The Chinese retail giant had pioneered a powerful new approach: linking up an online livestream broadcast with an e-commerce store to allow viewers to watch and shop at the same time. Welcome to the next wave of the e-commerce revolution.
Live commerce combines instant purchasing of a featured product and audience participation through a chat function or reaction buttons. In China, live commerce has transformed the retail industry and established itself as a major sales channel in less than five years. In a survey, two-thirds of Chinese consumers said they had bought products via livestream in the past year. While retailers overall in the West are still behind China in the pursuit of live commerce, early movers are also starting to rack up significant sales.
How exactly this new channel will develop remains to be seen. What is clear is that it holds enormous long-term potential for brands and e-commerce platforms alike. Accelerating conversion.
Live commerce is entertaining and immersive, keeping viewers watching longer. It also telescopes customer decision journeys from awareness to purchase. Time-limited tactics such as one-off coupons can be used to generate a sense of urgency. Companies report conversion rates approaching 30 percentβup to ten times higher than in conventional e-commerce. Improving brand appeal and differentiation. It can strengthen positioning among existing customers and attract new ones, especially young people keen on innovative shopping formats and experiences.
Some companies are seeing their share of younger audiences increase by up to 20 percent. Live commerce has evolved rapidly in China, taking less than five years to develop into an innovative sales channel with an estimated penetration of 10 percent.
