Out of the ashes: will live shopping be the rebirth of retail?

Young Pham at CI&T explores the phenomenon of social commerce and asks whether it will be a model for retail recovery in the UK

The pandemic hit every area of the sector hard, from food and beverage to clothes and homeware, with 2020 seeing the largest year on year fall in sales on record. Numerous titans faced either store closures and redundancies, or complete collapse and takeover by digital rivals.

However, the story of this year is not a guaranteed tragedy. Instead it could be more aligned with tales of the mythological phoenix, rising once again from the ashes.

More recently, light has begun to appear at the end of the tunnel. As lockdown restrictions ease and high streets reopen, brick-and-mortar retailers are enjoying record sales thanks to shoppers flocking back to stores.

While this surge in demand is much appreciated by the sector, it doesn’t necessarily reflect how the industry has been transformed by the pandemic. Indeed, many areas of the sector are still struggling and will not return to normal soon, if at all. What then, will arise from the ashes? To peer into this future, we must look to China.

Made in China

While social commerce is still relatively nascent in the UK, the industry had already had a foothold in China before the pandemic sent traditional retail into a downward spiral. In 2019, social commerce in China was valued at ¥1.675 trillion – that is almost £187 billion. Advanced social retail media including platforms like WeChat and Pinduoduo have continued to grow in popularity in recent years, especially under the restrictive period of the pandemic.

A key area driving this growth is live shopping, an updated version of telemarketing for the digital world. This new medium, valued at £45.4 billion in China in 2019, revolves around influencers and celebrities demonstrating and advertising products on live streams, encouraging viewers to buy the same product in real time.

By engaging with viewers, answering specific questions live and enticing them with limited time offers, live shopping combines the best of social media and e-commerce in a more immersive experience.

The opposite of shopping by yourself

Following years of sustained economic growth and a burgeoning middle class, China is seeing an influx of people consuming new products and looking for the easiest way to do so. In a competitive and often daunting marketplace fraught with misleading or even fraudulent products, consumers rely on reviews to help them understand why they should buy a product over the ten alternatives one click away. 

Live shopping answers this need by providing the same information as 1,000 reviews from a spokesperson they already know and feel they can trust. Live shoppers get to see the latest products, the excitement of people talking about the product and to engage with others to see what they really think – all from their mobile phone. It’s the opposite of shopping by yourself.

The medium was already growing at an explosive rate in China and to a lesser extent globally before the pandemic shut down shopping centres and high streets. Over the last year, however, it also has filled the new hole left in people’s social lives and habits, as consumers relegated to shopping at home pine for the small interactions that come with shopping in-store.

While shoppers in many countries are beginning to tentatively return to stores, this new phenomenon with both the convenience of e-commerce and interactivity of traditional shopping is not likely to disappear any time soon.

Is UK retail ready for rebirth?

While live shopping certainly meets all the demands UK shoppers have at the moment, the speed at which it can be rolled out in this relatively new market is somewhat limited. The growth of the medium in China is built on the back of large uptake in well-developed media platforms with the capabilities to host livestreams and the in-built capabilities needed for interacting with viewers and letting them buy within the stream.

Unfortunately, most popular social media platforms in the UK can’t compete with the standards of their Chinese counterparts when it comes to livestreaming and interactivity.

The key for the growth of this ecosystem is not just developing a channel that enables live shopping, for which there is ample existing technology, but developing a platform with a large enough user base. An example of this already in action outside of China is Amazon Live – the e-commerce titan’s new branch into the channel.

However, most retailers lack the scale and existing customer base to have their own proprietary live shopping stream, and therefore will need to rely on established platforms such as TikTok and Instagram. Time will tell how fast these platforms can adapt and impact on UK retail.

A new era

Often it takes the flames of a crisis to bring about radical change to an aging system. From the dust of fallen retail giants, a new generation of digital retail is sure to arise. While numerous uncertainties and difficulties around these revolutionary new mediums still lie ahead, consumers and businesses all stand to benefit from this new lease of life for the retail industry.


Young Pham is Chief Strategy Officer at CI&T

Main image courtesy of iStockphoto.com

© Business Reporter 2021

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