Live streaming: A modern e-commerce

By Lai Siow Teng and Associate Professor Dr Goh See Kwong

COVID-19 has accelerated the digitalisation process for many firms, making the e-commerce industry even more competitive in the last year and a half. In turn, brands and businesses need to be innovative in the e-commerce platforms for them to gain a competitive position.

Many physical stores were not able to operate during lockdown and this has hampered their consumer product sales and revenues significantly.

Given that the situation is full of uncertainties and ambiguity, as to when COVID-19 pandemic will finally end, it is imperative that brands become creative in engaging with their customers.

Many companies have hopped onto the trend of live streaming during this period to differentiate themselves with competitors, and this is a new way to connect with customers.

The live streaming trend is experiencing growth. According to TechJury (2021), the live streaming market will be valued at USD$247 billion in 2027 with a CAGR of 28.1%.

Additionally, it is stated that 82% of viewers prefer to watch a live stream, rather than a brand’s commercial posts.

One of the key benefits of live streaming is the ability to demonstrate the product USPs such as features, design, and usage, from different viewpoints.

It has solved problems that traditionally the e-commerce industry has faced with regards to trust and communication issues, as now customers are able to watch authentic product presentations, and directly communicate with the e-retailers.

Viewers are able ask questions directly and sellers can answer them through the chat box or in the comments section.

The benefits of live streaming as a marketing strategy helps bring a lot of online traffic and customer engagement in a short period – increasing the chance of the customer’s purchase intention.

The key question is, what attracts consumers to these live streaming platforms?

There are three major influences towards consumer adoption of live streaming sites.

Firstly, the platform used is important. Consumers are more likely to participate in a live stream if they find that the platform is trustworthy and has good quality information.

The chosen platform should ensure that any information shared online is accurate, useful, relevant, and comprehensive.

In other words, consumers can obtain what they want while attending the live streaming session. In ensuring trustworthiness, the live streamer should be able to explain or illustrate the authenticity of the product and its performance in real time.

The platform or live streamers should also provide clear images about the product description and explanation in real-time, as this allows consumers to grasp or understand the product at every angle.

Secondly, the interaction quality between the live streamer and consumers is a crucial factor. Interaction quality refers to the live streamer and e-retailer’s ability in responding to consumers promptly and effectively.

When consumers join live sessions, there is an expectation that the platform would ease their communication access, so that the live streamers’ team can respond to them in real time.

This would ease their decision-making and solve any doubts the consumer may have when considering purchasing the product.

It is also found that consumers prefer to have personalised responses to their queries. As such, the quality of interaction should include not only an easy-to-use platform, but also prompt, genuine and personalised responses.

Lastly, characteristics such as the personality, tone, manner and content of the live streamer greatly influences a customer’s perception.

A well-known person or a pleasant, engaging and persuasive live streamer would capture the attention of consumers.  In fact, this is the key factor that motivates consumers to continue watching the live stream.

Many consumers are known to participate in a live streaming activity with the purpose to watch the live streamer due to their characteristics and attractiveness.

This is why many major brands invite KOLs and celebrities to host live streaming sessions. More often than not, consumers purchase products because of the live streamer – rather than based on the actual products’ benefits.

Some consumers may treat watching live streaming commerce as their daily entertainment channel, while placing an order at the same time when they see the products that would suit their needs.

Ms Lai Siow Teng is an MBA Candidate at Taylor’s University.

Associate Professor Dr. Goh See Kwong is the Head of School for the School of Management Marketing, at Taylor’s Business School, Faculty of Business and Law, Taylor’s University.

Taylor’s Business School is the leading private business school in Malaysia, based on the QS World University Rankings by Subject 2021 edition.

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