- Live commerce is new kind of shopping, where brands and influencers stream videos to consumers.
- From apparel to produce, live streaming has taken off in China on platforms like Alibaba’s Taobao Live and Douyin, China’s version of TikTok.
- Live commerce offers a more streamlined experience than home shopping TV networks like QVC with check-outs embedded in the platforms and payment details stored.
- In the US, platforms like Facebook and Instagram are making a push into e-commerce.
- Live commerce could soon arrive in the US, where influencers are already monetizing their social media followings.
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It’s no secret Gen Z loves video. From YouTube to Instagram, and, most recently, TikTok, social media platforms have amassed huge user bases. The more popular the app, the more brands and influencers will look for ways to monetize through advertising.
In China, a new wave of social media monetization is underway: live commerce.
Influencers and merchants alike are using interactive short-form video (both live-streamed and pre-recorded) to sell products to users on social media and e-commerce platforms. In China, leading live commerce platforms include e-commerce giant Alibaba’s Taobao Live and Douyin, China’s version of TikTok.
From apparel to cosmetics to tech, these live commerce videos give users an interactive and entertaining way to shop from their phones. Mimicking the experience of window shopping at a mall, live commerce videos often feature influencers trying on several outfits in a video stream, where users could interact with the hosts and ultimately purchase the clothes.
Even farmers have taken to live streaming to sell produce.
“It’s entertainment plus shopping,” Connie Chan, general partner at Andreessen Horowitz, told Business Insider.
And while it might sound like a new twist on QVC or HSN, live commerce offers a more streamlined experience, with check-outs embedded in the platforms and payment details stored. In some cases, users can check out in-app while the video keeps playing.
And in China, live commerce has grown amid the coronavirus pandemic.
“COVID brought it even more to the forefront now that the average person in China is shopping with live streaming,” said Chan. “I think in the US, it will roll out and eventually have a lot of features that are largely inspired by Asia.”
Live commerce presents an opportunity to further monetize social media
Before the coronavirus pandemic, live streaming was already growing in China.
During e-commerce giant Alibaba’s Singles Day in 2019, Taobao Live recorded $2.85 billion in sales generated from live commerce — about 7% of its total $38.3 billion in sales.
A key selling point of live commerce is that it’s easy to track the effectiveness of the videos in driving sales because users can make purchases directly from the stream.
“Rather than have the influencer hashtag #ad, you can credit to see which influencers are actually converting sales,” said Chan.
The influencer marketing industry is on track to be worth up to $15 billion by 2022, with brands continuing to spend more year-over-year, according to Business Insider Intelligence.
Read more: SARS created the perfect storm that changed how China shopped forever. The coronavirus could do the same for the US.
Visual China Group/Getty Images
Players like Facebook and Instagram are well-positioned to host live commerce
The US, like China, is awash with influencers who already have loyal social media followings. And Chan expects that the US will see live commerce start to roll out.
“It allows someone who already has…
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