Will India Join The Global Live Commerce Rage?

With the pandemic bringing down footfalls at brick-and-mortar stores and causing an uptick in e-commerce, live commerce is soon expected to make waves in India

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In 1994, Zee TV launched India's first teleshopping network, Asian Sky Shop, which showcased anchors selling many products live on television. Since then, teleshopping has continued to grab eyeballs.

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Today, the same concept is being replicated in the digital world. Called live commerce, here hosts interact with potential consumers through live video, who then make an instant purchase. Live commerce makes the best use of social media, e-commerce and streaming technology, and enables real-time interaction between sellers and buyers.

With India's e-commerce industry booming at present, live commerce is expected to be the next big opportunity for e-commerce and D2C brands. According to RedSeer findings, India's live commerce is going to reach $4-5 billion by 2025. Beauty and personal care (BPC) is expected to grow the highest by surpassing $1 billion in GMV with live commerce. Recently, Firework, a global B2B short-video platform, conducted a live steam sale that was joined by many D2C brands and more than 30,000 shoppers.

"While previously India's approach to onboard live commerce and smart tech was slow, retail stores faced an unprecedented challenge due to the pandemic and had to adapt to an environment where brick-and-mortar stores were no longer viable. This led to an increase in demand for brands that were well-equipped to integrate live commerce services into their existing service. Fulfilling this sudden demand gave rise to many startups venturing and building multiple digital services to complement the retail industry," said Shashank Randev, founder VC at 100X.VC.

He added it replaces the usual touch and feel aspect required by a consumer by providing increased customer engagement and interaction. "All this led to the big brands in the retail industry either to invest heavily in live commerce services or opt for onboarding services from an outside provider," he added. One of 100X.VC portfolio companies SaleAssist.ai is providing a solution to address this opportunity.

Tried And Tested Model In China

Also called live streaming e-commerce, this is a popular model in China. It all started in 2014 when Chinese fashion e-commerce platform Mogujie started experimenting with the concept. It was followed by Alibaba's Taobao and makeup brand Kohl. By 2018, it picked pace further and the Chinese live commerce market was estimated to reach 440 billion yuan (around $63 billion) in 2019, according to Everbright Securities. On 2019 Singles Day in China, live streaming generated a sale of 2.6 billion yuan for TMall alone.

Since then, globally, many well-known brands such as MAC, Levi's, Ralph Lauren, Sisley and Burberry have taken to this style of commerce. Influencers have also been launching their own products and live streaming the same. Some like Kim Kardashian have collaborated with celebrity live streamers to sell their products. Recently, Amazon added a permanent section for live streams on their homepage in the US. Walmart, and brands including Samsung, Adidas, Loreal have also joined the bandwagon.

In India, live commerce is still at a nascent stage but is expected to take off soon and thus has been lately grabbing investor interest. "Live commerce is a mainstream trend in China now and a better way to generate sales for Chinese sellers and social commerce users," said Nilesh Padariya, co-founder and CTO at GlowRoad.

"Live commerce has been a money-spinner in China but the rest of the world is just waking up to it. The model has worked in China because of the presence of super apps that offer content plus commerce. Till now, no other app has been able to pull off that aspect well enough," said Tamiesh Sood, founder at TAM Collective, a startup that offers retention marketing services for D2C brands.

Players Tapping The Opportunity

In India, live commerce is mostly an added live layer on top of video commerce at present. For instance, at GlowRoad, a leading social commerce platform, many resellers who have a strong social media presence, go live on their Instagram Live, Facebook Live or YoutTube Live. They showcase, review, unbox or put up a haul show of the products from GowRoad live to their followers and generate a lot of sales per live video session they do.

Similarly, other social commerce startups including Bulbul, 2Mall, Simsim and Trell, among others, offer video commerce on their site where a user usually records himself/herself with a product review, unboxing, or a haul show, and live commerce is done by resellers.

"If you see apps in India, every app has a "stories" feature, Instagram started it... now it is on all apps. But I don't see "going live" feature on many Indian apps right now, perhaps they will innovate and build it and then live commerce will gain traction," said Padariya.

According to the RedSeer report, at present, there are two key channels that are expected to offer live commerce on their platform. First is the pure-play short-form video apps including Chingari and Roposo which are looking to foray into the live commerce category, and then there are social commerce players including BulBul and Meesho which started live commerce at a low scale.

The majority of their target audiences are millennials and Gen Z consumers who are looking at personalized ways to shop online. Leveraging live commerce also helps brands align with the behaviors of vernacular speaking audiences in tier-2 and 3 cities in India by offering an audio-visual medium of marketing a product and gaining user trust.

Factors Leading To The Boom

Millennials and Gen Z customers, especially in tier II and III cities in India, are spending more time on social media than ever before and short video apps have been gaining a lot of popularity amongst these consumers lately. These two reasons, added with an overall uptick in e-commerce due to the pandemic and rise of influencers have paved the way for the trend.

"Going live is a great way to connect with your users, customers. If someone is showcasing a product to you on a live video, with all the details and you can comment live and ask them for a feature or any instruction, and it happens live on the video... that creates a great buying intent and trust in you as a customer and you are more likely to buy the product quickly," said GlowRoad's Padariya. He also added that GlowRoad resellers get hundreds of orders per live session on their Instagram live showcasing GlowRoad products to their followers.

"Users can watch influencers try out their favorite products which they can buy directly through the video app. Consumers in tier II and tier III cities are able to connect better with the product through live commerce as it is somewhat successful in removing the language barrier," said Ankur Bansal, co-founder, and director, BlackSoil.

Future Trends

In terms of new segments that will adopt live commerce, Randev believes, physical retail space would soon experiment with this phenomenon primarily for three reasons. One, it is currently suffering. Two, they can sell to thousands of people simultaneously and three live streaming gives these retailers, whose clientele is generally local, the ability to sell PAN India.

E-commerce experts believe that since live commerce works well for video-based content, all social apps that rely on video stand to gain from this trend. YouTube and Instagram are also simultaneously poised to take advantage of this trend. Other than video apps and social commerce, chatbots, interactive tech, AR/VR visuals and animations paired with seamless UI will be the upcoming live commerce layers that will provide strong value additions for brands.