Live shopping set to explode

Some of the world's biggest retailers are investing heavily in live shopping

There are numerous indicators suggesting that live shopping is set to explode in the Western world, mirroring its successful implementation in Asian markets. While not a new retail concept, the integration with social media platforms, which have surged in popularity in recent years, will give social commerce and live shopping a significant boost.

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In this edition, discover the strategic moves of retail giant Zara (Inditex), innovative developments at Otto Group, status of TikTok shop expansion, a comparative analysis between Asian and Western markets, and insights into the evolving landscape of live shopping within the framework of laws and regulations.

What is Live Shopping?

Live shopping, also known as live commerce, combines live video streaming with online shopping. In this format, hosts showcase products in real-time, demonstrating their features and benefits while interacting with viewers who can ask questions, leave comments, and make purchases directly within the live stream. This method of retail leverages the immediacy and engagement of social media with the convenience of e-commerce, creating a dynamic shopping experience that feels personal and interactive.

Current Status of Live Shopping

Live shopping has seen significant growth, particularly in Asia, where it has become a major retail trend. In China, platforms like Taobao Live, Douyin (TikTok’s Chinese sister app), and Kuaishou have revolutionized the e-commerce landscape. Influencers and celebrities often host live shopping events, attracting millions of viewers and generating substantial sales volumes. This format is deeply integrated into the daily shopping habits of Chinese consumers, making it a critical channel for both local and international brands.

Asian vs. Western Markets

Asian Markets

1. Popularity and Penetration: Live shopping is immensely popular in China and other parts of Asia. It is a mainstream shopping method, with a high penetration rate among internet users.
2. Influencer-Driven: The success of live shopping in Asia is largely driven by influencers and celebrities who have large followings. Their endorsements can significantly boost product sales.
3. Platform Integration: Major e-commerce platforms like Alibaba’s Taobao and JD.com have fully integrated live streaming into their shopping apps, offering seamless experiences for viewers and shoppers.
4. Sales Performance: The sales generated from live shopping events in Asia are impressive, often accounting for a significant portion of total e-commerce sales during major shopping festivals like Singles' Day.
5. Technological Advancements: Asian markets leverage advanced technologies to enhance live shopping experiences, including augmented reality (AR) and artificial intelligence (AI) to provide personalized recommendations and interactive features.

Western Markets

1. Emerging Trend: Live shopping is still an emerging trend in the Western world. While gaining traction, it has not yet reached the level of mainstream adoption seen in Asia.
2. Platforms and Adoption: Western companies are starting to experiment with live shopping. Platforms like Amazon Live, Facebook Live Shopping, and Instagram Shopping are leading the way, but their user engagement and sales impact are still growing.
3. Cultural Differences: Western consumers may be less accustomed to the hard-sell tactics often used in Asian live shopping events. There is a greater emphasis on creating a friendly, casual, and informative shopping experience.
4. Influencer Role: Influencers in the West are also key players, but the market is more fragmented. Influencers may use multiple platforms and channels, such as YouTube, Instagram, and TikTok, to host live shopping events.
5. Adoption by Brands: Leading brands and retailers in the West, like Zara, Sephora, and Walmart, are exploring live shopping as a way to engage customers and boost sales. However, the scale and impact are still being tested and refined.

Conclusion

Live shopping represents a significant shift in retail, combining the immediacy of live video with the convenience of e-commerce. While it has become a dominant force in Asian markets, particularly in China, the Western markets are still in the early stages of adopting this format. As Western consumers become more familiar with live shopping and as brands and platforms refine their approaches, this retailing concept is expected to grow and evolve, potentially bridging the gap between Eastern and Western shopping experiences.

Zara Expands Live Shopping Experiment to Europe and the US

?Zara is set to expand its live shopping broadcasts to the UK, Europe, and the United States this year, bringing a format already wildly popular in China to Western shoppers. The fast-fashion giant has seen great success with this concept in China, where five-hour live shopping shows are streamed weekly on Douyin, TikTok's Chinese sister site. According to Zara, a team of 70 people works on the live show, which is broadcast from a 1,000-square-metre space in Shanghai, utilizing seven cameras to capture various angles. These broadcasts attract around 800,000 unique viewers per show, significantly boosting Zara's sales since their launch in November.?

The expansion of live shopping is expected to further enhance Zara's global reach. "We want to take this to Western countries, where livestream is not as popular...but we think why not – from an entertainment perspective, this is like an evolution," said a Zara spokesperson. This initiative is set to launch between August and October. The livestreaming format also allows Zara to maintain its presence among shoppers even as its physical stores in China have decreased from 570 in 2019 to just 192 as of January 31 this year.

In the UK, US, and other European countries to be announced, Zara will host live shows on its app and website rather than on third-party social media platforms, ensuring control over aesthetics. Inditex, Zara’s parent company, continues to demonstrate its momentum and ability to be at the forefront of experimenting with new formats.

