- The livestreaming ecommerce market in China will approach $300 billion in sales this year.
- In the US, livestreaming commerce is still in the early stages, and there’s a lot of room for growth.
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Last year, livestreaming commerce was a nearly $300 billion market in China, according to our estimates. And by 2023, that figure will more than double.
While some brands in the US are experimenting with livestreaming commerce, it’s still in the very early stages. That said, there’s a lot of opportunities, as discussed in our recent “A New Era in Retail and Ecommerce Is Emerging” webinar.
Key opportunities of livestreaming commerce
Livestreaming commerce brings a lot of opportunities to marketers. For one, they’re able to reach a younger demographic, who currently have—and will have even more—spending power.
“Not surprising, those who are ultimately making a purchase through livestreaming are those who are already watching livestreams, who tend to be the younger shoppers,” said Zia Daniell Wigder, senior vice president of content at Insider Intelligence.
Several studies have also alluded to the fact that some companies are seeing conversion rates of up to 30% with livestreaming shopping. “That’s about 10x what you would typically expect to see,” said Wigder. “So, another reason that brands are interested in this.”
Just as importantly, many brands who are currently harnessing livestreaming commerce in an effort to drive up sales are often seeing lower return rates as well. And that’s because of the channel’s immersive nature—consumers are able to visually see the products and content beyond a static image. For example, a presenter is able to showcase how a piece of clothing will look on someone, what it should be paired with, or even how a certain product works. As a result, consumers have a better understanding of what they’re buying, and how they’ll be able to use it.
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In the US, livestreaming commerce is still in the early stages
At the moment, there’s a lot of experimentation going on. “Consumers are in a curious phase at the moment,” said Wigder. “A lot of them are watching influencers talk about products, but relatively few are buying.”
“Pre-pandemic, consumers weren’t ready to adopt as quickly as retailers and brands were into new ways of using technology, but with the pandemic people didn’t have a choice, and then they were stuck at home, so then they were looking for new ways of being entertained, and livestreaming was one of those ways,” said Suzy Davidkhanian, eMarketer principal analyst at Insider Intelligence.
“But retailers need to think about it in a slightly different way,” she said. “And while yes, China is really an important place to get inspired from, I don’t know that we can replicate that here, especially in terms of last-mile delivery. It’s just too expensive for it to happen here quite in the same way, but I did like that Best Buy just announced that they were using their fulfillment center to have associates showcase products and do a whole livestreaming around the product.”
A new way to shop across various categories
Livestreaming commerce won’t be just used for specific categories, such as clothing and accessories. In fact, the opportunities with this retail trend are vast, though there will be some specific sweet spots—including lifestyle categories, fashion, beauty, and home decor.
“Electronics is not the first one, though I’m actually very interested to see if this experiment can work, because that could tap into a totally new opportunity, and frankly I don’t know how to hook up anything in my home with home electronics, so there’s a real value add that can come through in livestreaming that you can’t get elsewhere,” said Andrew Lipsman, eMarketer principal analyst at Insider Intelligence. “But I really think that lifestyle brands and lifestyle categories, especially through the lens of influencers, will be effective.”
“Influencers are kind of the media channel through which a lot of this happens because they can attract and aggregate those audiences, and that’s really what’s going to take for this behavior to be adopted in a more mainstream way,” he said.