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Amazon places hope on influencers to break into the live shopping market

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Amazon has stepped up plans to break into the QVC-style live shopping market as the $1 billion e-commerce giant aims to replicate the success of its social media rivals in a bid to revive slumping online sales .

The group has increased its investments in Amazon Live, a platform it quietly launched in 2019 but is now front and center as it fights to grab a share of a market growing considered the future of shopping by social media platforms.

This year, the company hosted at least four events designed to attract more influencers to its platform, including a glitzy retreat at a Mexican beach resort. To the biggest names, he offered generous bonuses: thousands of dollars in extra incentives to live stream on Amazon rather than elsewhere, according to major influencer agencies.

Amazon’s aim is to establish itself as the leading destination for live online shopping, ahead of competing efforts from YouTube, Instagram and TikTok, but also a slew of small start-ups backed by prominent corporations. venture capitalists, such as WhatNot, backed by Andreessen Horowitz.

Each of these groups is betting that Western consumers will embrace live e-commerce with the same enthusiasm as in China, where sales generated by live streams are expected to top $400 billion this year.

That’s about 15% of all e-commerce sales in the country, up from 3.5% just three years ago, according to Insider Intelligence, the research group. The model has proven lucrative for TikTok’s parent company, ByteDance – sales of Chinese sister app Douyin have more than tripled year-on-year, selling more than 10 billion products.

Wayne Purboo, the executive responsible for Amazon Live, said he believes “live shopping is the future of retail.”

“We know that video is a driving force in customer purchases. We know that when customers are on Amazon, they are already in shopping mode. So we wanted to look into that,” he added.

As comfortably the biggest player in e-commerce, Amazon has a strong hand, said Gaz Alushi, of social media creator commerce agency Whalar, and formerly of Snap and Facebook.

“Amazon has fundamentally changed the game in terms of a seamless, non-sticky shopping experience,” he said. “Amazon Live is a very smart extension of what’s already happening in the ecosystem.”

Alushi points to trends on TikTok where videos tagged “#amazonfinds” — meaning a product found on Amazon — have collectively been viewed more than 23 billion times. With Amazon Live, Amazon hopes to tap into this virality, directing audiences to direct selling on its own platform, thereby increasing the rate of purchases.

The move is key for the e-commerce giant as it seeks to boost the sluggish performance of its online store – sales fell 3.4% last quarter to $51 billion – and embarks on new new areas with which it has been less successful in the past, such as luxury clothing.

“Amazon has consistently squeezed the juice out of every possible category,” said Insider Intelligence analyst Andrew Lipsman. “Now they need to start breaking into all the categories that are increasingly difficult to sell online. Amazon is trying to wear [influencers’] public on Amazon Live. It’s easier said than done. »

While Chinese shoppers have embraced live e-commerce, the US market is in its infancy, analysts say. Coresight Research estimates that the value of goods sold to US consumers via live shopping streams could reach nearly $70 billion by 2026, or about 5% of all online purchases, up from $20 billion this year. year.

The success in China has been “inspiring” for Amazon as it built its live platform, according to Munira Rahemtulla, the former company executive who led the development and launch of Amazon Live.

“We started experimenting before [Chinese live shopping platform] Taobao Live has gone big,” said Rahemtulla, who left Amazon in October after 16 years. “But we were certainly inspired by what we saw there. We would be crazy not to be. I really think there’s no reason why something similar can’t happen in the United States.

Chart illustrating retail livestream e-commerce sales ($ billion) and share of total e-commerce in the United States.  Sales will grow from $6 billion in 2020 to around $68 billion in 2026 and its share of total US e-commerce will increase from 0.8% to 5.2% as forecast over the same period.

But replicating the model in the West has not proven easy so far. TikTok has scrapped plans to expand its live e-commerce initiative to Europe and the US this year after its UK launch was hit by internal issues and struggled to gain traction with consumers. consumers.

It remains to be established, Lipsman said, whether Western buyers are behind the live trade — or just plain uninterested.

“I think there’s been this conventional wisdom that it’s inevitable that this will become a major trend here,” he said. “And I haven’t yet seen any evidence to suggest that’s really the case.”

On Amazon Live, typical streams on the site last an hour or more, during which time around a dozen products may be featured, purchasable with a few clicks or taps, and likely delivered in two days or less.

For influencers, commissions vary: according to the rates published on Amazon’s website, a physical book earns an influencer a 4.5% discount, while luxury beauty products earn 10%. Digital video games only receive 2%, unless that game is from Amazon’s own game studio, in which case the commission increases to 20%.

Bar chart of the most popular destinations for US consumers watching live shopping.  showing Connected, ready to buy

Chicago-based mother of two Lindsay Roggenbuck was one of the influencers approached by Amazon to start streaming on Amazon Live. Her TikTok videos showing the various products she bought online have exploded in popularity during the pandemic, gaining around 1 million subscribers across various platforms.

“I was very good at being comfortable in front of the camera and everything,” Roggenbuck said, saying she had experimented with streaming on Facebook Live. “So I was like, why not?” The terms of its agreement with Amazon prohibit Roggenbuck from sharing specific details.

When selling their wares, influencers must be careful not to break strict rules. For example, when selling alcohol-related products, such as a bottle opener, Amazon’s policy states that streamers should avoid suggesting customers get a drink “every night.” Shot glasses for alcohol cannot be described as a “must have”.

But influencers have had problems building an audience, said Addi McCauley of influencer marketing group IZEA.

“There aren’t many people,” she said, referring to the number of viewers typically tuned into Amazon Live’s homepage. “That’s why Amazon needs to reach out to these influencers, telling them that we’ll be paying you thousands of dollars a month on top of commissions.”

But influencer interest in Amazon Live is slowly growing. “I wouldn’t call it a roaring scream yet, but we’re starting to hear the volume increase,” McCauley said.