When it comes to social commerce, influencers and Twitch streamers are thriving

By Aimee Pearcy , written on November 12, 2020

From The Ecommerce Desk

Atarabyte is a Twitch streamer living in South Korea who is currently doing daily streams on Amazon Live. She started last year when the platform was just taking off, and she has come a long way since she first started streaming on Justin.TV ten years ago.

When it comes to selling products, she has a unique approach. 

“I think since I'm one of the only streamers that came to Amazon Live from Twitch I treat Amazon Live more like Twitch. Not strictly selling but making friends starting conversations, and I stream every day,” she says. 

“I used to work at Gamestop for 5 years and I joke and tell my viewers I'm basically a virtual GameStop girl who just enjoys helping people and making new friends on the platform. I learned that if you make even minor connections with people they'll come back to the platform or even to you specifically if you've helped them in the past.”

Influencer marketing has come a long way since the days of a ten second shoutout in a YouTube video

Now, a new trend is emerging: informal livestreamed commercials. In the West, it’s become known as ‘social commerce’. But in China, it's already an established trend. When launching presales for Singles’ Day this year, merchant live-streaming platform Taobao Live hit $7.5 billion in the first 30 minutes -- a 400 percent jump in sales over the same period last year. 

“I think ‘social commerce’ doesn’t really make sense. It's more like making ecommerce entertaining. It doesn’t really have anything to do with being with your friends really, although some people will feel a sense of community as fan groups all do,” says China tech writer Rui Ma. “We just call it livestreaming ecommerce”.

The U.S. has been slow to catch on properly -- until this year. In July, Popshop Live announced the close of a $3 million funding round that brought the company’s total funding to $4.5 million. More recently in September, Bambuser announced that it had raised $45 million in new funding this year after switching its focus from live video journalism to live video shopping. $34.5 million of that amount was raised during the pandemic. 

Indie stores are making a comeback, and they’re being powered by Shopify 

As the number of content platforms integrating commerce continues to rise, it’s becoming clear that ecommerce giant Amazon is being unbundled by smaller stores. Shopify has previously even outlined its strategy as “arming the rebels of Amazon”. Over the past few months, it has partnered with Instagram Shopping, Pinterest Shop, and most interestingly, TikTok.

As Brian Dean from Exploding Topics pointed out in our interview a few weeks ago, Shopify is booming. In Q3 2019, Shopify recorded a $72.8M net loss. In its Q3 2020 earning report, it recorded $191M net income. Its partnership with TikTok is a game-changer for the creator economy. It’s a huge sign that social media is becoming less social and more product-oriented. 

It’s not just Twitch streamers that are using streaming platforms to sell their products. After teaching yoga for eight years and being a lululemon ambassador for four years, Erin Dubs finally decided to take the plunge to create her own apparel store, Azur Fit, in 2018. “I had the chance to try, work and live in so many different types of fitness apparel. I fell in love with the technical side of fabrics and I saw a few gaps in the industry that I knew I needed to fill,” said Erin. 

At the start of her journey, she had only 800 followers. But word spread quickly. Since then, Erin has been able to grow the brand up to 15,000 followers solely through customer re-shares. In May this year, she began selling her wares on TikTok. Her growth strategy differed from most: instead of advertising her products directly, she grew her audience by sharing tips and tricks with other e-commerce business owners to help them sell their own products. 

The accounts took off fairly quickly and I was lucky to land a few vital videos which sent tens of thousands of people to my site each time,” says Erin. “Having the Instagram and web link in the bio is key! Consumers say ‘hey this girl gives out good tips. I wonder what she sells?’

So they head to the site and the branding, customer reviews and on-trend products do the selling!” 

The partnership between TikTok and Shopify bears a strong resemblance to the partnership between Alibaba and Douyin 

Alibaba partnered with Douyin, the Chinese version of TikTok, back in 2018. But this year, Douyin tightened its ecommerce policies to compete with Alibaba and and banned third-party links to maximise its own profits ahead of Singles’ Day. 

“TikTok has learnt the value of social commerce from its partner app Douyin in China, where commerce is more advanced and a key strategic pillar going forward. Given advertising across all mediums has taken a hit since covid, I expect we'll see more Western platforms reducing their exposure to the advertising model and diversifying through integrating commerce, as we recently saw with YouTube,” says Mark Tanner, the managing director at Chinese consumer research agency, China Skinny.

“TikTok's Shopify partnership is a smart move, given the broad range of digital-savvy sellers that Shopify has. It is a natural partner as each party stands to win. There are few potential conflicts, however. There is some medium-long term exposure for Shopify that TikTok may follow Douyin's lead and integrate ByteDance's proprietary ecommerce platform and phase out third-party platforms as it is doing in China eventually.”

Ma, however, thinks there is a “much lower probability” of this happening with TikTok and Shopify. “China is a much more competitive market where people will go into each other’s lanes,” she says. “Alibaba actually already has a very strong livestreaming ecommerce platform, and so in a way kind of competes with Douyin whereas that dynamic doesn’t exist vis a vis Shopify.”

Since November 10, TikTok has also been promoting #ShopBlack,  an in-app campaign that amplifies and celebrates Black-owned businesses. More than 40 Black Shopify merchants across the US and Canada will be featured on the Support Black Businesses website to allow the TikTok community to explore their businesses. The event will run until November 15.

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