..."/>

Live Commerce: the Next Big Thing in Online Shopping

A New Report on China’s Live Commerce Industry blazes a trail for Europe to revolutionise its online sales channels

Live Commerce is the buzzword on everyone’s lips in the retail sector, a phenomenon fusing online shopping with live entertainment. Influencers, known in China as KOLs (key opinion leaders), are digital marketing specialists, who promote products and services via livestreaming videos to shoppers they interact with via chat and reaction buttons.

The sector has boomed in China since its launch in 2016. According to Shanghai-based digital industry research firm iResearch, 40 percent of China’s internet population use livestream e-commerce, of which 66.2 percent buy products while watching live streams. This accounts for a total of over 256 million people and a market of the size of RMB 1.2 trillion (around EUR 160 billion) in 2020.

“By 2023, live commerce is expected to account for roughly 24.3 percent of total online sales in China, growing from last year’s 10.6 percent”, says Zhao Kun, Director of E-Commerce Research at iResearch Institute, citing data from the new report “2021 China’s Livestreaming e-Commerce Industry”.

Luxury companies like LVMH, Burberry, Gucci, Armani and Givenchy are among the early pioneers to catch the trend and use live commerce solutions to entice Chinese consumers. In China’s second biggest shopping festival “618” (1-20 June), L’Oréal recorded a sale of RMB 40 million (around EUR 4.38 million) in the peak live session on 18 June; Italian pharmaceutical skin care brand Rilastil has 35 percent of its total sales in China reliant on live commerce.

“The majority of successful European brands operating in China run daily livestreams that each last between 3-8 hours; at such scale, it is important to combine KOLs with in-house bloggers (KOEs = key opinion employees). The most important skill for any marketing person in China today is live-streaming and brands battle for the best talents”, says Ashley Galina Dudarenok, Founder of China-focused social media agency Alarice and China trends watching and training company ChoZan.

In Europe, the pandemic has spurred a number of Western brands, retailers and marketplaces to establish their own live-commerce ventures to boost sales. If China’s growth trajectory is taken as a model, by 2024, Europe has the potential to reach around 160 million live streaming e-commerce users, of which approximately 100 million people might also make purchases while watching live streams.

How can livestreaming agencies really hit the ground running in Europe? iResearch lists three core competitive elementsfor companies to stay ahead of the game: first, livestream agencies need an embedded supply chain management system from product design through production to sales to deliver products on time; second, a rigorous KOL professionalism program to stay apace with increasingly stringent regulations and competition; and third, a content distribution platform and ads resource integration capabilities to enhance exposure of high-quality content.

One company in China who adheres to these three core elements is Xinxuan Group, a multi-channel network and digital retail company. Xinxuan runs an ecosystem of 300 high-standard factories and three self-owned warehouses, using C2M (Consumer to Manufacturer) digital retail supply chain system to link global brands, factories and industrial zones with the users of social media and livestreaming platforms.

Xinxuan works with over 5000 Chinese and international brands and incubated 11 influencers who each recorded sales of more than RMB 100 million (over EUR 13 million) per live session.These top KOLs have become the new growth engine for brands in apparel, beauty, fashion, food, etc., driving the industry to operate more efficiently and be more in touch with their customers.

“In the future, we hope to work with more European brands in China, and partner with European e-commerce players to help local streamers to improve their performance and build trust-based relationships with their viewers”, says Leah Wang, Chief Marketing Officer of Xinxuan Group.

A study by Forrester and AliExpress conducted during the COVID-19 pandemic found that 70 percent of 14,460 consumers surveyed in the U.K., Spain, France and Poland expressed interest in this new form of online shopping, which they call “shoppertainment”.

 “Still prime for early adoption in Europe, live commerce has the potential to become the next big wave in e-commerce,” says Madison Schill, Marketing & Communications Director at Livescale – a Canadian startup who provides integrated live commerce solutions to big players like Mejuri and L’Oréal. “Leading the Live Shopping offering for western consumers, we see sales conversion rates with our solution jumping year over year already, taking our clients from setting records to creating moonshots for their competitors.”

Related posts

Top