There is a new convergence happening in the commerce space. First came the rise of digital commerce across verticals and the conversion of offline commerce into digital. Over the past years, we have seen the convergence happening between online and offline commerce, where online-only operators are getting into offline retail and merging the two using the advantage of data and tech. In China and Southeast Asia, it is now aptly called O2O.
A new convergence is on the rise today, it is the convergence of entertainment and commerce. With the growth of internet and smartphone penetration coupled with the popularity of video content, we are seeing entertainment and shopping is increasingly becoming indistinguishable. This is where a new trend is soaring: live commerce, where you watch videos and shop.
In this excellent interview, we sit down with Rashedun Nabi, Partner, Strategy & Business Development, Next Billion PTE Limited, and a Live Commerce aficionado, to discuss the origin and dynamics of live commerce and the future of live commerce in Bangladesh and his live commerce project at Ajkerdeal, the country’s leading ecommerce platform to launch the first live commerce platform in Bangladesh.
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Future Startup
Could you please give us a rundown on live commerce that is what, and how of Live Commerce as well as your work at Ajkerdeal where you are working on launching Bangladesh’s first live commerce platform?
Rashedun Nabi
If I use a relatable example, Live commerce is a combination of the business model of Asian Sky Shop of Bangladesh or QVC of the USA, which we were familiar with when we were a child and Facebook Live along with an ERP system put together.
In the advertisements of Asian Sky Shop or QVC, we used to watch a seller describe a product . The problem with that was a potential customer could not interact with the buyer immediately to ask questions or place an order. Social media platforms took this to a different level. When you do Facebook live and try to sell something through that, customers can ask you questions relevant to the products during the live. You can demonstrate your product, entertain your customers, and interact with your customers via Facebook comments. Facebook Live is a commonplace thing in Dhaka these days. Thousands of people use this feature to build an audience and sell products online. The limitation of Facebook Live is that it is not a commerce platform. Customers, even if they want to, could not place an order while watching your live video. They could comment, ask for details, or order via a message. That too is quite cumbersome and experience is not that worthwhile. This is where Live commerce comes in. You put a shopping option with Facebook Live through which customers can directly place an order. If you combine all of these features you get Live Commerce.
While Live Commerce is a dominant trend in China and many markets in South East Asia, in Bangladesh, it is predominantly about Facebook Live. But the process is not optimal. What usually sellers do is that they go on live on Facebook from their page or profile, demonstrate products, ask customers to take a screenshot and/or comment/message if they want to buy. It has several issues. One, when people are told to comment during a Facebook live most people write irrelevant comments. Hence it becomes hard for a seller to find the comments relevant to the products. Two, the entire process is not a good experience for customers. Usually, old comments come later than new comments when you scroll through the comment section. As a result, by the time the sellers see the comments of people who commented earlier the products get stock out. Managing the entire thing is quite complex as well. This has given rise to the live commerce platforms and dedicated live commerce features are now being used by ecommerce companies across markets. Live commerce does not suffer from these limitations.
Whenever someone places an order in live commerce, it immediately gets recorded and later the merchant delivers the products through their live commerce partners.
Taobao first launched Live commerce in China. It was the early days of ecommerce in China and Facebook was not that dominant as yet. Taobao saw that, firstly, customers usually spend less time on e-commerce sites, and secondly, they want to see real photos of the products. Taobao launched Live Commerce on their website and the feature was a huge success out of the gate.
The annual growth rate of Live commerce in China and Southeast Asia is estimated to be 150%.In 2021, Taobao estimates that their market of live commerce will grow to 70 billion USD.
In China and Southeast Asian markets, live commerce has become synonymous with commerce. An increasing number of companies are launching Live Commerce features. Some companies operate dedicatedly in the vertical. In 2020, I have identified 36 companies in Southeast Asia, Europe, and North America that have launched Live Commerce platforms.
In Thailand, I know a merchant who sells dry fish through live commerce. His weekly sale is around 6 lakhs Thai baht. Sometimes it goes upto 1 million baht and that’s only through live streaming. He comes to Facebook live every night and entertains his customers discussing various things. That’s how the term “Shoppertainment” originated. In many ways, live commerce is a convergence of commerce and entertainment. People have time to kill, which is far greater in amount than we otherwise might think. Facebook is an example of that. It means if you can entertain them, you can have their attention. Live commerce allows you to entertain your audience. And there is rarely a better sales approach than entertaining people.
Li Jiaqi is a Chinese millionaire, who is in his 20s, and who sells lipsticks through live commerce. In his previous job, he was a salesperson in a beauty shop. He does live streaming on Taobao where he tries on different shades of lipstick to let his customers know about the products. His annual income is 8 million USD. In China, it is now kind of a full-fledged career that many people are pursuing actively. In Thailand, Lazada organizes a show called “Last Talent” which is a competition of live streamers. Where they select the top 20 live streamers and train them for a few months to prepare them for commercial live streaming.
