Live streaming: How businesses turn viewership into revenue
Live streaming was already gaining traction before the pandemic, but COVID-19 turned it from novelty to necessity. Money Mind looks at what it takes to turn viewership into revenue.
SINGAPORE: From any online device anywhere in the world – you can watch pandas laze the day away at their home in Chengdu, or check out rare artifacts in a museum overseas.
This is thanks to live streaming – or the broadcasting of live video in real time.
Live streaming has been around since the early days of the Internet. But increasingly, businesses around the world are now catching on to the potential of such video streams to promote and sell their products.
One of the pioneers was the Chinese e-commerce giant Alibaba. Taobao Live was launched in 2016.
In 2020, like many other online platforms, it saw growth during the pandemic. From February 2020, the number of businesses that adopted live streaming for the first time on the platform has jumped by 700 per cent, said Ms Bonnie Zhao, head of Taobao Live Product at Alibaba Group.
"When offline retail was not able to proceed in the normal way, through live streaming, we provided for entrepreneurs and this gave them a new lifeline," said Ms Zhao.
READ: Great Singapore Sale to go online this year with ‘new norm’ shopping experience amid COVID-19 pandemic
It is estimated that about 560 million people use live streaming in China. That is about 62 per cent of the country’s total number of Internet users.
This user base has spawned a new concept – “shoppertainment” - or the integration of entertainment and commerce.
China’s live streaming e-commerce sector was worth an estimated US$60 billion in 2019, and is expected to double by the end of this year.
Such growth has been helped by rapid advances in technology.
Mobile phone screens have increased in size, and the network in China has moved rapidly from 2G to 5G.
The rest of the world is increasingly catching up too.
LUXURY LIVE STREAMING
Louis Vuitton recently became the first major international luxury brand to join the live streaming model. Its Summer 2020 collection was live streamed in collaboration with a Chinese retail app.
And here in Southeast Asia, Pomelo recently debuted an in-app live stream technology.
Mr David Jou, CEO of Pomelo, noted the differences between the markets in the region.
The biggest adoption has been in Thailand, he said. In Indonesia, engagement levels have been high, but actual conversions have lagged behind. As for the Singapore market, Mr Jou says it is already an advanced one, and so live streaming may be more for content than for commerce.
Industry leaders know that building on this content can help to establish a stronger fan base for their products.
Ms Zhao said: “Live streaming is not just about satisfying your wants. It’s about creating more wants in your life. It is more than just a simple business transaction. It has evolved, and it is now about getting fans, personalising the experience, and gaining loyalty from consumers.”
Boy band BTS has shown what a big hit this business model can be.
More than 750,000 fans from over 100 countries tuned in for the group’s virtual concert in June. It was a new world record, but it didn’t last long. In October, BTS broke their own record, attracting an even bigger virtual audience – 993,000 across 191 countries and regions.
Fans had to log in via the group’s own tech platform. It is a business ecosystem that doesn’t just sell concert tickets, but also builds up long-term engagement with the brand.
And that opens up growth possibilities for entrepreneurs across many sectors.
For those looking to jump on the live streaming bandwagon, experts agree that engaging the audience is key.
Hormese Tharakan is commercial director at tech consultancy ThoughtWorks.
He said live streaming is here to stay, and so businesses need to start making it part of their business strategy.
“The key difference is going to be, who can get it right. And to get it right, it’s content which drives data, data drives insight and these insights help you create more personalised experiences for the users.
"These personalised experiences are now going to drive your sales. But driving the sales is not the last mile. What you would also need to do is set up a whole cycle which leads to building trust and loyalty.”