YouTube to begin shift to shopping destination

Weeklong holiday event to help kick off effort

Every day, millions of viewers come to YouTube to research the latest gadgets and beauty products that the site’s creators promote. Most of them then leave to make a purchase — often on Amazon.com.

YouTube wants in on the action. “We’re making their jobs harder,” David Katz, YouTube’s vice president for shopping, said in an interview. “YouTube has an enormous shopping opportunity.”

Starting next week, YouTube will host a weeklong livestreaming event, called Holiday Stream and Shop, where select social media stars will sell their own merchandise and brand name products directly on the platform. In the coming weeks, some YouTubers will be able to hawk goods from their videos, a concept known as shoppable video. It’s all part of the company’s biggest push yet to become a shopping destination.

YouTube, part of Google, has toyed with this idea for years, but its plans accelerated when the pandemic created a surge in e-commerce. The company also faces new competition in luring advertising dollars — its core business — from the likes of Amazon, which is quickly growing its ads unit.

Last year, YouTube began asking creators to track the items they featured in footage in an initial step to build buying features directly inside videos. This summer, YouTube hired Katz, an e-commerce veteran, and Bridget Dolan, an executive with beauty chain Sephora, to lead a new division focused on shopping.

While Americans are used to buying items showcased on cable networks like QVC and the Home Shopping Network, efforts to crack commerce in online video have mostly floundered.

That’s not the case in China, where the fusion of social media and e-commerce has created a colossal industry. Research firm EMarketer estimates that Chinese social commerce will hit $352 billion this year, almost 10 times larger than the market in the U.S. With its holiday event, YouTube is looking to replicate the lucrative bonanzas in China; last month, Li Jiaqi, a top Chinese livestreamer, sold $1.9 billion of goods on the first day of Alibaba’s annual festival.

YouTube’s rivals in social media — Facebook, TikTok and Snapchat — are now trying to also become shopping platforms. Apple’s restrictions on iPhone ad-targeting has throttled social media’s main ads business. Google, while less impacted, admitted on a recent earnings call that Apple’s changes dented YouTube’s ad sales, which topped $7.2 billion last quarter but fell short of Wall Street expectations.

However, YouTube has something its U.S. social media competitors don’t: Google’s online retail operation. The search company recently partnered with Shopify, Square and others to create a sort of anti-Amazon alliance in e-commerce. YouTube will rely on Google’s commerce system to connect with merchants and delivery systems.