57.5 F
Los Angeles
Saturday, Mar 2, 2024

Livestream Shopping is Latest Trend in E-commerce

Livestream shopping has been making waves in the e-commerce industry as more companies look to attract consumers with social media-like content. Content creators on such platforms as YouTube and TikTok have been experimenting with how to make in-app e-commerce a reality.

According to a survey conducted by business-intelligence company Morning Consult, fewer than half of Gen Z adults and millennials are aware of live shopping events – which means there’s a great deal of upside. In addition, of the consumers who participated in the survey that shopped from a livestream event, 86% said they were satisfied with their experience.

Although it is rising in popularity, findings from marketing research company Insider Intelligence show that 17% of people in the U.S. shop through livestreams, a long way to go compared to consumers in China where the live shopping industry makes up over 10% of the entire country’s commerce market.

 

Shopping and community

Livestream shopping is kind of an updated home-shopping channel such as QVC. A creator streams video online and showcases items that they are selling to viewers, and the tremed video is sent over the internet in real time, without first being recorded or edited. There is usually a live chat log where viewers can offer to purchase items or start other conversations with the host of the livestream and fellow viewers.

Consumers can purchase collectible novelty items such Marvel comics, limited-edition Funko pops, or vintage clothes that sellers find in thrift shops and then sell online.
Local startups have begun to take advantage of the rise in popularity of livestream shopping events. Last October, for example, Financial Times reported that TikTok was in talks with West Hollywood-based TalkShopLive, a company that hosts live shopping streams, to launch a live-shopping offering. Celebrities including Oprah Winfrey, Dolly Parton and Jennifer Lopez have used the app to sell a variety of merchandise, including cosmetics.

A local competitor to TalkShopLive is West Hollywood-based Popshop Live, a platform on which users can watch live shows from their favorite sellers, chat with shoppers and hosts, and purchase products. According to the company’s website, Popshop Live makes takes a 6% service fee — as well as a 3% payment processing fee — from purchases made through the app.

Marina del Rey-based Whatnot is also focused on live shopping. The company is a live-auction platform that allows people to bid on and buy rare novelties, vintage apparel and more. According to a Whatnot representative, today’s top sellers earn up to eight figures a year using the platform with over 100 sellers making nearly $1 million last year. Whatnot takes an 8% commission on the sold price of an item when it sells. Since being founded in 2019, the company has raised about $485 million from investors. Backed by Andreessen Horowitz, YC Continuity and CapitalG, the company’s valuation sits at $3.7 billion.

Logan Head, left, and Grant Lafontaine, founders of Whatnot.

“The race to ‘win’ live-stream shopping in the U.S. has been heating up over the past few years, and with the investments we’ve made in our platform, sellers and audience, we are ready to take over,” said Whatnotco-founder and chief executive Grant Lafontaine in a release.

A Whatnot representative said live-stream shopping is rising in popularity because static marketplaces like eBay are “boring and impersonal.” Many sellers use the platforms to sell collectibles such as rare Pokémon cards, comic books and action figures.

“Fandom has always had its place online, but it really, truly thrives at in-person events like Comic-Con and local specialty stores that cater to collectors’ interest and these one-of-a-kind items, so I think now more than ever enthusiasts who make a living buying and selling these products need something more than just a simple mass static marketplace,” the Whatnot representative explained. “They need something more than that to recreate the magic of those in-person interactions and like scale their businesses.”

According to surveys conducted by Whatnot, the platform has become not only a place for users to purchase items; a sense of community between buyers and sellers has also emerged.

“Whatnot has cracked the code on making online shopping engaging and fun through their community-first approach to livestream shopping,” Laela Sturdy, general partner at CapitalG, said in a written statement. “Whatnot’s fusion of entertainment and commerce has created an incredible growth flywheel that accelerates growth on both sides of their marketplace. Shoppers spend hours each week engaged in the app’s content and community, while sellers achieve stronger monetization than is available on other channels.”

 

Making sense

Cristel Russell, a professor of marketing at Pepperdine University, studies how people consume entertainment, along with marketing and shopping trends.

“The intersection of entertainment and shopping is nothing new,” Russell said. “There was always branded entertainment or product placement in TV shows, and of course the shopping channels like the QVC and old-school television, so the fact that Tik Tok is also now becoming a platform for people to actually demonstrate and sell products makes perfect sense.”

He said there will be more live shopping ventures in the near future as it opens up the e-commerce arena to more people with very little costs to get started.

“Just like you can be a small business and put your stuff for sale on Amazon, TikTok is this platform that has such a huge audience and there’s low cost to entry so people can just start a live shopping channel,” Russell continued. “And if you’re good at it, it will spread and develop super fast with very low

Featured Articles

Related Articles