The entire cross-border e-commerce industry is experiencing a revolution in marketing methods.
Following Amazon, AliExpress, Facebook, TikTok and other platforms, Latin American e-commerce MercadoLivre has also recently launched a live shopping platform MercadoLivreLive, which is its first involvement in the field of live e-commerce. Tainá Saramago, commercial regional manager of MercadoLivre, said that in the field of e-commerce, live streaming has become an inevitable trend. MercadoLivre will follow the trend and provide sellers and consumers with an interactive, personalized and entertaining shopping experience.
Giants have laid out, what is the current status of the development of overseas live e-commerce? In terms of the industry, can the introduction of live broadcasting to restore traditional consumption scenarios increase overseas e-commerce sales? For cross-border sellers trapped in fierce competition in the industry, is live e-commerce the antidote? Is now a good time to enter?
01
Traffic captures new tracks
Compared with China, the digital consumption pattern in the West is still changing rapidly. In 2020, due to the COVID-19 pandemic, more overseas consumers began shopping online. According to the US Retail Index released by IBM, the epidemic has accelerated the transition of US consumption from physical stores to e-commerce for 5 years. At the same time, after a long period of home isolation, consumers are eager to be attached and eager to connect with others. This desire to connect with others has fueled the popularity of live e-commerce.
"Before the pandemic, consumers weren't ready for new ways for retailers and brands to adopt new technologies, but as the pandemic progressed, people had no choice but to get stuck at home. They're looking for new ways to be entertained, and live streaming is one of them. Suzy Davidkhanian, principal analyst at eMarketer, said.
(Fitness coach Katie Austin broadcasts her workout live on Amazon Live.) During the live broadcast, she would take a break to promote the sponsored brand's dehumidifier. Below the video, a link to the product she uses (e.g. Under Armour shoes) scrolls on the screen/Image source: Amazon Live)
In line with the changes on the user side, from the seller side, more and more retailers are also testing live e-commerce in order to diversify the marketing mix and reduce traffic costs. Several industry insiders said that the cost per thousand impressions is still rising and is likely to continue to rise in 2022.
"Platforms such as Google and Facebook are currently facing serious bans and increasingly high costs of streaming, and the accuracy of streaming has also been affected by the IOS 14.5 privacy policy. Overseas live e-commerce is still in its infancy, and opportunities for emerging platforms and emerging forms are growing fast. With the increase in the order of magnitude of SKUs, the ability to tag in the future is also expected. A cross-border seller said.
ZAFUL is one of the first cross-border e-commerce brands to dive into live streaming (2018). At present, ZAFUL adopts a form similar to the domestic live broadcast e-commerce call, in addition to its own channels, but also through overseas mainstream social platforms such as Facebook, Instagram, TikTok to open a live broadcast portal, to achieve "Z-Me site social + app + social media" three-end synchronous live broadcast.
Recently, ZAFUL has maintained an update frequency of 4 live broadcasts a week, which generally last for one and a half hours, and the highest number of views on a single platform has reached about 6,000.
(Source: Social media screenshot)
In 2021, SHEIN also hosted several live events online, taking a step forward in exploring the diversity of live content. In August, SHEIN held the "SHEINX100K" series of challenges worldwide live broadcast, 30 emerging designers competed for the opportunity to enter the top five finals, and the first place in the competition won a prize of $100,000.
SHEIN simultaneously broadcast live on YouTube, Twitter, Instagram and Facebook pages and its own app, combined with user voting, professional advice from celebrity mentors and other comprehensive opinions to select the winners, the event successfully engaged nearly 3 million viewers worldwide.
The influx of capital is also one of the reasons for the development of overseas live e-commerce.
Investors have been pouring money into live e-commerce companies, including very well-known investment firms such as Andreessen Horowitz (Whatnot), Benchmark (PopShopLive, Supergreat), Lakestar (AGORA), Lightspeed (PopShopLive) or USV (ShopShops), among others.
Bambuser was an early social e-commerce player. Founded in 2007, the company has entered a period of rapid growth after launching its live broadcast feature in recent years, with revenue growing tenfold from 2019 to 2020. Uk-based live e-commerce company Hero was acquired by BNPL leader Klarna in July 2021, further proving the momentum of the space.
(Partial financing of overseas live e-commerce related companies / Source: Public information collation)
02
Live broadcasting is hot, but it is difficult to monetize?
Although the industry agrees that the development of overseas live e-commerce is a major trend, and even some optimists say that TikTok can reach the development level of Douyin e-commerce in China in 1 to 2 years, most domestic sellers are cautious about the layout of cross-border live broadcasting.
