Livestream shopping booms as small businesses hit social media

Last year, Anthony Velez, CEO of Bagreature, a small company that sells pre-designed handbags, made as much as $100,000 a month across his seven New York City stores.

This year, the business is much different: The Phillies have closed all of their physical locations, but they’re making up to $100,000 a day.

He told CNBC that the secret to his success is diving into the world of live shopping.

“All the scales exceed any other form of shopping I’ve seen — period,” said Velez. “We can go live on three to four platforms simultaneously.”

The trend involves a vendor broadcasting a live video of themselves demonstrating and explaining products while viewers ask questions and make purchases in real time. Livestream shopping on social media started in China and, according to Coresight research, has grown into a $512 billion market.

This market size may explain why some of the major platforms are rushing to grab a piece of the traffic here in the US

“Poshmark, eBay, TikTok. (I got) phone calls nonstop,” said Velez. “Tik Tok flew in from China to meet us.”

In its latest quarterly report, Coresight Research, which tracks the e-commerce live-streaming industry globally, predicted that US live-streaming sales will reach $32 billion by the end of 2023. However, CEO Deborah Wensweg told CNBC that The company has since revised this projection.

It said the original estimate was set early this year, and did not fully take into account the acquisition of South Korean internet giant Naver. Bushmark. on time, TikTok Shops, a way for users to purchase products within an app without having to go to a separate e-commerce store, is still in good shape.

Now, “we think streaming sales in the US could easily reach $50 billion this year,” Weinswig said. The company also estimates that streaming shopping will account for more than 5% of all e-commerce sales in the United States by 2026.

TikTok, Poshmark, and ebay Everyone told CNBC that they are currently testing livestream shopping.

“We’re really optimistic about the growth of this new way of shopping,” said Eddie Garcia, eBay’s Chief Product Officer. “The sky’s the limit…and we’ll keep learning. We’ll keep investing.”

Garcia, who oversees eBay Live, the company’s live-streaming platform, said she’s currently focused on fashion and collectibles, with plans to expand from there.

“We have 134 million buyers around the world who are very energetic and really happy to engage with sellers in this new way,” said Garcia.

Meanwhile, Velez said it’s still working to improve its deals with the platforms, which include handing over some of its earnings. Right now, it pays between 13% and 20% of each sale to cover things like payment processing and promotions.

“We give a percentage of our sales for visibility and ease of use,” he said.

Influencer Danielle Santana hosts live shopping shows on Amazon, selling products from other companies – everything from cheese graters to makeup sponges. She said she gets a portion of every transaction.

Santana, who can sell 500 to 3,000 items on a single show, told CNBC that she made just six figures on Amazon Live last year.

“(My commission) ranges from 2% to 20% – it all depends on the category and the items you sell,” she said.

Santana is one of hundreds broadcasting on the platform each day. An Amazon spokesperson said in an email that “thousands of creators” went live throughout the e-commerce site’s Prime Day event in July last year.

And while some major platforms are jumping into live streaming, one social media giant is pulling out.

Spokesperson for the Guardian of Facebook and Instagram meta Speaking to CNBC via email, the company made the “difficult decision” to end support for its live shopping feature in March.

previously, According to Instagramcompanies and creators were able to tag products when they were posted to the platform, allowing viewers to purchase or save products added to a shopping video.

“Companies will still be able to use live streaming but the ability to feature products will go away. This allows us to focus on experiences that deliver more value to people and businesses like Reels and ads that help with product discovery,” a company spokesperson said.

According to Coresight’s Weinswig, the Meta is “missing”.

“It could ultimately affect the number of eyeballs, which would affect advertising dollars. They also wouldn’t benefit from the sales focus on their platform,” Wensweg said. “Even the biggest loss for (Meta) will be the community, who will look elsewhere to shop, talk and learn from each other.”

Weinswig estimates that companies that establish themselves through live streaming could experience 25% higher growth.

So, who is poised to emerge victorious in the live broadcast battle?

According to Weinswig, it’s TikTok, which has a huge opportunity in the US market due to its 150 million monthly active users and its popularity with younger consumers.

The platform’s technological advantage over its competitors enables it to target users with products they may want to purchase.

Weinswig also noted that TikTok has made it easier for users to shop, keeping live streams and buying everything in the feed — without ever leaving the app.