Tuning into QVC and calling a toll-free number to order the stainless-steel saucepan you just saw on TV may seem like a thing of the past. But watching someone try before you buy is having a resurgence, thanks to social media and apps designed to showcase goods for sale.
From watching people test out a new concealer to showing off their vintage comic book collections, livestream shopping is blossoming. The concept has taken China by storm and is gaining traction in the U.S. as apps like Whatnot, Flip and NTWRK attract users and venture capital funding.
China makes up a big portion of the global market for livestream shopping, with live commerce sales making up 20%, or $171 billion, of all sales in the region in 2020, according to McKinsey. Though the U.S. livestream market is worth a fraction of that (estimated to reach $11 billion in 2021 ), the overseas growth is a sign that it could soon take over as a major player in ecommerce and retail.
Between January and mid-November, downloads of the top five livestream commerce apps reached a total of 2.7 million, up 8% year-over-year to the same time period in 2020, according to Sensor Tower, even as downloads of conventional ecommerce apps from retailers like Amazon, Walmart and Wish declined. Randy Nelson, head of mobile insights at Sensor Tower, said these trends show that livestream shopping apps are in a fledgling growth stage, while major retail apps have reached a "maturation point."
Social media giants are also hopping on the bandwagon. Instagram launched a series of livestream shopping broadcasts set for November and December, and Facebook added a live shopping tool for businesses in August 2020. TikTok launched its own live shopping feature in September, tapping into the app's popular niche of unboxing and product-review videos. YouTube kicked off a week of shopping livestreams on Nov. 15. These investments are a signal that companies big and small believe that consumers' appetites are heading in the way of livestream commerce.
Yet it's the dedicated apps that may prove to be the biggest winners with their focus on commerce and ability to integrate purchasing and viewing more directly.
One of the fastest-growing apps is Whatnot, a livestream shopping app focused on novelty items like Funko Pop figurines, baseball cards and comic books. Last year, the Los Angeles-based company brought in just over 60,000 new users between January and November, according to Sensor Tower. This year, the company gained nearly 805,000 new users in the same period.
It also raised $200 million in funding, climbing to a valuation of $1.5 billion. Y Combinator Continuity partner Anu Hariharan, one of the service's lead investors, called it "eBay 2.0" in a statement in May.
Flip, a live commerce app where users can review and sell beauty products, closed a $28 million series A funding at the end of August. Since then, Flip CEO and founder Noor Agha has seen a huge influx of brands wanting to work with creators on the app — including one he'd urged to join and had turned him down just a few months before.
The app's fast growth has given it a springboard for international expansion in 2022. Agha said he aims to launch Flip in at least one or two new countries each quarter starting in April.
"We want to be the first choice for everyone and everything related to beauty and skincare," said Agha. "Not because we're a good marketing company, but because this is the place where you can really find all the information that helps you decide what to buy and you're not tricked into buying something."
Artists like J Balvin and Doja Cat can bring in up to 60,000 viewers on a single stream Image: NTWRK
NTWRK, a creator-focused livestream shopping app for artists and designers, closed a $50 million series B round in September. Revenue grew by more than 300% from 2019 to 2020, it said. President Moksha Fitzgibbons attributed its growth to the overall rise of the industry and its use by major artists like J Balvin and Doja Cat, who can bring in up to 60,000 viewers on a single stream.
"We're educating North American audiences on the value of livestream shopping," Fitzgibbons said. "It's obviously massive in China, but here, it's a more emergent experience for consumers."
Even legacy shopping networks have shifted to keep up. Qurate Retail Group, which owns QVC and HSN, now streams on services like Amazon Fire TV, Roku, Apple TV and Android TV, along with its own dedicated livestream apps.
Growth in the space seems unlikely to slow down. By 2022, McKinsey estimates that livestream shopping sales in China are going to grow to $423 billion. The market could more than double its current value in the U.S. by 2023, reaching an estimated $25 billion if current trends continue, according to Coresight.
Based on those projections and their own experiences of growth, companies and investors have high hopes for the sector. Even as the pandemic subsides, consumers will still have the apps installed — and a new habit ingrained.