| THE FUTURE OF COMMERCE |
It is estimated the global video commerce market is projected to grow at an explosive compounded annual growth rate (CAGR) of about 32% from 2023 to 2028. It was valued at US$526.72bil last year and is expected to reach US$2.79 trillion by 2028.
Original Post: TheStar SMEBiz
The Video Commerce Boom
The video commerce trend is fast catching up in corporate Malaysia with the rising popularity of e-commerce.It is estimated the global video commerce market is projected to grow at an explosive compounded annual growth rate (CAGR) of about 32% from 2023 to 2028. It was valued at US$526.72bil last year and is expected to reach US$2.79 trillion by 2028, according to India-based research and consulting firm Daedal Research.
With the emergence of video commerce, it has provided a channel for small and medium enterprises (SMSs) to sell their products and services and fuel their bottom lines.
Shedding light on the video commerce business, Boutir country manager for Malaysia Chris Chia tells StarBizWeek the popularity of video commerce is due to the current generation of young consumers who are into video content. He says for SMEs looking to garner a larger audience, it is imperative for them to adopt the usage of this channel as it aids their expansion plans without much hiccups. Furthermore, he says this channel is seen as a huge shift in how businesses and consumers interact online.
“It helps SMEs elevate their brands, personalise the branding of their digital store, and build connections with customers online. There is also the aspect of executing an “omni-channel” strategy by using video commerce.
“With video commerce, SMEs can show their physical stores in the video. This is one way they can attract shoppers from the online world, into their offline stores. At the same time, video commerce makes e-commerce more profitable on the whole.
“As with a video, customers can “see, “experience”, and “interact” with products before buying them. Furthermore, they also know what they are buying. We have seen how the younger generation before buying a product tends to go online, and find videos to see how the product is before purchasing them,” he says.
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As in other parts of the world including Malaysia, Chia says Generation Z (Gen Z) and Millennials are driving the rise of video commerce.This is the generation that grew up from 1985 onwards and heavily hooked on online videos, YouTube, TikTok, and Instagram. Globally, it is estimated that 84% of Gen Z and Millennials consume video content daily, far more than other demographics. At the same time, he says for SMEs, this is a generation that has increasing spending power. It is projected that Gen Z and Millenials will make up nearly half of total global retail spend by 2030.
Chia expects video commerce to continue growing at an explosive rate as it spreads from China to South-East Asia and other parts of the world. He says major brands like Victoria’s Secret, Dove and Schwarzkopf have all adopted video commerce.
“It is becoming increasingly clear that video commerce is the future of e-commerce, especially when it comes to certain product categories like fashion, apparel, cosmetics, hobbies, home decor, and food and beverages.
Elaborating on the success of using video commerce to drive sales, Chia says this can be seen by comparing the conversion rate and the order value when an online merchant starts using this channel versus their conversion rate and order value before using video commerce.
“On average, we have seen a 300% increase in conversion rate and a 200% increase in average order value on companies that utilise video commerce through Boutir.
“The conversion rate is the percentage of website visitors that actually buy something, as compared to the total number of visitors on the website.
“With video commerce, enabled websites become more engaging and interactions become more human-like and consumers tend to stay longer. On average, people spend four times longer on video-centric online stores.
When they spend more time in the store, he says they buy more too. And that is what merchants want, he adds.
On the type of videos which are most effective for this channel, Chia says there are two types, live streamed videos, and short videos. And each serves a different purpose, he explains.
Live streaming is a popular tool for “flash sales”, he says, adding that it is so much more than that as merchants now utilise live streams to engage with customers in various ways.
For instance, he says through live streaming, merchants can introduce new products, engage with customers, offer product demonstrations, and provide instant responses to customers queries. This approach is not limited to sales but extends to building awareness and engagement, he adds.
“Unlike the traditional website where visitors will just look at static images of products, a merchant can use short videos to deliver a comprehensive overview of a product and what makes it special.
“Sellers can more effectively showcase products by assuming the role of models or users, offering “firsthand” demonstrations. This more immersive approach enhances customer understanding of the product and fosters interactive engagement, creating a meaningful and informative experience,” Chia points out.
He says brands are also now introducing new products by live streaming directly on their websites rather than on major Internet platforms, like TikTok.
By streaming directly on their website, he says SMEs are able to collect and gather a deeper level of valuable customer data and insights, as compared to using a third-party platform, where data is collected by another party.
On another note, Chia says in Hong Kong, where Boutir was established in 2014, it has on boarded 140,000 merchants, not just SMEs like Beginning, Kediar, and 26Closet, but also established brands like TITIKA, and well-known brands like MUJI, KAO, GUESS, and Sa Sa.
Boutir also partnered with Octopus Cards Limited (OCL), one of the world’s leading and most extensively accepted contactless smartcard payment systems, on an exclusive Octopus x Boutir “Buy Here Buy Now” Video Shopping Scheme – to provide customers with a fun and interactive experience that combines entertainment and shopping.
In Malaysia, he says there is a stronger adoption among SME merchants selling apparel, fashion, cosmetics, and home furnishing items through Boutir’s video commerce platform.
Some of the local SMEs on Boutir include Cosyco (selling kaftans and kurungs), La Flor Florist, Litz (a Johor-based shop that sells gold jewellery), Pan Zi (ladies’ apparel seller), Okashi Bakery (a KL-based custom cakes and desserts seller).
As more consumers gravitate towards interactive shopping experiences, he says businesses that fail to embrace the usage of video commerce will find themselves at a competitive disadvantage.
In terms of the challenges posed by video commerce, Chia says the most challenging aspect for some sellers, especially for the seniors, is that they might struggle to produce engaging video content.
“For example, we recently talked to a prominent SME fashion brand which showed interest in Boutir’s video commerce platform. Unfortunately, it was hard for them to evolve into a video-centric brand as the company had invested massively into their traditional e-commerce website, which features heavily on text and images,” he adds.
Chia says for a high quality photoshoot, you need editors, photographers, and a professional studio setup. But for videos, one just needs to know what sort of content a customer would like, and add creativity to it.
With video, he says it is more about the sort of interaction and the experience you create using the video.
For this reason, he sees higher adoption rates among SMEs, especially those run by the younger entrepreneurs who are more familiar with video content.
On the advice which he will impart for SMEs planning to venture into video commerce, he says at Boutir, it is very focused on merchant education.
“For example, we provide free webinars and workshops featuring top Malaysian e-commerce entrepreneurs and certified eCommerce trainers. We have brought in these experts to teach Malaysian SME owners how to convert and retain customers, and build their brands using video commerce.
“In fact, we also recently partnered with government bodies like the Malaysia Digital Economy Corp (MDEC) to deliver merchant education and cultivate the local video commerce market. Boutir also provides free one-to-one consultations and onboarding training for SME owners who want to learn how the company can help them grow their businesses,” Chia emphasises.
He urged SMEs to join the video commerce bandwagon as it is a powerful platform that blends digital and physical aspects of shopping, to provide a human touch for consumers.
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