Selling goods over a live broadcast has been around for decades: In 1977, radio host Bob Circosta sold more than 100 can openers, after an advertiser paid for its spot with kitchen tools in lieu of money.That spawned a new career for Circosta in TV home shopping, an industry now dominated by players including QVC and HSN.

Fast-forward to 2022, and livestream shopping is a global hot ticket. Overall sales in China’s market alone is expected to reach $432 billion this year, according to McKinsey, more than double the figure for 2020. The sector is huge, and coming to the U.S, with a raft of new channels, products, and superstar sellers accessible online to consumers on smartphones, providing a huge opportunity for brands. Barrier to entry is relatively low for those firms that already have shopping accounts set up on social media. Platforms like Instagram and TikTok are upping their e-commerce functions as they realize people want to be inspired by content and shop all in one place.

Instagram launched Live Shopping in 2020, where companies and creators sell during a live broadcast. Brands need a shop and catalog on Instagram before going live, but after that, it’s just a case of picking a product selection and hitting the broadcast button. Instagram typically takes a 5% cut for each sale, or $.40 if that’s less than $8.00. That’s waived through the end of 2022 to help boost businesses following COVID.

TikTok is currently testing real-time live shopping ads with a limited number of accounts. Merchants will need to have a shop in the TikTok Seller Center and, as this is an ad product, there is a cost involved.

Going live

During a live shopping stream, a host will typically talk through a product or selection, with popular categories ranging from beauty and fashion to travel and education. Shoppers ask questions through a chat function before clicking to buy, all on the same platform. And hosts can range from regular users right up to top-level influencers.

For those raised on the high-production value of QVC, live shopping can feel like watching a home video. But that’s often the allure — these are real people selling items from their stores and homes, and they’re sharing details about what fits their body.

Certainly bigger brands will use studio spaces, like a recent Ted Baker launch hosted by tech platform Bambuser. But Mimi Striplin, owner of The Tiny Tassel in Charleston, South Carolina runs a live shopping drop every Sunday afternoon right from her store via Instagram Live.

“Hi! Thank you so much for tuning in,” she exclaims as a comment springs online.

Each item she shows gets pinned to the bottom of the screen. Clicking that brings up details of, say, the Dorchester Dress, covered in pink hearts, a garment she’s showing off for Mother’s Day which is only available for 24 hours through the Instagram feed. She’ll stop mid-pitch to send some love back to someone in the chat, and even walks off screen to grab something from the rack. And her smiles never fades mid-sale.

“I don’t know about you all but whenever I am wearing a fun print like this, people find so much joy, their eyes just light up,” she says, beaming.

How brands are responding

Brands eyes are lighting up too. That’s fueled in part by figures including those from China’s social media app Xiaohongshu, or Little Red Book, clocking 200 million active users each month. By The U.S. market is still in its infancy by comparison. Estimated to be worth around $11 billion last year, it is expected to rise to $25 billion by 2023, according to research company Coresight.

Bambuser opened its first U.S. office this year, helping clients including Saks Fifth Avenue, LVMH and Bloomingdale’s set up live video on their channels. Buyers can also go directly to sites including Instagram or Posh Parties, real-time virtual shopping events run daily on resale site Poshmark where people browse and buy items on the platform. These differ from parties on Xiaohongshu because they don’t use live video, but are seeing success. Poshmark debuted a mini version of its parties via Snapchat, where users of the social media app can invite their friends to join events or share item listings.

In China, Alibaba pioneered this kind of e-commerce in 2016 with Taobao Live, a marketplace where consumers and influencers sell to shoppers via live video. The space now includes players such as Xiaohongshu, which co-founder Miranda Qu describes as China’s “Instagram plus Amazon.” Around 70% of content on the site is user-generated. But the remainder is created by influencers or brands eager to attract attention from these shoppers, including Gucci, Hermes, Chinese beauty company Perfect Diary and P&G’s own Downy.

Qu suggests brands put some thought into how they will court or woo this particular consumer before leaping into the space, she told P&G’s Signal conference in 2019.

“You should attract them,” she said. “You cannot just be there and inform them and educate them with…TV ads or billboards,” she said. “You should ‘date’ them; you should listen to their needs.”

Best practices for getting started

Getting started on Xiaohongshu is relatively straightforward: International brands that have the right to sell in China can create an account, undertake the company’s online training program and then start posting regular content, as they would on Instagram. Seller fees vary widely depending on the size of the company, where they’re based, and what they’re selling. These fees range from 5 to 20% on goods sold.

Creating a brand page, tailoring content to the platform, using SEO and keywords, and posting consistently are top tips for getting noticed on Xiaohongshu, says Chinese marketing agency, Emerging Communications. It’s important to build an audience before starting to sell to them, says the agency’s Michaela Zhu. And the best way to do that is to work with sellers known as Key Opinion Leaders (KOLs) or Key Opinion Consumers (KOCs) — which Zhu says can cost upwards of millions of dollars — and then try not to control everything.

“We do need to offer the influencers…some freedom to be creative because people trust their content. If it’s too commercial…it could have some negative performance,” Zhu says.

Due diligence around using these influencers is also important. In December top Chinese live streamer Viya was fined $210 million for tax evasion by the Chinese authorities, after being accused of not declaring her income. Then in March, the country said it had plans to limit how much influencers can earn.

Bambuser lets brands run live shopping events via their websites or social media platforms. Clients can use just a smartphone to go live, but Bambuser also offers content strategy and high-performance streaming known as RTMP, with costs going up according to the complexity of the setup. To get started, companies book a demo via Bambuser’s website, and the company is also launching a free academy for brands to learn more tips on converting viewers into buyers.

Bambuser doesn’t disclose its pricing but charges a setup fee that includes training on its platform, plus a ‘nominal’ monthly license fee that enables unlimited streaming and replays, a representative told Signal360 via email.

The “magic” balance is one where brands host regular live or video shows on their website plus one-off larger events where a famous face might host a sale, says Sophie Abrahamsson, Bambuser’s president of Americas. People watch live shows for an average of 10 minutes, she says, and converting 10% to 20% of visitors into buyers is “completely doable” with a good strategy. Brands who haven’t launched their own live shopping strategy have time — but Abrahamsson believes, the party has already started. “Live video shopping is so much in its infancy,” she says. “We’re starting to see the trailblazing customers gaining traction and figuring their magic formula out. But I expect this to take off within six to nine months.”