Streaming has come to dominate many facets of our lives, from watching our favorite shows to gaming, fitness, and events. But there’s a new frontier emerging: social commerce. The West is following Asia’s example – particularly China – as the thirst for live video shopping grows.
- COVID-19 has accelerated the transition to e-commerce, and social media, as well as streaming platforms, are facilitating it. A new trend is emerging for influencer marketing: informal live-streamed commercials. In the West, it’s become known as ‘social commerce’.
- In July, Popshop Live – an American e-commerce platform that uses streaming video to let sellers both connect with their shoppers and sell in a new way – announced the close of a $3 million funding deal that brought the company’s total funding to $4.5 million,
- More recently in September, the Stockholm-based company Bambuser announced that it had raised $45 million this year after switching its focus from live video journalism to live video shopping. $34.5 million of that amount was raised during the pandemic.
A game-changer for the creator economy
Given its popularity and profitability, digital content platforms are increasingly integrating live video shopping into their offerings.
- In Q3 2019, Shopify recorded a $72.8M net loss. In its Q3 2020 earning report, it recorded a staggering $191M net income.
- Its partnership with TikTok is a game-changer for the creator economy. It’s a clear indicator that social media is becoming less social and more product-oriented.
“As COVID-19 has accelerated the e-commerce revolution, we are likely going to be seeing many more contextual commerce platforms arrive to market, so differentiation and simplicity will be key, for each platform, users, and brands,” wrote Neilson Hall and Allie Tattersall of Reprise UK, in the WARC Guide to e-commerce and the future of effectiveness.
Social media is becoming more product-oriented
Livestream shopping, also called social commerce, is most established in China, where dominant live commerce platform Taobao Live saw gross merchandise volume grow 150% per year for the past three years.
But social media platforms are also beginning to pursue a social commerce goal, experimenting with engaging formats that drive sales.
- Instagram launched its in-app checkout feature to selected brands in March 2019, and the platform has recently opened it up to all eligible brands across the U.S.
- In August, Facebook added the e-commerce feature to its main app, following on from their launch of the cross-platform Shops integration in May.
- Tiktok’s recent partnership with Teespring, an external commerce platform, will allow the bigger creators to create, design, and sell merchandise to their audience, without handling any of the inventory or production of the products.
The roll-up: Social commerce seems to be booming. For content creators and brands alike, creating unique and engaging social commerce strategies could be a promising revenue stream.