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Will Live Shopping Become the New Normal?

Live e-commerce, a form of shopping, uses the real-time interactive features of virtual face-to-face to create an immersive experience for consumers, while also providing a unique shopping experience that facilitates consumers’ willingness and behavior to buy. In e-commerce live streaming, consumers can interact with the anchors and other consumers in real time at any time according to their needs, gaining insight into the quality and features of the products and thus making purchasing decisions. In recent years, this kind of market has taken the lead in China in terms of rapid growth, with various live e-commerce platforms such as Taobao Live, Racer Live and Jindong Live popping up. According to related reports, in September 2020, a platform anchor under the Byte Jumping Company reached a turnover of 130 million yuan in 90 minutes of live streaming, bringing this new e-commerce business format to the public’s attention. In the post-epidemic era, offline commerce has been hit hard and major businesses have flocked to live-streaming in order to save themselves, pushing live-streaming with goods to the top. The commercial value of live-streaming with goods is very high and the profits are also very high. At present, the average sales of a head anchor on China’s live-streaming platform exceeds 20 million in one night, and the profits can reach more than ten percent. Ai Media Consulting data shows that the market size of China’s live e-commerce market is 433.8 billion yuan in 2019 and is expected to reach 961 billion yuan in 2020, accounting for 8.7% of China’s online retail market.

Mainstream companies in other markets around the world have also noticed the potential that exists for live shopping as an emerging form of e-commerce. in February 2019, e-commerce giant Amazon began piloting its Amazon Live e-commerce live business and opened up cross-border live shopping to global merchants in February 2020, with cross-border goods on the platform mainly coming from sellers in mainland China, Hong Kong, China, South Korea, the United States and Europe. In February 2021, TikTok Shop is the first to open its live streaming feature in Indonesia. in April 2021, TikTok Shop UK opens. in April 2022, TikTok Shop Vietnam, Thailand, Malaysia and the Philippines go live for cross-border business.

For the time being, TikTok Live Shopping has the ability to grow relatively larger than Amazon Live. According to observations, the average number of viewers of Amazon’s headliner, Amazon Official Live, was only 3,126 at the same point in time over a total of 8 days from 10 July 2022 – 18 July 2022. Meanwhile, through the UK and Indonesian markets alone, TikTok’s 2021 transaction volume has reached US$1.7 billion, with Indonesia contributing over 70%.

The reason for TikTok’s higher growth than Amazon Live is the difference between live shopping customers and traditional e-commerce customers. The root of the sustainability of the live-streaming model lies in the better matching of users’ needs. For those who watch live, the needs of the user are not limited to shopping. Live shopping customer’s include shopping needs and entertainment needs, the traditional e-commerce platform does not have entertainment attributes, cannot match the user’s entertainment needs, so the e-commerce platform’s live broadcast layout has little effect. Broadcast platforms can launch high-quality, original and specialized content resources according to the needs of users at different levels, and strengthen the creation of branded products to increase users’ consumption desire and potential, thus greatly enhancing the attractiveness and stickiness of users to traffic. By also adding clear shop information to the live streaming interface, users’ shopping pleasure and efficiency will be increased and their perception will be enhanced. On the other hand, TikTok’s parent company, Bytedance, already has a successful experience in the Chinese market and provides a model that can be run for entering other national markets.

TikTok is highly optimistic about the future of live e-commerce, and by 2023 the TikTok Shop is aiming for a total transaction volume of US$23 billion, more than 10 times higher than in 2021. But despite this, the market has yet to test whether e-commerce companies can become the new norm for online shopping. In the UK market, where TikTok has high hopes, consumer acceptance of live buying is not yet high. Most live streams are currently only able to complete a few sporadic orders. Most TikTok users in the UK are still there for leisure and entertainment, and are not in the habit of watching live shopping.

By JIN Kaiwei

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