Tags: Influencers, Creators, KOLs; Social commerce; Livestreaming; Strategy
This article was written for WARC as a part of a Spotlight series on social commerce in APAC.
Link to the article here: How to set yourself up for success in live selling.
Live selling is increasingly mainstream. Sales from Live selling in Southeast Asia surged from $1 billion in 2019 to $13 billion in 2022, projected to exceed $75 billion by 2027.
It is one of the biggest pillars of social commerce, providing a unique experience to the consumer at the convergence of online and retail store experience. It is entertaining, and buying is fun without being pushed into it. Tying it in with a passionate, charismatic influencer who knows how to sell an attractive product, it is a great way to bring in new customers interested in innovative shopping experiences.
Live Selling can trigger behavioural cues and win consumer preference
In an increasingly non-linear digital commerce world, consumers tend to switch between different stages of their purchase journey.
The value of Live selling lies in its potential to play into cognitive biases, rapidly accelerating consumers from discovery to purchase through behavioural cues such as:
a. Motivation: Deals, free (even unrelated) gifts with a purchase
b. Ability: Ease of purchase, key product specs displayed as a way to simplify and sway purchase decisions
c. Triggers: Fear of missing out (FOMO.)
With the power of other’s recommendations, Live selling builds social proof and consumer trust through comments, shares and likes. Moreover, live videos have users’ attention 20 times longer than other types of video content. The longer we keep someone engaged, the easier it is to communicate the brand’s purpose, build a relationship with the consumer, and the more likely we are able to sell to them.
Decoding the strategy behind Live Selling
In theory, Live selling is innovative and has the potential to grow a brand. Yet, it seems interesting that with all these benefits and the growth shown by China year on year, adoption in the rest of the world has been slow. It is yet to pick up in the US and UK, despite high internet penetration, prevalence of social/online shopping, and online video consumption. However, SEA has been a promising market for Live selling, particularly in countries like Indonesia.
Indonesia is the largest Live Shopping market in the region with nearly USD$5B estimated GMV from Live sales in 2022; 40% of internet users in the country are expected to have made a purchase from Live selling in 2022. TikTok CEO Shou Zi Chew has announced plans to invest in Southeast Asia, where it counts 325 million users, of whom 125 million are in Indonesia. Indonesia represented 42% of TikTok's USD$4.4B regional gross merchandise value (GMV) last year.
Why is Live selling popular in Indonesia? What are they getting right?
According to GroupM Consumer Eye Research, the top 3 reasons why shoppers watch and buy from Livestreaming are exclusive product offerings, authentic products, and sellers’ interaction with viewers. Clearly, authenticity leads the way, but this is something we have always known.
In addition to authenticity, Live selling has also become a way to overcome geographic and socio-economic barriers by bringing stores home to shoppers that cannot access them. It helps them engage with brands real-time under a cover of anonymity, particularly where they might be shopping for products that would make them uncomfortable interacting in real life. Shoppers find it easy to ask questions and bargain, giving them the satisfaction of getting a great deal. Last, Live selling in Indonesia is highly regional and seasonal, and the message conveyed by brands resonates with shoppers deeply.
This gives us three takeaways for brands: a) Live selling needs to solve for a problem, b) it needs to reach the shopper at the right place with the right message, and c) it needs to provide enough learnings to make it a repeatable tactic. Let us unpack this step by step.
I. Define the problem that Live selling will solve for your brand
The most important aspect of setting ourselves up for success is to first understand what problem can Live selling solve for a brand, or what is the main requirement?
Livestreaming can support multiple touch points of the funnel, but narrowing down to Live selling implies that our objective is to influence purchase intent or drive some sort of a conversion - It could be that we are looking to reach a unique set of consumers, test how a new platform works for our brand, find a new stream of sales, bring new users to the brand, driving product trials, or more. Having clarity on the goal helps dictate the rest of the flow.
II. Identify the right platform for Live selling
While the most popular platforms in SEA for Live selling are Shopee (27.0%), Facebook (25.5%), and TikTok (22.5%), sellers in the region typically use two channels on average for live commerce, and platform preferences differ by country.
