Livestream shopping is transforming China's ecommerce landscape. Projections show that the Chinese livestream shopping sector will reach $720 billion in 2023 and now accounts for more than 10% of its ecommerce revenue.
Every year, the hype surrounding livestream shopping peaks in the fall. On October 24, 2022, the first day of Taobao's Double 11 shopping festival pre-sales, China's livestream shopping superhost Austin Li drew 460 million people and broke the sales record he established the previous year by reportedly selling $2.9 billion worth of items in a 10-hour session.
Livestream shopping has become a significant part of the Double 11 shopping day (i.e., November 11th) in China. And while livestream shopping hasn’t taken hold in the rest of the world quite the same way, Forbes projects the U.S. livestream shopping market will reach a revenue of $57 billion in 2025.
In this article, we’ll explain what livestream shopping is, how it works, and how to get your ecommerce business strategy ready for the coming boom.
What Is Livestream Shopping?
Simply put, livestream shopping is the digital version of television shopping channels like QVC. Hosts go on a live show to describe, review, and demonstrate products and sell them at a promotional price directly to their audience via links.
Unlike the old-fashioned shopping channel, livestream shopping takes place on various platforms, including ecommerce apps, social media platforms, and websites. Customers click a call-to-action button instead of placing a phone call to make the purchase.
Bilibili, also known as B Station or "China's YouTube," was the latest to launch its own livestream shopping feature. Just days ahead of 2022’s Double 11, they were aiming to snag a piece of the shopping bonanza pie.
Livestream shopping began with live runway shows on traditional websites almost 20 years ago. In 2015, Alibaba Group first introduced it to mobile devices, and it has since expanded rapidly in China. The pandemic further fuelled livestream shopping fans as lockdowns spurred demand for online shopping and entertainment services. Today, livestream shopping has become an essential fixture of China's ecommerce landscape.
This partly explains why experts have expected social commerce to mature quickly in the U.S. and the rest of the world. The major players are taking action. Social networks and ecommerce platforms, including YouTube, Amazon (Amazon Live), and TikTok, are investing big in live shopping tools. Retailers and brands, too, are jumping in. Nordstrom launched its own live events platform, while Forever 21 and Macy’s are among those that added live shopping to their apps.
How Does Livestream Shopping Work?
Livestream shopping has changed the buyer's journey and rewritten the retail landscape. It restores the personalized customer experience of traditional brick-and-mortar stores while also adding the convenience and comfort of online shopping.
The ecosystem of livestream shopping consists of four components:
- Brands bring in the products.
- Consumers are the decision-makers
- Platforms provide the broadcast space and fulfill orders.
- And the hosts, who are the key players in this system, glue them all together.
Anyone can be a host for a livestream session. Professional streamers, celebrities, key opinion leaders (KOLs), brand founders, and company executives are all examples. Or it can be you and me.
But not everyone can be successful. Qualities of a successful host include being knowledgeable, professional, authentic, engaging, and capable of building connections and trust with their audience.
Austin Li is all of these things. He first made a name for himself by selling lipstick via live video. He stood out as someone who knows the inside out of the lipsticks, including shades, texture, packaging, etc. He tested each lipstick to demonstrate the real color on his lips, which resonated with the lipstick users and increased their confidence when buying.
He once tested 300 lipsticks in a six-hour streaming session. “I can’t feel my lips anymore," he admitted after.
The result? He sold 15,000 lipsticks in 5 minutes.
It's not a one-way street. Audiences are encouraged to participate through the chat and reaction functions. They can leave comments, share their own experiences, and ask the hosts questions. They can even interact with other viewers as well.
Raffles, giveaways, celebrity appearances, and limited availability are frequently used in livestream shopping sessions to attract diverse audiences, build hype, and boost sales.
What Is the Ideal Audience For Livestream Shopping?
One would assume that livestream shopping audiences are millennials and Gen Z—younger audiences more familiar with the internet world, streaming, and mobile devices. But that's not entirely true.
Anyone with access to the internet is the ideal audience for livestream shopping.
It's not an exaggeration. According to a 2021 survey, two-thirds of Chinese consumers purchased products via video stream the previous year. The concept of livestream shopping is familiar to many generations of viewers, ranging from grade school students to senior citizens.
For example, the majority of attendees at a livestream session selling scarves were women aged 60 and up. They enjoyed learning about different ways to wear a scarf from the hosts and models. They didn't need to be tech-savvy to make a purchase in these sessions, thanks to China's easy, quick, and accessible mobile payment options.
3 Tips to Start a Livestream Shopping Session
There is no high barrier to entry into the world of livestream shopping. Anyone with a cell phone can go live. But more is required to run a successful session or channel.
Tip #1: Find the right host
Aside from the qualities mentioned above, a business must find a host who is familiar with its brand and products. If you're collaborating with an influencer, make sure they have a similar target audience as you.
Establishing a partnership with top-tier hosts is preferable for emerging brands. Livestream shopping is more than a profit generator. It’s a brilliant content marketing strategy to build brand awareness and increase demand.
Consumers see livestream shopping as an opportunity to learn about emerging brands and try out their products for a reasonable price. Austin Li is known to have acted as a catalyst for several Chinese beauty brands that are now highly regarded.
Tip #2: Find the optimal platform
We see fruit growers doing exceptionally well going live in their own orchards. They don't have a setup except for a phone. They pick an apple or orange from the tree, peel it, and take a big bite to show how fresh and juicy the fruit is. People love shows like this and are ready to pay for farm-to-table fresh.
For these small business owners, choosing the best livestream shopping platform is critical. A full-fledged ecommerce platform has the infrastructure to schedule goods and channels, fulfill orders, and deliver the products to the customers' doorstep fast.
Recommended reading: Top 10 Easiest Ecommerce Platforms
Tip #3: Offer a deep discount
With consumers becoming less brand loyal and more price sensitive, many are in it for a good deal. As a result, livestream shopping events offered by brand founders and company CEOs are always a big hit.
They are experts in the brand and its industry. And as the decision-makers, they are also expected to provide deeper discounts to their viewers, which drives impulsive purchases and generates huge revenue for the companies.
When Dong Mingzhu, the chairwoman of Chinese air conditioner brand Gree first began live streaming in 2020, she offered nearly half price for her air conditioners. She performed 13 livestream shows that year and generated $47.6 billion RMB ($6.6 billion USD) in sales.
Get On Top of the Livestream Wave Early
It’s only a matter of time until livestream shopping fully blooms in the rest of the world.
With traditional sales and marketing channels yielding poor conversion rates, livestream shopping is one of the best ways to connect with like-minded viewers and accelerate their journey through the conversion funnel from awareness to purchase. It might just be the latest and most effective trend for many businesses struggling to expand their audiences.
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