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China leads live commerce boom, will ASEAN be next?
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Click and buy: A Jakarta resident uses a device to shop on a local e-commerce platform on June 15. The digital market continues to thrive in Indonesia and Asia in general. (Antara/Muhammad Adimaja)
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ive commerce has transformed into a lucrative industry in the Indonesian and overall Southeast Asian digital ecosystem, especially after seeing how China managed to scale up the system into one of its strongest sales campaigns.
McKinsey Digital reported in July 2021 that the compound annual growth rate (CAGR) of live commerce – a trading system through live streams on digital platforms – in China grew more than 280 percent in three years, reaching a staggering amount of US$171 billion in 2020.
The same study said that live commerce created value by accelerating conversion, as Chinese companies reported near 30 percent conversion rates, which was up to 10 times higher than in conventional e-commerce.
“Live commerce is entertaining and immersive, keeping viewers watching longer. It also telescopes customer decision journeys from ‘awareness’ to ‘purchase’. Time-limited tactics such as one-off coupons can be used to generate a sense of urgency,” said the report.
Another study by Momentum Works pointed out that whether the segment would achieve such explosive growth in Southeast Asia has been debated as the segment is still evolving.
It is also worth noting that the region is at a much earlier stage of live commerce development compared to China.
“We believe that the differences in maturity of infrastructure, or the quality of video, are probably not fundamental,” said Momentum Works in its report.
