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Shopper Trends|February 04, 2022

Livestreaming in the U.S.A.? Learnings from China

From Nordstrom to Petco, a blend of merchants hosted livestream shopping events in 2021, and the U.S. livestream sales were estimated to reach $11 billion by year’s end. Yet just 16% of U.S. shoppers purchased from livestreams in 2021, our How America Shops® research shows. In China, two-thirds of consumers said they bought something via livestream in 2020. A look at cultural differences might explain why.

Is Livestreaming Dying on Our Shores?

Livestreaming – hosted, interactive videos that sell merchandise – is the latest Asian retail practice eagerly embraced by U.S. brands and retailers. In 2021, retail observers projected the channel could generate $25 billion by 2023. Yet in 2021, just one in six shoppers told us they bought something via livestream.

Why? Retail practices that we uncovered in our latest Retail Safari®, which explores livestreaming, provide some hints.

These Differences Shape Shoppers on Both Shores

From its micro-managed, centralized retail structure to its less competitive marketplace, the factors that distinguish how China approaches livestreaming extends beyond culture. Not everything that benefits the livestream complex in China may translate here, but just knowing these basic cultural differences should help retailers and brands avoid missteps and plan better:

1. The hosts: Inconsistencies abound

U.S. retailers use a mix of host types, from well-versed celebrities to grassroots influencers; sales associates taping in the store to independent candid reviewers. As a result, the presentations (really, the pitches) are uneven. Some hosts are hard sellers; others focus on entertainment. This inconsistency can make a retailer’s approach – heck, even the entire livestream movement – feel unpolished, unprepared and untrustworthy. Only one-third of livestream buyers find the host entertaining or trust the pitch.  

In China, brands use “key opinion leaders” to host. They are focused on selling and are subject to user verification requirements to ensure viewers they are who they say they are. This verification wraps them in a cloak of trust that U.S. livestream hosts might lack.

2. The access: Too much fragmentation

U.S. consumerism prides itself on choice, but when it comes to something new, less is often more. Livestreams in the U.S. occur in many places: social media platforms, brand and retailer websites and independent platforms. Many platforms are new, unfamiliar and therefore somewhat untested. Confused shoppers may choose to skip livestreaming all together, or wait for a recommendation, rather than invest time figuring out which channel or program is best for them.

In China, one key player dominates the livestreaming complex. The online shopping platform Taobao (owned by Alibaba) accounts for 56% of the country’s e-commerce, integrated in one platform for social media, livestreaming, payments, gaming and other services. (For context, the next dominant player, JD.com, controls 16% of the e-commerce market.) In a word: easy.

3. The shopper perspective: Individualism versus groupthink

In the U.S. shoppers define themselves through freedom and individuality. This is why indie startup brands do so well. Yet U.S. individualism also leads to more scrutiny – when shoppers see something new, they expect the retailer or brand to have information easily available. If a livestream pitch feels huckster-ish and opaque, their smart-consumer senses will tingle.

Asia is a group culture where being accepted and blending in is important. This is why big brands such as Gucci and Nike are so well established there (even the counterfeits!) – these brands stand for something that the group wants to be part of. Similarly, the key opinion leaders and platforms hosting China’s livestreams are established and stand for something. Again, it’s an issue of trust, and in an individualistic culture like the U.S., trust is harder to earn.

What Do These Differences Have In Common?

A sharp eye will recognize three themes in these cultural differences: Livestream events that capture shoppers – regardless of origin – are fun, easy and trustworthy. Shoppers are not settling for less.

If you’re looking for the right mix of unique product, compelling story and good storyteller to achieve this, turn to the Home Shopping Network and QVC for some guidance. But keep in mind: base on our research, in the year 2000, 10% of shoppers were buying from TV; by 2014 it was 5%, as new channels opened up. Keep the future in context.

Then compare notes and ask yourself: What makes our shoppers return? The “fun, ease, trust” qualities that bring them back to you physically and digitally should be duplicated in a livestream event. Because consistency applies to all channels – no matter how new. 

What new channels and innovations are you interested in learning more about? Visit WSL’s Shopper Insights web page for the latest How America Shops® surveys, Retail Safari’s and Hot Topic Reports. To read our latest Retail Safari®, “Livestream Retail: The Future of …” click here.

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