Livestream shopping, group buying and social discovery: The boom of social commerce


Sep 02 2020

As 2020 forced the closure of physical retail stores across the globe, brands have been quick to explore alternative retail avenues to maintain connections with their customers. As the pandemic took its toll on the physical retail landscape, it opened the door to digital retail acceleration as brands and shoppers alike were forced to embrace change in their everyday routines. Because of this, social commerce has rapidly gained momentum since the beginning of the year, with China leading the way but steady momentum is being built throughout APAC and the rest of the world.

Social commerce sales in Asia Pacific reached USD$2 trillion in 2019, with this figure expected to double by 2024 (Businesswire). Major social networks around the world have been quick to capitalize on this success. Facebook has launched Facebook and Instagram Shops during the pandemic, allowing retailers to sell directly through their Facebook and Instagram accounts, while Pinterest, Snapchat and TikTok have all launched new ad products and shopping features to promote discovery and commerce within the platforms. Likewise, we have seen the growth of livestream commerce and group shopping platforms including Taobao Live and Pinduoduo coming to the forefront of the Chinese retail environment.

As social commerce continues to go from strength to strength, we examine the key trends that have emerged.

Livestream sales: Driving excitement, entertainment and urgency

Livestream commerce has exploded in 2020, boosted by brands seeking new ways to deliver digital interactive shopping experiences to consumers who have been confined to their homes. The commercial opportunity for brands is significant, with China’s Commerce Ministry reporting that the number of e-commerce livestreaming sessions topped 4 million in Q1 2020, with TaoBao Live, Kuaishou and Pinduoduo all reporting a boom in livestreaming activity (CNBC).

Outside of China, livestream commerce has been relatively slow to take off, although retailers in Southeast Asia including Lazada and Shopee have begun to successfully add livestream commerce offerings to their platforms. Limited time and limited quantity offers are key to driving livestream success, with low prices (51%) and good visual presentation (45%) the leading reasons why Chinese consumers shop livestream sales (Statista).

Shanghai Fashion week back in March was fully livestreamed on Taobao live, with viewers able to pre-order the featured clothes and shop from the designers’ existing collections. Livestream shopping can combine events with commerce and open them up to a global audience. Given this potential, we expect to see the popularity of livestream commerce continue in a post-pandemic world and see retailers from the rest of the world begin to get on board.

Group buying: Team purchases unlock greater value

In China, shopping has become a team sport with the boom of group shopping platform Pinduoduo, which has grown at staggering rates to become one of China’s top 5 most valuable listed tech companies in just 5 years (South China Morning Post). With a valuation of more than $114bn USD, founder Colin Huang Zheng has described the company as “a mixture of Costco and Disneyland”, combining bargain products with entertainment (The Guardian).

Through Pinduoduo, shoppers can access discounts by enlisting others to buy the product as a group – and the bigger their shopping ‘team’, the bigger the discount. With over 683 million active users and 50 million orders a day, this group shopping model has proven to be thoroughly successful in China (The Guardian). Yet the model has not yet been successfully duplicated overseas, with critics arguing that the platform has focused solely on user growth rather than building a profitable business model.

As retail businesses outside of China begin to explore group shopping as an e-commerce avenue, it will be vital for brands to create a differentiated offering to their core brand in order to provide the value that consumers are seeking without cannibalizing their own brand value. By launching exclusive products or limited time discounts, brands will be able to tap into the social network of group shoppers through the creation of shareable offers, in order to boost brand awareness and affinity amongst a new shopper segment.

Social discovery: Bite-size videos a hit with Gen-Z

The rapid rise of Bytedance-owned TikTok and Douyin has opened the door to a whole new generation of video content. The highly addictive, short-form format of TikTok champions user-generated videos that are one minute or less in duration, with a sophisticated algorithm that serves users the videos they are most likely to enjoy and engage with at the top of their home page. TikTok has resonated extremely well with Gen Z in particular and the app has now opened itself up to advertising and commercial opportunities allowing brands to target this difficult-to-reach audience.

Brands seeking to succeed on this platform must lean-in to the nuances that make this social format so successful amongst the younger generation. Authenticity and relatability are paramount, and marketers must take the time to deeply understand the platforms they are engaging in, and the type of content that performs well, in order to maximize their performance and ROI. Trends are a significant driver of success on TikTok, and marketers must be open to leveraging trends to authentically integrate their brand onto these platforms via short-form video. It’s likely a different type of marketing than ever before.

As TikTok has fallen victim to some controversy that has led to countries such as the US threatening to ban the app due to privacy concerns, Instagram has added a new string to its bow with the launch of Instagram Reels, attempting to leverage the short-form success of TikTok. With both formats, brands may find success by leaning on native platform users – either engaging them internally for content creation purposes or partnering externally with influencers and KOLs to maximize authenticity and engagement.

Key to social commerce success:

  • Create content that prioritizes entertainment; when it comes to social commerce, your sales message should be secondary.
  • Ensure all content is fit-for-purpose and tailored for each platform, informed by a deep understanding of the channel’s nuances.
  • Enlist the knowledge of native platform users to ensure your tone and messaging hits the mark.
  • Stay at the forefront of each platform’s trends and be reactive and responsive with your content creation.
  • Offer exclusive deals, one-off products or limited time offers to ensure newsworthiness and shareability.

Case Study: Tiger social video creation

Heineken’s Singaporean beer brand Tiger tasked us with the social media creation for their sub-brands, Tiger Black and White, to be used across multiple regions. Tag worked with Tiger to create assets based on the creative design shared by Tiger’s creative agency.

We created the short-form video assets via our video team in Bangkok while also making use of CGI to produce the creative using resource from both our London and Singapore studios. We created a total of 18 social assets which are currently housed on the Heineken digital asset management platform for easy download and reuse in each market.

At Tag, we create consumer-centric marketing campaigns that shift the dial on key metrics. Backed by the knowledge of our team of retail experts, we are uniquely positioned to help support brands in their offline-to-online retail acceleration. We provide end-to-end marketing solutions informed by data and insights, enabling our partners to stay relevant and agile in today’s constantly changing marketplace.

Schedule a call today to discuss your retail marketing needs.

Related reads:

Effective digital advertising in an ad-blocked world

Leading the way: How Gen Z is changing the face of retail

5 steps to boost ecommerce success

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