[2021 컨슈머]① “Selling houses, selling cars”…’Live commerce’ leading non-face-to-face consumption

Input 2021.01.02 07:00

Instead, wear it on, and answer right away… Pay attention to’interactive shopping’
Naver followed by Coupang and Baemin joining… 10 trillion market forecast in 2023
Next-generation commerce that embraces online and offline… Amazon and Walmart also jumped in
“Entertainment and game content will evolve into commerce”

One of the topics in the distribution industry last year was live commerce. It is a form of mobile home shopping that introduces and sells products through real-time broadcasting, and is also called’Labang’ for short. As a result of the coronavirus infection (Corona 19), non-face-to-face culture spread and video-based social media (SNS) such as YouTube, Netflix, and TikTok became popular, it has established itself as a new consumption pattern. The advantage of live commerce is that you can turn on the broadcast and sell goods anytime, anywhere with a smartphone, and that sellers and customers can communicate in real time. Although it is still in the introduction stage in Korea, it is observed that it will grow rapidly as distribution companies such as Lotte, Shinsegae, Hyundai, and CJ as well as large platform companies such as Naver and Kakao jump in. Experts predict that the market size will grow from 3 trillion won last year to 10 trillion won by 2023.

◇ 100 million in sales in 10 minutes… Department stores and Naver are’Labang’

SPC Group’s Paris Baguette and Baskin Robbins sold 40,000 sets of Christmas cakes through a 90-minute live broadcast on the 22nd of last month. The total sales amounted to about 1.1 billion won, earning more than 120 million won per 10 minutes. 11th Street, an online shopping mall, opened New Year’s Day with live commerce. Tak Jae-hoon, a broadcaster for 90 minutes from 11 p.m. on December 31, appeared and counted down the New Year and presented a prize, and over 15,000 people watched the broadcast.

The secret that live commerce has been well received is in’two-way communication’. It provides three-dimensional shopping information by putting on clothes for customers and answering the tricky question, “I’m a small harvey (lower body obesity), what size should I wear?” It also gives you a discount if you buy it while broadcasting. This process leads to a high conversion rate. If the purchase conversion rate of e-commerce is around 0.3-1%, the purchase conversion rate of live commerce is known to be 5-8%.

Some said, “I see Labang when I’m bored.” In fact, online shopping is lonely and boring. You have to look at product photos and descriptions by yourself, look for reviews from buyers, and filter whether the reviews are advertising or authentic. Only products and no experience. However, in live commerce, you can get a pleasant shopping experience through the process of browsing products and asking and answering questions. With everyday chatter like “I ate something today”, impulsive purchases may come true. As a result, there is a review of the industry as commerce that has removed the online and offline boundaries.

There are no restrictions on what to sell. 11th Street hosted a live broadcast of the MINI Abbey Road Edition limited edition model and BMW’s The New 5 Series, while Timon sold electric cars and officetel sales tickets. An official in the distribution industry said, “For real estate or car sales, one-on-one response is common, but after non-face-to-face consumption spreads, we are having difficulty in sales.” There are many companies that do live commerce.”

Another advantage of live commerce is that it is more efficient than TV home shopping, which is a similar sales type. Rin-ah Oh, a researcher at E-Best Investment & Securities, said, “Live commerce is valuable as a lightweight asset model because you only need to have shooting equipment without paying transmission fees.” Some voices are concerned that unlike home shopping, there are no related laws and regulations. It is argued that the responsibilities of live commerce platform operators should be strengthened and devices should be prepared to protect consumers.

◇’Two-way communication’ eliminates online and offline boundaries
Live commerce has come as an opportunity for the distribution industry, which is in crisis with Corona 19. In addition to department stores and duty-free shops, various sellers such as e-commerce, manufacturers, and small business owners are looking for a way to live in live commerce. Lotte Shopping’s online shopping mall, Lotte On, launched a live commerce’On Live’ in July last year. In addition to Lotte Department Store’s ‘100 Live’, Lotte Shopping’s various products such as Lotte Mart and Robs will be presented. In the second half of this year, it plans to switch to an open platform so that its sellers can also use it.

Hyundai Department Store Group introduced live commerce in department stores and home shopping, and recently launched a live commerce channel specializing in home furnishings through Hyundai LIVART. Shinsegae Group also established Mindmark, a video content production company, and is strengthening live commerce.

Platform and telecommunication companies are also jumping in. Naver, which has been running’Shopping Live’ since July of last year, exceeded 45 million cumulative viewers and 400,000 customers after 4 months. Naver also acquired Jam Live, a platform dedicated to live commerce through its affiliate Snow. Kakao, which launched’Kakao Shopping Live’ in May last year, surpassed 10 million viewers last month. They sell directly curated products once or twice a day, and the average number of views per episode reaches 110,000. The transaction amount increased by 2100% in the five months of launch. KT also introduced a live commerce platform last month in its online video service (OTT)’Season’. Coupang and the delivery app delivery people are also known to start live commerce sooner or later.

◇ Evolve into commerce of contents combining entertainment and games
In China, where live commerce was settled earlier than ours, the market scale from 19 billion yuan (about 3.2 trillion won) in 2017 to 9.6 billion yuan (about 191 trillion won) last year has soared. This accounts for 9% of the total e-commerce market. In the case of e-commerce company Alibaba, live commerce generated 25% of sales during the Gwanggun Festival last November.

The western market, which had little interest, is also jumping into live commerce. Wal-Mart, an American distribution chain, recently tested fashion products through live commerce through TikTok, and Amazon, the world’s largest e-commerce company, is running Amazon Live. Locally, it is observed that the U.S. live commerce market will grow to 25 billion dollars (about 27 trillion won) by 2023 as platform companies such as Facebook and YouTube jump into video shopping.

“Live commerce is a commerce that can embrace both online and offline distribution,” said Ahn Hyun-jung, director of the live commerce platform Grip. “It will evolve into an expansion type rather than a replacement for e-commerce.”

The domestic live commerce market, which was in its infancy last year, is expected to have a fierce competition this year. Companies are focusing on creating devices that customers can immerse in by using differentiated content and technologies such as augmented reality (AR).

Shinsegae Group’s integrated online shopping mall SSG.com recently showed off the world’s first marble pact of Yves Saint Laurent, a luxury cosmetic product through live broadcasting, and received a good response. An official from SSG.com said, “We launched a new product three months in advance by utilizing the buying power of luxury and imported brands of Shinsegae Department Store. This is a project that is difficult to show in e-commerce or platform companies.” We plan to show the combined live commerce.”

Planning to increase consumer participation, such as games and entertainment, is also considered a lock-in strategy. Naver recently launched entertainment-type shopping content. Previously,’Anything Bestseller’ and’BET2MEN’ were introduced, followed by’Rico’s Challenge’ at the end of last month. It is a form of shopping with an unknown card at a department store closed by the host Rico, and about 280,000 people watched the broadcast in 5 hours.