These days, buying things online has become commonplace.
This trend has further accelerated due to people refraining from going out during the coronavirus pandemic.
Under such circumstances, a new trend of “live commerce = selling goods and services through live streaming” is spreading mainly in China. It is a new form of EC, with many cases of sales of hundreds of millions of yen in just one hour of streaming.
This time, I will summarize such live commerce.
What is live commerce?
Live commerce is a new face-to-face communication tool that allows viewers and broadcasters to communicate while live streaming on SNS, etc., and combines e-commerce sites and live streaming. Viewers can purchase products of their interest while watching live streaming videos of product introductions by celebrities and influencers.
Until now, TV shopping was the mainstream way to shop while watching videos, but live commerce, to put it simply, is a form of TV shopping that is distributed over the Internet. Viewers can ask questions and make comments in real time, giving them the feeling of shopping online but at a physical store. There is a sense of realism that cannot be obtained by simply watching an uploaded video, and depending on how it is used, it is a field that is attracting a lot of attention as a sales method that can greatly increase the viewer’s desire to purchase.
Live commerce is a new form of mail order that is already popular overseas, and especially in China, where it originated, the number of product sellers and buyers has been increasing explosively since around 2016. It is believed that both the market size and the number of users will continue to expand in the future.
In Japan, multiple services began around 2017, and it was hoped that they would become widespread throughout the country. However, although the service was launched in about two years until 2019, it is true that a number of companies have withdrawn from the service.
While some companies are entering the market in response to the increasing demand for live commerce, it is also difficult for them to establish themselves in the market due to specifications that are not user-friendly or logical.
Why live commerce is attracting attention
As mentioned above, live commerce began to gradually become popular around 2016, but why is it gaining attention once again since 2020? There are three reasons for this in 2020.
Popularization of live streaming
Nowadays, the source of information is shifting from mass media such as television and newspapers to the Internet, and SNS is being used by a wide range of generations around the world. A popular SNS with many users has started a live streaming service and its functional enhancements.
As a result, many users are accustomed to live video, and compared to around 2016 when live video started to become popular, it can be said that live commerce has become more accepted.
The beginning of 5G communication
In Japan, 5G (5th Generation) commercial communication services began in the spring of 2020, led by four major domestic telecommunications companies, achieving high speed, low latency, and multiple simultaneous connections. The communication speed is several times that of 4G, and it is said to be comparable to the optical fiber that is widely used in homes and offices.
Games and videos that require huge amounts of data can now be downloaded anywhere at high speed, and with the evolution of the 5G communication system, it is expected that the hurdles to watching videos will become even lower.
Expansion of stay-at-home consumption
Due to the impact of the new coronavirus, which spread worldwide in 2020, lockdowns and curfews have been issued, and even now there is no prospect of returning to the previous lifestyle, such as avoiding unnecessary outings in various countries and regions. No. Similarly, in Japan, in response to the government’s request to refrain from going out for non-essential matters, events have been canceled and commercial facilities have shortened business hours.
A new trend that has arisen as more and more people are refraining from going out and staying at home is “stay-at-home consumption,” in which people spend money at home. There is a growing need for games, health equipment, and video streaming services to help people stay comfortably at home. Due to the impact of the coronavirus, sales in the e-commerce market have increased significantly around the world, and it can be said that the expanding demand is more than expected.
What are the characteristics of live commerce?
Now, let’s take a look at what kind of purchasing experience you can have when you actually use live commerce, along with its characteristics.
interactivity
Traditional e-commerce has the image of having a physical store on the Internet, where you basically do everything from selecting products to purchasing them yourself.
When compared to live commerce, it is a style that combines e-commerce with TV shopping and interactivity. The two-way interaction between broadcasters and viewers creates a simulated experience and communication similar to shopping at a physical store.
Information that is difficult to understand in text or images can be easily conveyed through interactive communication.
