enhance its livestream commerce infrastructure.

Furthermore, a growing category of SaaS tools, such as Bambuser, is collaborating with brands like Klarna to integrate native livestream shopping functionality directly into branded applications.

The Future of Retail

At the current rate of expansion, retailers will likely establish dedicated livestream commerce teams, mirroring the widespread adoption of influencer partnerships in recent years.

Integrating livestreaming will become a standard component of the digital strategy necessary to maintain competitiveness and relevance within the evolving landscape of marketplaces and e-commerce.

The Progression of Retail: From Ancient Markets to 5G

The cyclical nature of commerce is readily apparent. Previous generations frequently tuned into channels like QVC, appreciating the blend of personalized assistance and the ease of access from their homes. Today, livestream shopping represents a modern iteration of this “shoptainment” concept.

Hosts within these live broadcasts actively demonstrate products, engage with viewers, and generate excitement through exclusive deals, contests, and limited-availability items.

Livestream commerce facilitates the development of more meaningful relationships between sellers and customers, enabling immediate responses to inquiries. This represents a renewed emphasis on a principle observed throughout history, from the bustling marketplaces of Istanbul to contemporary mobile devices: individuals often shop to occupy their time and are more inclined to purchase when a personal connection is established with the seller.

The Power of Connection in Livestream Commerce

Armand Wilson, Marketing Director at Whatnot, articulates a compelling future for livestream commerce. He states: “It provides retailers with an engaging platform to share the narratives behind their offerings.”

This approach cultivates a closer relationship between consumers and their preferred content creators, empowering customers to actively participate in the dialogue. The fusion of this interactive element with the enthusiastic communities of collectors is driving a significant shift in the retail landscape.

Kirill Avery, co-founder of Lalabox – a company supported by Y Combinator – reinforces the idea that heightened engagement is the core innovation within livestream commerce. “Our application functions more akin to an enjoyable game than a traditional shopping platform,” he explains.

The Future Landscape of Livestream E-commerce

The growth of social media platforms has undeniably spurred the development of the creator economy. According to Yuanling Yun and Josh Costine of SignalFire, this evolution occurred through distinct phases: the initial rise of social media, followed by the emergence of influencers, influencer marketing strategies, and supporting Software-as-a-Service (SaaS) tools – all contributing to the foundations of this new economic model.

Consequently, significant opportunities exist for companies to expand and succeed as livestreaming gains prominence.

Several key trends are anticipated to shape this space, likely unfolding in the following sequence:

Social Networks: While Facebook possesses a substantial advantage in terms of consumer reach, its current Cost Per Mille (CPM) revenue model, centered around advertising, may impede its success in this evolving landscape. Facebook prioritizes user engagement with content that drives results for advertisers. However, overlaying advertisements onto livestreaming broadcasts could prove disruptive to the viewer experience; users may complete a show without making a purchase, instead focusing on specific creators and engaging in extended content consumption rather than scrolling through feeds. A structural adaptation will be necessary for Facebook to effectively compete in livestreaming.

SaaS Streaming Solutions: Platforms such as Bambuser empower brands to host live video shopping experiences directly on their websites and applications, fostering engagement and community building on their own terms. A primary benefit lies in enhanced engagement and data control. Instead of relying on external networks like Facebook and Instagram for advertising, brands can host shopping shows on platforms they control, design, and directly monetize. Given the privacy changes introduced with iOS 14, which have limited publicly available data, establishing direct connections with audiences is becoming increasingly crucial, making sign-up data at the top of the marketing funnel paramount in livestream commerce.

Host Discovery and Management Platforms: Analogous to influencer campaign management tools like Grin, Upfluence, and CreatorIQ, new platforms will emerge to facilitate the execution, administration, and tracking of livestreaming campaigns at scale. Brands with the capacity to produce their own livestreams, but lacking resources to identify suitable hosts, will benefit from tools designed to address these campaign gaps.

Host Marketplaces and Agencies: Similar to influencer networks like Famebit, new platforms will connect companies with livestream hosts. Brands without the infrastructure, teams, or budgets to independently manage their livestreaming initiatives can outsource these activities to specialized marketplaces and agencies. This development will particularly benefit emerging influencers seeking monetization opportunities on platforms like TikTok, where they may have a dedicated audience but lack the sponsorship support for a sustainable career.

For businesses, utilizing SaaS streaming tools represents the most effective approach to capitalize on livestream commerce trends. This includes seamless integrations with shop and social media management systems for broadcasting, as well as Customer Data Platforms (CDP) and email marketing tools.

These developments will bring about substantial transformations in several key areas:

• A Compelling Alternative to Traditional Product Pages: Livestreaming presents a powerful alternative to standard landing pages for customers arriving from direct advertising campaigns. Instead of a conventional product page, customers can participate in live events or access video-on-demand content. Frost Li, formerly VP of Growth at Wish, currently developing a livestreaming product, echoes this view: “[livestream shopping] fosters greater conversion rates and cultivates long-term customer loyalty through direct brand interaction.”
• Enhanced Data Ownership for Brands: Currently, brands heavily depend on social media channels like Facebook and Instagram for collecting user data, managing event registrations, tracking conversions, and monitoring engagement metrics that influence sales. However, this data is controlled by third-party networks, not the brands themselves. SaaS tools enabling native livestreaming ownership will empower marketing and product teams with valuable customer insights.
• Essential Features for Success: The ability to own and replay video and audio content, centered around hosts, will allow brands to significantly expand their content library, boost engagement, and strengthen customer loyalty. This, in turn, will provide clearer performance metrics than previously available, enabling brands to manage their video content as a performance channel, incorporating A/B testing, evergreen content strategies, niche marketing, and audience segmentation.

The Rise of Livestreaming for Brands

It appears that livestreaming is poised to become a crucial component of omnichannel marketing strategies for businesses. This new pillar will complement existing approaches like in-store experiences, conventional e-commerce, and social media platforms.

Success in this arena won't be uniform; a significant disparity is anticipated between organizations that rapidly establish a strong presence and those that encounter difficulties. The livestreaming landscape will likely differentiate itself further through the distinction between asynchronous and truly live video formats.

Challenges and Opportunities for Marketers

Marketers face the task of determining how to optimize brand campaigns for competitiveness within this evolving channel. Livestream e-commerce is expected to be quickly adopted by direct-to-consumer (DTC) brands.

These brands already recognize the importance of compelling content and active community engagement. While social media and influencer marketing previously enabled new brands to emerge, these are ultimately just tools.

The Importance of Storytelling

Ultimately, the most impactful and engaging narratives will consistently prevail. A strong narrative will be key to success.

The ability to connect with audiences through authentic storytelling will be paramount in the livestreaming environment. Brands must focus on creating value and fostering genuine connections.

• Focus on Engagement: Prioritize interactive content that encourages audience participation.
• Content Variety: Explore both live and pre-recorded video options.
• Community Building: Cultivate a loyal following through consistent interaction.