Is livestream commerce about to break through?
Knowledge at Wharton staff
Presented here for discussion is a summary of a current article published with permission from Knowledge at Wharton, the online research and business analysis journal of the Wharton School of the University of Pennsylvania.
In an article for Harvard Business Review, “Selling on TikTok and Taobao,” Wharton marketing professor Thomas Robertson argues that livestream commerce is fast becoming the medium of choice for online shopping, but technology and marketing’s learning curve is holding back adoption in the U.S.
A core reason livestream commerce is maturing faster in China than in the U.S. is because Alibaba’s Taobao platform provides the ability make a purchase without leaving the stream. According to iResearch China, livestream commerce is expected to account for between 20 percent to 25 percent of China’s online sales by 2023, up from 10 percent in 2020.
“We don’t have an integrated app at the present time in the U.S.” said Prof. Robertson said in an interview with Knowledge at Wharton. “It’s moving in that direction.”
In the U.S., the favored format among social-media platforms seems to be TikTok whereas other platforms are being retrofitted to accommodate video.
There’s also a learning curve involved. Prof. Robertson said, “You have to choose the right platform, and you have to choose the right influencer. Is it someone with a following, or a more specialized influencer who knows more about a specific category, such as cosmetics or a technology good?”
Nonetheless, Prof. Robertson expects rapid growth for livestream commerce as e-commerce shifts from a “solitary experience” supported by text and imagery to a communal one embracing real-time videos led by influencers.
He said, “People are relating to one another, so you’re not alone. You may not know the people shopping with you, but you identify with them because you have similar interests. Other people buy, and you feel it’s legitimate and will do it as well. There’s a social pressure of sorts in livestream commerce events.”
His advice for brands exploring livestream commerce includes starting early.
“This is part of your arsenal,” said Prof. Robertson. “You have to integrate livestream commerce with your other marketing strategies and tactics. How does it fit in? I recognize that, as I talk to some of these major brands, it took more than one experience to get it right.”
- Why Livestream Commerce Is on the Rise – Wharton
- TikTok and Taobao – Harvard Business Review – Harvard Business Review
- Is the pandemic pushing livestream shopping into the mainstream? – RetailWire
DISCUSSION QUESTIONS: Do you see livestream shopping becoming a more significant driver of e-commerce in the U.S. over the next five years? What advice would you have for brands thinking about jumping into livestream shopping?