"The current effect of Amazon live broadcasting is not too good, the number of daily real-time viewers is still below 1,000 people, the conversion rate is generally around 1%, and the labor cost cannot be covered." A cross-border e-commerce industry source said that the input-output ratio is the point he is most worried about, "The cost of hiring a foreign model in China is at least 30,000 or 40,000 yuan a month, and the possibility of generating benefits is still relatively low." In the early days, as much as possible, the company has been keeping the cost of live broadcasting within 10% of the total cost. ”
In terms of live broadcast costs, anchor resources now account for the majority. Gu Jun, co-founder of DTC's home furnishing brand Newme, told Hugo Cross-Border, "There are 6 foreign anchors who often come to the company, supporting more than a dozen Chinese teams. China's foreign anchor resources are still relatively scarce, with an hourly salary of about 100 US dollars. Finding the same ordinary anchor in the United States is an hourly salary of 30 to 40 US dollars, but factors such as far away from the goods and insufficient familiarity with the ecology of the United States are also difficult points in the localization layout. ”
Newme began experimenting with live streaming on TikTok at the end of August this year, and now it's about 4 live streams a day, each lasting 1 to 2 hours. Allegedly, the revenue ratio of the company's short video and live broadcast is currently 9:1. However, the company is optimistic about the development trend of TikTok live e-commerce, hoping to quickly layout to seize the dividend, and then will increase investment in 9 live broadcasts a day.
"The linkage with celebrities is the most critical place to form a brand. How the merchandise layer interacts well and efficiently with local influencers may be the next point of opportunity. Gu Jun said that celebrity influencers from YouTube or Instagram currently see themselves more as creators than sellers. Their ultimate goal is often to launch their own brand, rather than selling other people's products. There are also regions, such as Japan, that lack trustworthy influencers in the field, and the incubation program is still in its infancy.
At present, some MCN institutions in China are also turning to overseas markets. Companies including Yowant and JoyMedia have begun investing in potential anchors in North America. TikTok is also encouraging E-commerce-focused MCN agencies on Douyin to transplant their experience in the Chinese market to overseas markets.
Unlike in China, though, U.S. consumers need less help deciding what to buy. There are more mature consumer protection systems, what you see is what you get, and the trust between buyers and sellers is usually higher. Compared with the classic product display, the difference between watching the product demonstration in real time and asking questions is small, and the netizens pay more attention to the live broadcast based on its entertainment. "Anchors can keep interesting in live broadcasts is the key to obtaining higher conversion rates, and the live broadcast rooms that can really be profitable in the future are basically strong IP." A cross-border e-commerce industry source said.
03
Content can't support live e-commerce
"Content media need the support of the supply chain to better build a live broadcast ecology, precipitate private domain traffic, and empower industry growth." Xu Weilin, CEO of Wudao, shared his words at the video conference.
Live e-commerce is essentially not separated from the people, goods and fields in traditional marketing, whether it is infrastructure construction, such as warehousing and logistics to ensure the sustainable operation of businesses, or the improvement and iteration of its own traffic distribution logic, it is an indispensable part. Now domestic sellers pay more attention to the traffic acquisition of overseas platforms, but live e-commerce should improve conversion, improve the production ratio, obtain long-term benefits, and the improvement of supply chain capabilities is also worthy of attention.
"From our own data, TikTok's users do not overlap with those of Amazon and Facebook at least 40%. However, cost performance has always been a point that users pay more attention to, and Chinese sellers have an advantage in this regard. When we first started doing TikTok in March this year, the unit price was only about $17, and now the unit price has reached $30-40. The higher the unit price, the higher the understanding of the local culture, but the price can penetrate all cultures, and the cost performance is the foundation. Gu Jun told Hugo cross-border.
E-commerce live broadcasting can attract more people, but converting ordinary people into consumers ultimately relies on high quality and low price explosion. Efficiency is the basis of the net red live broadcast with goods, even if it is a large anchor with strong ability to carry goods, if there is no super fast speed and product richness, it can not afford to sell.
A cross-border seller who opened a live broadcast on TikTok said, "In the past, companies conducted A/B tests on Instagram, and the feedback in graphic form was slow, and the voting cycle was long. After the live broadcast on TikTok, the test speed was significantly improved, and the new one was faster. It can also interact directly with the audience to get feedback, and the test effect is better. ”
More and more e-commerce platforms are carrying out live streaming with goods, and the relationship between e-commerce and factories is getting closer and closer, with on-demand customization, on-demand mass production, and low-cost volume, and the requirements for the supply chain are getting higher and higher.
In fact, the overall overseas live e-commerce is still in its early stages, and there are no brands with very strong advantages in content IP and logistics supply chain. Oliver Lewis, founder of British creative agency TheFifth, also said, "We haven't reached it culturally, with China at least four to five years ahead." ”
But while Lewis claims that markets outside of China will take longer to embrace live e-commerce, he urged brands to invest in the space. "It's a long game for brands. Live shopping won't generate huge revenue in the short term, but those who move fast will have an advantage. ”
Of course, the investment of overseas live e-commerce should also pay attention to avoiding risks. Judging from the current situation of brand live broadcasting, the failure of product demonstrations, the loss of control of costs caused by discounts in live broadcast rooms, and the difficulty of localization layout are all problems that enterprises need to make plans before entering the game.