Livestream shopping: How brands can harness this latest phenomenon

Thought Leadership

Livestream shopping has taken China by storm. First practised by e-commerce platforms back in 2016, this year it proved an invaluable bridge across the gap between goods suppliers and consumers during the peak of lockdown caused by COVID-19. Over the country’s latest annual shopping festival on July 1, livestream shopping generated US$449.5m in sales on one day, alone.

With content fronted by an influencer – often a celebrity – promoting a product, it might seem like the reinvention of an old-style format: the infomercial. But that’s where the similarity ends. Livestream shopping content is interactive and viewers can chat and click to buy. It is creative, too, with the emphasis more on entertainment, engagement and celebrity value and less on hard sell. And it offers a faster route to checkout. 

Currently, livestream shopping is most established in Asia – especially in China (where dominant live commerce platform Taobao Live saw gross merchandise volume grow 150% per year for the past three years). Almost one-third of internet users in China have purchased goods via live broadcasts that link directly to product web pages, research shows.

However, interest in livestream shopping and its potential is growing fast elsewhere.

Last year, Amazon launched livestream shopping platform Amazon Live which brought in big-name celebrities such as Jessica Alba to headline live shopping streams. Now, Facebook is developing live shopping opportunities on Facebook and expanding it on Instagram. Meanwhile, a number of brands – luxury player Moda Operandi, for example – have launched livestream shopping on their websites. 

All are inspired by the fact that growth of ecommerce as a proportion of total retail sales is rising, fast. In Europe, for example, pure play ecommerce revenue growth in Europe rose 40-80% in Q1 2020 year on year.

For now, those most likely to participate in livestream shopping are female Gen Z and Millennial consumers – groups whose shopping behaviour is most likely to be impacted by celebrity influencers – typically for those product categories these groups are most interested in: notably fashion. But it is fast-growing amongst other consumers, too. In April, Viya – China’s leading livestream shopping saleswoman – sold a rocket launch for $5.6m.

Analysis of those most effectively using livestream shopping in China – provide important lessons for brands considering using it elsewhere.

1. Choosing the right platform

The best platform for a brand wanting to try livestream shopping is a mature one built for shopping with livestream features built in. 

If a native e-commerce platform is unavailable, a brand could use some of the livestream shopping functionality being added to established social platforms – Facebook, for example. However, additional measures may be needed – for example, a technical bridge to link this type of content on, say, Twitter to a brand’s own e-commerce site. 

Whatever platform a brand uses for livestream shopping, ease of access to the ecommerce component is key.

2. Allocating media budget

If a brand decides to run its livestream shopping itself (rather than via a native e-commerce platform), it needs to allocate media spend to raise awareness in order to drive traffic to its livestream. 

Diverting budget from offline and traditional media is one option to cover this. But the best place from which to reallocate media spend will depend on what mix a particular brand already has in place, their target audience, and their overall business objectives.

Whichever way they cut it, however, it is important to maintain a good balance between budget allocated to brand and budget allocated to product in order to ensure long-term sustainability and growth.

3. Choosing the right talent
Livestream shopping requires an influencer – often a celebrity. But not just anyone will do. They need mainstream appeal as well as a passionate following capable of lending the brand they work with for livestream shopping an air of must-see exclusivity. 

A-list celebrities will give brands the most traction, but if going with a less well-known face, consider the media budget needed to drive awareness (as per the above). 

In China, among the most successful livestream shopping influencers are Viya and ‘lipstick king’ Li Jiaqi, who engage tens of millions of potential consumers each day. On 11.11, Singles Day – the country’s largest annual shopping festival – Li Jiaqi’s livestream on Alibaba’s livestream platform Taobao Live attracted an audience of more than 36 million and, with only five minutes spent on each product, generated more than US$145m in sales.

4. Getting the creative execution right

Scripting is key. Where many brands fail is leaving their talent to create content themselves whilst livestreaming in real-time. If a celebrity is uncomfortable with delivering a monologue, consider adding a host to prompt and stimulate discussion. Insert appropriate jokes regularly space throughout. 

Beware of being overly-product-focused, however. Allow time for host and celebrity to talk about non-product-related things. And strike a balance between sticking too closely in your script to brand guidelines and veering too far off course.

Aim for a length of 25 to 30 minutes. Running on too long can cause fatigue – for the shopper and celebrity. Around half an hour means there’s still something to see if a shopper missed the start. 

In China, consumers find the livestream shopping experience more social and interactive, research by the China Consumer Association shows. They also rate it more highly for enabling them to better understand a product.

5. Choosing the right products and price points

In a live stream, it is difficult to touch up in order to optimise a product’s visual presentation. A brand owner should therefore prioritise products that will naturally look good not just on screen but on a small screen – products that are colourful and bold, not subtle. 

It shouldn’t be about just one product per livestream, either. The most effective livestream shopping content revolves around a number of related or complementary products to keep the stream lively and interesting.

Price point is also important. Products need to be positioned as good value for money within their category. This is an important trigger for an impulse purchase, which is what livestream shopping is all about.

6. Choosing the right markets

Participation in livestream shopping is not spread equally worldwide. Rather than seek to invent a new consumer behaviour from scratch, brands should adapt to consumer behaviour in their market.

Fast growth so far has been seen in China. A significant uplift in other SE Asia markets – notably, Japan and India – is also evidence. 

With e-commerce usage levels in the US and UK high, both are well-positioned to be the next big growth areas for the livestream shopping trend. When considering a market’s potential, it is not absolute levels of annual growth of e-commerce but e-commerce as a percentage of all retail sales which is key.

7. Creating a long tail for content

Finally, if you are investing time and money on creating livestream shopping content, consider how to give that content a long tail. To make your investment work harder, use it on as an on-demand asset once a livestream ends. 

The good news with livestream shopping is its innate entertainment value. This is content that can remain relevant and live on other channels like on a brand’s YouTube, Facebook Watch or web site, re-cut into shorter versions, because unlike an infomercial, it’s not just about selling. 

Pete Lin is North Asia Regional Managing Director at We Are Social.