Live Commerce Survey Report -Part 1-

Irep Inc.

What Is The Difference Between Viewers Who Are Easy To Convert And Those Who Are Not?

Live commerce combines livestreaming and e-commerce sites to communicate with users in real time while conducting sales. Due in part to the spread of Covid-19, an increasing number of companies are getting involved with live commerce. Irep Inc. provides support services for companies launching their own live commerce services. This time, we conducted a survey to understand the audience. The results will be explained in two parts. In the first part, we’ll take a deeper look at live commerce viewers in terms of their viewing objectives.

1. What is Live Commerce?

Live commerce is when a company introduces and explains its products to viewers in a live-streaming format via social networking sites and e-commerce sites. Viewers can ask questions about products live using the comment function, allowing them to resolve their questions on the spot and purchase the products introduced on the e-commerce site. The unpredictable developments created by the interaction between the streamer and the viewers is what makes live commerce interesting.

These following articles explain the market size, types, and value of live commerce as a measure.
Live Commerce Team TAKE ZERO Column Part 1
Live Commerce Team TAKE ZERO Column Part 2

2. Survey contents

With more and more companies entering the live commerce market in recent years, we’ve been receiving an increasing number of inquiries about our live commerce support services. In this context, there is a growing focus on clarifying the actual status of viewers and the effects of any measures taken. This time, we conducted a survey to find an appropriate evaluation method for live commerce measures.

Here we will discuss the statistics surrounding viewers and the effects of live commerce in the following sections. Part 1 (this article) will cover the overall experience of live commerce and analyze and classify users by viewing purpose.

3. Overview of Live Commerce viewers

Since understanding the overall experience of the audience is a good place to start, let’s first look at the current penetration rate of live commerce itself (Figure 1). Among all survey respondents (n=5,178), the awareness rate of live commerce is 33.1%, which means that it’s still unknown to many people. Furthermore, the viewing experience rate is 12.2% and the purchase experience rate is 4.1%, which are even lower. Although the market has begun to spread to the early adopter segment (13.5% of the total market) as described by the innovator theory, the market will not cross the chasm unless the awareness rate and viewing experience rate increase.

Next, we break down the penetration rate by gender and age group (Figure 2). The results show that the viewing and purchase experience rates are higher among young female consumers (in their teens and 20s) than the overall rate. Looking only at the gender groups with viewing experience (Figure 3), the percentage is higher for women, with a particularly large percentage of women in their 20s and 30s. There may be a variety of reasons for this, such as the fact that female-oriented products such as cosmetics and apparel are often handled in live commerce, and that Instagram, where live commerce is often distributed, has a high usage rate among younger people.

Currently, it is likely that women in their 10s to 30s will be the driving force of the live commerce market, given that word of mouth is also a factor in the viewing experience.

(Figure 1: Live commerce penetration rate)
(Figure 2: Live commerce penetration rate by gender and age)
(Figure 3: Live commerce viewership by gender and age group)

Next, we asked those who have experience viewing live commerce (n=468) about their viewing purposes (Figure 4) and classified their answers into four broad categories.

  1. To become a fan of the streamer
  2. To check information on products
  3. To become a fan of the brand
  4. To pass the time

It is clear that the same viewing behavior can have different motivations. It can be inferred that this difference in viewing purpose influences whether information gathering or purchasing behavior occurs during or after live commerce.

(Figure 4: Purpose of watching live commerce)

4. Analysis of Live Commerce viewers

In understanding the overall experience, we found that viewers have different viewing objectives. Different viewing objectives may influence viewing attitudes and create differences in behaviors such as live engagement (likes and comments) and purchases, depending on the objective. Next, let’s take a deeper look at the viewer’s purpose for watching live commerce.

We asked the respondents what they expected from live commerce (Table 1), and based on their answers, we used cluster analysis*1 to statistically classify viewers into 6 groups. We named each group as follows and provided explanations based on the expectations that were common to the groups (Figure 5). With the exception of the general group, which did not have any outstanding characteristics, each user group has its own characteristics.

*1: Analysis that combines individual data (in this case, survey respondents) with similar data patterns into the same group

(Chart 1: Live commerce expectations)
(Figure 5: Viewer Classification by Viewing Purpose)
  • Content group (N=78)
    Viewing live commerce not as a place to gather product information or make purchases, but to enjoy it as a single live content. They also expect famous/favorite celebrities and models to appear and interact with them in order to enjoy the content.
  • Passing time group (N=59)
    They are not interested in learning about products they are interested in, nor are they enthusiastic fans of the distributor or brand. They watch live commerce of products/distributors/brands they are interested in to pass the time when they have some free time.
  • General group (n=224)
    The largest volume of viewers.
    Viewers have a variety of reasons for watching, including brand fans, for purchasing products and gathering information, for the performers, and to pass the time.
  • Streamer group (N=92)
    Viewed for the purpose of watching and interacting with streamers. They look forward to product introductions by streamers with whom they have a sense of familiarity and affection, and at the same time, they are pleased to be able to interact with them.
    People in this group are more likely to be motivated to purchase products through introductions by the streamer.
  • Brand group (N=102)
    People in this group are fans of the brands that deliver live commerce and watch for the latest information. Of course, they also focus on gathering information on the brand’s products and are highly motivated to purchase.
  • Product information gathering group (N=45)
    The primary purpose of viewing the livestream for people in this group is to gather information on products they’re interested in. They have a high motivation to make purchases and do not place much importance on brand information or performers.

The brand group and product information gathering group are considered to be users who are already interested in the brand, its products, and its staff, and who are either existing customers or already interested in the brand. The streamer group*2 may either be fans of the brand’s staff or influencers/KOLs.*3 In the former case, they’re existing customers of the brand (or close to it), and in the latter case, they’re an audience that is likely to make a purchase depending on the compatibility between the brand and influencers.

