Live Shopping: Zara's Ambitious Goal

Earlier this week (3rd June 2024), Zara announced that, after huge success with their live shopping broadcasts in China, they are bringing the experience to the UK, Europe and the USA., with hopes of launching in August this year.

While some brands have tried live shopping in the West (with mixed results), it's safe to say that live shopping here isn't the incredible phenomenon it is in China. Here are some fun facts about China's live shopping market to illustrate the importance of this eCommerce channel. Did you ever think you could sell a rocket launch in a live shopping broadcast? Viya, a live shopping celebrity in China, most certainly managed!

While live shopping has been a part of everyday life in China, with a market size 44 times that of the US, this channel of eCommerce has not seen the same success in the West. There have been some success stories here and there, but it hasn't become the phenomenon it is in China.

Why? It can be narrowed down into 3 key differences between China and the West: tech infrastructure, eCom ecosystem and consumer mindset.

Tech infrastructure

According to Jimmy Robinson, director of PingPong Digital, China "largely skipped the desktop internet generation and went straight into a mobile-focused internet economy". As a result, the Chinese consumer is very comfortable using their mobile phones for anything, including payment.

If you have ever travelled to China, you will know the prominence of payment apps such as Alipay and WeChat Pay. They are more than just digital wallets like Google Pay or Apple Pay, they are an integral part of daily life: you can pay or receive payment with a QR scan, you use them to pay for public transport, you can pay utility bills on them, you can hail a taxi, you can even buy insurance. They are super convenient, and practically eliminate the need for physical cash.

In addition, China's high speed internet adoption is strong: most cities and even rural centres have 5G coverage, meaning people can stream content quickly, even on the go. This is not the same in the UK, where we still lose signal on the London Underground. As a result, Chinese netizens spend on average 2 hours a day browsing social media, compared to the UK's 1 hour 49 minutes.

Combine their 5G coverage with their payment superapps, this means consumers in China are more than comfortable with online payments and transactions. In turn, this means their propensity to purchase via social media is higher, with 84% of the population having purchased on a social media platform, one of the highest in the world.

eCom Ecosystem

Not only is China's digital payment infrastructure powerful, their eCommerce ecosystem is incredibly integrated for a good user experience. Let's look at Taobao, one of China's leading online shopping platforms, as an example. They are owned by Alibaba, who also own Alipay. They created Taobao Live, a livestreaming platform where many influencers and KOLs (Key Opinion Leaders) broadcast their live shopping shows. It is seamlessly integrated into the Taobao app, so if viewers like what they see on Taobao Live, they can click directly through to purchase, where they pay with the aforementioned Alipay. The entire experience is essentially hosted by different fascias of Alibaba, resulting in a seamless journey for the customer from livestream to purchase.

In contrast, Western websites and social media are not set up in this integrated way. Popular social media platforms are separate businesses to top retailers. Amazon would be the Western equivalent to Taobao, but Amazon don't have a version of Taobao Live. Any advertising or live shopping event would be hosted on external platforms like Instagram or TikTok, and it's only recently that these platforms have made the shopping experience less clunky, and even then it's not entirely smooth and painfree.

Consumer Mindset

Chinese consumers see live shopping events as opportunities to learn more about the brand and products on sale. They truly value the opinions of the hosts, who are often very well-trained and know how to deliver brand information and education in a fun, interactive way. Viewers can see the products in action, and can ask questions during the session to help them make an informed decision on whether or not to buy. This is why live shopping events can be up to 12 hours long, or even longer.

(Don't feel bad that the hosts and behind-the-scenes teams are pulling all-dayers though; they often reap strong results. For instance, Li Jiaqi, otherwise known as the "Lipstick King", sold $1.7 billion of goods in his 12-hour stint.)

In contrast, Western consumers tend to use online shopping as a means to purchase something they already have intention to buy, rather than use it as a learning opportunity. Speed and convenience rank higher in importance with Western consumers, so the hours-long format of live shopping doesn't resonate as well in countries like the UK.

Zara's live shopping experience

In November 2023, Zara launched their live shopping broadcasts in China, and have seen a 50% increase in sales in the first 3 months of 2024 vs 2023. This is all the more extraordinary considering the reduction of Zara stores in China from 570 in 2019 to just 192 in January 2024.

Zara's weekly live shopping broadcasts were hosted on Douyin, China's version of TikTok, and each broadcast was 5 hours long. The broadcasts were of models trying on different outfits, as well as catwalk and behind-the-scenes footages. A team of 70 people worked on the live shows in a 1,000-square metre space in Shanghai, and 7 cameras were used, allowing for different angles and close-ups. On average, 800,000 unique viewers watched each show. 800,000! That's not even their highest number , but their average number of unique viewers. No wonder Zara are keen to emulate this success in the UK, Europe and US.

So will Zara succeed?

According to Reuters, Zara have announced that they will work with 2 "very well-known" fashion personalities, though they have kept the names secret to build suspense. By using well-known influencers, much like Chinese KOLs, it will add authenticity and trust with the consumer throughout the events.

But what is promising is that Zara have already announced the adaptations they will make for the Western venture into live shopping. Firstly, their broadcasts will not be on conventional social media apps, but instead will be hosted on their own app and website. This should hopefully mean a seamless user experience akin to the Taobao Live/Taobao/Alipay journey we cited earlier, which will help to increase conversion. As customers, we don't like lags, we don't like glitches, we don't like any form of mild inconvenience. Therefore, by hosting it on the Zara eCommerce ecosystem, this should help ensure as smooth a customer journey as possible.

Secondly, the broadcasts will be limited to 45 minutes to an hour. They will still be fun, friendly and interactive, but no 5 hour marathons for the UK. While the exact nature and content haven't been announced, Zara have clearly considered the difference in consumer mindset between China and the West and are willing to adapt accordingly.

These changes show that Zara have considered what's been successful in China and tweaked them to suit the Western market. One of the biggest mistakes brands make is assuming that ideas, trends and habits are similar across the globe. Sure, there are some cultural differences, but at heart we're all human, so minor tweaks are surely enough to make success in the West equally successful in the East, right? Wrong, and live shopping is a very good example of this. The differences are not just cultural: often technological and economic factors play a huge part in these differences, so companies need to think sincerely to understand how to overcome these hurdles.

So will Zara succeed? Will they be the pioneers of Western live shopping? Will they be the breakthrough we need to unlock this powerful eCommerce channel? Only time will tell, but whatever the result, here at Mpowering Solutions, we are cheering them on and can't wait to see what they have in store. Good luck, Zara; we wish you every success!