What is the ‘shoppertainment’ phenomenon in e-commerce?

• The convergence of live streaming and e-commerce has become not just China’s, but the world’s, favorite way to shop
• The technical barriers to retail live-streaming are lowered by increasing smartphone penetration and affordable costs
• As shoppers look for more of an experience than just picking items, ‘shoppertainment’ will continue to play a role in retail

Lest we forget what a transformative year 2020 was, it was a year that was constantly evolving, to say the least. As the world continues to grapple with the long-lasting effects of the pandemic, online retail has been undergoing a series of changes, adapting rapidly to changing consumer behaviors like no other.

Take ‘Shoppertainment’ for an instance — as Amazon’s Twitch creates shoppable ‘experiences’ in the West, in China, Alibaba is seeing great success turning e-commerce into entertainment on a grand scale. In fact, in China, live streaming has become the primary medium for key opinion leaders (KOLs) to engage with their audience in China, as fans can ask questions about the products, talk to the hosts and even send virtual gifts as a token of appreciation.

For context, e-commerce kicked into high gear as shelter-in-place policies force many people to shift their shopping habits online. New data emerging from the Covid-19 Commerce Insight tracker shows that pure e-commerce revenue growth in Europe is up by 40-80% by April 2020 alone, compared to the preceding year. Within the same period, online orders are up 80% in North America.

Shoppertainment can drive retail

The goal of “shoppertainment,” is to draw shoppers to purchase from the online store the physical space by offering interactive and engaging activities. Broadcasting live on streaming platforms to showcase products has been yielding conversions to actual sales. 

It has been reported that Chinese consumers find the live stream shopping experience more social and interactive, and market growth numbers reflect their engagement. Taobao Live, the dominant live commerce platform in China reported that its gross merchandise volume has grown by 150% per year over the past three years.   

The success of this innovative approach is such that retailers internationally are just beginning to cotton on to the phenomenon of shoppertainment – it may represent a ‘new normal’ in the retail marketer’s playbook for 2021 and beyond. The promise of Shoppertainment’s ongoing success is such that many of the biggest e-commerce firms globally are betting big on live streaming, adding retailer ‘live’ content to their shopping sites and apps. 

Considering how livestream-generated commerce was a US$60 billion industry in 2019, according to Gartner principal analyst Matt Moorut, there’s definitely still room to grow since only US$1 billion of that was generated in the US, while the “vast majority” was spent in China. This year, expect to see live streaming expand beyond China in a more meaningful way since platforms like Instagram and Facebook have rapidly innovated and are adding more live stream commerce options of their own.

The market is fragmented among players like Facebook, Instagram, TikTok, and Amazon, but these platforms have shown a vested interest in cracking the nut as live streaming helps brands connect with consumers.