M17 Group finds value in e-commerce through livestreaming
By Tan Jee Yee December 2, 2019
- Livestreaming provides interactivity with customers e-commerce lacks
- HandsUP allows retailers to stream across multiple platforms
Fancy buying fish on Facebook? You can, you know. There’s such a thing as Facebook Live fish auctions, where fishermen set up auctions on the social media platform to sell fish to wholesalers (and anyone else interested). Successful bidders pay via bank transfer, and the seafood will be delivered to their doorsteps.
It’s a new, fascinating take on a rather old concept of selling – that of TV shopping channels, but delivered to you over the Internet, and for specific wares. And this form of e-commerce – by using livestreaming to sell online – is taking over Asia by storm.
It’s a storm that first brewed in China, which currently houses more than 200 livestreaming sites and over 200 million users. China’s livestreaming industry will see US$5 billion in revenue by 2019, according to analyst – a number that could more than double to US$12.6 billion by the end of 2020.
Retailers would peddle their wares online, demonstrating their goods by trying them on or showcasing their features. It’s clearly working, because even large-scale online marketplaces like Shopee have started accommodating livestreaming services to their list of seller features.
Shopee Live has garnered more than 200 million views across Southeast Asia since its inception in March this year.
Value in interactivity
That livestreaming e-commerce is successful shouldn’t be surprising, as teleshopping is still seeing optimistic growth. In countries like the US, at-home shopping is still making a lot of money, and certainly a case for not fixing what ain’t broke.
Livestreaming, however, has certain advantages, notes M17 Group CEO Joseph Phua. M17 is a Taiwanese based social networking entertainment group that announced on 1 Nov it had acquired Hong Kong based MeMe Live, a livestreaming platform owned by Next Entertainment (Hong Kong) Limited, and focused on markets in Asia Pacific. M17 claims that the deal would bring its total market share of the livestreaming industry in developed Asia to over 60%.
Earlier earlier this year it also released a service called HandsUP, a multi-platform livestreaming service.
“There is great value in converging e-commerce and live-streaming. In the West, we see mostly home-shopping channels or e-commerce, which lacks interactivity,” Phua tells Digital News Asia in an email interview.
“Social communities play a pivotal role in impacting decisions; watching other people shop makes you want to shop. This prompts a desire to join the conversation and to grab a best-seller for yourself.”
Livestreaming selling also has some advantages over e-commerce platforms. “As live content has an expiry date, it creates a sense of urgency that e-commerce platforms could never create,” Phua adds. However, it’s the interactivity that makes it most unique.
“Customers can ask questions during the live stream which allows for transparency, something customers value in this day and age. The two-way conversation allows sellers to gather feedback and identify concerns of buyers.”
Putting your HandsUP
Livestreaming selling is not without its challenges and limitations, of course. Phua says that the method is still in its nascence and there is “still a long way to go before it becomes the dominant way to shop.”
However, this is also a huge opportunity for sellers to gain first-mover advantage, especially in regions haven’t yet reach the scale of livestreaming in China. But first, Phua believes that there needs to be stable infrastructure in place first.
“Tech adoption rate and shopping behaviour vary in each market; this includes even users’ preference for payment gateway and delivery method, trust between buyers and sellers. There is a need to optimise product user experience to suit the demands of live-shopping,” he says.
Trust is also an aspect that livestreaming e-commerce needs to address. For this, Phua says that HandsUP is able to help. “[HandsUP] provides access to social media accounts, which helps validates orders and boost confidence in products.”
In fact, HandsUP is specifically set to fill a bevy of gaps livestreaming e-commerce has. For one, it allows retailers to livestream simultaneously across multiple platforms. Typically, a seller may only be able to stream from a single platform – say, Facebook - which limits their audience.
“E-commerce traditionally relies on its main website to display and sell. Any effort to share across multiple social platforms result in intensive man-hours spent on compiling orders with possibility of human errors. Hence, the ability to stream and sell simultaneously across multiple social platforms and aggregate the orders greatly elevates the shopping experience,” Phua says.
“Also, live-shopping democratises the commerce space. Sellers from all walks of life can simply go on HandsUP to sell to digital audiences.”
Riding the wave
Phua tells Digital News Asia that M17 has achieved “significant growth” across all business units and has turned profitable company-wide, with 70% year-on-year growth.
“The company is on track to achieve two milestones: Projected annual revenues of TWD 10 billion (US$323 million), and projected annual live and social commerce GMV of TWD 10 billion,” he says.
Clearly it has recovered from its failure to list in the US in 2018 when its IPO was pulled dramatically on the day shares were supposed to begin trading. The company issued a statement saying that it had been suspended “due to issues related to the settlement of American depositary shares by specific IPO investors”.
The IPO was initially targeted to raise US$115 million in 2018 before dropping the target to US$60.1 million.
[RM1 = US$0.23]
Going forward, the company’s efforts including upgrading the existing technical infrastructure and hopes to introduce innovative features in the future – ones that have higher levels of interactivity between content creators, sellers and users.
“We will continue to strengthen our presence in the U.S. by applying learnings from the West and best practices of the East to herald a new era of premium live content and interactivity,” Phua concludes.
In the meantime, local retailers are also able to tap into the livestreaming wave in China. Chinese key opinion leaders (KOL) can, for one, help promote local items in China. During a weeklong campaign to promote Malaysian local produce run by Alibaba, eight top-tier influencers who regularly host livestreaming shows via the Taobao platform helped facilitate goods sales of 1 million yuan (US$142,433) in just three seconds. They even helped one Malaysian merchant sell 80,000 bottles of bird’s nest in just five minutes.
Perhaps it’s time for e-commerce retailers and merchants in Southeast Asia to start tuning in.