The Growth of Live Shopping

August 30, 2023

The Growth of Live Shopping

In an era where e-commerce is booming and consumer habits are rapidly evolving, a captivating trend has emerged at the forefront of digital retail - Live Shopping. As technology continues to weave its threads into the fabric of our daily lives, consumers are no longer satisfied with the static, impersonal online shopping experiences of the past. 

Instead, they crave real-time engagement, interactivity, and authenticity. Enter Live Shopping, the dynamic fusion of e-commerce and live video broadcasting that is revolutionising the way we shop and connect with brands.

What is Live Shopping?

Businesses venturing into live streaming have typically used it as another channel to fight for customer attention, generally focused on education, entertainment, or consumer interaction. However, converting that attention into sales has never really been considered a viable strategy for most. 

Live Shopping allows retailers to broadcast and demonstrate their products, all while connecting directly with consumers and answering their questions, in whatever way is authentic to their brand. 

Interaction is the key factor that sets this new format apart from the old-school TV-based shopping channels. Pair this with a relevant influencer presenting, an in-platform checkout, and you can see how some brands are now converting streams into sales.

Who is adopting Live Shopping?

Growth in Live Shopping was sparked during the pandemic, understandably as an alternative to the in-store experience. Unlike many behaviours that were adopted and then forgotten, Live Shopping has actually maintained growth in post-lockdown life in many countries. The industry has been estimated to be worth $480 billion in China, and so far valued at $11 billion in the United States. In 2023, Live Shopping now accounts for 19% of total e-commerce sales, a significant rise from the pre-pandemic 4% in 2019 (Forbes, 2022).

Taobao is the clear market leader in China, unsurprisingly owned by e-commerce giant Alibaba. But as Live Shopping is gaining momentum we have seen Facebook, Instagram and TikTok build out functionality. Amazon has also created their own onsite Live Shopping tech and communities. This supports growth across Western e-commerce markets.

The biggest demo for TV-based shopping are viewers over the age of 55. The most rapid growth demo for Live Shopping is among Gen-Z and Millennials. The key product categories taking off are apparel and fashion (36% market share), beauty products (7% market share) and food (7% market share). It seems obvious to assume Live Shopping might only be successful across lower-cost products and fast-fashion. Although, luxury retailers are also adopting the channel in China. This highlights the scope of opportunity for any brand to carve out their niche.

What are consumers getting from Live Shopping?

For many, Live Shopping can remove the friction of physical in-store shopping (travel, opening times, busy shopping centers), while maintaining benefits like human interaction (asking for advice from specialists). In 2023, consumers are craving to see a realistic “preview” of how a product might work specifically for them, not just a static image. 

Over the last couple of years, we have seen many AI e-commerce solutions pop up. These include AI store assistants, virtual clothing fittings, and Augmented Reality furniture placement inside your home. It’s starting to look like the new standard for e-commerce will be providing a range of these tools. Allowing consumers to gravitate towards whichever approach works best for them, based on their purchase journey and preferences.

How important are influencers to the success of Live Shopping?

A huge component of what makes live shopping work, and the strategy propelling growth in Western markets, is the leverage of influencers. Viewers who already have a community trust with a creator are much more likely to buy based on their recommendations, than those from an unknown brand representative reading from a script. 

Key players like Amazon have recognised this, and are leaning on influencers to present their own regular or one-off live events. Live shopping isn’t featured on the Amazon homepage yet, but it’s definitely creeping up the navigation!

Influencers have extended the existing business model of brand deals into the live shopping realm. Many influencers use this as another channel to build community engagement, and leverage their relationships with brands. They do this through featured products and endorsements on shopping streams viewed worldwide. These will be covered by the same evolving rules around sponsored posts and product gifting that are now mandatory in social posts.

These “ad” or “sponsored post” signposts increase the transparency for audiences, who are able to make their own informed decision about the authenticity of the endorsement. It seems many creators are taking pride in providing a full-picture review. Honest opinions can be rewarded with growth in community trust, which is an important component for long-term online relevancy.

Curious about how to stream?

With so much worldwide opportunity already in live shopping and projected growth over the next few years, now is the time to start experimenting with the format. 

Wondering how live shopping could work for your e-commerce store? Reach out to Reason to learn more.

Written by:

Sophie Turner

Ecommerce Specialist
at Reason

Written by the team at Reason.

More from Reason