Live-streaming e-commerce, in which businesses host live online broadcasts to sell products, is growing rapidly. Already worth $63bn in China¹, there are signs that it is beginning to take off elsewhere,with global retailers including Walmart and H&M Group running streaming events for customers in the U.S. and Europe. According to Coresight Research, the market is set to generate $25bn in sales in the U.S. by 2023.² And one survey of 14,460 consumers in the UK, France, Poland and Spain found that 70% said they were interested in live-streaming as a way of enhancing their engagement with e-commerce.³

It’s a similar concept to home shopping channels. Streams are fronted by brand ambassadors or influencers, who talk about a product in detail and answer customers’ questions in real time. Live-streams differ from tele-shopping by offering more interactivity between retailers and customers.

Here are five things to know about this global trend.

For a better understanding of live-streaming e-commerce, look at how it’s done in China. In 2019, the market in China reached RMB440bn ($63bn), according to Chinese financial services company Everbright Securities.¹ That’s predicted to almost triple in 2021, to RMB1.2trn.⁴

During the annual Singles Day shopping event (11 November) in 2020, Alibaba-owned Taobao made $6bn in sales from live-streams – twice the amount made in 2019.⁵ The leading two live-streamers on Alibaba made over $1.4bn in two days of pre-sale for Singles Day in 2020.⁶

Consumer goods such as apparel and cosmetics are typically the best performing product categories on live-stream e-commerce. According to a 2020 survey of consumers in China, 36% of respondents had purchased apparel in an online streaming sale, and a similar proportion had purchased cosmetics. Other high-performing categories included food (35%) and household decorations (27%).⁷ And this is reflected in the types of companies that are getting into live-streaming in the West, such as H&M Group and Sephora.⁸

Like television shopping channels, retailers often use live-stream e-commerce for specific sales events, such as the launch of a new product or seasonal shopping day like Black Friday. For example, Burberry hosted a livestream of its fashion show in September 2020 on Twitch,⁹ while Walmart hosted its first live-stream shopping event in December 2020 on TikTok^.10

One-off discounts, special promotions and limited stock availability are common features of e-commerce live streams, designed to play on customers’ fears of missing out on a good deal and to encourage quick sales.⁵

The big advantage of live-streaming is its interactivity. Businesses can speak directly to their customers, obtain feedback on products and tell more detailed stories about the product and its uses, while customers can get their questions answered in real time. Not only does this help to drive sales, it also helps to build a deeper connection between brand and customer.⁵

Luxury retailer Harvey Nichols found that customers who’d engaged with a live stream were 21 times more likely to buy from them than those just using its traditional e-commerce channel.⁸ Meanwhile, some small retailers have reported that live-streaming has allowed them to create a community around their business.²

Platforms including Facebook, Instagram, TikTok and YouTube already feature live-stream functions that allow users to broadcast video content live to their followers. In late 2020, Instagram launched Live Shopping, which allows viewers to click on and shop for products within live content.¹¹ And YouTube trialled a live shopping event with 20 small businesses in the U.S. and Canada in June 2021.¹² Elsewhere, a number of technology startups are developing artificial intelligence to add shopping features to video and audio content.⁹

It’s early days for live commerce, so it’s inevitable that you won’t get everything perfect first time. It may be that some channels work better for you than others, or that users respond better to influencers than people from your brand. Try different approaches, ask for feedback from your audience and make changes accordingly.⁵