Social media comes for QVC
Social media giants are sprinting towards the live shopping market that's long been dominated by traditional television networks like QVC and HSN.
Why it matters: Tech firms have spent years building algorithms to get people to click on ads, but now they're finding that the real purchasing power on social media lies in live product reviews from people users trust.
Driving the news: Pinterest on Monday launched Pinterest TV, a video platform with live series and original content featuring Pinterest creators hawking goods.
- Pinterest users can interact with hosts by asking them questions live via a chat function. Creators can tag products within the videos which allow Pinterest users to shop and purchase on the retailer’s site.
- Instagram introduced live shopping in September via the Instagram Feed, Instagram Stories, Instagram Video and Reels, Facebook's TikTok knock-off.
- TikTok rolled out a live shopping feature in September that lets brands include links to products in live videos.
- Snapchat debuted its first "shoppable" original show in 2020. "Art of the Drop" lets users buy streetwear via a hybrid of entertainment and commerce video series.
- Amazon launched Amazon Live, a livestream app for creators to hawk goods to followers in July 2020.
Be smart: The pandemic helped to fuel the live shopping craze, not just on platforms like YouTube and TikTok — which have long attracted creators that do product reviews — but also on traditional TV shopping networks.
- QVC and HSN had one of their best years ever during the pandemic in 2020, bringing in $11.5 billion for QVC Inc., the video commerce subsidiary of the publicly-traded Qurate Retail Group.
- A slew of live shopping startups have raised big money from venture capital investors trying to capitalize on the trend.
The big picture: Live shopping has long fueled e-commerce growth in China, but U.S. social media apps have lagged behind, in part due to supply chain differences.
- "Unlike in China, social video platforms in the U.S. have so far not embraced the entire transaction process from awareness to fulfillment," says Humphrey Ho, managing director of Hylink Digital US, a Beijing-based digital ad agency.
- "In China, influencers have longed embraced 'QVC 3.0' where their ability to be entertaining, relevant, and fun to their audiences creates an entertaining social shopping experience — in combination with the eCommerce platforms themselves or social video platforms that integrate well into the environment."
By the numbers: Livestream e-commerce is expected to grow to $25 billion in sales in the U.S. by 2023, according to Coresight Research, a retail and tech analysis firm.
- In China, livestream e-commerce sales are expected to surpass $280 billion by 2023, per eMarketer.
What to watch: For tech companies grappling with instability in the advertising market, shopping and ecommerce offers a new lifeline.
- The Information reported Monday that both Snapchat and Facebook — two of the ad-based tech platforms most heavily impacted by changes to Apple's privacy policies — are leaning into e-commerce to get ahead of those changes.
Go deeper: Live video is the next hot shopping trend