On the other hand, viewers in the content and passing time group are more interested in consuming content provided through live commerce than in making purchases, so they are likely to be potential customers of the brand.

*2: Refers to the streamer and performers
*3: Stands for “Key Opinion Leader” and refers to influencers who have a strong influence on consumers’ purchasing decisions, especially in China

Now let’s look at each group from different perspectives. We’ll state the facts and our interpretation for each.

First, looking at gender and age (Figure 6), we see that women account for nearly 70% of the brand group, and among them, many are in their 20s. Conversely, in the passing time group, the majority of respondents are male, and among them, a high percentage are in their 20s. In the streamer group, women in their 20s are predominant, and in the product information gathering group, a high percentage of both men and women are in their 40s.

(Figure 6: Gender and Age Ratio by Group)

In terms of the most recently viewed live commerce categories (Figure 7), the high share of fashion is noticeable in the sender purpose and brand purpose segments.

(Figure 7: Viewing categories by group)

The following are characteristics of the triggers that motivated respondents to watch the last live commerce (Figure 8).

  • Brand group: Notifications from the brand account they follow
  • Product information gathering group: Archives from the official brand site and social media
  • Passing time group: Notifications from the entertainer performing on the show, as well as from friends and acquaintances
  • Content group: Notifications from the entertainer performing and archives from social media

It can be inferred from the viewing triggers that the brand and product information gathering groups are already connected to the brand. On the other hand, it can be inferred that those who are viewing the site to pass the time or for content purposes went to view the live commerce show because it was announced by a celebrity they were following.

(Figure 8: Viewing triggers by group)

Now let’s look at how the attitude of viewers from each group changes after actually viewing live commerce shows, based on the changes after the most recent live commerce viewing. First, looking at the size of the increase in brand favorability after viewing live commerce (Figure 9), the streamer group shows a large increase from the overall value of 25.6%. The ability to interact with a store employee or influencer of one’s choice who introduces products may increase satisfaction and lead to an increase in favorability of the brand. This may be the effect that live commerce excels at achieving.

(Figure 9: Percentage increase in brand favorability after viewing by group)

In the rate of increase in product purchase motivation after viewing the last live commerce show (Figure 10), the rate of increase in the streamer group, brand group, and product information gathering group are significantly larger than the other three. In contrast, the content group seems to have the most difficulty in increasing their motivation.

(Figure 10: Rate of increase in product purchase motivation after viewing the last live commerce show)

What about the experience of actually making purchases after viewing live commerce shows (Figure 11)?

The top three are the streamer group, product information gathering group, and brand group, which also had high purchase motivation levels. Like before, at the bottom is the content group.
The streamer group is particularly high among the groups with high purchase experience. In addition to the fact that the bar is low because they are probably existing customers, their willingness to purchase may have increased as a result of interaction with the streamer. The product information gathering group is also likely to have made a purchase as a result of obtaining the product information they were looking for. In contrast, the content group’s objective is the viewing experience, and their willingness to purchase is probably not high to begin with.

(Figure 11: Percentage of post-viewing purchase experience by group)

5. Takeaways from viewer analysis

We found that among viewers, there are users with distinctive motivations, such as the streamer group, brand group, product information gathering group, content group, and passing time group.

The role of live commerce varies greatly depending on these customer groups. As explained at the beginning of the previous chapter, those in the brand group are already customers of the brand, as they are fans of the brand and the brand’s purpose. Therefore, even if they don’t purchase during the regular live commerce delivery, if their loyalty grows through the delivery, it may lead to their continued purchase. In other words, live commerce is a CRM measure for the target audience of the streamer and the target audience of the brand. In the case of campaigns or sale-type live commerce aimed at short-term CV increase (sales expansion), it may also function as an acquisition measure for these groups.

It is assumed that the product information gathering group is viewing live commerce as part of the purchasing process and is either an existing customer or a potential customer close to purchase. For this group, live commerce is basically a way to understand the product before making a purchase.

On the other hand, the content group and passing time groups have high ratios of inflows due to celebrity announcements and are considered to be prospective customers who have had little involvement with the brand/product. In this case, live commerce is considered to work as a measure to promote brand recognition and understanding.

6. Summary

Whatever the purpose of live commerce, if you’re dealing with consumer goods, there’s no better way to increase the long-term sales than through improved LTV. In this sense, it’s important to have measures to attract viewers to come and watch streams so that many people become aware of them, and to plan and direct the live commerce broadcasts to make viewers who come to watch them stay longer and become loyal fans so that they will come back to watch the next stream as well.

Part 1 of the report focused on understanding the users of live commerce. In Part 2, we’ll focus on the effects of live commerce. What are the appropriate KPIs to evaluate live commerce as an actual measure? We’ll discuss this based on the effect of live commerce on changing attitudes. Irep Inc. is currently engaged in the business of supporting corporate live commerce, and can assist in all aspects of live commerce, including measures to attract customers, planning and direction, and commerce training, all of which are critical to the success of live commerce. We also offer a variety of packaged solutions depending on the needs of the client company and the brand equity of the brand and product, so please feel free to contact us for more information on design, implementation, and other operational aspects.

Want to know more about Live Commerce?
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Irep Inc. is an award-winning global digital marketing agency based in the San Francisco Bay Area. Our headquarters are in Tokyo and our network spans more than 20 countries. In Japan, we are ranked No. 1 for performance-based marketing. We also offer highly specialized market entry, as well as integrated marketing and localization services. Since 1997, our data-driven solutions have effectively led our diverse international clientele to continuous success in Japan, Asia, and beyond.

Irep Inc.
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