Live shopping has been making waves in the e-commerce industry as more companies look to engage consumers with social media-like content. Content creators on platforms such as YouTube and TikTok have been experimenting with how to make integrated e-commerce a reality.
According to a survey by business intelligence firm Morning Consult, less than half of Gen Z and Millennial adults are aware of live shopping events, meaning there are a lot of ‘advantages. Additionally, among consumers who took the survey and purchased from a live event, 86% said they were satisfied with their experience.
Although it is growing in popularity, findings from marketing research firm Insider Intelligence show that 17% of people in the United States are buying through live streams, a long way to go compared to consumers in China where the industry direct shopping accounts for more than 10% of the country’s entire shopping market.
Shopping and community
Live shopping is a kind of updated home shopping channel, such as QVC. A creator streams a video online and showcases the items he sells to viewers, and the tremed video is sent over the Internet in real time, without being recorded or edited first. There is usually a live chat log where viewers can offer to buy items or start other conversations with the live stream host and other viewers.
Consumers can buy collectible novelty items such as Marvel comics, limited-edition Funko Pops, or vintage clothing that vendors find at thrift stores and then sell online.
Local startups have started to take advantage of the growing popularity of live shopping events. Last October, for example, the Financial Times reported that TikTok was in talks with TalkShopLive, a West Hollywood-based company that hosts live shopping streams, to launch a live shopping offer. Celebrities like Oprah Winfrey, Dolly Parton, and Jennifer Lopez have used the app to sell a variety of merchandise, including cosmetics.
A local competitor to TalkShopLive is West Hollywood-based Popshop Live, a platform where users can watch live shows from their favorite sellers, chat with shoppers and hosts, and purchase products. According to the company’s website, Popshop Live charges a 6% service fee – as well as a 3% payment processing fee – on in-app purchases.
Whatnot, based in Marina del Rey, also focuses on direct shopping. The company is a live auction platform that allows people to bid and buy rare new arrivals, vintage clothing and more. According to a representative from Whatnot, today’s top sellers earn up to eight figures a year using the platform, with more than 100 sellers earning nearly $1 million last year. Whatnot takes an 8% commission on the sale price of an item when it sells. Since its inception in 2019, the company has raised approximately $485 million from investors. Backed by Andreessen Horowitz, YC Continuity and CapitalG, the company’s valuation stands at $3.7 billion.
“The race to ‘win’ live shopping in the US has intensified over the past few years, and with the investments we’ve made in our platform, our sellers, and our audience, we’re ready to pick up the slack.” “, said Whatnotco. -founder and CEO Grant Lafontaine in a statement.
A Whatnot representative said live shopping is growing in popularity because static marketplaces like eBay are “boring and impersonal”. Many sellers use the platforms to sell collectibles such as rare Pokémon cards, comics, and action figures.
“Fandom has always had a place online, but it really thrives at in-person events like Comic-Con and local specialty stores that cater to collector interest and these one-of-a-kind items, so I think now more than ever, the enthusiasts who make a living buying and selling these products need something more than just a static mass market,” the Whatnot representative explained. “They need something more than that to recreate the magic of those in-person interactions and like to scale their businesses.”
According to surveys conducted by Whatnot, the platform has become not only a place where users can buy items; a sense of community between buyers and sellers also emerged.
“Whatnot has cracked the code to make online shopping engaging and fun through their community-based approach to live shopping,” CapitalG general partner Laela Sturdy said in a written statement. “Whatnot’s entertainment and commerce merger has created incredible growth cushion that is accelerating growth on both sides of their market. Buyers spend hours each week engaging with the app’s content and community, while sellers get stronger monetization than available on other channels. »
Cristel Russell, professor of marketing at Pepperdine University, studies how people consume entertainment, as well as marketing and purchasing trends.
“The intersection of entertainment and shopping is nothing new,” Russell said. “There’s always been branded entertainment or product placement in TV shows, and of course shopping channels like QVC and old-school TV, so the fact that Tik Tok is also becoming a platform form for people to demonstrate and sell products makes perfect sense.”
He said there will be more online shopping businesses in the near future as it will open up the e-commerce arena to more people with very little cost to get started.
“Just like you can be a small business and put your stuff up for sale on Amazon, TikTok is that platform that has such a huge audience and there’s a low cost of entry so people can just start a channel. ‘live buying,'” Russell continued. “And if you’re good at it, it will spread and grow very quickly with very little