U.S. companies are beginning to adopt an online retail model widely used in China: livestreaming e-commerce.
Livestreaming e-commerce is the live promotion and selling of products via social media influencers either on their own channels or on the channel of an e-commerce platform. In China, it is mostly held on a channel hosted by one of the online shopping giants such as Alibaba.
Livestreaming retail is not completely new. The experience is akin to a segment on the QVC or Home Shopping Network, but the Chinese shows are often much more energetic and hosted by young, charismatic celebrities hawking the products. The segments are not fully focused on the shopping, as some sessions feature live performances and other variety shows.
A Chinese SensationSocial e-commerce has taken off in China, driven by millennials and Gen-Z consumers. The video streaming shopping market was worth an estimated $30 billion in 2016, according to TotalRetail.com. It is expected to reach $70 billion by 2021, and up to $184 billion by 2027.
Its growth in China has been organic. The country has a lot of young, technology-savvy consumers already predisposed to shop online. Alibaba’s Taobao Live, Baidu, and JD.com—the three largest Chinese online retailers—are the biggest players and all have channels dedicated to livestream shopping. These retail giants often partner with social media websites such as Kuaishou and TikTok’s Chinese version, Douyin.
In recent years, livestreaming in China has also branched out to topics beyond shopping. Some segments use celebrities to promote public service announcements from local officials or virtual tours to promote museums. In some ways, livestreaming has become an intersection of shopping and entertainment.
Foreign firms such as luxury apparel brands have been the early adopters of this method of online retail in China. But more recently, foreign companies from other sectors have also partnered with livestreaming events. Asset management firms, such as Invesco Great Wall, have used celebrities to pitch their mutual funds on livestream shopping events.
Americans Adopting LivestreamingLivestreaming isn’t as popular in the United States, accounting for only $1 billion in annual sales, according to Bloomberg.
U.S. consumers are slowly becoming accustomed to this marketing channel. Several dedicated platforms exist, including Brandlive and TalkShopLive, which have seen significant growth during the pandemic. Amazon has a streaming platform called Amazon Live where gifting experts record segments to promote certain products sold on Amazon.
But these events have not received much mainstream attention—until Dec. 18.
Retail giant Walmart hosted a “first-of-its-kind” livestream shopping event on Dec. 18, partnering with TikTok. The event was shown on Walmart’s TikTok profile page and 10 TikTok creators—including Michael Le, who has 43 million followers—hosted a “shoppable variety show event” lasting one hour.
At the time of the deal, it was unclear why Walmart, a brick-and-mortar retail, was a party in the TikTok transaction. But its recent livestream shopping event on TikTok gave an indication of how Walmart plans to utilize social media to promote its online retail platform.
As TikTok assimilates into the U.S. technology framework, will it also bring Chinese online shopping methods to Americans?