On the 2nd, an office worker is watching a product sales broadcast of ‘Naver Shopping Live’, a live commerce platform. Live commerce is emerging as a new market for small business owners who have difficulty using TV home shopping. / Reporter Huh Moon-chan “/>
The so-called ‘labang (live broadcasting)’ market, which sells products through real-time Internet broadcasting, is growing rapidly. The number of products sold is estimated to be close to 20 times that of TV home shopping. The transaction amount has doubled in seven months. Analysts say that it is shaking the landscape of the commerce industry by significantly lowering the broadcasting threshold for small business owners who have difficulty accessing TV home shopping.
According to Startup Alliance on the 2nd, in the third week of July (18th-24th), two major live commerce platforms (Naver Shopping Live, Grip) sold nearly 10,000 items. Naver Shopping Live sold 5731 products from 2458 companies and Grip sold 4030 products from 1372 companies. Compared to the 3 TV home shopping companies (Lotte, GS, and Hyundai Home Shopping) that sold 549 products during the same period, it is 20 times more. This is the result of a research team led by Professor Seung-yeop Lee of Pukyong National University.
The number of companies selling products through these two live commerce platforms was 3,830, which was 10 times the number of 3 TV home shopping companies (363). Professor Lee said, “Most of the live commerce sellers are small business owners or individual entrepreneurs. We are actively using commerce.”
TV home shopping can only broadcast one channel per channel due to the nature of the media, but the live commerce platform allows multiple live broadcasts at the same time.
Soo-hyeon Boo, a professor of psychology at Gyeongsang National University, said, “The strength of live commerce is that it gives a sense of being directly shopping in a store through interactions between sellers and consumers. “He said.
Live broadcasting has already become a trend in China, where e-commerce is active. The number of companies that sell products through live commerce with ‘Wang Hong (influencer)’ is increasing significantly. About a quarter of the Chinese population has experienced live commerce.
Growth is also rapid in Korea. According to CV3, a start-up specializing in live commerce data, the monthly transaction amount of 15 domestic live commerce platforms increased from 39 billion won in January this year to 75 billion won last month.
15 live commerce platforms, transaction amount from 39 billion won to 75 billion won in 8 months
‘Labang’ monthly views from 310,000 → 600,000… “Eighteen million viewers a day”
Nine out of 10 companies that sell products through live commerce platforms are small businesses or sole proprietors. This contrasts with the majority of TV home shopping sellers (81.9%) being large or medium-sized enterprises. It is analyzed that it has become an important market for small business owners who have a hard time entering TV home shopping as anyone with a mobile phone can sell products through the platform. However, some consumers complain that live commerce sellers often exaggerate product descriptions.
○ ‘Labang’, the trend of e-commerce
According to the data collection system of Labangba Data Lab on the 2nd, the number of ‘Labang (live broadcast)’ transmitted through 15 major live commerce platforms from January to August of this year reached 190,000 cumulative. On a monthly basis, the number rose from 12,000 in January to 28,000 as of last month. Nearly 1,000 labs are being held a day, and more than that are being sold. Live commerce is a compound word of live streaming and e-commerce, and refers to buying and selling products online in real time.
The number of monthly views of Labang on these platforms doubled from 310,000 in January to 600,000 last month. Monthly transaction amount increased from 39 billion won to 75 billion won during the same period. Se-Hoon Kim, manager of CB3, which operates Labangba Data Lab, said, “If you simply calculate the number of views, regarding 18 million people watched Labang a day in the first half of the year.
○ 90% of small businesses and individuals
In live commerce, there is no additional cost because the seller sends the video through the platform and receives the order directly. The threshold is much lower than TV home shopping, which can be broadcast only with a lot of manpower and product composition. As a result of a survey conducted by Professor Seung-yeop Lee of Pukyong National University (as of July 18-24 broadcast), 84.6% of Naver Shopping Live sellers and 99.5% of grip sellers were small businesses or sole proprietors. The ratio of small businesses and individuals is higher than the average of the three TV home shopping companies (18.1%).
It is analyzed that live commerce is opening a market for local small business owners who cannot enter TV home shopping. The proportion of live commerce sellers in non-metropolitan areas was up to 3.7 times higher than that of TV home shopping. The proportion of businesses in small towns and counties, not in large cities, was also twice that of home shopping.
According to Professor Su-hyeon Bu, a professor at Gyeongsang National University, as a result of conducting lavang marketing for local small business owners in May and June, sales increased by up to 547% with just three broadcasts. Professor Boo said, “In many cases of successful live commerce, the CEO appeared directly, and it is interpreted that knowledge, passion, and storytelling of the product gave consumers trust.” A shopping mall that had no sales at all achieved sales of 1.37 million won.
○ Appearances in ‘AI Celebrity’
As the market is growing rapidly, competition between Labang platforms is also getting fiercer. Currently, the No. 1 platform in the industry is Naver Shopping Live, which occupies regarding 62% of the transaction amount.
As the influence of TV broadcasting is diminishing, home shopping companies are also competing for live commerce. H Mall of Hyundai Home Shopping is the second-largest Labang company in terms of transaction volume (13% market share). An industry insider explained, “Naver Shopping is the ‘one-top’, and home shopping companies are rapidly hitting the market.”
An increasing number of companies are applying artificial intelligence (AI) and non-fungible tokens (NFTs) to live commerce. On the 30th of last month, Grip, a platform specialized in Labang, conducted live commerce with an AI human that resembles Dr. Yeo Esther, a family medicine specialist. Ahn Hyun-jung, Vice President of Grip, said, “We plan to actively pursue new attempts, such as appearing in AI.” However, some consumers still complain regarding the inconvenience of live commerce. According to the Korea Consumer Agency, ‘frequent interruption of broadcasts’ (51.4%) ranked first in consumer complaints regarding Labang. ‘Use of absolute expressions (highest, greatest, best, etc.) without objective data’ (45.0%) and ‘exaggeration of product performance and efficacy’ (41.7%) were followed in that order.
Reporters Ko Eun-i/Lee Si-eun/Kim Jong-woo koko@hankyung.com