The Rise of Live Commerce In the US and Europe vs. China: 2024 Status
30/07/2024
Video Commerce
Just as you think digital consumption is at an all-time high, a new trend that shifts us deeper into digital spaces emerges. Some trends come and go, but live commerce has steadily revolutionized the way we buy products online.
eCommerce continuously has to evolve to meet consumer demands. As live commerce effortlessly combines immediacy, interactivity, and convenience, demand for it has also not waned. Here’s how it has changed over the past few years and a look at its adoption across major markets.
What Is Live Commerce?
Live commerce, or livestream commerce, is a branch of eCommerce that uses live streaming to showcase products in real-time. This approach not only allows viewers to see products in action but also allows them to interact directly with the host and make purchases instantly.
You can think of it as a fusion of live streaming and online shopping. It’s similar to traditional home shopping networks, but a modern version created for digital networks.
Live commerce is growing in popularity across many different markets, as you can see from the image below. In this article we will focus on 3 main markets: China (where it all started), the US and Europe.
Source: Statista
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Why Is Live Commerce Such a Big Trend?
Shopping doesn’t have to be purely transactional. Live commerce gets this. It involves the customers, giving them more reason to buy, which in return benefits brands again.
If you consider the following main benefits offered by live commerce, its growing popularity isn’t surprising.
Enhanced consumer engagement and conversion
The biggest problem with eCommerce is the low conversion rate. People typically click on an ad, visit the website, look around a bit and leave. Only 2% end up buying.
Live commerce’s higher level of engagement solves this problem. Unlike static product listings, live commerce offers a dynamic, interactive experience which can lead to between 20% and 30% higher conversion rates on average.
Consumers can ask questions and, what’s more, get an immediate response. This heightened engagement also fosters a sense of community.
Plus, trust and credibility can also be increased. Where it took brands months to build with content, real-time product demonstrations boost product trust virtually immediately.
Trust especially is a critical component for converting browsers into buyers.
Real-time feedback and adjustment
Not only do brands benefit from higher conversion rates, but they also have other incentives that are driving this trend.
Firstly, there’s the element of impulse buying. Limited-time offers, exclusive deals, and the excitement generated by live interactions taps into the psychology of impulse buying. Like the increased engagement that it offers, this factor also significantly boosts conversion. In fact at buywith, we see conversion rates of 40-50% — in some cases as high as over 60%.
A second major incentive is real-time feedback. Brands and hosts can gauge viewer reactions and adjust their presentations on the fly. This adaptability makes it easier for brands to fine-tune their messaging.
How Have Different Markets Embraced Live Commerce?
Eastern parts of the world have been quick to embrace live commerce. However, other major markets have also adapted to this trend, quickly turning live commerce into a global way of shopping.
China
China is the pioneer in live commerce. Here, familiarity and adoption among online shoppers are the highest.
According to a survey completed in 2023, 81% of Chinese consumers have already used livestream commerce to buy a product in 2023. Platforms like Taobao Live, Douyin, Xiaohongshu, and Kuaishou are leading the charge.
Chinese consumers have embraced this trend wholeheartedly, making it a multi-billion dollar industry. To give you an idea of its growth in terms of sales over the last few years, the gross merchandise value of eCommerce live-streaming in China added up to over 4.9 trillion yuan. In 2017, this was less than 20 billion yuan.
While the wide adoption of live commerce on social media in China hasn’t duplicated yet in western markets, western brands are taking live commerce in a different direction by hosting these events directly on their brand online store, as previously discussed in our webinar.
United States
The same 2023 survey found that 40% of US consumers have used livestream commerce to buy a product in 2023. Considering that the trend only started in the US a few years ago, US consumers are quickly catching on to this new trend.
Plus, according to estimations it’s rapidly gaining traction. To give you an idea of where it’s heading, it’s anticipated that by 2026 sales will grow by 36%.
While Amazon and social media platforms are popular channels because of their large audiences, hosting live shopping events on your own brand store has numerous advantages for both your brand and your customers. Hosting it on your eCommerce site seamlessly integrates into the purchase journey and gives you more control and higher conversion, while making it a seamless experience for shoppers to purchase without exchanging platforms.
Compared to China, brand-specific websites are also more popular in the US. According to a McKinsey and Company report, 9% of frequent live-commerce shoppers have used the brand’s own site for this purpose.
Europe
Europe presents a mixed picture with varying levels of adoption across countries. While some markets are enthusiastic about live commerce, others are more reserved.
Spain, Poland, and the Netherlands are three of the countries with the highest adoption rates. Here, about a third of consumers have used the medium to buy an item in 2023. In the United Kingdom, the picture looks similar, with 35% having used it.
Here, social media is also used more often than marketplaces. Brand sites also have a role that they can play with European audiences using it as often as their American counterparts.
However, as more global brands enter the live commerce arena, European consumers are expected to follow suit, making it a burgeoning market to watch.
China vs the US vs Europe: Key Differences
Aside from adoption and preferred platforms, the following are a few other key differences between these markets identified in the McKinsey and Company report that you should use to inform your strategy:
- While in China the most popular category is groceries, in the US and EU the top category is clothing.
- In the US, live commerce users are older (half are older than 35), while in Europe and China only 37% and 45% respectively fall into this age bracket.
- In China it’s more popular among females (58%), while in the US and Europe it attracts more male than female users (59% and 53% respectively).
Source: McKinsey and Company report
Source: McKinsey and Company report
Key Takeaways
Live commerce is more than just a fad. Even in regions like the United States and Europe where adoption was slower, forecasts predict that it’s going to grow quickly over the next few years.
For eCommerce brands looking to stay ahead of the curve, adopting live commerce is not just an option — it’s fast becoming a necessity. However, as there are significant differences between how markets choose to engage, brands will have to adapt their approach and strategy to each market.
As shoppers in western markets such as the US and Europe are more inclined to use brand-specific sites, a platform like buywith can be especially useful. It brings the in-store experience online to offer the personal interaction of in-person experiences at the convenience of a button click, fueling live commerce sales and boosting conversion up to 10X.
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Co-Founder and CEO of buywith
Adi Ronen Almagor is the Co-Founder and CEO of buywith, a leading video commerce platform and creator marketplace for major brands and retailers globally. A seasoned Video commerce entrepreneur and leader, Adi is an expert in B2B2C digital marketing and e-commerce, with proven effectiveness in creating content creator marketplaces, and has been featured in Forbes, Glossy and WWD, and presented at numerous conferences worldwide on Livestream shopping.
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