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Livestream lessons from global e-commerce players

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Despite its massive success in China, livestream e-commerce is still in its infancy in the US. The launch of Walmart's first-of-its-kind livestream shopping event proves this trend is growing in significance in the American market. We look at how e-commerce leaders are racing to garner online shoppers and what US retailers can learn from global best practices.

TikTok's foray into livestream e-commerce with Walmart

Last December, popular video-sharing platform TikTok teamed up with global retail giant Walmart to launch their premium shoppable livestream campaign. It's the first time TikTok has hosted such an event in the US.

Why does Walmart want in on TikTok? By teaming up, TikTok could help Walmart appeal to the lucrative cohorts of millennials and Generation Z. This partnership is expected to bend the US e-commerce war rules if it can create a different shopping experience from Amazon's in a way that’s both entertaining and cost effective.

Compared to China's top influencer Austin Li's provocative livestreaming and deep discounts, this Walmart special shoppable session was more like an extensive introduction to Walmart's e-commerce experience. Influencer Michael Le, 20, was the first high-profile personality to participate and was the host of the one-hour event, with 45.7 million followers on TikTok.

At the beginning of Walmart’s live event, Michael Le started by greeting his fans and encouraging them to interact with him in real time by using the comments section. Austin Li’s best practice involves using a fixed camera position for a product closeup to introduce the item and provide more detail. By contrast, Michael Le's specialty is dancing, so he often pulls the camera away for a panoramic view and uses the whole time to show off his dance moves, which had nothing to do with selling products.

To date, US consumers have not yet formed the habit of regularly following livestreams. There are several critical differences between online shopping in the US and China. For one, online celebrities ineffectively position themselves as content providers rather than sellers. Moreover, the developing logistics network in the US makes it difficult to replicate China's experience with livestreaming.

Conversely, many Chinese online platforms provide a livestream feature for e-commerce, such as Alibaba's Taobao Live, WeChat mini-program, JD.com and Pinduoduo. In addition, short-video platforms Kuaishou and Douyin are vital players in livestreaming e-commerce business.

Alibaba's Taobao Live, a seasoned counterpart

Livestreaming e-commerce is a wildly popular phenomenon in China. Livestreaming already experienced a big boom in 2019. Therefore, it does not come as a surprise that numerous global merchants have counted on livestreaming to keep their businesses alive during the pandemic.

The coronavirus crisis indeed yielded explosive growth in livestreaming e-commerce in 2020. Livestreaming is now indispensable in China's post-pandemic e-commerce industry.

Such livestreaming sessions usually occur on Taobao, China's eBay-like consumer-to-consumer platform, which has attracted more than 600 million individuals. Brands can either choose to host a livestreaming session on their store channels or collaborate with a well-known influencer to do it on their Taobao channel, enabling them to target the influencer's existing fan base to amplify brand reach.

In the weeks ahead of the Spring Festival, China's Ministry of Commerce urged the public to go online to satisfy their shopping and gifting demands to support pandemic-control work. This means that customers spent more online and locally. Taobao debuted "New Year's shopping gala" online, offering a wide range of categories to Chinese customers, such as fashion, beauty, groceries, mom and baby and household equipment.

During a New Year's Shopping Gala session on Taobao Live, influencer Austin Li introduced products to his followers in the “Household Category" and his team hosted a raffle or virtual game to keep customers entertained. Public chat was enabled during the session, so viewers could directly ask questions about each product's look and feel, and interact with the host. At any point during the session, which attracted 20 million views, the online audience could purchase products by clicking on a small link and paying with Alipay, Alibaba's mobile and online payments platform.

WeChat builds the foundation of livestreaming commerce

WeChat is China’s incredibly popular social media platform and its mini-program is a mini-app that helps companies evolve from e-commerce to social commerce. WeChat mini-program is now becoming an essential part of the online retail channel strategy for international retailers. WeChat's livestream function launched February 2020, which was a major milestone for the WeChat mini-program as it’s considered the biggest game-changer in the livestreaming e-commerce industry.

With an uncertain e-commerce climate and the rise of local brands, 50-year-old global beauty retailer Sephora did not stop its journey when the pandemic hit in 2020. Over the past year, Sephora has continued its omnichannel marketing strategy in China. On April 23, 2020, Sephora released the new season's beauty trends in the form of livestreaming through its WeChat mini-program, bringing the trendy show online.

To celebrate the Lunar New Year and Valentine's Day, Sephora's WeChat mini-program held a livestreaming event on Feb. 5, an exclusive campaign to interact with Chinese beauty shoppers. The anchors presented a more comprehensive range of popular merchandise and new arrivals to online viewers at the start.

At the same time, the customers could click on a link to go directly to Sephora's WeChat mini-program store, where they could register as members and get a 15% off coupon by scanning QR codes shared with the livestreaming preview content. The coupon could also be used in offline retail stores.

According to Tencent Live data, each two-hour live broadcast attracted more than 20,000 views. The livestream campaign has been an increasingly popular way for Sephora to promote their products to consumers. This marketing feature has helped merchants interact with customers in real-time and generate sales via mini-program livestreaming. Global retailers now let viewers click the products listed on the livestreamed video and seamlessly directs them to place their orders.

Livestreaming is not just a sales channel, but a place for Sephora to have deep and direct communications with customers. As well as anchors, beauty assistants can help customers select the most suitable products and use rewards to encourage viewers to share the livestream link with their friends and communities.

The rise of livestream shopping in China may offer some clues as to how the trend may take off in the US, particularly as TikTok, which China's ByteDance owns, continues to grow its user base in the US.

Key takeaways:

  1. TikTok and Walmart's first shoppable livestream is bringing livestreaming e-commerce to the US while signaling this innovation is growing in significance in this market.
  2. Livestreaming is a new form of selling as the ultimate "virtual shopping" experience of watching and buying. As a digital, social way to shop in real time, users place orders during the live broadcast, creating a new shopping experience.
  3. Livestreaming is not just a sales channel. It’s also a place for anchors or brand representatives to interact and connect with their most desired communities of customers.

 

Franklin Chu is managing director US for Azoya International, a provider of turnkey cross-border e-commerce solutions to assist retailers looking to expand into China through a cost-effective and lower risk method. To date, over 35 retailers in 11 countries are partnering with Azoya to expand into China with ease, including French fashion retailer La Redoute, Australia’s largest pharmacy group, Sigma, as well as Feelunique, the largest online beauty retailer in Europe.