The Future of E-commerce: Live Commerce and Social Commerce?

During my recent visit to China and Singapore, where I had spent 15 years of my life, I was still surprised by the palpable changes in the shopping experience. The transformation was clear: the future of e-commerce has arrived, and it's being shaped by two powerful forces—Live Commerce and Social Commerce.

These trends are not just redefining retail; they're revolutionizing it.

First off kudos to my friend September Guo along with 埃森哲 and the team at TikTok , for their insightful report on SHOPPERTAINMENT 2024 and the emergence of content communities with example like BookTok and BeautyTok that have revolutionizing the way creativity is shared and consumed, empowering anyone to become an influencer and shape new consumer trends - a great piece by Shant Oknayan .

So I was saying: with Live Commerce and Social Commerce models are not just altering the way we shop; they're redefining the very fabric of consumer engagement and brand strategy, let me explain what these developments means for brands with a focus on the scale, adopting a “new” operating model, and navigating geographical market variations.

The Rise of Live Commerce

Looking back now, I recall seeing firsthand the launch of Alibaba's Taobao Live, back in 2016 or what is now seen as the beginnings of the livestream shopping era. While intrigued, at the time, I didn't realize just how transformational livestream shopping would become, to my defense, I don't think anyone could have predicted just how transformational Live Commerce was set to become. (thank you pandemic times)?

It's now a way more dynamic shopping format that allows real-time product purchasing and interaction during live video events.?An interactive approach leading to a more engaging shopping experience, with conversion rates up that can be up to ten times higher than traditional e-commerce. (Link )?

Social Commerce or Community-Driven Marketplace

The other influential trend is social commerce, especially on platforms like WeChat that blend social interaction and shopping. Everyday conversations seamlessly lead to product discovery, evaluation and purchase - all within trusted social circles. This differs drastically from Western notions where social commerce relies on ads and links, taking users outside communities to shop.

In the WeChat ecosystem, the social experience and transactions occur natively without disruption. Friends' recommendations, opinions and referrals drive commerce organically. Users explore and buy right within those social interactions. This creates a unified system where relationships power actual purchases, not just marketing funnels. Asian platforms enable effortless social sharing of products as well as frictionless transactions. (link )

Western applications confine shopping to ads and storefronts outside lively social feeds. Users must disengage from communities and connections to complete purchases. Whereas in China and Southeast Asia, discovery through trusted circles and seamless purchasing occurs intertwined within vibrant ecosystems. Social isn't just a stepping stone - it is the very foundation enabling an active marketplace. This integrated approach represents the full future potential of social commerce that we are still lacking much in the West.

A New Operating Model for Brands

The convergence of Live Commerce and Social Commerce means a new operating model for brands. Rather than transactional e-commerce, the focus shifts to fostering engaging communities.

To put it simply: It's a shift from transactional to relational e-commerce.?

Brands must now create captivating content and shopping experiences that consumers actively participate in. This caters to the 70-81% of shoppers demanding extensive product information before purchasing. (link )

Platforms like WeChat allow brands to showcase items in real-time, answer questions, and cultivate consumer communities surrounding products. The interactive format leads to higher conversion rates and brand appeal and attracting younger demographics in particular.

Yet, brands mains barriers in adopting this model, includes concerns over stale content, poorly scheduled or produced livestreams, product value perception and availability. To fully leverage live and social commerce, brands must create convenience through intuitive browsing, interactive streams and readily available inventory to drive sales through ever-evolving consumer communities.

This new model demands a whole new approach to content and digital experiences that actively fosters dynamic engagement with empowered consumers.

What about Europe and the US?

While live commerce has become mainstream in China, it remains an emerging trend in Europe and the US.?

Even if we see early signs pointing to rapid growth… That being said,? I dont think?the scale of live commerce seen in Asia will be possible in Europe or the US due to differences in e-commerce sophistication.

China's platforms offer such a seamless process - from in-app checkout to personalized short video feeds and extensive analytics - that the path from discovery to purchase is nearly frictionless. This level of e-commerce sophistication outpaces most offerings in the West.

Additionally, live commerce's is an impulse-buy by nature, based on (massive) discounts and FOMO, leading sometimes to a high return rate. Meaning for it to work well, markets needs robust return logistics and speedy delivery with hassle-free returns, those are the backbone for such impulse purchases to thrive. Most Western markets lack that quick and convenient infrastructure.So while the interactive format shows early Western promise, realizing Asia-scale live commerce demands more than replicating technology.

Comprehensive platforms, frictionless checkout and robust logistics form an entire ecosystem where live selling can flourish.

Western markets likely lead in technology but still lag in these factors for this ecosystem to fully blossom.

My Perspective: A Shift in Why We Buy

To conclude here on the future of social commerce and live commerce, I believe these trends are not just changing how we buy but are fundamentally altering why we buy.

They represent a shift from passive consumption to active participation, from transactional efficiency to emotional engagement.

In this new landscape, the brands that will thrive are those that can leverage these platforms to build genuine connections with their consumers, turning every interaction into an opportunity for engagement and every purchase into a moment of joy and community.

As we look to the future, it's clear that the brands and platforms that embrace this new paradigm will be the ones to lead the charge in the next wave of e-commerce. The future of shopping is interactive, community-driven, and live, and I, for one, am excited to see how these trends will continue to reshape our digital & retail landscape.

Disclaimer: Opinions are my own and not the views of my employer.