East meets west: why live shopping is here to stay

China is the global trailblazer in this space, with its livestreaming e-commerce market projected to reach $770.7bn by 2023. According to Forbes, live shopping accounted for nearly 12% of China’s total retail sales in 2021.

Apart from some interesting experimentation in 2020 and 2021, this e-commerce strategy remains relatively new in much of the western world, which begs the question: is live shopping just a trend or is it here to stay?

Here are three reasons why it may have real staying power.

Tech platforms are making big investments

A well-documented rise in video consumption, plus the example set by China, has created a compelling reason for tech platforms to ramp up their investment.

Live shopping capabilities on YouTube are among the most popular with both brands and consumers, with 30.2% of US retailers that host live shopping events having used it in the last year.

Meta, which has had live shopping capabilities for years, began testing a Facebook feature in late 2021 to make collaborations between creators and brands more seamless and effective. One of the new capabilities allows creators and brands to stream live events across both of their pages at once – a feature creators had asked for.

Amazon has also increased investment in its dedicated live offering Amazon Live, which is home to dozens of livestreams per day across multiple product verticals. It also features high-profile product launches, and author and celebrity Q&As.

TikTok has a new live shopping integration, which it says “lets merchants connect with their audiences in real time and helps users buy what they discover while watching a brand’s stream.”

Beyond the well-known players, there are several other live shopping platforms cropping up – some of which are getting major attention from investors. One example is Popshop Live, a live selling startup that closed a Series A of approximately $20m at a valuation of about $100m last year.

The combination of investment from big tech platforms and the early interest in innovative startups is a good indication live shopping is just ramping up.

Brands are experimenting in the space – and it’s paying off

There are two main things brands can hope to gain from implementing a successful live shopping strategy: improved conversion rates and increased engagement.

Due to the time-limited nature of live shopping events, consumers are enticed to make impulse purchases, resulting in an accelerated customer journey from awareness to purchase. Some companies have reported streams can capture sales from 10-20% of the audience, which in some cases is up to 10x higher than conventional e-commerce conversion rates.

Beyond sales, brands are also seeing impressive increases in engagement, particularly among gen Z consumers, with some companies reporting an increase in younger audiences by up to 20%.

A brand already experimenting with live shopping is L’Oréal, which has partnered with influencers and beauty experts to host more than 50 live shopping events in five countries. The events feature tutorials, virtual try-ons and real-time recommendations.

While live shopping is still in the test-and-learn phase for many brands, what’s clear is there are endless ways for brands to get creative and build unique experiences for their customers.

Live shopping gives brands access to new insights

Another unique benefit brands can expect from hosting live shopping events is new consumer insights.

Consumers who purchase products during a live shopping event are significantly less likely to return them, with data showing the return rate is up to 50% lower than traditional e-commerce purchases. Experts believe the ability to ask questions, see various sizes and colors and get a live product demo could be driving the lower return rates.

Additionally, brands will gain access to an entirely new set of engagement and conversion metrics connected to their live shopping events, which marketers can use to inform their strategies.

While there are plenty of reasons why live shopping could continue to be the next big thing in e-commerce, platforms and brands will need to keep working together to test, learn and focus on positioning the right content in front of the right audience.

After that, it will be in the hands of consumers to decide whether live shopping will be around for good. But with inspiration from China and plenty of experimentation in the west, it’s a bet most brands should be making.

To learn more, Frog is hosting a panel event on June 28: Reverse the Funnel; From Advocacy to Awareness. For more information, visit our site and get in touch.