In addition, the on-time presence that can only be experienced through live streaming and the more comfortable interaction with the broadcaster will add excitement and fun to the process from selection to purchase.
presence of influencers
Live streaming by famous celebrities and popular influencers with many fans and followers can be expected to capture potential customers who are less likely to be interested in your products. The level of interest will depend on the distributor, but it can be said to be highly effective in terms of profitability and PR.
On the other hand, the challenge is that it is meaningless unless it is viewed during the distribution, so it will take time to find ways to select well-known people and make announcements.
Benefits of live commerce
Respond to user questions on the spot
Live commerce allows for two-way communication between broadcasters and viewers in real time.
The advantage of live streaming is that users can easily talk to the broadcaster and receive feedback from the broadcaster in real time. Viewers don’t just make a purchase, we also provide an “experience” that includes a sense of presence and togetherness.
Simply put, it means that you can receive customer service and shop at a physical store from the comfort of your own home.
In addition, you can answer simple questions on the spot, including the advantages and disadvantages, which will help alleviate your concerns when making a purchase. One of the benefits of a product description is that it also conveys the benefits of the product that cannot be expressed through text or images alone.
A smooth path to purchase
With live commerce, the process from wanting a product to purchasing it is smooth, and it is possible to “pay” on the spot, which lowers the barrier to entry, which is also an advantage.
Even if users are satisfied with the quality and price of a product, they may hesitate to purchase it when it comes time to pay. If you require complicated input or time-consuming procedures at the time of purchase, customers will find it troublesome and are likely to lose their desire to purchase.
With live commerce, making a purchase is as simple as a few taps or clicks, so you can make a purchase without losing your instant desire to purchase.
Since the purchase can be made stress-free from the user’s perspective, it is unlikely to leave a negative impression and will be remembered as a positive experience, which can be expected to attract repeat customers and fans.
Disadvantages of live commerce
It is necessary to attract customers on the web.
Live commerce requires attracting customers to be recognized on the web in order to sell products. Celebrities and influencers are often used to attract customers because of their influence. However, if celebrities and influencers are unable to collect a population of potential customers, the number of target users will inevitably decrease.
To begin with, the strength of live streaming is that it allows you to share time with your viewers in real time, but it also has the weakness of missing out on purchasing opportunities for people who don’t have the time to do so. It is said that it is difficult to attract customers that will lead to sales unless celebrities and influencers make announcements on their own social media accounts or make announcements on their homepages to attract people to live streaming. It is essential to create a system for advertising and attracting customers online, and it is necessary to devise ways to attract a wide range of viewers.
Potentially detract from user experience
Unexpected situations may occur during live streaming. For example, due to the influence of the specifications of the server and system that provides live commerce, if too many customers are attracted, the server may not be able to handle it and the video may become heavy, the image may become distorted, or in the worst case scenario, the service may stop. . Similar problems may also occur due to differences in the Internet environment of the sender and viewer, or differences in device specifications. Furthermore, if the number of viewers is larger than expected, even if you watch the live broadcast for the purpose of communicating with celebrities and influencers, your questions and comments may not be answered or ignored due to the large number of viewers. Being less sensitive can also be considered a disadvantage.
One thing to keep in mind is that while it has the advantage of being able to share time in real time and provide two-way communication, depending on the environment there may be problems viewing the video, which may impair the user experience, so be careful.
Live commerce service example
Next, we will introduce live commerce services. There are two main types of live commerce: the type that uses live streaming functions set up on SNS such as YouTube, Instagram, Facebook, and LINE LIVE; the EC mall type that allows you to watch videos directly from the EC site; and the EC mall type that allows you to watch videos directly from the EC site. There is a SaaS type that is embedded in
We will introduce the service and summarize its features such as the user base that supports it.
Instagram
Instagram is a popular SNS app, especially among women, that allows you to share photos, images, and live broadcasts. You can easily check the price and product name by tapping the posted product tag.
The checkout feature, which allows you to search for items and make payments within Instagram, was launched in the United States in 2019. In Japan, it is still possible to post product tags on stories and feeds, so you can disseminate detailed product information and information about the brand and manufacturer.
