How live commerce is bringing elements of fun and authenticity to online shopping

Live or video commerce is gaining traction in the Indian ecommerce market, with a potential to reach a size of $4-5 billion GMV by 2025, according to a research report.

How live commerce is bringing elements of fun and authenticity to online shopping

Friday August 20, 2021,

6 min Read

The ecommerce market in India has been witnessing a rapid evolution in the recent years with the emergence of newer formats like direct to consumer (D2C) and social commerce.

And now, brands have started exploring live commerce, popularly known as video commerce, on their platforms to onboard new customers.

Live commerce is a form of online shopping where customers can shop during live video streaming of events. It has become a viable way for brands to market, communicate, and sell products online.

In its previous avatar, it was called teleshopping, where hundreds of products were advertised on television. Now, in the digital age, it has become much more engaging, creating bigger opportunities.

Live commerce

Image source: Shutterstock

“Consumers are moving from traditional transactional ecommerce environments to one that incorporates social engagement, fun, and storytelling at the core of customer experience,” noted consultancy firm Zinnov in its whitepaper titled ‘What Is Shaping India’s Digital Economy: E = MC2 (Mobile* Content* Commerce*)’.

A growing market

The live or video commerce segment in India is still in its nascent stage, and has the potential to be the next big thing in the content space.

At present, some of the top players in the segment in India include Bulbul, Simsim, etc. Simsim was acquired by YouTube in July this year. The video commerce startup leverages content and creators to connect shoppers with the sellers.

Similarly, content discovery platform Glance, which owns video-platform Roposo, announced the acquisition of social commerce startup Shop101 in June this year.

Piyush Shah, Co-founder, InMobi Group, and President & COO, Glance, in an interaction with YourStory during this acquisition announcement, said,

“Mobile shopping is going to change dramatically. Traditional commerce is very functional, and we feel consumers want authentic and entertaining experience in a live manner in many categories, which is done by influencers or celebrities.”

Glance sees the coming together of content, creators, and community on the live commerce platform, he added.  

Enabling factors

In a report titled ‘How India shops online 2021’ done by Bain & Company and Flipkart, it notes that video content consumption has gained traction and has given birth to a substantial community of local creators and influencers. These creators are looking to monetise their following and are likely to drive an uptick in video commerce.

The report notes that livestreaming commerce startups such as Bulbul and Simsim have seen 9x to 10x growth in their user base over the last year.

Live commerce

Image credit: How India shops online 2021 - Bain & Company and Flipkart

In China, livestreaming commerce already accounts for 9 to 10 percent of gross merchandise value (GMV), it added.

The Covid-19 environment has also played its part as the work from home scenario is driving higher video consumption.

The Bain & Company report noted, “The video-watching user base expanded greatly during the pandemic and grew by 25 percent in India in the past year alone, increasing to 350–400 million users. Thousands of creators will help propel livestreaming and video-enabled commerce significantly in the coming years.”

Other elements like the internet population, importance of vernacular demographics, and new users coming from outside of metros, are expected to boost the prospects of live commerce in India.

A report by IAMAI and Kantar Research notes that internet users in the country stood at around 622 million in 2020, which is expected to grow 45 percent in the next four years. This means a substantial number of new users will be coming onto the digital platform.

Live commerce

Secondly, the internet penetration has also expanded substantially into the Tier II and beyond locations as well as rural areas, which will help in the growth of live commerce.

Thirdly, English language will not be an effective medium of communication for many first-time users coming onto the digital marketplaces. Here, online shopping through vernacular videos play an important role. Also, around 45 percent of India’s population is in the 15-45 age group who are more digitally savvy. These factors make it necessary to look at different ways of engaging this user base.

According to industry observers, there are certain limitations to live commerce as these cannot be used for every product category as most of the transactions online are very functional in nature and do not require much of engagement in terms of videos.

An engaging platform

Ankur Bisen, Senior VP, Technopak Advisers, says,

“Video commerce is an important tool for engagement, specifically for categories which require a lot of visualisation, and also for those consumers who are not transactional in nature.”

He believes there are many categories like fashion and jewellery where video commerce plays an important role in onboarding new customers. “Video commerce is filling this gap,” he remarks.

The live or video commerce market in India is expected to reach $4-5 billion by 2025, according to Redseer.

Live or video commerce also plays an important role where language becomes the critical tool for onboarding first-time users, especially the non-English speakers.

live commerce

Image credit: How India shops online 2021 - Bain & Company and Flipkart

The experience in China is also an indicator of how things could evolve in the Indian ecommerce industry.

The Zinnov White Paper notes that the number of live streaming users in China surpassed 433 million in 2019, accounting for over 50 percent of Chinese internet users. This massive user base propelled live streaming commerce to become a third of China’s total ecommerce sales in a short span of a few years.

Collaboration and competition

The video commerce segment could witness a rapid evolution in India as the existing players in India -- be it large ecommerce marketplaces like Flipkart and Amazon, or social commerce startups such as Meesho or even content platforms like Glance, will have the capability to fulfil the requirements of an online transaction.

The interest in this segment can be evinced with the acquisitions made by Glance of Shop101 or Youtube announcing the acquisition Simsim. Simsim has raised funding from the likes of Accel Partners and Shunwei Capital, while Bulbul is backed by Info Edge.

“We can expect to see interesting collaborations among players across content, payments, and commerce to bring the interactive commerce model to life,” says the Zinnov report.

Live commerce creates the environment of comfort and brings an element of discovery in online shopping unlike the very transactional nature of conventional ecommerce transaction, while also bringing the element of fun.

Ankur says, “This is a very important trend and holds a lot of promise for the Indian ecommerce industry.” He remarks that marketing of products on television channels is still an important platform, which reveals the potential of live commerce.

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Edited by Megha Reddy