Live commerce uses live video streaming to introduce products and services in real time to encourage customers to make purchases. Live commerce is growing particularly rapidly in China and is likely to expand further in Japan. This is due to the increase in opportunities to create videos for distribution via social media and to watch live videos from home, a trend that has grown since the COVID-19 pandemic began in 2020.

In this article, we explain the basics of live commerce – including its advantages and disadvantages – and introduce examples of products suited to live commerce.

What’s in this article?

• Live commerce explained
  
• Background of live commerce
  
• Advantages of introducing live commerce
  
• Disadvantages of introducing live commerce
  
• Product suitability for live commerce and examples
  
• Using live commerce to expand your business
  

Live commerce explained

Live commerce refers to a sales method that advertises through live videos broadcast to customers. Influencers who are popular on social networking sites are the most common type of live commerce broadcasters, but there are also cases where store or public relations staff from companies also broadcast videos.

Live commerce uses realistic promotional content carried out in real time. Companies can communicate with fans watching the broadcast and provide feedback on products and demonstrations. The structure of live commerce encourages viewers to make purchases by allowing them to purchase products live and by providing discount codes.

This sales activity makes the most of the interaction between the broadcaster and the viewer. The content is entertaining for followers and fans, so it also attracts attention on social networking sites.

Live commerce in the Japanese market

Although live commerce will likely grow further in the Japanese market – as it has in China – the live commerce market in Japan is not yet fully mature. One reason for this might be that there are not enough knowledgeable and experienced live broadcasters specialising in product introductions and sales. Therefore, in addition to training and supporting live streamers who plan to engage in live commerce, a future issue to address is the need for multiple, dedicated live commerce platforms that could become mainstream.

Japanese customers tend to prefer shopping at their leisure, looking at products in physical shops or in e-commerce marketplaces. For example, customers who like a product they see through live commerce might not actually purchase it while watching the livestream. Instead, they might buy it from a physical shop or e-commerce site at a later date.

It is especially difficult for e-commerce sites to calculate reliable sales figures based on live commerce alone. With points offers such as “3X points on the third of every month” and frequent weekly sales events, calculations can become complicated.

In addition to selling products during the livestream itself, live commerce can also lead to business expansion. For example, live commerce can promote products with low visibility and can be used as a community space for engagement among proprietors, distributors, and viewers (i.e., customers) that could lead to future sales. It will be important to keep a close eye on the future growth and trends of live commerce in the Japanese market.

Background of live commerce

Live commerce is expanding globally due to the rapid onset of the video market on social networking sites. In recent years, the speed of mobile communications has increased as a result of continuous improvements in mobile communications technology. With each generation of smartphones more powerful than the last, it’s possible for anyone to easily distribute videos. There is also a large number of influencers who are now as popular as traditional celebrities.

In addition, the COVID-19 pandemic led to the spread of shopping culture on e-commerce sites. Social media video streaming by celebrities and influencers became common as people stayed at home. As a result, live commerce – where celebrities, influencers, and ordinary people recommend products and brands – has become as normal as TV commercials.

Live commerce allows you to reach tens of thousands of followers who want to support influencers and enjoy influencer content, creating a significant marketing opportunity. Recently, influencers who are ordinary people and who viewers can relate to have been gaining in popularity. Influencers from an average background are also a key part of live commerce video streaming, as they are approachable and can convey their thoughts on products in a more realistic way.

Advantages of introducing live commerce

Communicate details about the product in real time

One of the biggest advantages of live commerce is it allows you to communicate detailed information you cannot convey through text or images. For example, with images, you can only show clothing from one direction or at a few different angles. However, with live commerce, you can show the clothing while moving it around and showcasing its features, such as how it coordinates with other clothes or how it feels to wear.

Develop a closer relationship with fans and followers

Typically, broadcasters who already have many fans and followers participate in live commerce. Existing fans and followers will watch the streamer’s live commerce videos, so you can expect it to attract a lot of potential customers. These fans will also be watching the live video with a positive mindset, supporting the broadcaster by asking questions about the product, showing active interest in it, and increasing the promotional value of the broadcast.

For example, if an influencer with hundreds of thousands of followers who posts cooking videos on social networking sites were to release a recipe book with their own recipes, many of their followers might buy the book to support the influencer. They could also use the recipe book to stream cooking videos and conduct live commerce at the time of release.

Easily select the time and place for a video

Anyone can broadcast videos at any time from anywhere. Japanese business owners can also contact influencers living overseas and ask them to produce live commerce videos for their Japanese followers and other viewers. Live commerce also allows you to easily produce videos without the need for large-scale filming and editing, unlike TV commercials. By using settings viewers can relate to, you can also make it easier for them to imagine how it would feel to actually use the product.

Disadvantages of introducing live commerce

Viewers and sales

The key to a successful broadcast is to attract customers. Therefore, if a business owner chooses a broadcaster who doesn’t match the product image – or if they fail to prepare in time and broadcast a live video without prior notice – there is a possibility the business will not be able to attract as many customers as it had hoped. In this case, live commerce might not lead to sales.

