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Live Stream Shopping Investing

Live stream shopping is the future of retail. Here are the stocks that will be affected

market & industry analysis Sep 24, 2021

While brick and mortar businesses have felt the brunt of the pandemic, online businesses earned a significant win in 2020. The win was largely attributed to the fairly new trend of ‘Live Stream Shopping’. This is currently enjoying unprecedented popularity, announcing itself as a serious contender in markets that have traditionally been ruled by physical, one-to-one sales and online/app-based marketplaces. In China for instance, the number of live stream shoppers crossed 400 million, as the total sales from live streams surpassed $161 billion in 2020 alone.

What is this crazy concept? Is it sustainable, and should we be keeping an eye on the stocks it may affect? Let's break it down below:

 

Live-stream shopping:

So what is it? Live-stream shopping is the streaming of videos of influencers trying out, commenting upon, and marketing different products.

Haven't you ever wondered how that shirt being sold on Amazon actually looks, feels and fits?

Isn’t that literally the reason why you’d drive to the nearby mall and try the apparel out in the changing room before making up your mind about buying it? This new trend tries to compromise between your urge to check out the items live, and your reluctance/inability to check in a physical store – the influencers here will try out the products live, along with well-rounded commentary and their personal recommendations. The apps hosting these streams also come equipped with product carts, a payment gateway, recommendation algorithms and an attractive interface to ensure a one-stop, high-satisfaction shopping experience.

 

Who's doing this:

In China, apps like Taobao (owned by Alibaba) and Douyin (sister app of TikTok) have facilitated live stream shopping by combining the pull of entertainment with the prospects of product marketing. Millions of users tune in to the streams held by their favorite influencers every evening, and at least a few of them end up owning the products demonstrated there.

This strategy has been highly efficient, too - about 60% of the streaming viewers tuned in to such shopping streams in 2020, and 65% of such live stream shopping viewers bought something at least once during the year.

The trend is now no longer restricted to the fashion industry - automobiles, consumer staples, traditional handicrafts and even financial securities are being offered on live streams in China!

 

An analysis of the future:

So the key questions at hand is, "Can we expect this trend to migrate from Asia to the North American and European markets? Is live-stream shopping the start of the next revolution in the retail world? Can we expect to witness a new Amazon in the next ten years?"

Frankly speaking, the idea seems good enough as a tertiary option to the traditional brick-and-mortar retail chains and the more recent (and stable) online marketplaces. However, we feel that it is not a replacement or even a threat to the prevalent sales mediums (over the foreseeable future). In fact, as the world now comes out of the exhausting lockdowns and boring lonely life, the pull towards malls, stores and public places will only increase. Why would you, for instance, trust someone (who might be working on commissions) to decide for you what should be bought, when you can enjoy the experience yourself before making a purchase decision? A brief analysis of the post-pandemic performance of the retail chains across the US, Canada and Europe proves this point beyond doubt.

 6 Stocks where we're placing our money:

While we'll admit that while we don’t recommend investing in newcomers focusing only on live-stream sales, it doesn’t harm to put some money in sustainable, stable and low-risk retail behemoths and IT giants who have entered this segment with some serious focus:

  1. Facebook has made in-roads quite aggressively, introducing Facebook Live Shopping (and a new series “Live Shopping Fridays”) in May this year.
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