Which platform we choose depends on which stage of the consumer journey we aim for, and if our product is the right fit for the platform. For example, X can be a great fit for TikTok, but products like Y might benefit more from setting up streaming on their own D2C websites.
With Reach being higher (if not on par) with eCommerce platforms, social media also plays a critical part in both Discovery and Evaluation stages of the consumer journey. Commerce platforms can accelerate consumers from consideration to purchase and help with fulfilment, all within the same ecosystem. Live selling is also a great way to bring shoppers to engage with and purchase from D2C websites and brand properties.
III. Define your success metrics from the outset
Once we have the objective and platform chosen, it is important to find the measurement parameter that tells us if we are on track.
While different platforms track metrics under different names, they offer most of the traditional KPIs that can measure performance of Live selling such as CTR, Sales, Conversion Rate %, or ROAS.
For Live selling, tracking sales in isolation can be a simplistic view of understanding how efficient the medium has been, how many of our consumers are new to the platform or our brand, or if they prefer our content.
For instance, for a platform like TikTok, ROAS from a live event is calculated only for the duration of the livestream, so if you showcase a product in a Live Shopping Ad and shoppers choose to buy later from your TikTok Shop, the ROAS from the event might not help provide a full view of whether Live selling drives GMV.
Given that TikTok is a product discovery and a content platform, it might be more beneficial to also track how many new users we have acquired from the platform. Or we could track the efficiency of live content in engaging shoppers and driving sales through a new metric called ‘GPM, or Gross per Mille.’ Defined as GMV per a 1000 product views, the metric is unique to TikTok (and Douyin,) and helps brands keep track of what kind of content or creator drives conversions.
For Live selling, we need to go one step further and break it down by stages - Pre, During, and Post - There is a lead up to the event, where we can measure how many users are engaging with the posts, or how many have signed up. Then there is the event itself, where we can track metrics focusing on our objective. And post-event, we can track how many users are visiting and purchasing from the product page.
What does the future hold for Live selling?
Live selling is a fast-moving space, platforms and features emerge and disappear before we know it. But the rule of thumb is to understand how Live selling makes an impact for our consumers and for our brand.
Given how so much of social commerce and Live selling is led by authenticity, there is a chance that Live selling might go beyond trendy or attractive goods and start being more tailored to the masses. We can expect to see growth beyond Beauty and Personal care, expanding to categories such as fresh food, edutech, and automobile. There is also potential for local services to grow through O2O (Offline to Online) Live selling.
We already have examples of how during Covid times, rural farmers in China used Pinduoduo and Tekka markets in Singapore embraced livestreaming to promote goods ranging from rice to fresh fish.
From a platform perspective, given the focus on a cookieless world, we can expect to see an increase in social commerce enablement and Live selling on D2C and brand properties. This can also help brands personalize the shopping experience and analyse viewer segments in detail, something that is tricky with social apps and eCommerce platforms.
Similar to Pinduoduo again, we may start to see an increase in community-led or reseller-led models, where groups of users come together to unlock a special deal. We already have startups like Chilibeli, Super, and Evermos in Indonesia building capabilities in this space.
Shopper needs are evolving and platforms are constantly merging their capabilities and expanding to new services. Live selling, without doubt, is here to stay, and both brands and shoppers can expect Live selling to be a powerful platform offering entertainment, commerce, and convenience all at once.
 Source: eMarketer ‘Live Commerce 2023’; Includes Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam;  Image source: WARC Hankins Hexagon  Read more: Fogg Behaviour Model  Research by Forrester  Cube Asia report: Social Commerce in Southeast Asia 2022  https://www.channelnewsasia.com/asia/indonesia-entrepreneurs-cash-tiktok-live-selling-spree-3582386  From Singapore-based consultancy Momentum Works.  According to logistics firm Ninja Van, based on a November 2022 survey among 1,186 merchants in its network.  https://www.technologyreview.com/2020/05/06/1001186/china-rural-live-streaming-during-cornavirus-pandemic/  https://tnp.straitstimes.com/news/singapore/tekka-online-markets-first-facebook-livestream-big-hit