The number of influential Instagram influencers in Japan is gradually increasing, and there are many accounts with millions of followers.
There are already some influencers who are commissioned by companies to earn advertising revenue by promoting their products, and influencers are starting to be seen as a new way of working.
SHOPPROOM
Operated by SHOWROOM Co., Ltd. This is a service derived from video streaming services for idols and artists.
Live streaming is possible not only on the app but also on a PC. The main product categories we handle are mostly celebrity goods related to models and talents, and the main distributors are also celebrities. They sometimes introduce clothes worn in dramas, and they also promote products that are rare on other sites. Users tend to be men in their 20s to 40s.
C CHANNEL
C CHANNEL Co., Ltd. is developing a video distribution service such as product introductions through the app. Many of the streamers are models and influencers, and more than half of the users are F1, and the main users are women in their 20s and 30s. The content is also a curation type app that collects information that people of the same age group want to know.
TAGsAPI
This is a cloud-based live commerce service provided by Moffly Inc. that allows you to easily conduct live commerce on your own EC site. We have a track record of implementation in major department stores and apparel stores. In March 2021, we announced the launch of the “LIVE SHOPPING” business, which supports companies’ participation in live commerce, in collaboration with Takarajimasha Co., Ltd., which ranks among the top in terms of fashion magazine sales.
LIVE812
This is an online streaming distribution app developed and operated by MyStar Co., Ltd. that had its grand opening in May 2020. The origin of the service name is “LIVE812” because its head office is in Yaizu City, Shizuoka Prefecture.
It is characterized by many unique people, such as handmade artists and farmers. We provide the valuable experience of hearing directly from streamers who are involved in a profession with which they are not familiar with the quality of their work.
au PAY market
au PAY Market, operated by au, is a mall-type e-commerce site. The site was previously known as au Wowma!. The main users are people in their 30s and 40s, and the site has a live streaming function that allows live commerce.
Since this is an e-commerce site that can be used not only by users of au mobile phones but also by users of related services provided by au, it can be said to be a strong platform for attracting customers, which is an issue in live commerce.
Live commerce usage examples
Here, we will introduce examples of how live commerce can be used.
Application examples of FiNC Technologies Co., Ltd.
As a result of selling health care products selected by registered dietitians and others on an e-commerce site, introducing TAGsAPI, and distributing health care product sales and usage images, we were able to share deep knowledge about the products with customers. We had found it difficult to convey the image of our products using only text and images, but we were able to overcome this challenge by introducing live commerce.
Utilization example of Mitsukoshi Isetan Holdings Co., Ltd.
Isetan Mitsukoshi, a major department store, introduced year-end gift products through live commerce in 2018, and as the EC site sales reached record highs, they continued to introduce year-end gift and mid-year gift products in 2019 and 2020, effectively I am using a live commerce distribution service.
Usage example of Shiseido Co., Ltd.
Shiseido has been developing a service using live commerce distribution in China and has been able to increase sales on its own e-commerce site in China, so it started this service domestically in July 2020. We have started an initiative where beauty consultants (BCs) broadcast live videos introducing cosmetics and beauty methods, allowing consumers to purchase products while communicating with BCs in real time.
summary
Live commerce is a new product sales strategy, and it is expected that the market will expand in the future and the number of new companies will increase.
Viewers who are consumers can ask questions about products in real time, and there are many benefits, such as proposal-based sales. Although there have been reports of some cases of failure, it is also a field that is expected to develop, and future trends need to be watched carefully.
The strength of live commerce is that it enables online customer service similar to that of a physical store, creating a user experience by allowing customers to enjoy communication before making a purchase. In addition to using EC, there are many other ways to use it, which will lead to the creation of new business opportunities.
Although it cannot be said that it has spread in Japan yet, as 5G becomes more widespread, it may become commonplace as a marketing method. In order to reach customer and purchasing groups that could not be reached through traditional advertising methods, more and more companies are likely to consider introducing live commerce as a new sales format and advertising method.