Livestream shopping has been around since 2016 in China, but the recent lockdown measures that were implemented in the country caused a massive upsurge in this industry. Now livestreaming has become an indispensable format through which Chinese consumers shop. Major international e-commerce companies such as Amazon have already begun to put their money behind this new trend. Communicate spoke with Sachinn J. Laala (right) and Richard Nicoll (left), CEO and Managing Director respectively of shopper marketing and e-commerce agency Liquid Retail, to understand how quickly the MENA region will adopt this trending phenomenon.
How long has the concept of livestream shopping been around for?
Richard Nicoll: I first came across this concept in 2015 in China, where there was a need to create entertaining content for the Chinese e-commerce ecosystem. The big e-commerce players got involved and it became an absolute requirement to create entertaining dynamic content on those platforms. Since then, livestreaming has exploded and it’s now become China’s favorite way of shopping. This year, Taobao, an online shopping website owned by Chinese e-commerce giant Ali Baba, will have an estimated $500 million in sales just from their livestream shopping platform. It’s a concept that’s now completely embedded in the way Chinese consumers shop and buy goods. We’re likely to see that spreading elsewhere, but in a different way.
Do you expect livestream shopping to pick up quickly in the Middle East?
R.: In the Middle East, e-commerce is still a transactional channel and [online retailers] haven’t been able to replicate the experiential experience that is provided in stores. People misunderstand the meaning of shopper experience and experiential. All of the e-commerce players have been focused on maximizing the shopper experience in the last 14 weeks, which means providing easy access and delivery of products to consumers. This does not mean providing experiential entertainment. Livestream shopping is entertainment content that drives sales. Some markets, because of their infrastructural development and historical understanding of experience in terms of retail, are going to pick it up quicker than others.
Sachinn J. Laala.: Compared to other markets in the Middle East, the UAE is very well set up, [but] e-commerce platforms are [currently unable] to match the experience you get shopping at say Mall of the Emirates or even your next-door grocery. So, infrastructure will play a big role along with the population that resides in these markets.
Could you elaborate more on how these two elements will impact livestream shopping?
R.: In countries like the UAE, the US, and the UK, the infrastructure for shopping existed whereas it didn’t in countries like India and China, but the demand to shop was still there. This is the reason why e-commerce became so popular in these countries, especially in China, because it met that demand. But at the same time, these consumers also wanted to have human interaction during the shopping process. This is where livestream shopping comes in to help fill the gap. Livestream shopping combines the ease of online purchase with a meaningful interaction with the person. It’s both push and pull advertising and its popularity has soared in the last two to three years. The Chinese consumer wants to experience the feeling of being sold to. This is where the regional differences between the Middle East and China come into play and whether livestream shopping will pick up quickly or not.
S.: Livestreaming has been around for five to six years. Asia caught up with it in 2015, but the US and Europe haven’t because these markets don’t [really] need it and consumers in those regions don’t shop like that.
However, in the Middle East, the population is very diverse and comprises of different classes. So marketers need to be more strategic in our approach. When livestream kicks off here, I suspect it will do best in categories such as fashion and makeup. In these categories, consumers love to talk to the promoters in retail stores, to understand more about what product is best suited for them. There’s potential for these categories to [create that same offline engagement and drive sales] through livestream shopping. E-retailers can use live streaming to keep their content fresh and drive repeat purchases by providing new and entertaining content.
[Bear in mind,] while we’re excited about [the possibilities of] livestream shopping entering the Middle East, we need to be mindful because it’s important to [execute] based on market needs, and not by trends. It doesn’t work that way.
Are influencers a key element of the livestream shopping experience?
S.: While we’ve always focused on influencers in this region, we also love content. I believe the right content will negate the fact that even if you don’t have an influencer for the livestream, as long as the content is entertaining, consumers will absorb it. You don’t always need a celebrity for the content to do well. This obviously differs from region to region, but the content will play a very important role. For livestream to do well, it depends on how the content is being presented and what kind of audience is consuming it. So we’ll have to experiment and see what works and what doesn’t work in this region.
R.: Although influencers and livestreaming have grown together in China, they can quite easily be decoupled. Livestream shopping with influencers is not another celebrity engagement tactic but a completely new channel. Its maker is as strong as the celebrity. A person who grows tomatoes in Abu Dhabi can bypass retailers and sell directly to consumers through livestream tactics. It’s possible but the challenge is in building an audience. That’s where media agencies will have a big role to play.