What is live commerce? 

Live commerce links immediate product purchases with audience interaction via chat function or reaction buttons.

In less than five years, live commerce has transformed the retail business in China and established itself as a key sales channel. Two-thirds of Chinese customers indicated they had purchased things via live stream in the previous year in a 2020 poll. While Western companies are still lagging behind China in the quest for live commerce, early adopters are beginning to display significant revenues.

It remains to be seen how this new channel will evolve. However, it is undeniable that it has excellent long-term potential for both companies and e-commerce platforms. According to our estimate, if China’s history is any indication, live-commerce-initiated sales might account for 10-20% of all e-commerce by 2026.

Brands, businesses, and marketplaces can benefit from live commerce in 2 main ways:

Accelerated conversion.
Live commerce is engaging and fascinating, keeping people watching for longer. It also narrows client decision paths from awareness to purchase. In addition, time-limited promotions, like one-time discounts, can be utilized to create a sense of urgency. As a result, companies claim conversion rates surpass 30%, up to 10 times greater than in traditional e-commerce.

Improving brand uniqueness and attractiveness.

Live commerce boosts brands’ attractiveness and identity while attracting extra viewers when done correctly. It can improve current customer relationships while also attracting new ones, particularly young people who are interested in innovative shopping forms and experiences. Some businesses are experiencing a 20% growth in their proportion of younger viewers.

Live commerce has expanded quickly in China, taking less than five years to emerge into an innovative sales channel with a 10% projected penetration. Between 2017 and 2020, China’s live-commerce business value increased at a compound annual growth rate (CAGR) of more than 280%, reaching an estimated $171 billion in 2020. The COVID-19 epidemic has accelerated this rise, and Chinese sales are estimated to reach $423 billion by 2022.

The product categories most frequently presented in live commerce are clothing and fashion (36%), followed by beauty items and food (about 7% each). Consumer electronic devices account for almost 5%, and furnishings and home decor account for nearly 4%.

Generation Z and millennials are the most active users in terms of demographics. However, live commerce is also beginning to attract middle-aged and older consumers. By March 2020, 265 million people—nearly 30% of Chinese Internet users—were using live commerce. With a market share of 35%, Taobao remains the world’s most significant player.

Following the footsteps of China, Western companies, businesses, and marketplaces are launching their live-commerce projects and events to advertise their products, particularly in the beauty and fashion industries. Douglas, a German cosmetics store, was among the early adopters, streaming multiple presentations each week in various formats, from workshops with experts to discussions with influencers, with estimated conversion rates rise of up to 40%. Tommy Hilfiger recently expanded its live stream program to Europe and North America on the fashion front after seeing success in China. One broadcast allegedly drew 14 million viewers and sold 1,300 hoodies in two minutes. In December 2020, Walmart conducted a live stream fashion event on TikTok, attracting seven times the number of viewers predicted, which allowed it to grow its TikTok following base by 25%.

Plenty of specialized start-ups have also sprouted, such as NTWRK, which streams shows in which guests present limited-edition streetwear, and Buy with, in which viewers watch hosts browse the e-commerce site and talk via webcam.

Meanwhile, customer demand is growing: according to a poll conducted, about a quarter of consumers outside of China would prefer learning about the newest released products through a live stream featuring an influencer or brand representative.

Several findings indicate that the following developments are likely to occur in the next years:

Expansion into new markets. 

As the scope of live commerce expands, businesses such as healthcare, engineering, finance, and, in time, B2B sectors are expected to join. A significant technology business, for example, intends to leverage its live streaming platform to deliver health-related content and services such as consultations and appointment scheduling.

Micro and nano-influencers. 

Influencers and celebrities with millions of followers are costly to employ and may not necessarily make the ideal hosts. However, using influencers with a few thousand loyal followers can help you create a more intimate and trusted relationship with your audience at a cheaper cost. According to one report, nano-influencers on Instagram had ten times the engagement rate of mega and macro-influencers.

Augmented formats. 

Augmented reality (AR) and virtual reality (VR) can enhance the buying experience by allowing shoppers to see a product from every aspect. Ulta Beauty, for example, collaborated with AR company Perfect Corp to incorporate virtual try-on in their “Beauty School” webcast. In addition, through AR, consumers may have virtual face-to-face talks with show hosts in the future, just as if they were conversing in a store. 


Live commerce has become the standard operating procedure for successful consumer enterprises in China and most of Asia. It is rapidly spreading to Europe and the United States. Some trendsetters have had a far-reaching impact and influence. Others who want to follow their example will need to start as soon as possible to devise their experiments to make the most of this exciting new channel.

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March 11, 2022 — ShopParty