Why the western way of shop­ping is ‘way be­hind’ the Chi­nese model

Margi Mur­phy re­ports on how chan­nels such as QVC are be­ing over­taken by ‘live shop­ping’ streams

The Daily Telegraph - Business - - Business -

The shop­ping chan­nel as for­mula has been largely un­al­tered since it emerged in the heady con­sumerism of Eighties Amer­ica, hook­ing in thou­sands of view­ers des­per­ate for every­thing from a new fridge to a necklace.

Le­gions of smil­ing sales­men ex­tolling the virtues of hoovers, ovens and hairdry­ers on the likes of QVC might feel like a throw­back, but they have long proved im­mune to the sweep­ing changes wrought else­where by the in­ter­net age.

Now, though, the digital world is fi­nally catch­ing up.

Live shop­ping, as it is known, al­lows for browsers to view a far wider va­ri­ety of wares through stream­ing.

“Think of it as a reimag­i­na­tion of QVC,” early adopter Eric Feng said dur­ing a live TV in­ter­view on Bloomberg three years ago.

In 2019 Feng’s live shop­ping app Pack­agd was snapped up by Face­book, which paid an undis­closed sum for a firm with five staff that was last val­ued at $21m (£16m).

As novel as it sounds, live shop­ping has long been a hit in China, where it was es­ti­mated to be worth $63bn last year ac­cord­ing to Core­sight Re­search.

Con­sumers on Alibaba’s Taobao Live can scroll through all man­ner of items for sale. BMW sales­men show off the lat­est model while food­ies munch on bags of dried shrimp in a con­stant ad­ver­tis­ing blitz.

Kuaishou, a so­cial me­dia ri­val to TikTok, has more than 100m peo­ple tun­ing in to live shop­ping streams ev­ery month. China’s most pow­er­ful shop­ping streamer Viya is re­ported to have made a record $385m (£301m) in profit in a sin­gle day and once helped Kim Kar­dashian sell 15,000 bot­tles of her per­fume in a man­ner of min­utes.

“We are way be­hind in the west,” says Cathy McCabe, former Burberry and Jaeger tech­nol­ogy chief. “It has al­ways been com­mon to buy on WeChat and Alibaba and it re­ally un­der­pins the im­pul­siv­ity, im­me­di­acy and con­ve­nience that we know drives pur­chases – you can see the prod­uct and you get en­ergy and a vibe which you don’t get from just brows­ing alone.”

The slug­gish re­sponse may be ex­plained by an­a­lysts’ fail­ure to pre­dict the ex­tra­or­di­nary rise of the mo­bile.

China by­passed desk­top com­put­ing, with many con­sumers ex­pe­ri­enc­ing the in­ter­net for the first time on a smart­phone. Mean­while, western re­tail­ers have spent years in­vest­ing and per­fect­ing the shop­ping ex­pe­ri­ence for a big­ger screen. Tog­gling be­tween a YouTube video rec­om­mend­ing mas­cara and sev­eral e-com­merce web­sites to com­pare prices is a painful ex­pe­ri­ence on mo­bile, and now the web­sites them­selves are fo­cus­ing en­tirely on buying through your phone.

Cul­tur­ally, the im­por­tance of hag­gling in the east sits well on so­cial me­dia. Hugely pop­u­lar Chi­nese app Pin­duo­duo of­fers dis­counts for so­cial buying, en­cour­ag­ing groups to pur­chase at the same time and share their ex­pe­ri­ence on­line.

This gives Face­book, In­sta­gram and Google a dis­tinct ad­van­tage be­cause they can merge so­cial me­dia, peer re­views and pay­ments in one place.

The pan­demic has ac­cel­er­ated the adop­tion of video shop­ping in the UK, with brands such as Ace & Tate of­fer­ing con­sul­ta­tions to find glasses frames which suit a browser’s face. John Lewis has also launched per­sonal styling ap­point­ments, with re­sults that sug­gest the trend may be here to stay.

Re­tail­ers tra­di­tion­ally might have se­cured pur­chases from 20-25pc of those vis­it­ing a bricks and mor­tar store, but video con­sul­ta­tions are con­vert­ing 60pc of cus­tomers, says McCabe, who is now chief ex­ec­u­tive of con­sul­tant Prox­im­ity In­sight and has clients in­clud­ing John Lewis and fash­ion chain Matches.com.

But if Ama­zon Live – a shop­ping ser­vice which launched in 2019 to lit­tle fan­fare – is any­thing to go by, sim­ply set­ting up a live stream on a web­site is not enough.

This week Google re­vealed it had dipped its toe into the wa­ter with a new app named Sho­ploop, a TikTok style video ser­vice where users pub­lish 90-sec­ond clips to sell beauty prod­ucts. The ser­vice is only avail­able on a smart­phone and aims to be en­ter­tain­ing serv­ing up sales pitches.

Google is acutely aware of how pop­u­lar videos of women do­ing their make-up can be. Its video plat­form YouTube fea­tures thou­sands of beauty tu­to­ri­als which have racked up hun­dreds of mil­lions of views. The firm may have missed a ma­jor ad­ver­tis­ing op­por­tu­nity with YouTube but it is ag­gres­sively mak­ing up for it with Sho­ploop, which not so much blurs the line be­tween user con­tent and ad­ver­tis­ing but morphs them un­apolo­get­i­cally into one. Scroll down and there are hours of in­flu­encers shar­ing clips spray­ing them­selves in fake tan, tu­tor­ing view­ers on fa­cial mas­sagers and show­ing how to cre­ate “the per­fect curl” with the lat­est hair tongs.

“Be­fore, when we had big cam­paigns for Chanel or Carolina Her­rera, we were spend­ing thou­sands of dol­lars to cre­ate beau­ti­ful pho­tos,” says Laura Bar­rera, fash­ion brand­ing ex­pert at Gig Mi­ami.

“Now brands want to in­vest in so­cial me­dia with an ev­ery­day girl just try­ing on the items.”

A small Los An­ge­les based start-up, Pop­shop Live, has al­ready beaten Google and Face­book to live shop­ping af­ter launch­ing last month. The app – which has se­cured $4.5m in fund­ing – gives small busi­ness own­ers hour­long slots to live stream a shop­ping spree. One seller claimed she can make more sales dur­ing a sin­gle Pop­shop Live stream­ing event than in a week at the two stores she owns.

Per­haps rivals to the TV shop­ping chan­nel have hit on a win­ning for­mula.

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