According to a survey conducted by Alibaba, in countries where they didn’t introduce live commerce, the conversion rate is 1-2%, and in countries where they have introduced live commerce, the conversion rate is 9.5%. A 2019 Alibaba survey also reveals that in countries where live commerce has not been launched buyers usually spend around 15 minutes on the e-commerce websites, while for countries with live commerce platforms the time spent on the e-commerce websites is up to 56 minutes. When people spend more time on your platform, it means more business for you. E-commerce companies in Dhaka should take live commerce seriously.
E-commerce platforms use several tricks to make people engage with their live events. In Thailand, Lazada shows a popup message when a viewer leaves a live streaming event saying that if you watch this live video for another 3 minutes, you’ll get a reward point. Later these reward points can be used to get discounts during online shopping on their website. This helps them to keep users on their platform and eventually convert them into customers. This is so clever because when someone spends more time on a website, the money spent increases. There are many upsides to live commerce. Customers can contact sellers on the go. Get answers to their questions. Orders. And get confirmed about their orders. It is also an excellent medium for the sellers. The biggest advantage of live commerce is that it lowers the return rate. As through live streams, customers get a complete idea of a product before purchasing, they rarely return the products after delivery.
Future Startup
We have been seeing a convergence between entertainment and commerce. It now appears everything is becoming commerce. What does it take to launch a live commerce platform? Could you please talk about the intricacies and logistical requirements of launching a live commerce platform?
Rashedun Nabi
A few things here. One is the technical aspect - building a live commerce platform.
Several platforms provide live commerce solutions in the form of SaaS. There are different packages offered by these platforms based on data speed, storage, etc. You can buy a subscription and then start your platform.
I’ll suggest you build a prototype of live commerce first before getting into it head-first and then get feedback from the market as you grow and gradually improve your platform. You can also build your platform from scratch if you see value in doing so. While I can offer product insights from a user perspective, I’m not a tech guy to explain the intricacies of building a platform.
The second important aspect is eventually building out the platform aka bringing users to your platform. There are two sides here: one is customers who will buy from your platform. Another is sellers who will make the live shows and sessions. A major challenge for live commerce platforms is finding a balance here where they have enough sellers who are creating live shows as well as enough customers who are watching and doing shopping. The challenge here is that unless you have enough sellers who are selling through engaging live commerce shows, customers would not be interested to come to your platform. Similarly, if there are not enough customers many brands and sellers would not see value in creating shows on your platform. It is a classic chicken-egg problem. We have found an interesting solution to this challenge at Ajkerdeal, I’m coming to it in a moment, but usually solving this puzzle would be the biggest challenge for any live commerce platform.
If an e-commerce platform already has a good number of viewers then they can utilize live commerce. But if an e-commerce platform doesn’t have that then they should focus on increasing the number of viewers first.
Thirdly, there is a demand-side and a supply-side. Marchants want to do live streaming, but not many people can talk confidently on Facebook live due to camera phobia. Besides, many people write negative comments on live streaming which makes many live streamers concerned about their social image. So young people or influencers who do Facebook lives regularly can do the lives on behalf of the merchants. It means you will not only have to convince merchants to come to your platform, but you will also have to help merchants to find live streamers as well.
There can be options for merchants on live commerce platforms to choose between whether they would like to do the live streaming themselves or they would prefer to assign a live streamer for that.
Live streaming is already a thing in Bangladesh. A large number of people do live videos on Facebook and it is increasing every day. . YouTube is also seeing growing participation by Bangladeshis. There are many vloggers on YouTube who do promotional videos on YouTube and they earn a lot of money from this sector. I know many shops in Bangladesh that pay vloggers to make YouTube videos for them. It means there is already a certain level of awareness and education in the market.
To my reading, for any live commerce platform, figuring out the go-to marketing strategy is more challenging than technological aspects. Attracting viewers and finding a balance between sellers and customers can be a challenge.
At Ajkerdeal, we are working to find a comprehensive strategy to tackle these challenges and we think we have found an approach that will work. One, AjkerDeal already has a solid user base. They will be using the service. Second, we are keeping the live feature open, which means you can share your live show link on your Facebook and other platforms and your followers will be able to watch your show without requiring you to log in to any platform. We have a “share” option through which you can share the link of your live streams on Facebook. After clicking on the link viewers will be directed to the Ajkerdeal app and those who don’t have the app will be directed to a screen where they can watch the show without registering and place an order using the same order process.
Many buyers won’t feel the need to install a new app just to buy something. We are also considering keeping the platform open for any seller as well. Ajkerdeal sellers will be able to use the live commerce. At the same time, if you are a brand or an ecommerce seller who does not have a shop on Ajkerdeal, you can also use the live commerce service as a standalone feature for a live commerce show or session.