Otto Group Develops Live Shopping App for Apple Vision Pro

Otto Group is working on an app for live shopping on the Apple Vision Pro. Otto was even mentioned in Apple's global communications for the launch of additional countries with the Apple Vision Pro. In Germany, the Apple Vision Pro will be available starting July 12, and the in-house developed app will be accessible in the App Store. With "OTTO Live Shopping for Apple Vision Pro," you can experience numerous products in 3D via augmented reality (AR) during live shopping shows, directly before making a purchase. At launch, Otto is partnering with renowned brands like LEGO? and Miele, who are providing 3D models of selected products. OTTO Advertising is responsible for producing and marketing the new live shopping offering.

The app is designed specifically for the intuitive operation of the Apple Vision Pro. You can easily navigate through the shows, view products in 3D, and purchase them immediately if you wish. This project was driven by Otto's Innovation Team at Otto Group Digital & Consulting and integrated into the MOVEX Live Shopping Software by OSP – Otto Group Solution Provider (OSP).

With "OTTO Live Shopping for Apple Vision Pro," Otto sets a new standard in German online retail. "Our customers can now experience products live, ask questions about them, and purchase them online directly. Thanks to AR technology, they can also view and place products virtually in their own homes," said an Otto representative.

With its high-end technology, the Apple Vision Pro is an ideal complement to Otto's live shopping offering. The real-time integration of realistic, animated 3D models of the products fundamentally changes the online shopping experience. This new technology allows online retail to bring customers closer to the products than ever before. Customers can explore features and details previously only possible in physical stores and even place products virtually at home, which is especially valuable for furniture. Live shopping is a constantly evolving format, and we are proud to take it to the next level with our launch on the Apple Vision Pro.

Otto continues to expand the live shopping concept it started in 2021. Just in January, Otto released the in-house developed live shopping app for Apple TV. Live shopping has been firmly integrated into the well-known OTTO apps for iOS and Android for years, including AI-supported chat functions for questions and moderated product presentations. We now reach up to 100,000 people live per show. The goal of live shopping is to bring people into close contact with partners like LEGO?, Miele, Adidas, and Philips. The focus is on inspiration and engagement with the products.

TikTok Shop in Europe

One of the most popular live shopping platforms is certainly TikTok.

Unfortunately TikTok has halted the launch of its TikTok Shop in major European markets, including Germany, Spain, Italy, France, and Ireland, to focus on the U.S. market, where it faces potential bans or a forced spin-off.

Plans to expand the Shop feature to Mexico and Brazil have also been put on hold. Originally set to launch this summer, the rollout has been delayed amidst regulatory pressures from the Digital Services Act and Digital Markets Act in Europe. ByteDance, TikTok's parent company, aims to become essential to the U.S. economy to make a ban more politically challenging. TikTok Shop, first introduced in the UK and Indonesia in 2021, has seen significant success in the U.S., with over 500,000 sellers by late 2023. ByteDance is currently challenging a U.S. Senate law that could ban TikTok nationwide. The recent pause in Europe highlights ByteDance's strategic shift to prioritize the U.S. market.

Does live shopping fall under fiscal laws

Given the diverse fiscal landscapes across countries, a universal answer isn't straightforward. The crucial consideration begins with determining whether live shopping is classified under ecommerce by law, which is generally the case in many countries. For instance, among the 28 European countries we support, 16 enforce fiscal laws that encompass ecommerce activities. Consequently, these countries are likely to include live shopping within this framework.

Take France, for example, where live shopping is subject to fiscal regulations stipulated under French law. Similarly, Portugal mandates that all transactions via live shopping platforms comply with fiscal requirements. Moreover, solutions used in Portugal must undergo certification.

However, in countries such as Austria and Germany, ecommerce and consequently live shopping are not subject to fiscalization requirements.

Overall, it's evident that the trend towards fiscalizing ecommerce concepts is gaining momentum, with an increasing number of countries enacting fiscal laws in this domain. It is expected that similar regulations will also be applied to live shopping platforms in the future.

Community Day 2024

Get ready for our Community Day 2024!

On September 26th, we will host a special one-day event filled with information, networking, and fun.

In the first part of the day, you can join several workshops related to fiscal topics. Learn how to successfully complete certifications in Portugal, implement new fiscal laws in Hungary, get updates on upcoming fiscal laws in Spain, and much more.

The benefits for you are huge:

- Free workshops on fiscal topics

- Networking with other users, global retailers, and POS software vendors

- Speed consulting: Meet our consultants and ask anything about fiscalization in 27 countries

- Provide feedback and influence our roadmap

In the second part, enjoy a special exhibition of digital art organized by the Faculty of Contemporary Art.

And the best part? You'll receive a one-year subscription to our fiscal portal for the country of your choice.

This event is invitation-only and will be kept very small. If you want to join, get in touch with us.

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