When it comes down to it, ecommerce in the US is pretty boring.
Online shopping in the west has been dominated by functional needs: fast product selection, low pricing, efficient shipping and so on. We want something, we find it, we buy it and we receive it. Just make all that as fast and easy as possible.
But while we’ve been bogged down in simply making ecommerce work for the last twenty years, China has been innovating in a completely different direction. Younger audiences there are shopping through live video streams hosted by Taobao (Alibaba) and other platforms. It’s huge, with estimated annual sales of $66 billion and growing fast.
This “live commerce” is nothing like the TV shopping channels of old. It plays into all the trends we know so well, such as mobile internet use, influencers, interactivity and social media. The difference is that we are years behind China in adapting all of those to ecommerce.
So, this is what ecommerce will look like in the US (and everywhere else) in three years. For some people it’s the logical next step in the development of online media and shopping. For others, it’s a dystopian future where everyone and everything is for sale, all of the time.
The lipstick king
Austin Li Jiaqi is a 27 year old live streamer specializing in beauty products, and one of the top influencers in China, with over 40 million followers. He once sold 15,000 lipsticks in five minutes.
How is that possible? The foundation is live video streaming, with constant two-way comments and interaction, like Facebook Live. Layered on top is an ecommerce platform, making it possible to easily buy the products being shown. So far, so simple.
What lifts live commerce to another level is the building-in of flash sales, gamification, augmented reality and social media. It has had just about every technological feature and marketing gimmick thrown at it. Maybe the result should be a big mess, but somehow the whole is greater than the sum of the parts, creating something that is relatable, exciting, addictive and efficient.
Unsurprisingly, the younger generations of Millennials and Generation Z are the target audience for all this. But it shouldn’t be dismissed because it’s “only” for them. Millennials are the largest generation in the US and globally, and the most powerful consumer base. What they are into now will become the mainstream soon, if it isn’t already.
Here’s a few minutes of one of Austin Li’s four-hour live streams:
Breaking bad in ecommerce
On the face of it, watching a live stream sounds like an incredibly time-consuming, boring and inefficient way to shop online. But this isn’t just shopping. It’s entertainment, social interaction and celebrity worship as well. People will watch their favorite live streamers, or let them play in the background, instead of using conventional social media or watching TV.
Why on earth would you choose to watch this QVC on steroids in your spare time? Because it harnesses the personal connection people get from influencers, along with a powerful arsenal of marketing tricks. For example:
- Flash sales and group-buying discounts. Time-limited special deals are the norm.
- Referring friends to get unlimited chances to win cash rewards every time they watch a live stream over the next 100 days.
- Being able to browse products freely while keeping the live stream running in a small window.
- Augmented reality to virtually “try on” makeup and clothes, embedded right into the live stream app and linked to the products being shown.
Live commerce is not shopping with added video, it’s a psychedelic mashup of ingredients to create a potent product that’s perfectly constructed for viral marketing, social influence and impulse buying. Some people call it “shoppertainment”. If it came in the form of a pill then it would be illegal.
Today, live streams are being used on Chinese marketplaces to sell clothes, cosmetics, jewelry, food, electronics and even cars and houses.
A matter of time
The annual Single’s Day sale event put the spotlight on Chinese ecommerce this week. The sales were staggering, as usual, with Alibaba alone raking in $75 billion. That’s much more than Black Friday and Cyber Monday for all online retailers in the US combined.
But we shouldn’t get hung up on the size of online sales in China. The more important trend is the seamless blending of commerce and entertainment. You can see it in the extravagant live concert used to launch the event, and you can see it in the live streams that are now a big driver of sales.
So why hasn’t it taken off in the US? One reason is that the big players in ecommerce and content are different companies. Facebook and YouTube are the largest content platforms. Amazon is the leader in ecommerce. They are all trying to create live commerce platforms, but no-one has got the formula right, yet.
Live commerce might sound like Amazon Live, but it’s a really different animal. Amazon Live is TV shopping with a couple of added features. It’s hidden away on the site, with poor interactivity and no social media integration. They even allow pre-recorded video. This is why live commerce in the US is not going to be won by Amazon – it has to come from the social media giants.
And coming it is. Here are a few developments in the last month alone:
- WhatsApp added a shopping button, just this week.
- Instagram announced a shopping cart for both IGTV and Reels.
- YouTube announced that you will soon be able to shop on the site, and creators are already tagging products in their videos.
- TikTok partnered with Shopify to help merchants sell on its platform worldwide.
There’s a lot of effort being expended to get live commerce off the ground in the US, and globally. The formula works. The platforms boost their profits with sales commissions. Influencers have a new route for monetization.
And consumers? They get their “shoppertainment”.
Cover image: Kim Kardashian West on an Alibaba livestream before Singles Day in 2019.