Future Startup
Suppose I’m a third-party merchant who is not on the Ajkerdeal platform. I can do live streaming on Facebook and YouTube. Then why should I choose AjkerDeal?
Rashedun Nabi
Like I said you’ll get support for order management, order fulfillment, and delivery. Also, you get the traffic of AjkerDeal, an audience who come to the Ajkerdeal app for shopping, whereas people usually don’t use Facebook or Youtube for shopping rather for entertainment.
Future Startup
You eventually want these merchants to open an account on Ajkerdeal to utilize the live commerce platform.
Rashedun Nabi
That’s what we would like of course. But we don’t want to tell a merchant that without opening an account he will not be able to use the live commerce service from Ajkerdeal. . There are some guidelines to maintain and you get into a relationship with Ajkerdeal when you open an account on Ajkerdeal as a merchant. g. But if you are a Facebook-based seller and want to use Ajkerdeal Live commerce you can use it. If you want to become a merchant of Ajkerdeal after that, you can do that as well.
Usually, Facebook merchants face challenges regarding order management, logistics management, delivery management, etc. Moreover, many Facebook merchants told us that due to the current changes in the algorithm of Facebook, Facebook lives don’t get views like before. Ajkerdeal provides you all these supports as well as an audience who are ready to shop.
We plan to launch the live commerce platform in early February this year. We are targeting both offline and online merchants. Eventually, we will also target brands and companies who want to launch products to a live audience.
Future Startup
There are some challenges around internet speed and cost, how do you see these challenges when it comes to Live commerce?
Rashedun Nabi
While there are some challenges when it comes to the speed of the internet and the cost of the internet, we have seen an excellent smartphone and mobile internet penetration in Bangladesh. Mobile data is quite stable across cities and it is getting cheaper. A large number of people now have access to the internet. There are and will be challenges, but I think we have made progress and will be making more progress in the coming days. We have also taken some initiatives such as minimizing video resolution and size so that people can watch them even with a moderate bandwidth speed.
Future Startup
How do you think about potential competition in the live commerce space? How do you plan to respond from Ajkerdeal?
Rashedun Nabi
Social media platforms across markets have tried commerce with varying degrees of success. People go to Facebook for different reasons. While Facebook has become an important channel for small businesses and brands to sell and interact with customers, full-fledged commerce on Facebook is unlikely. We think Ajkerdeal has certain leverage such as willing customers who come to the platform for buying things. Second, there will be other live commerce platforms for sure. But we want to be a first mover in the space and we have strategies in place to win over the market and ensure strong competitive moats.
Future Startup
What is your take on the future of live commerce in Bangladesh given the fact that we are quite different from China, where the internet ecosystem is quite different from us?
Rashedun Nabi
Merchants in Bangladesh are well aware of the importance of digital presence. Pandemic has accelerated this awareness. As I mentioned earlier, the number of people using smartphones has been growing consistently and continues to see excellent growth. If you see video platforms like Likey, Tiktok, etc; you’ll see that a large number of people prefer videos over still photographs. Now a person can shop everything for his or her wedding online. Ecommerce has seen excellent growth. If you look at the internet consumption trend in Bangladesh, users completely prefer videos if they are well made and entertaining. To that end, I think live commerce is the future.
Today, a large number of sellers sell their products on Facebook live because buyers want to know about the products in detail. But there is no specific platform for that. Merchants have owes and challenges when it comes to managing orders, so there is already a need for a live commerce platform that will also offer order management plus other services.
In the past, there were brand promoters whose job was to promote their brands in shopping malls or even streets. Even now if you go to the superstores you’ll see them. They give people a demonstration of the product. But in person, that brand promoter can only give demonstrations to a few hundred customers. If you find a platform where you can have 1000+ potential customers within just half an hour, you’ll choose the second one. This idea is giving rise to the live commerce platforms. As blockchain technology becomes more mainstream, this could also be used to enable and empower live commerce platforms embedding greater stability and trust in the process.
Live commerce is effective. I can attest to that myself personally. We have a survey tool at Next Billion where we collect the personal information of the potential customers for our clients to understand their opinion about a product. The in-field marketing and consumer data collection is at present hampered due to social distancing and lockdown measures. Right now, given the pandemic, it is still difficult to predict from when any in-field activities will start at scale.
As a result we are seeing an opportunity to further the digital transformation of in-field type activities and the engagement with consumers. With mobile devices readily on-hand for most consumers, live streaming is extremely accessible, easy to use, and a great tool for real-time engagement.
We see that this is a great opportunity for brands to use Live Streaming to demonstrate the features of the product and collect PII information incentivised by offering instant rewards.
In the end, I would like to say that I believe there are a lot of opportunities in Bangladesh for live commerce.
Conversation by Ruhul Kader, prepared by Tithi Chowdhury and edited by Ruhul Kader.
