Is Live Shopping Just Another Trend?

 The current opinions on live shopping are varied. With the emergence of smartphones, e-commerce has also changed significantly. Live shopping has especially gained a lot of popularity by allowing customers to purchase products while directly seeing them in real-time. A phenomenon that the COVID-19 pandemic has amplified. As offline shopping became increasingly harder to do under lockdown regulations, e-commerce saw an opportunity for great growth. 

   Some see live shopping as a passing trend that just happened to align with various factors. In fact, although many live shopping services have emerged, only Naver Shopping Live, Kakao Shopping Live, and Baemin Live are considered to be operating with a significant user number and revenue. The development of live shopping is also not significantly different between 2020-2021, according to analysis.

Related article : Only Naver, Kakao, or Baemin Survived… the Dilemma Even Coupang Can't Solve: Live Commerce

This time, we will be summarizing how live shopping is changing as 2022 ends.

From Public to Private

   The first change in the trend we are seeing is big brands leaving public platforms and operating live shopping directly on their own shopping malls or websites. In the early days of live shoppping, places where you could operate live shopping just by entering, such as Grip and Naver Shopping Live, gained popularity. Since they already had an effective and accessible platform, anyone could easily operate a live shopping channel only focusing on selling products and creating content.

   However, there were many lacking areas behind these efficient and simple public (open) platforms. The system is overly competitive with a commission of about 10-15%. Compared to home shopping, a commission of 10-15% is refreshingly low, but it is simply an unnecessary expense for companies with their own functioning online shopping malls. Due to the fierce competition in public platforms, various means are used to stand out. From marketing strategies and unique broadcasting techniques to giving away expensive gifts, there are many ways to capture the viewers’ hearts. And from this competitive environment companies’ concerns arise.

   Thus, a question arises: Is it necessary to use public platforms to adopt various marketing techniques to secure viewership? Unlike home shopping, live shopping often struggles to attract a significant number of viewers. For instance, achieving over 1,000 views on Naver Shopping Live can be quite challenging without running separate advertisements. This is especially true when selling products with low brand awareness. When it comes to securing viewers before the broadcast, if you're going to spend marketing expenses anyway, conducting it through your own platform can be advantageous in terms of saving on platform commissions and potentially gaining genuine fans.

   Certainly, integrating live shopping into your own online store is not an easy task. It requires a significant investment of capital and time. However, for companies with long-term plans for operating live shopping or brands with a loyal customer base, it is worth considering.

   In South Korea, companies such as Catenoid, ShopLive, and SourceLive are known to provide live shopping solution services. Recently, Grip and Naver Shopping Live have also begun offering the live shopping solutions. One of the advantages of using your own online store for live shopping is the ability to customize and apply new features that are not available on public platforms, as well as the flexibility to tailor the user interface to your preferences.

Related article : Modetour Launches Its Own Live Commerce Channel ‘Live M’

   For a brand that conducts discount sales on a monthly basis, they can use live shopping to run these events directly without relying on other platforms or offline stores. Additionally, it's possible to host private broadcasts for specific buyers. Linkshops, a well-known B2B clothing wholesale service, has recently started a live shopping for its retail store customers.

Related article : Linkshops to Broadcast Global Live Commerce

North Face introduces live shopping to its mall

Sales to Marketing

   The second trend is a shift in perspective regarding live shopping, viewing it not just as a sales tool but also as a marketing tool. In the early days of live shopping, it was primarily the sales department that commissioned broadcasts. Organizations that directly sell products operated live shopping to increase sales. However, recently, there has been a growing trend where it is commissioned by the marketing department rather than the sales department.

   This movement aligns with the first trend I mentioned earlier. Since the primary mission of live shopping is promotion rather than sales, this change in trend has emerged. To achieve higher sales, you need to have a high number of viewers. It's akin to the concept that you need a lot of people in the market for goods to sell well. To gather a large audience, you need to spread the word and promote that this neighborhood or that neighborhood's market is open. Marketing departments are responsible for performing this role. Depending on how well they execute this first mission, the sales figures of live shopping can vary. In the end, the online marketing tasks that marketing departments have been consistently performing in the past have become naturally necessary for live shopping as well.

   The way organizations operate may vary depending on the size of the brand, but the sales department's fundamental role is typically managing distribution methods and business partners. In the past, sales departments often managed and operated home shopping, and due to that experience, sales departments have come to oversee live shopping as well. Tasks such as sending broadcast samples to live shopping production companies and invoicing for sales are within the purview of the sales department. However, it is uncommon for the sales department to handle online marketing. In smaller companies, roles may not be as strictly divided, and employees may handle various tasks as needed. However, in general, the roles of the sales department and the marketing department are quite different.

