Last year, Anthony Velez, CEO of Bagriculture, a small business selling pre-owned designer handbags, earned up to $100,000 per month across his seven New York City brick-and-mortar stores.
This year’s business is very different: Velez has shuttered all of his physical sites, but he’s making up to $100,000 each day.
He revealed to CNBC that the key to his success has been his foray into the realm of livestream purchasing.
“All of the metrics exceed any other form of shopping I’ve seen – period,” Velez added. “We can go live on three to four platforms simultaneously.”
Vendor broadcasts live video of themselves exhibiting and discussing things to viewers as they ask questions and make purchases in real-time. According to Coresight Research, livestream purchasing began on social media in China and has evolved into a $512 billion sector.
This market size might explain why several large platforms are scrambling to get a piece of the action in the United States.
“Poshmark, eBay, and TikTok are all options.” “I’ve had nonstop phone calls,” Velez explained. “TikTok flew all the way from China to meet with us.”
Coresight Research, which follows the worldwide live streaming e-commerce business, forecasted that U.S. livestream sales will reach $32 billion by the end of 2023 in its most recent quarterly report. However, CEO Deborah Weinswig told CNBC that the company’s prediction has subsequently been changed.
According to her, the previous estimate was made early this year and did not fully account for South Korean internet giant Naver’s acquisition of Poshmark. TikTok Shops, a mechanism for users to buy things within the app without having to travel to a separate e-commerce shop, was also only getting started at the time.
Weinswig now believes that “live streaming sales in the United States could easily reach $50 billion this year.” According to the business, livestream shopping will account for more than 5% of overall e-commerce sales in the United States by 2026.
TikTok, Poshmark, and eBay have all confirmed to CNBC that they are actively trying livestream shopping.
“We’re very optimistic about the growth of this new way to shop,” said Eddie Garcia, eBay’s chief product officer. “The sky is the limit… We will continue to learn. We will continue to invest.”
Garcia, who runs eBay Live, the company’s live-streaming network, stated that the site is presently focusing on fashion and collectibles, with ambitions to expand from there.
“We have 134 million buyers all over the world who are salivating at the prospect of engaging with sellers in this new way,” Garcia added.
Meanwhile, Velez stated that he is currently fine-tuning his agreements with the platforms, which include turning over a portion of his revenues. He now pays between 13% and 20% of each transaction to cover costs such as payment processing and advertisements.
“In exchange for visibility and ease of use, we give a percentage of our sale,” he explained.
Danielle Santana, an Amazon influencer, presents live shopping programs where she sells things from various companies ranging from cheese graters to make-up sponges. She stated that she receives a percentage of every purchase.
Santana, who may sell 500 to 3,000 products in a single broadcast, told CNBC last year that she made six figures on Amazon Live alone.
“[My commission] ranges from 2% to upwards of 20%, depending on the category and the items that you are selling,” she explained.
Every day, Santana is one of hundreds of people that broadcast on the site. In an email, an Amazon spokesman stated that “thousands of creators” live-streamed the e-commerce site’s Prime Day event in July of last year.
While several large platforms are venturing into live streaming, one social media behemoth is staying away.
A representative for Facebook and Instagram parent firm Meta informed CNBC via email that the company took the “hard decision” to discontinue support for its Live Shopping service in March.
Previously, companies and creators could tag items when they streamed live on Instagram, allowing viewers to buy or save products added to the shopping video.
“While businesses will be able to use live broadcasting, the ability to tag products will be removed.” This enables us to focus on experiences that add more value to customers and companies, such as Reels and Ads that aid in product discovery,” stated a company representative.
Weinswig of Coresight believes Meta is “missing out.”
“It could eventually affect the number of eyeballs, which will affect advertising dollars.” “They will also not benefit from the concentration of sales on their platform,” Weinswig added. “The community, which will look elsewhere to shop, converse, and learn from one another, will be the bigger miss for [Meta].”
Weinswig predicts that firms striving to establish themselves through live streaming might experience up to a 25% increase in revenue.
So, who will come out on top in the live-streaming war?
TikTok, according to Weinswig, has a tremendous possibility in the US market because of its 150 million monthly active users and appeal among younger customers.
According to HSBC, the new Silicon Valley Bank UK would keep a startup emphasis while aiming for worldwide expansion.
Because of the platform’s technological edge over its competitors, it can target customers with things they would be interested in purchasing.