Last year, Anthony Velez, CEO of Bagriculture, a small business that sells second-hand designer handbags, earned up to $100,000 a month from his seven brick-and-mortar stores in New York City.
This year, things are very different: Velez has closed all of its physical locations, but it is generating up to $100,000 a day.
The secret to his success, he told CNBC, is diving into the world of livestream shopping.
“All the stats beat any other form of shopping I’ve seen — period,” Velez said. “We can go live on three to four platforms at once.”
The trend involves merchants broadcasting live videos showing and explaining products, while viewers ask questions and make purchases in real time. Livestream shopping started on social media in China and has grown into a $512 billion market, according to Coresight Research.
That market size could explain why some major platforms are scrambling to grab a piece of the action here in the US
Poshmark, eBay, TikTok. [I’ve gotten] non-stop calls,” Velez said. “TikTok flew out of China to meet us.”
Anthony Velez, CEO of Bagriculture, a small business that sells second-hand designer handbags, is live-streaming a shopping event.
Andrea Day | NBC
In its most recent quarterly report, Coresight Research, which tracks the live streaming e-commerce industry globally, predicted that US live stream sales would reach $32 billion by the end of 2023. However, CEO Deborah Weinswig told CNBC that the company has since revised that forecast.
The original estimate was made early this year, she said, and didn’t fully account for the acquisition of South Korean internet giant Naver. chic. At the time, TikTok Shops, a way for users to buy products in the app without having to go to a separate e-commerce store, also gained a foothold.
Now, “we believe live stream sales in the US could easily reach $50 billion this year,” Weinswig said. The company also estimates that livestream shopping will account for more than 5% of total US e-commerce sales by 2026.
TikTok, Poshmark and eBay.com all told CNBC that they are currently testing livestream shopping.
“We are very excited about the growth of this new way of shopping,” said Eddie Garcia, eBay’s chief product officer. “The sky’s the limit… and we keep learning. We keep investing.”
Garcia, who oversees eBay Live, the company’s live streaming platform, said it is currently focusing on fashion and collectibles, with plans to expand from there.
“We have 134 million buyers around the world who are thrilled and very excited to interact with sellers in this new way,” said Garcia.
Meanwhile, Velez said he is still fine-tuning his deals with the platforms, which means he will have to hand over some of his earnings. Right now, he pays between 13% and 20% of each sale to cover things like payment processing and promotions.
“We give a percentage of our sales in exchange for visibility and ease of use,” he said.
Influencer Danielle Santana hosts live shopping shows Amazon, sell products from other companies – everything from cheese graters to makeup sponges. She said she gets a cut of every transaction.
Santana, who can sell 500 to 3,000 items in one show, told CNBC she made six figures on Amazon Live last year.
“[My commission] ranges from 2% to over 20% — and it all depends on the category and the items you sell,” she said.
Santana is one of hundreds broadcasting on the platform every day. An Amazon spokesperson said in an email that “thousands of makers” were livestreaming the e-commerce site’s Prime Day event last July.
And while some major platforms are live streaming, a social media giant is pulling back.
A spokesperson for Facebook and Instagram parent meta told CNBC by email that the company made the “difficult decision” to end support for its Live Shopping feature in March.
Earlier, according to Instagrambusinesses and creators could tag products when they went live on the platform, allowing viewers to purchase or save products added to the shopping video.
“Companies will still be able to use live broadcasts, but the ability to tag products will disappear. This will allow us to focus on experiences that provide more value for people and businesses, such as Reels and ads that help discover products,” said the company spokesperson. said.
According to Coresight’s Weinswig, Meta has “something gone wrong”.
“It could end up impacting eyeball count, which will impact advertising dollars. They also won’t benefit from sales centered on their platform,” Weinswig said. “Even the bigger miss for [Meta] will be the community that will look elsewhere to shop and talk and learn from each other.”
Weinswig estimates that companies looking to establish themselves with live streaming can achieve revenue growth of more than 25%.
So, who is about to emerge victorious in the live streaming battle?
According to Weinswig, it’s TikTok, which has a significant opportunity in the US market given its 150 million monthly active users and popularity with younger consumers.
The platform’s technological advantage over its competitors allows it to target users with products they might want to purchase.
Weinswig also noted that TikTok has streamlined the shopping process for users, keeping live streams and purchases all in-feed — without leaving the app.