Taobao Live, the e-commerce livestreaming platform, raked in $7.5 billion within 30 minutes of starting presales for 11/11 Singles Day. This phenomenal figure attests to the growing trend of livestreaming e-commerce in China, which is predicted to bring in $125 billion in sales this year. Closer to home, livestream e-commerce has grown to nearly $4 billion in market size in Southeast Asia, said experts at a TechNode Global ORIGIN 2020 conference panel, moderated by Eric (Ye) Fang, president and founding partner at Favour Capital, on Nov. 18.
The new shoppertainment experience
A combination of factors has spurred the growth of this “shoppertainment” market. Traditionally, livestreams offer great deals and discounts. “There are many funky ways to bundle discounts in fashion, beauty, and wellness livestreams,” said Andrew Lim, CFO at influencer marketing agency Gushcloud International. He added that these livestreams often see powerful sales due to the demonstration- and review-based nature of the products.
Consumers want to know what they are buying into, and livestreams allow them to ask questions to the host. “The interactivity supported by livestreams has made it more convenient for consumers, who no longer have to travel to brick-and-mortar stores to interact with the retail staff,” said Colin Phua, founder and CEO of digital content production and integrated digital marketing agency Captive Interactive.
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COVID-19 has led to more buy-in from brands, as well as talent, which accelerated the growth of livestreaming e-commerce, said Lim. Brands are experimenting with shopstreaming as an alternative to the offline shopping experience, as many retail outlets are forced to close in lockdowns. Influencers are also attracted to this industry after seeing livestreamers such as Zhang Dayi, Wei Ya, and Li Jiaqi skyrocket to fame.
Read more: Not just a hard sell, livestreams help build a brand image
Influencer marketing
Influencer marketing has become the standard of the livestream e-commerce space. Beyond traditional advertisements, consumers now look to influencers’ promotions of products for interactivity and credibility.
Sega Cheng, co-founder and CEO of AI-based consumer engagement company iKala, broke down the merits of micro-influencers. Consumers have more diversified interests and preferences as more customized products hit the market, he said. Unlike one-size-fits-all mega influencers, micro influencers that match unique tastes are more trusted by the consumers.
Cheng added that social media platform algorithms are “influencer-blind.” Big influencers do not necessarily reach more people given the same budget. On the topic of budget, cost-effectiveness has become a new measure for these influencers marketing. Cheng explained that instead of one mega influencer, brands can now turn to 10 or even 100 micro influencers for more effective influencer marketing.
Phua said, “Even if you are an influencer, it does not necessarily mean that you are good at livestreaming.” He said that streamers need authenticity and an “X factor” in front of the camera, and to be able to interact and engage with the audience. Consumers do not want to feel as though they are being sold a product, Phua said—instead, authentic influencers should make them feel like they are getting a good deal because of shared interests.
AI to revolutionize the live commerce space
AI is redefining the customer shopping experience with a personalized touch. Businesses with Natural Language Processing (NLP)-based chatbots can deliver a more efficient and enriched customer experience, said Cheng, noting that chatbots are increasingly becoming customers’ first touchpoint with a business.
With image recognition technologies, Cheng said that the friction in customer shopping experience is reduced. “Image recognition allows e-commerce sites to display products similar to the ones which a customer is looking at.”
Where is SEA in all of this?
The Covid situation has been the contributing factor for the recent take-up of e-commerce. “Comparing the behaviors of shoppers in the region and China, both want to know what they are buying into, the value proposition, prices, fun, and interactivity”, said Phua.
Cheng said that Thailand is catching up in the live commerce arena, with an estimated market size of $10 billion. However, the limiting factor will be ecosystems, because “tons of platforms are being used across the Southeast Asia countries. In Indonesia, it is mostly WhatsApp, and in Thailand, most merchants use Facebook,” he explained. “However, these platforms are not even e-commerce native. Payment and logistics have to be sorted out.”
Lim added in agreement with Cheng that there is an infrastructure gap in the region compared to China. With Shopee, Lazada, Tokopedia flexing their muscles, “which will be the platform of choice?” As its markets mature, we can expect Southeast Asia to mirror what has happened in China.