Before asking a broadcaster to do a live commerce broadcast, make sure the product matches the needs and image of the broadcaster’s followers who will be watching. It’s also important to check the influencer’s follow count, hold preliminary meetings, and make announcements about upcoming broadcasts.

Live video quality and broadcaster skill

Experienced film crew and video editing teams meticulously plan and produce TV commercials, and the team can improve them with good preparation, such as setting the scene, revising the script, reshooting scenes, editing out unnecessary parts, and emphasising information using computer-generated imagery (CGI) effects. The quality of a TV commercial can always improve.

However, when it comes to live commerce, the video is not edited and is presented in real time. Therefore, the quality of the video is entirely dependent on the broadcaster. For this reason, even if it is unintentional, there is a risk that unexpected problems might occur, such as damage to the brand or product image or a disruption in transmission due to problematic comments.

When selecting a broadcaster, business owners should request an influencer who is used to live streaming, responds flexibly and calmly to any problems, and has made thorough preparations in advance, such as arranging equipment or props and rehearsing.

Product suitability for live commerce and examples

Before you give live commerce a try, it’s important to understand that not all products are suitable for live commerce. To make the most of this sales method, you should carefully consider which products you want to promote using live commerce.

Below, we provide examples of products suitable for live commerce:

Apparel (i.e., clothing)

When introducing apparel products through live commerce, you can communicate the size and fit more accurately to the viewer by showing the broadcaster actually wearing it and moving around. This product category is well suited to live commerce, as it is easy to communicate and provide straightforward answers to questions from viewers about the texture and feel of the fabric.

• Success story: Graniph sells clothing and goods with unique designs created through collaborations with original characters and popular anime. The company introduces its products in live videos on social networking sites, explaining details that can’t be fully expressed in photos alone (e.g., neckline, side slits, and designs inside pockets).
  

Cosmetics and beauty-related goods

Cosmetics – such as foundation and eye shadow – and beauty-related products – such as face packs and facial rollers – are categories that have a high visual impact on viewers. Broadcasters can demonstrate their “before and after” while talking about how the products feel to use.

In the case of live commerce for cosmetics, viewers can ask questions about features you can typically only find out by using the product, such as texture and scent. They can also see the results after using them in real time, reassuring them about the product.

• Success story: The Shiseido online store uses live commerce to increase sales and improve customer engagement, introducing popular products and seasonal recommendations while demonstrating product features and usage.
  

Food

For live commerce of food products, the broadcaster samples or cooks the food while talking about how it pairs with other drinks or ingredients. This allows viewers to more easily learn how the food tastes. It is also possible to approach the subject from various angles, including information on the production area, nutritional value, time-saving recipes, and ways to arrange the food. This makes live commerce much more effective than simple articles.

• Success story: All Nippon Airways (ANA) Live Shopping, provided by the ANA Group, a major Japanese airline company, is an e-commerce site specialising in live commerce. It allows customers to purchase featured products while watching live videos. Although ANA occasionally features non-food products, food is the main focus. For example, it includes livestreams showcasing seasonal ingredients (e.g., seafood) and various gourmet foods from the places where companies produce or harvest them. It’s also easy to find past videos and check the schedule for future livestreams on the site.
  

The following are examples of products that are not suitable for live commerce:

• Products for older people: It can be difficult to approach generations unfamiliar with live commerce or who don’t know how to access it. For this reason, it could be better to avoid products primarily aimed at older customers, such as supplements and walking aids. However, if the product is a gift for a special day, such as Respect for the Aged Day (Keiro no Hi), the age range of the viewers might be lower. Therefore, there are some products for seniors that can be suitable for live commerce.

• Low-value-added products: If the product has no added value or if the only added value is a feature such as “only sold here,” then it will lack appeal for customers. They might not feel driven to buy it through live commerce. For this reason, food and everyday items that are always in stock at convenience stores and supermarkets – and customers can easily purchase locally – are not suitable for live commerce.

• Products with long-term results: With products such as diet foods, users can expect to see results after a few weeks or months of continuous use. If the product is introduced during a live video broadcast, the broadcaster cannot show those results on the spot. For this reason, products with results that aren’t immediately visible aren’t suited to live commerce.

Using live commerce to expand your business

In this article, we explain the basics of live commerce, including its advantages and disadvantages, as well as products that are suitable for live commerce and those that are not.

With live commerce, broadcasters stream videos in real time, so if a problem occurs, a production team cannot edit or reshoot it. Thorough preparation is a must to make the most of this method. However, live commerce also allows you to instantly respond to questions and comments from viewers, making it a valuable community space where you can engage in sales activities while communicating with viewers. Therefore, it is possible to expand your business by using live commerce. In addition, regularly sending out information that you can only communicate through livestreaming can improve customer engagement.

It’s also important to optimise your company’s payment environment so customers who become interested in your products through live commerce can pay quickly and smoothly. Stripe provides a wide range of tools and functions that support the efficiency of payment operations, including the introduction of various payment methods, information processing, and revenue management. For example, if you are an e-commerce business owner who operates an e-commerce site that uses live commerce, by introducing Stripe Payments, which can flexibly handle online payments, you can create a payment environment that suits your business style without having to develop your own system.