A sweater for RMB 39, a pair of shoes for RMB 29, and plastic hangers for RMB 10. Three seconds is all Douyin live streamer Zheng Xiangxiang spends for each product she showcases.
Each item is pulled out from an orange Hermes box by Zheng, who then announces its price before swiping it offscreen to make way for the next product.
Despite her deadpan expression, Zheng’s unconventional formula allows her to showcase hundreds of products in one sitting, reportedly selling over RMB 100 million (USD 13.7 million) worth of products within a single week, according to 8 Days.
While Zheng’s gimmicky sales tactic resulted in significant sales, Douyin began cracking down on the practice in November 2023 to protect consumers, introducing penalties such as fines and account closures for violators. Nonetheless, Zheng’s case aptly highlights the growth and potential of the live commerce market.
What is live commerce?
Live commerce is the sale of products during live streams on digital platforms such as TikTok. Similar to home shopping television programs, products are sold over a virtual format, enabling viewers to purchase goods at their convenience. However, instead of using infomercials, live commerce typically entails selling products in real time.
Contrary to Zheng’s methodology, live streamers generally provide in-depth explanations and product demonstrations. Items commonly sold through live streams include clothing, beauty products, groceries, and electronics. In a survey conducted by McKinsey, clothing was found to be the most popular product category for live commerce in Europe, Latin America, and the US. In China, groceries take the lead. Around 20% of all e-commerce sales could stem from live commerce by 2026.
Apart from TikTok, several e-commerce platforms have sought to capitalize on the live commerce wave such as Alibaba Group, which introduced Taobao Live in 2016. Other social media platforms like Meta’s Facebook and Instagram have also expanded into live commerce with integrated shopping features. Statista indicates that Facebook was the most popular platform for live commerce as of 2022, used by 58% of global consumers. Instagram came in second with 46% of consumers, followed by TikTok with 16%.
Why live commerce works
The appeal of live commerce can be attributed to its interactivity, convenience, and engagement. Live streams allow audiences to interact with the host in a myriad of ways through likes, reactions, and comments. Unlike infomercials, audiences can ask questions on the spot for hosts to clarify, offering a smoother consumer experience.
Live commerce not only brings the in-person shopping experience to users’ screens but offers greater convenience through the way platforms have simplified the overall experience. For example, TikTok introduced its in-app marketplace feature, TikTok Shop, enabling users to purchase goods without requiring redirection to another app or platform. In an eMarketer survey, 70% of respondents noted an increase in their TikTok usage following the introduction of TikTok Shop, suggesting a stronger platform stickiness that creates a cyclical value chain by combining shopping and social media to drive prolonged usage.
To stand out, live streams typically employ a variety of strategies to bolster engagement. Hosts may offer discounts exclusive to their respective live streams, encouraging impulse buying with timed offers. For beauty products, demonstrations and tutorials are often utilized to drive consumer engagement. Brands can also collaborate with influencers and content creators to push their products in live streams, leveraging on their following.
When executed well, live commerce provides a comprehensive yet novel way of bringing products to consumers, improving awareness, and driving sales. For this reason, it is a fast-growing market that continues to evolve and innovate.