Livestreaming marketing and shopping is commonly defined as providing both live video and online shopping services on one platform. Consumers can log on to shopping websites or social media channels to make real-time purchases while watching live streaming and interacting with hosts. The concept probably emerged in March 2016 in China, when social media fashion content provider Mogujie embedded a shopping feature in its livestreaming interface, allowing customers to spend while watching livestreaming content. Covid-19 lockdowns further accelerated the adoption of living streaming marketing and shopping.
The development of e-commerce, social media and payment infrastructure enables a seamless livestreaming marketing and shopping experience. Fast and often free delivery, efficient return management also enhance people's trust in live streaming. More importantly, the livestreamer, typically known as key opinion leaders (KOLs), can turn livestreaming into an engaging impulsive shopping experience, pitching products and service to targeted audience with an immersive and real time demonstration. Today, top influencers in China like Li Jiaqi and Wei Ya can reach over 35 million viewers and generate millions of sales in a single livestreaming session. The conversion rate can be 5x higher than traditional marketing.
As of now, China is an absolute leader in livestreaming marketing and shopping. Many other global platforms are following the trend. For example, Amazon has launched Amazon live in the US. In Korea, Hyundai Home Shopping also received wide popularity.
Despite the popularities of livestreaming marketing and shopping in the recent two years, many challenges emerged as well. First, one of the core value propositions of live streaming shopping is its low price, typically 30-60% off regular retail price. As a result, large sales volumes and high conversion rate do not always lead to high profits for the seller. Second, as competition intensifies in the space, marketers must come up with creative livestreaming content to stay engaged with target audience, leading to a higher production cost and lower marketing ROI.
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