   This trend change, in other words, indicates that more companies perceive live shopping as a marketing tool rather than a sales tool. In a previous article, it was mentioned that brands are increasingly using live shopping as a means of communication with customers. This can also be classified as a marketing method, as it falls under the marketing tasks of retaining and managing loyal customers. 

Utilizing Live Shopping to the Fullest

   The third trend is a change in the usage patterns of live shopping. This can be seen as a conclusive part based on the changes discussed in the first and second trends. Depending on the size of the brand or the purpose of using live shopping, patterns can be broadly categorized into two.

   For big brands, it is clear that their perspective on live shopping will be limited to a marketing tool in the future. This is because it is a commerce method that requires significant marketing expenses to generate substantial sales. Performance marketing is the field where marketing expenses directly correlate with revenue, making it a cost-effective choice for big brands. Performance marketing is often operated through auction systems, so the advertising cost is determined distinctly. It visibly shows how much marketing expenses need to be spent to sell one product. When looking at live shopping as a marketing tool, there can be a difference in whether the revenue matches the marketing expenses invested. If live shopping firmly establishes itself as a marketing tool, advertising costs could be set in a similar manner to performance marketing.

   Labangba Data Lab is a prominent service that demonstrates the rise of live shopping as a marketing tool. By using Labangba Data Lab, you can access performance data for domestic live shopping broadcasts, including metrics like views and sales. Recently, they have also introduced specialized advertising products designed to boost views and revenue for live shopping. The combination of data and advertising products essentially transforms it into performance marketing.



Main Page of Labangba Data Lab

   To fully leverage this marketing approach, brands need to reach a certain level of scale. In other words, larger brands are more likely to operate live shopping. For smaller brands where immediate sales are crucial, investing significant resources in live shopping marketing is not an easy task. Live shopping production also incurs costs, and it's not easy to allocate marketing expenses for an uncertain live shopping that doesn't guarantee purchase conversions. Small brands may opt for more efficient marketing channels than live shopping.

   However, that doesn't mean smaller brands won't engage in live shopping. As mentioned earlier, for smaller brands that rely on periodic discount sales to ensure sales volume, operating live shopping as a means of direct communication with customers and as an event for loyal customers can be a valuable marketing tool. Brands in sectors such as health supplements, cosmetics, and pet food, where periodic purchases are common, can use regular live shopping broadcasts to engage with customers and secure loyal customer bases.

   Recently, even SOHO(Small Office Home Office) online shopping mall platforms like Cafe24 and Shopify have integrated live shopping into their services. Now, these platforms allow small brands to easily and affordably introduce live shopping solutions to their online stores with just a few clicks. For them, this presents another opportunity. Once a brand has built up its scale and a loyal fan base on public platforms, it can seamlessly transition to its own online store's live shopping.

   Live shopping is not limited to product sales; it has also found applications in the banking sector. Banks like Shinhan Bank and Hana Bank use live shopping not just for selling products but also for providing customers with information on new financial products and offering comprehensive financial knowledge through live shopping broadcasts.


Related article : Hana Bank Jumped into Live Shopping and Surpassed Beauty Broadcasts


Related article : Shinhan Bank Advances Live Commerce Platform ‘Sol Live’


   Some brands use live shopping as a means to engage with their customers by conducting quizzes or inviting financial YouTubers to provide knowledge-based broadcasts. It can be seen as a form of customer appreciation event using live shopping. In the past, when promotions were primarily conducted with photos and text, it was difficult to gauge customer reactions. However, with live shopping’s real-time comment feature, customer satisfaction can be monitored immediately.

   Occasionally, there may be viewers who leave malicious comments continuously due to a negative experience with the service. However, even this can be viewed as customer feedback for one's own products or services, ultimately having a positive aspect. These are all advantages of live shopping.

   In summary, we discussed three live shopping trends. Trends are ever-changing tendencies, so they cannot be definitively stated. However, for companies or professionals considering live shopping, it would be beneficial to gain insights from this article and prepare live shopping strategies tailored to their specific circumstances.

Junseok Seo PD

-   Current Position:: Live Shopping Production PD for Lalastation

-    Previous Experience: Mobile Content Production PD for Makeus PD

-   Previous Experience: Reporter for Techsuda & PD

-   Previous Experience: Marketing Team Leader for 39 Degrees C