Live commerce is on the rise in Southeast Asia and it’s time brands start paying attention. Here are some statistics to consider: the TikTok Shop GMV for 2022 was USD 4.5 million. In independent analysis of data from logistics partners, we saw that while the sales from ecommerce was stable, live commerce sales is growing by 200-300% month on month. So what is live commerce and why has it got people hooked?
Live commerce is where influencers sell to their followers over livestream. It’s an engaging environment, where buyers are in conversation, live with the seller. From a business standpoint, live commerce is a highly cost-effective form of marketing as compared to traditional digital marketing on Google or Facebook. Nowadays, you have to fight for a spot on the latter platforms, bidding with other players, and the conversion rate isn’t guaranteed. There are also scams or faulty ads on Facebook and Google that generate fake clicks.
On the flipside, with live commerce you know how many followers an influencer has, and that provides a certain guarantee of ROI. We also see followers being loyal to live sellers, not only wanting to buy the products they’re selling, but also to show their support to the influencers. And the data is fascinating: influencers with 10k followers on average are able to make USD 30,000 per month from live selling. Bigger celebrities might be able to reach USD 400,000 in just 40 minutes of live selling. This goes to show that not only are live sessions engaging, they also tend to have an addictive quality that keeps the audience hooked.
It’s important to note that with live commerce, the audience is committed to an influencer/seller more than a platform. So in a sense, live commerce isn’t platform dependent – most will follow a seller across various platforms. And as a result, brands can now focus on building loyalty with one person – the seller – instead of 100,000 people. If you build loyalty with the seller, their 100,000 strong audience will follow too. So in that sense, it’s a lot more cost-effective for brands.
In Southeast Asia, live commerce is becoming increasingly popular. Just 10 years ago, the environment was very new, with low adoption from buyers and sellers. Now, however, most brands are looking to claim their piece of the live commerce pie. Even without doing a deep dive into the data, you’ll see that the number of live sellers on TikTok or Facebook Live is increasing consistently.
The average consumer hasn’t built up their habit of online shopping yet, so there’s a lot of room for many more players to join in. They don’t, for instance, have the habit of only going to Shoppee to buy something – they might sometimes choose to shop at Lazada or Amazon. As long as these platforms have the product they need at a reasonable price, every platform receives roughly the same attention. However, live commerce is all about personalized interactions, as we will explore shortly. The GMV from TikTok Shop is growing faster than anyone could expect right now, and it’s time we take notice.
The Difference Between Ecommerce and Live Commerce
Ecommerce tends to be fairly value driven. People tend to shop on ecommerce platforms for items that are cheap, for example household items such as toothpaste or detergent. For these items, consumers tend to look for the highest value products for the lowest price.
On the other hand, for live commerce, consumers are looking for quality. With disposable income steadily increasing in Southeast Asia, people are more willing to spend on medium/high-tier, quality products.
Live commerce gives you the chance to hear from real people about the product you’re buying. It’s somewhat similar to a traditional retail environment, where if you’re buying a high-value product like a TV or fridge, you speak to a salesperson with the expertise to help you make the best decision. Today, not everyone has the time to do in-depth research into every purchase they need to make, and that’s where live commerce comes in. You have sellers or influencers who have already built trust with their audience talking about the product, introducing its features and benefits, and telling people why it’s worth their money.
When we launched in the Philippines, we were surprised to see that some people skip work to watch their favorite influencers selling live, despite the fact that they weren’t planning to buy anything. This points to the natural desire for interaction on a human level. If you think about it, in an ecommerce situation, this interaction is missing. You go to a website and click ‘Buy’ and there it ends – you’d only interact with the store if you had an issue with the product or your order. With live commerce, sellers have conversations with buyers. They don’t refer to themselves as buyers and sellers, but rather by name, as if they were friends. The experience of purchasing a product is more personal and less transactional with live commerce. You’re able to send messages, ask questions, and talk to the person you’re buying from.
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Nhat Vu Huynh Nguyen
Co-Founder & CTO