The rise of live streaming is disrupting commerce

At its AGM on June 19, food producer KIDO Group highlighted the role of live streaming in its business strategy. Its “E-commerce Entertainment” trade promotion project on TikTok will remain a valuable tool for the group to implement marketing strategies, promote products and test new markets while better understanding consumer behavior, especially through live streaming.

“KIDO previously sold goods through traditional channels. Since the launch of the project late last year, we have used live streaming to introduce new products. The more live streaming we do, the more orders we are likely to close,” said CEO Tran Le Nguyen.

The KIDO platform offers a combination of shopping, entertainment and promotional activities, and KIDO brands actively participate in live sales events to increase brand recognition and revenue.

The rise of live streaming is disrupting trade, photo illustration/Source: freepik.com

Similarly, consumer electronics chain FPT Shop has also jumped on the bandwagon to promote its products via live streaming on TikTok, a move that aims to capitalize on the growing trend of shoppertainment and changing consumer behavior in Vietnam’s e-commerce industry.

Vietnamese coffee brand Meet More is also touting its live-streaming strategy in 2024, aiming to grow 10% to 20% of its revenue from omni-channel sales. Live-streaming currently accounts for half of Meet More’s revenue.

Ralf Matthaes, Managing Director of IFM Research, told VIR: “Live streaming is still in its infancy in Vietnam, so there is still a lot of room for growth. In addition, younger people seem to have a shorter attention span and prefer videos to reading. Hence, this advertising format has already established itself with this generation, both in terms of careers and shopping channels.”

For example, 43% of all online consumers have made a purchase at least once in the last 30 days from a TikTok store, showing how popular live-streaming sales are becoming in Vietnam.

“Brands are looking for every advantage they can get right now. That’s why live streaming will become more common and more brands will join the fray,” Matthaes added.

With its high internet penetration, Vietnam is fertile ground for live streaming. NielsenIQ, a global data measurement and analytics company, revealed a study in April that found that about 95 percent of online shoppers are likely to have purchased items during a live streaming sales session in the first quarter of 2024. Vietnamese people spend an average of 13 hours per week watching live streaming sales sessions.

“Customers are drawn to live streaming because of the entertainment factor, the convenient way to interact with salespeople to get more information, and the detailed and comprehensive product viewing. As many as 64 percent of live streaming viewers are motivated to make more impulsive purchases than usual. Meanwhile, as many as 78 percent of customers said they feel excited while watching the session,” NielsenIQ noted.

According to AccessTrade Vietnam, the top three live streaming platforms in Vietnam are Facebook (31.9%), Shopee (30.9%) and TikTok (17.2%). On average, there are 2.5 million live streaming sales sessions each month, involving more than 50,000 sellers.

Peter Christou, CEO of Kantar’s Vietnam Worldpanel division, said that in just the last two years, the rise of live streaming commerce in Vietnam has created an exciting revolution in fast-moving consumer goods (FMCG) sales strategies.

“We see this trend, particularly brand and content, as an opportunity for companies to connect with consumers in more engaging and interactive ways. To succeed in this new landscape, companies must adapt their strategies by focusing on two key areas: understanding the evolving consumer journey and developing effective channel and portfolio strategies,” Christou said.

Social commerce, and live streaming platforms in particular, are changing the way consumers discover and purchase FMCG products, Christou added. “It’s no longer a linear journey from awareness to purchase. Live streaming serves as a conversion focal point, influencing both the upstream discovery phase, where consumers become aware of products, and the downstream decision-making process, when they decide to purchase.”

Because the rise of live streaming isn’t negating other retail channels, Christou advises brands to develop both complementary channels and portfolio strategies that address the needs of different customer groups across channels.

Matthaes of IFM Research noted that, as with any form of advertising, it’s crucial to understand three key marketing metrics: live broadcast awareness, reaching the right audience, and improving content and products.

“Currently, the cost of live streaming is largely driven by key opinion leaders and discount volumes. This is not a recipe for success, and brands can damage their image and market share in other retail channels,” Matthaes said.

“Therefore, the most important lesson to learn now is to ensure that brands are using the right ad spend. Another strategy is to mix and match discounts to avoid over-reliance on live streaming, which can ultimately reduce margins and damage brand image,” he added.

Live trading booms Live-streaming jobs are expected to grow this year as the pandemic continues to spur demand for online shopping. But the trend is also putting the government on edge as it seeks to manage it.