Live stream shopping is taking off in the western internet economy with Amazon, Facebook, Instagram, and TikTok all launching or releasing updates this year to incorporate video commerce into their mobile apps for US users. New startups like Whatnot and PopShop.Live have raised tens-of-millions of dollars to build their own live stream shopping platforms.
But live stream shopping isn’t a “new” concept — it’s been a feature of shopping platforms in Asia for years (Taobao reportedly did $60 billion in GMV through livestreams last year and $6 billion in one day). One could also argue that TV-based home shopping networks like QVC and HSN are the forebears of today’s live stream shopping apps and platforms.
What is new however about this latest push into live stream shopping is that all the major western internet platforms are attempting to turn social commerce into a seamless “shoptainment” experience — rather than the current state of jarring buy buttons and sponsored posts. The skepticism around social commerce isn’t unwarranted. Historically, western social platforms have struggled as a referral source for eCommerce brands and retailers — social referral traffic to eCommerce stores have a 2% conversion rate while search referral traffic (I.e. Google) has a 12% conversion rate.
With the latest live stream shopping trend, there is a lot of money at stake for brands, retailers, payment processors, and other eCommerce stakeholders. The discretionary retail spending (specifically, non-grocery goods and entertainment) of all social media users in the US represents $1.3 trillion. If Facebook can capture just 5% of discretionary retail spending from its 260 million US users that represents $64 billion in gross merchandise value (GMV) currently being spent elsewhere. Live streaming will likely be a key driver of social commerce going forward while also becoming a bigger part of the traditional online retail shopping experience on platforms like Amazon and Walmart as well.
If Facebook can capture just 5% of discretionary retail spending from its 260 million US users that represents $64 billion in gross merchandise value (GMV) currently being spent elsewhere.
Fashion and beauty brands are likely to be at the forefront of the live stream shopping trend for the next several years. 41% of young American shoppers say they have purchased apparel as a result of seeing it featured on social media, while 23% have purchased a beauty product due to its social presence. We see the same dynamic with live stream shopping in China, as 36% of Chinese shoppers say they’ve purchased apparel or cosmetics from a live stream.