The rise of live commerce in APAC: Will it eventually replace traditional eCommerce?

Live commerce, a way for brands to sell products through live streams on digital or social platforms, is one of the latest retail trends that has been leading the China market for years and now emerging in the APAC region.

According to a report by China Internet Network Information Centre (CNNIC), as of June 2022, the user size of live streaming in China had reached 716 million, an increase of 12.9 million over December 2021, accounting for 68.1% of all Internet users. Specifically, the user size of live-streaming eCommerce was 469 million, up 5.33 million from the end of 2021, accounting for 44.6% of all Internet users.

Until recently, more brands in APAC have been dipping their toes into the live commerce scene, for example, Asia Television Holdings (ATV) in Hong Kong has entered the livestreaming eCommerce business to boost the sales and market share of the group’s media, cultural and entertainment business. Back in March, TVB garnered sales of $RMB 23.5m in just six hours of the debut of its first live commerce show with live-streaming platform Taobao Live.

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Why are more brands in APAC adopting live commerce? 

While there is a growing trend in APAC brands banking on live commerce to boost sales, industry players MARKETING-INTERACTIVE spoke to said that there are quite a number of reasons the trend is picking up steam.

Some brands will use live commerce as a test bed to get customer feedback, with others trialling it as a method of improving the shopping experience with a more personal touch, said Danny Wong, head of growth and innovation, APAC TEAM LEWIS.

But for customers, it’s viewed predominantly as a place to get access to exclusive discounts and a forum to be inspired on new products to try.

The penetration of digital users and the technological innovation of online marketplaces and social media apps also explained the rise in the live commerce trend. “The live commerce ecosystem is fully commercialised in China, providing a sense of scarcity to online consumers with a limited time frame to participate in incentivised shopping experiences and a community platform for socialising with hosts and other audiences during live stream programmes,” said Carmen Wu, head of Havas Market, Havas Media HK.

The role social media plays in live commerce 

In fact, the line between social media and eCommerce is becoming increasingly blurred, but they both play a unique role in driving awareness and conversion in the sales funnel within the live commerce market.

Xen Chia, strategic marketing director, XGATE said live commerce addresses the social experience gap that is missing in eCommerce. “ECommerce marketplaces lack the casual experience of window shopping or social networking."

Therefore, live eCommerce combines the convenience of eCommerce plus the social element from offline shopping to provide consumers with a more desirable shopping experience.

Agreeing with Chia was Tim Durgan, APAC VP, strategy and insights at Assembly, who said instead of going into an electrical retailer or a clothing store and having the whole sales pitch with bespoke service, live commerce now provides brands the opportunity to measure effectiveness and bring the traditional in-store sales experience into digital consumer behaviour.

On the other hand, Jeffrey Hau, co-founder and director; and Clement Lee, digital strategist of Prizm Group believed that the effectiveness of live commerce depends on whether the specific product or service’s nature can leverage the perks of social media.

At the end of the day, to drive sales through social media, it thrives on the impulsiveness of social media’s users.

Live commerce VS traditional eCommerce 

Despite the increase in adoption of live commerce by brands in APAC, it is unlikely to replace traditional eCommerce as they exist in symbiotic nature and serve different target audiences and purposes. “While live commerce is a great tool for brands and audiences alike to do discovery and potentially trial, eCommerce is about regular replenishment or a need-based purchase - which requires a higher level of brand recognition, product understanding, and general trust,” said TEAM LEWIS’ Wong.

Agreeing with Wong was Havas’ Wu, who said the live commerce trend is unlikely to fully supplant traditional e-commerce. She also suggested brands take a comprehensive approach to learn quick wins, and leverage proof cases to aim for higher success. “With the right strategy and execution, live commerce can be highly effective in creating a win-win situation of reaching a broader audience and driving incremental sales,” she added.

On the social media front, PRIZM’s Lee and Hau saw live commerce as a fascinating amalgamation of taking the creativity and charisma of influencers, and its major role lies within the top portion of the conversion funnel.

We are just experiencing the honeymoon period of the live commerce hype. When we see an overwhelming volume, we are yet to find out whether consumers will lose interest or question its genuineness.

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