Is Livestream Shopping Taking Over or Is It in Decline?

Livestream shopping, a captivating and innovative retail experience, is being touted by many as the future of digital commerce. Being live means it’s unedited, and this often adds more momentum and energy to the experience. Shoppers can interact and feel engaged when the host responds to their questions, comments, or requests in real time.

Livestream shopping first gained success in China with Alibaba’s 2016 Singles’ Day and was first identified by Coresight Research. In 2022, “an estimated $500 billion in goods were sold via livestream on apps like Douyin, the Chinese version of TikTok, or Kuaishou, another short video platform — an eightfold increase since 2019,” according to the New York Times.

One recent livestreaming event took place from Oct. 9 to 14, when Good Housekeeping partnered with TalkShopLive, an online livestream shopping platform. During the week, shoppers were able to tune in live every day and shop exclusive deals from guest celebrities and influencers.

Each guest had a specific program. For example, Dolly Parton offered a copy of her first album, “Rockstar,” and her upcoming book, “Behind the Seams: My Life in Rhinestones,” and Paris Hilton unveiled her new cookware line in collaboration with Walmart. Having an event with well-known celebrities makes it more likely that devoted fans will be primed to tune in and buy the products offered.

According to Chain Store Age, TalkShopLive’s CEO Bryan Moore explained how they have “created a scalable live commerce solution for any publisher, retailer, brand, or creator to go live across multiple domains.”

CNBC recently noted that TikTok, Poshmark, and eBay are all currently testing livestream shopping and are “rushing to grab a piece of the action here in the U.S.” eBay’s chief product officer, Eddie Garcia, claims that the company is bullish for this new shopping experience and is investing in it. Garcia, who oversees the company’s livestreaming platform eBay Live, stated that eBay is currently “focused on fashion and collectibles, with plans to expand from there.”

In a specific example, CNBC shared how “Anthony Velez, CEO of Bagriculture, a small business selling pre-owned designer handbags,” went from making up to $100,000 a month in his brick-and-mortar store to up to $100,000 a day with no physical stores, thanks to livestream shopping.

Now, all eyes are on TikTok’s foray into live shopping, and while eBay’s Garcia thinks “the sky’s the limit,” Forbes thinks otherwise.

In China, shoppers quickly embraced using influencers and social channels for product discovery, thanks to a seamless blend of social and commerce. Alibaba’s innovation introduced the live shopping element, and the pandemic further accelerated its growth. By 2019, live shopping had gained traction in the Western world and was firmly established in China, with ByteDance’s subsidiary, Douyin, entering the market.

In 2021, livestream shopping in China generated $327 billion, a 108% increase following a 220% growth in the previous year. This represents about 10% of China’s e-commerce market, a notable but relatively small portion in comparison to the vast retail market of around $6.4 trillion. In contrast, the U.S. saw approximately $20 billion in live shopping in 2022, making up about 2% of the e-commerce market and only 0.3% of the total retail market.

The market structure varies significantly between the two countries. In China, Alibaba’s TaoBao dominates with an 80% share, while Douyin and Kwai account for the rest. In the U.S., the landscape is more fragmented, with Meta discontinuing live shopping on Instagram and Amazon playing a prominent role.

Even in China, there are signs of potential challenges ahead. Douyin, the second-largest player in the live shopping market, anticipates stagnant growth, with livestream shopping potentially peaking within the next two years at approximately 20% of total e-commerce sales.

Additionally, there’s another facet of livestream commerce that receives little attention. According to reports from Gartner, North American retailers have reported conversion rates reaching as high as 40% during livestream events. However, within Douyin, a substantial 80% of its sellers’ revenue often hinges on just one or two products. In certain categories, like jewelry, “buyers’ remorse can lead to return rates as high as 80%.”