How to Sell
TikTok and Amazon's Struggle with Livestream Ecommerce in the US
Both TikTok and Amazon are finding it challenging to replicate the success of livestream ecommerce that has captivated the Chinese market for over a decade. Despite substantial investments from major companies like Amazon, YouTube, Shopify, and TikTok itself, the American consumer base has yet to fully embrace live selling as a mainstream shopping format.
The Rise of Livestream Ecommerce in China
In China, livestream ecommerce has become a multi-billion dollar industry, with a market valuation of approximately $42.3 billion by 2022. Platforms like Douyin (the Chinese version of TikTok) and Taobao have capitalized on their massive user bases by integrating shopping cart functionalities that allow celebrities and influencers to sell products directly during live streams. This approach has resonated well with Chinese consumers, partly due to the scarcity of retail spaces and a cultural affinity for engaging, interactive shopping experiences.
In contrast, the American ecommerce culture is significantly different. U.S. consumers often prioritize convenience and time savings, with a notable 28% of Amazon purchases being completed in three minutes or less. The rapid pace of American shopping habits poses a challenge for the more leisurely and interactive format of livestream shopping.
The American Market's Unique Challenges
Amazon launched its Amazon Live platform in 2019, aiming to bring the immersive experience of video shopping to a wider audience. The platform has hosted various livestreaming events, including those for Prime Day in 2021 and 2022, where Amazon Shoppable Videos garnered 100 million views, with top streams peaking at 57,000 concurrent viewers. Despite these numbers, the traction among American consumers is not as robust as anticipated.
For Amazon, video shopping is seen as the future of retail, yet the path to widespread acceptance in the U.S. remains uncertain. The American preference for content that adds value, rather than direct selling, is a hurdle that platforms need to navigate. This difference in consumer behavior is partly why influencers selling products on TikTok and Amazon are finding it difficult to establish the kind of audience relationships that are crucial for success in this domain.
"Creating a relationship with the audience is key," said an industry insider, emphasizing the importance of engagement in driving sales through livestreams.
TikTok's Global Expansion Efforts
TikTok, known for its massive global reach and influence, has made significant strides in expanding its ecommerce capabilities. The launch of TikTok Shop in the UK in August 2021 marked a crucial step in its efforts to penetrate Western markets. However, in the United States, influencers on TikTok Shop face considerable challenges, as American consumers remain more skeptical of livestream shopping compared to their Chinese counterparts.
The cultural differences are stark. Chinese influencers have successfully marketed products such as lingerie to young women on TikTok, a trend that has not yet found a parallel in the U.S. market. American consumers are more likely to return products and prefer shopping experiences that are less about entertainment and more about efficiency and reliability.
Strategic Partnerships and Future Prospects
In an effort to bolster its live shopping presence, YouTube has expanded its partnership with Shopify, allowing for a more seamless integration of ecommerce features within live streams. This collaboration is part of a broader strategy to capture the attention of American consumers who may value the convenience and familiarity of shopping through established platforms.
As Chinese companies continue to eye the U.S. market for livestream ecommerce, the challenge will be to adapt their successful models to fit the unique preferences of American shoppers. This involves not only overcoming logistical and cultural barriers but also redefining what it means to engage with consumers in a way that is both entertaining and efficient.
The struggle of TikTok and Amazon to gain traction in the U.S. serves as a reminder of the complexities involved in transferring a successful business model across different cultural and consumer landscapes. As they continue to innovate and adapt, the future of livestream ecommerce in America remains an intriguing space to watch.