In brief

In brief

  • Live shopping is an established retail channel in Asian markets. Sales generated via livestreams in China doubled in 2020 alone.
  • But outside of Asia, shopping via video streams is yet to gain real traction. CPFs should evaluate this as part of their D2C approach.
  • We explore this channel and discuss the considerations for CGPs to capitalize on this new trend.


Live shop till you drop

Live shopping is an established channel in Asian markets. However, outside of Asia this channel is yet to gain real traction.

7.5%

In China, 7.5% of revenues on Singles Day 2020 (the anti-valentine holiday) were driven by live streams.

In Europe in particular, few major retailers have integrated live shopping into their repertoire. This poses the question; How will the live shopping ecosystem develop and how can new players enter the game?

As social apps such as Instagram already have shoppable live streaming features, it seems logical that they could become the hosts of future live shopping. European CPGs, who up until now have only tested the waters of live shopping, will need to scale up to find their place in this ecosystem. And with D2C operating models increasing in CPG, they should consider extending channels even further towards live shopping.

There are macro as well as company-specific factors: bandwidth is a potential obstacle in EuropeThe live shopping boom in China was enabled by strong LTE coverage and the accelerated 5G roll-out in 2020.

How to win in live streaming

To get started CPGs must first assess whether their business model is a fit for live shopping, and which categories are suited for the channel:

Storytelling

Products must spark interest with consumers and ideally allow for a demonstration

Audience

Target customer segments must align with the platform’s target audience

Unit Economics

Products must be priced so that a single item basket is still economical

View All

With the right D2C models and strong partnerships in place, CPGs may elect to ride the live shopping wave. One crucial factor in success is to be an early adopter. European CPGs should not wait for the ecosystem to develop, but instead start experimenting, testing, and learning now.

For more insight into this innovative new growth model, and how you can get started, download the first edition of The Consumer below.

Niklas Mallmann

Consultant – Consumer Goods and Services

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