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"The Rise of Livestream Shopping" - Harvard Business Review

March-April 2023 issue

By 9FunFactsPublished about a year ago 3 min read
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In recent years, the rise of livestream shopping has revolutionized the way people shop online. Livestream shopping is a form of e-commerce that allows consumers to watch live videos of hosts demonstrating and showcasing products, while also allowing them to interact with the host and make purchases in real-time. This innovative approach to online shopping has been gaining popularity around the world, particularly in China, and has already started to make its way into other countries like the United States and Europe.

One of the main drivers of the rise of livestream shopping is the way it combines entertainment and shopping. Livestream hosts are often social media influencers or celebrities who have built up a large following, and they use their platforms to showcase products and create a fun, interactive experience for viewers. Hosts will often offer special deals and discounts for viewers who make purchases during the livestream, and viewers can also ask questions and get advice from the host in real-time. This approach has proven to be very effective at engaging consumers and driving sales.

Another reason for the popularity of livestream shopping is its ability to provide a more personalized shopping experience. Livestream hosts are able to tailor their presentations to their audience, and can showcase products that are most relevant to them. This makes the shopping experience feel more personalized and less like a generic online shopping experience. Additionally, viewers can ask questions and get advice from the host, which can help them make more informed purchasing decisions.

Livestream shopping has also proven to be a boon for small businesses, particularly during the COVID-19 pandemic. Many small businesses were forced to close their physical stores due to lockdowns and social distancing measures, and livestream shopping provided a way for them to continue to reach customers and make sales. By partnering with livestream hosts, small businesses were able to showcase their products to a wider audience, and the interactive nature of livestream shopping allowed them to build relationships with customers in a way that wasn't possible with traditional e-commerce platforms.

Despite its many benefits, there are also some concerns about the rise of livestream shopping. One concern is that it could lead to an increase in impulse buying, as viewers may be more likely to make purchases in the heat of the moment during a livestream. Additionally, there are concerns about the privacy and security of personal information that is shared during livestreams, particularly in light of recent data breaches and online privacy concerns.

Livestream shopping has been growing in popularity in China for several years, and has already become a multi-billion dollar industry. According to eMarketer, the value of China's livestream e-commerce market is expected to exceed $300 billion by 2023. The success of livestream shopping in China has been attributed to a number of factors, including the popularity of social media platforms like WeChat and Douyin (known as TikTok outside of China), and the widespread use of mobile payments.

In recent years, livestream shopping has started to gain traction in other countries as well. In the United States, major retailers like Walmart and Amazon have experimented with livestream shopping events, and smaller businesses have also started to embrace the trend. According to a report by Coresight Research, the global livestream shopping market is expected to be worth $25 billion by 2023.

Livestream shopping has also started to make its way into other industries beyond fashion and beauty. For example, real estate agents have started to use livestreams to showcase properties to potential buyers, and car dealerships have used livestreams to showcase new models to car enthusiasts.

Livestream shopping has also proven to be a popular way for businesses to launch new products or promote limited-time deals. For example, luxury brand Louis Vuitton partnered with Chinese e-commerce platform Taobao to launch a limited-edition handbag collection via a livestream shopping event. The event generated over 11 million views and sold out within minutes.

One of the most interesting aspects of livestream shopping is its potential to create new business models and revenue streams. For example, some livestream hosts earn money through affiliate marketing, where they receive a commission for each product sold through their livestream. Others earn money through sponsorships or advertising deals with brands. Some businesses have even started to use livestream shopping as a way to fundraise for charitable causes.

In conclusion, the rise of livestream shopping has transformed the online shopping experience by combining entertainment, personalization, and interactivity. It has proven to be particularly effective for small businesses and has the potential to revolutionize the way we shop online. While there are some concerns about its impact on impulse buying and privacy, it is clear that livestream shopping is here to stay and will continue to shape the future of e-commerce.

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9FunFacts

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