Livestream Shopping: The Next Big Thing in Ecommerce?

Following Chinese Trends

Livestream shopping is an online phenomenon where a social media host promotes products to a live audience of viewers. It has gained popularity in China over the past few years as a source of entertainment for the viewers and a marketing campaign for the companies involved.

In 2020, livestream shopping brought in $159 billion in revenue to Chinese companies. This year, that number is projected to grow to $512 billion.

US companies are eager to get in on the action. Many view livestream shopping as critical to building brand awareness among younger consumers. It’s also one of the most effective ways to collect data on consumers’ shopping habits.

US revenue is expected to hit only $20 billion this year, but experts expect the figure to grow to $57 billion by 2025.

Buying In

Major US retailers like Walmart (WMT), Amazon (AMZN), and Target (TGT) have all dabbled in livestream shopping, but none of them have hit a home run just yet.

Walmart is currently developing its own internal livestreaming platform. Amazon has tested three separate livestreaming products over the past five years, but now uses its subsidiary Twitch to run events. Meanwhile, Target collaborated with NTWRK, a livestream marketplace, to run a sold-out live-shopping event last month.

These initiatives have had varying degrees of success, with some getting more traction than others. But, there is one main reason why live shopping isn’t taking off in the US like it has in China.

Monopoly-less

Despite the dominance of US tech giants, none of them own the entire end-to-end process for these livestream events. In China, single companies like Alibaba (BABA) control apps for social media, messaging, streaming, shopping, and analytics. This model allows them to oversee and influence an entire live-shopping event internally.

US companies don’t have this level of control. For example, Walmart has a massive audience of shoppers, but doesn’t own a social media platform. It must collaborate with other companies to host an event. And major social media platforms, despite their access to hundreds of millions of users, mostly don’t have marketplaces. Throw in the need for streaming capabilities, and no wonder it’s much more difficult for US companies to throw successful live-shopping events.

For consumers, it’s important to note that the digital landscape is always changing. It’s reasonable to expect live-shopping will likely become popular at some point. But be aware: it probably means a company wants a closer look at your data.

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