Short video platforms like Chingari and Josh anticipate live commerce (or quick comm) to factor in heavily in their revenue stream soon.
After launching livestream shopping or live commerce feature in November 2020, tech giant Meta has decided to pull the plug. The concept is simple. Live commerce combines instant purchasing of a featured product which a creator showcases and audience participation through a chat function or reaction buttons. Meta didn’t see a significant business pick, so, in September 2022, it announced that it will gradually shift away from the ‘shopping’ feature in its social media platforms.
The company will be removing the ‘Shop’ tab from Instagram this month. It will now focus more on ‘Reels’ on both Facebook and Instagram. However, Meta isn’t the only tech giant opting to move out of the live commerce space. TikTok also announced that it won’t be expanding the business.
It’s worth noting that Meta didn’t exactly push the live commerce business in India to begin with. Users can only find the ‘Shop’ option when they view a brand’s profile on the app.
Live commerce may not be even relevant for Meta and other global tech companies when it comes to India. But, for Bharat first social media platforms, primarily short video platforms, live commerce is the ‘in thing’. The social commerce market in India is expected to touch nearly $70 billion in 2030, industry experts share.
Akshay Gurnani, CEO and co-founder, Schbang, opines that the opportunity that live commerce presents for social media platforms, is immense. “Platforms like Meta may be de-prioritising the ‘Shop’ tab by giving more importance to ‘Reels’, as the latter will understandably drive more advertising revenue for them. But e-commerce platforms like Myntra or Flipkart, or home-grown social platforms like ShareChat, Chingari, Josh, etc., are embracing live commerce because the traffic they attract comes with the intention of product discovery.”
In a chat with afaqs!, Deepak Salvi, co-founder and COO, Chingari, shares that they feel that the demand for live commerce is much higher in Tier-II/III cities. The large chunk of the audience for Chingari, like many other Bharat first short video platforms, hails from these cities.
Salvi says that influencers have a much stronger connection with local audiences in smaller cities. This, coupled with the limited presence of major fashion brands in smaller cities, opens up a strong live commerce proposition. “We are currently experimenting with (developing) an AI/ML that can scan video content pixel by pixel. It can share, with the user, what the influencer is wearing in the video. This data is also shared with our e-commerce partners.”
Salvi believes that live commerce could become a significant revenue builder for the company in the not-so-distant future. He anticipates live commerce to contribute about 15% to their revenue soon, once the infrastructure is in place.
Josh is also trying to make a footing in this market. Sunil Kumar Mohapatra, CRO of the short video platform’s parent company VerSe Innovation, feels that social commerce has emerged as a game-changing opportunity for businesses.
“Indians are spending more and more time on social media and video-sharing apps. These platforms have become important touchpoints for brands to provide an elevated e-commerce experience via easy product discovery, engaging content, and trusted recommendations from influencers. Add to that, a single click checkout. The shopping journey is, thus, completed from the beginning to the end on the same app.”
Mohapatra says that with Instagram shifting its focus from the shopping feature, there is an opportunity for social media players to boost their commerce offerings and enhance users’ shopping journeys. “We are currently exploring formats such as shoppable commerce, live commerce, and gifting, to enable creators and brands to bring engaging experiences to their communities and monetise their content. As the popularity of short videos continues to skyrocket, we will continue to collaborate with brands looking to expand their business in India.”
What is the future of live commerce in India?
While it is clearly evident that smaller social media platforms want to leverage this opportunity, the question arises will they be able to leverage the opportunity?
Sunil Nair, president, BeLive Technology, is of the opinion that social media is not built for commerce in the first place. He explains that the average time spent by the audience on any social media platform on a video is around 4-5 seconds, hence it is very easy to swipe away something that is not relevant. “We are dealing with a large demographic of people for whom swipeable media is the only media that exists. It is no surprise then that Meta is pulling back from live commerce or even commerce in general and the trends is across other social platforms too.”
However, for the aforementioned platforms, live commerce is the talk because of the failure of all other revenue models, Nair opines. “The hype generated in 2020, when every short video platform claimed to have captured the imagination, has died down after facing the reality of retention. We at BeLive work with many platforms in Asia and SEA that are now introducing Livestream commerce as part of their offering. It makes sense for brands as well because it is cheaper to showcase a product to an audience that is not English native in the mother tongue. Brands start off with livestreams on these platforms and then eventually build their own solutions,” he says, adding, “India is the fastest growing market for livestream commerce, though, behind India, it has headroom for at least the next 5 years.”
Sharing a similar opinion, Sanjeev Jasani, COO, Cheil India, says there is significant room for growth and innovation in the live commerce space in India. “Platforms need to use live commerce to build an experience that is seamless. I suggest these platforms need to offer exclusive products and deals, focus on creating engaging, entertaining, and educational content that's not easily available elsewhere,” he comments.