Future of retail? China’s livestream shopping craze attempts to gain U.S. footing

Imagine chatting with your favorite influencer and getting a product recommendation that you can click to buy immediately. Livestream shopping offers that sense of personal connection and instant gratification — and brands are banking on its potential in the U.S. 

The emerging trend kicked off in China, where consumers could watch celebrities and influencers tout products, available for purchase with one click, while communicating with each other and influencers through a chat feature. In 2020, two-thirds of Chinese consumers bought products via livestreams, according to McKinsey Digital. 

Livestreams also brought in $6 billion in sales — nearly double from the year before — during Taobao’s annual Single’s Day (China’s Black Friday) in 2020.

The success in Asia has piqued the interest of digital platforms and brands in the U.S. looking to imitate similar success. So far, platforms including Amazon, TikTok, Instagram, Pinterest and YouTube have launched shopping live stream features and events, while brands in other verticals, such as Klarna and Sephora, are dabbling in the space. 

But U.S. companies shouldn’t simply “cut and paste” China’s techniques to find success, said Michael Liu, SVP, head of innovation at Carat USA.

“In Asia, it's easier for that culture,” he said. “The people there have a habit of ordering things online and getting them delivered in just a few minutes, or later in the day. We just haven't seen that in the U.S. at a massive scale.”

Livestream shopping is also about positioning the right product. Cosmetics and household products are particular fits because they are easy for influencers to demonstrate, said Liu, giving them a large role to play. 

“You can tell a different story about the same product five different ways to five different creators, and have five different audiences,” he said. “The fan actually has a piece of something that they believe in, because there's somebody talking about it.”

Platforms catch the bug

It’s no surprise that innovation on the live stream shopping front is coming first from the major U.S. tech platforms. 

Amazon was one of the first big platforms to dabble in livestream shopping — way before the pandemic — with Amazon Live in 2019. The platform live streamed shows where influencer hosts demonstrated products available on Amazon, leading to future specialized events and streams featuring Black-owned businesses and creators.

Facebook’s Live Shopping Fridays began this past summer featuring beauty, fashion and skincare brands including Clinique, Bobbi Brown and Sephora. And Instagram will debut shopping broadcasts this holiday season. Also this holiday season, artists T-Pain and Normani will star in a shoppable music film for Google, which features products from Black-owned businesses.

Livestream shopping is becoming integral to platforms’ social commerce strategies. In November, Pinterest unveiled Pinterest TV, a series of live, original and shoppable videos on it’s app where creators and influencers such as Olympic athlete Tom Daley, makeup guru Manny MUA and more will host shows centered around fashion, beauty, home and food.

As the trend takes off among platforms, media giants also want a piece of the pie. NBCUniversal debuted a new show, Impulse Try with Remi Bader, starring TikTok star Remi Bader, earlier this month. The shoppable show will air for three days, beginning on November 26, live on Instagram, Facebook and Comcast’s Xfinity X1 cable box, and feature guest stars from NBCU’s Bravo network. 

NBCUniversal also launched the Virtual Bravo Bazaar, an augmented reality website where consumers can purchase products featured on Bravo shows like Below Deck and the Real Housewives franchise. 

Consumer brands get in on the fun

But it's not just platforms and entertainment brands that can capitalize on live stream shopping. Consumer brands, particularly in retail and financial services, are testing the waters, too. 

Often, this is happening through partnerships with platforms. In December 2020, Walmart teamed up with TikTok to live stream shopping events on the platform, where people could purchase items through pop-up pins on the video that directly add the item to their Walmart cart. Walmart didn’t disclose sales from the event, but said that it drew in 7 times more views than a typical TikTok stream and grew its audience on the platform by 25%. The success led Walmart to partner with TikTok on beauty and back-to-school shopping themed events later in the year. 

Macy’s and Sephora are following in similar footsteps, having hosted their own live shows on Facebook, YouTube and TikTok in the past year.

But some brands are entering the space on their own. Capital One, for instance, rolled out a shopping browser extension on Twitch user DNP3’s livestream, which led to a conversion rate of 39% within the first eight days.

In March, Klarna held its first livestream shopping event with Macy’s. And in November, American Express invested in Firework, a live shopping and video ad tech company that creates TikTok style videos for products with add-to-cart functionality. Neiman Marcus and Saks are also investing in shoppable video ahead of the holidays, the latter through its virtual event platform Saks live.

And in CPG, earlier this month, Hasbro debuted its first livestream shopping event, Hasbro Holiday Shopping Live, featuring hosts Daphne Oz and Buzzfeed contributor Iván Emilio showing off the season’s newest toys.

The influencer effect

Influencers are the driving force behind most of these livestream events, as brands look to draw people to their streams and influencers look for more accessible revenue streams. 

“Creators need to support themselves, and now they finally are able to monetize off of these big platforms and their audiences and this growing trend to not only connect more with your fans and audience, but also take more of the pie,” said Liu. 

Influencers are the not-so-secret sauce to driving sales for brands during live stream shopping events. Shahs of Sunset star Reza Farahan, for instance, relies on fellow influencers to sell his haircare products on NBCU’s shopping live streams. 

“Influencers are like the generals of my army,” Farahan said during a NBCUniversal press event in November. “They have access to all of these loyal followers who want to know about the things that influencers are experiencing. I look at influencers as essential to helping spread the gospel of our brands.”

But retailers, beware: ultimately, influencers hold a lot of power — including controlling the direction of commerce.

“There’s a risk where these creators are circumventing the need for certain retailers and the traditional purchase model,” Liu said. “But there’s also an opportunity where brands can sway purchase with more influence than typical messaging through fandoms and shopping events.”