TV shopping on steroids: live streaming e-commerce
Prediction #9 for 2021
2020 surprised us all with extreme turbulence and digital hyper growth due to the global pandemic. In 2021 several new technologies, fostered in 2020, will breakthrough, showing the way to the future.
As in earlier years, I have curated the most interesting and pressing digital trends for the year to come, which I will reveal in a series of ten articles — this is number 9.
What happens once video streaming merges with e-commerce?
Most of us have forgotten (or do not know of) the precursor to e-commerce: TV shopping. By connecting a modified television via a telephone line to a real-time multi-user transaction processing computer, Michael Aldrich was able to launch home shopping for the first time in 1979. And the rest — as they say — is history.
At its peak, the two largest channels, QVC and HSN, generated a combined $10 billion in revenue per year! And even now, where internet-based e-commerce dominates, TV shopping is still a great business.
Now, however, it seems that these two electronic shopping formats are bound to converge. To see where this is heading, we once again need to turn our eyes towards the East, where e-commerce is taking off at an exponential rate. The 2020 version of the Singles Day event, which typically takes place on 11 October, ran for two weeks this year, culminating in a 24-hour live TV show. Revenue broke all records and ended at $74 billion, peaking at 583,000 orders per second!
Two hundred luxury brands — like, for example, Cartier — participated this year with different experiments involving live streaming linked to direct shopping opportunities.
‘Taobao Live’ ran 30 live-stream channels during the event. Approximately 10 per cent of the revenue of the Singles Day event was generated through live streaming.
China has long been at the forefront of fully e-commerce integrated live stream platforms like Taobao, Douyin, JD Live and Little Red Book. And if you haven't’ yet heard of Kuaishou.com, you should definitely check it out!
Online influencers can earn a lot of money through live-streaming
The coronavirus crisis has further accelerated this development. Live-stream shopping, offering a mix of entertainment and e-commerce, has become extremely popular during the pandemic.
Viewers choose to buy directly from hosts, celebrities and influencers who showcase products in real-time videos on the internet.
Viewers chat and pose questions directly to the host. Additionally, the hosts have the opportunity to offer viewers discount coupons and flash deals in real time.
Alibaba has further enhanced the experience by providing AI-driven virtual hosts, and on top of that, they provide real-time translation into four languages. And of course, they all offer one-click purchase solutions.
Coresight Research has estimated that the live-streaming market in China will bring in about $125 billion in sales this year — up from $63 billion in 2019.
US is trailing behind
Right now, the US is trailing far behind at $5 billion.
The best-known live-streaming platform in the western world would be TikTok, but in our part of the world live streaming has mostly been about entertainment and gaming. That, however, is changing right now.
TikTok has already performed its first tests involving shoppable live streams together with NTWRK — a home shopping network targeting Generation Z.
In Denmark, Matas are testing the concept with Matas LIVE, and it´s off to a good start. But it still lacks the smooth e-commerce integration.
Matas is one of the first to try live streaming in Denmark
Even though it’s still early days for this area in our part of the world, the enormous success we’ve seen in China will not go unnoticed. I predict that new formats for live-streaming e-commerce solutions and platforms will break ground here in the western world in 2021.