Last year, Anthony Velez, the CEO of Bagriculture, a small business selling used designer handbags, made up to $100,000 a month at his seven brick-and-mortar stores in New York.
This year, business is much different: Velez has closed all its brick-and-mortar locations, but is generating up to $100,000 a day.
The secret to his success, he told CNBC, was immersing himself in the world of live shopping.
“All metrics exceed any other form of shopping I’ve seen — period,” Velez said. “We can live on three to four platforms at the same time.”
The trend involves a retailer broadcasting a live video showing and explaining products while viewers ask questions and make purchases in real time. Live 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 big platforms are rushing to grab a piece of the action here in the US
“Poshmark, eBay, TikTok. [I’ve gotten] non-stop phone calls,” Velez said. “TikTok flew in from China to meet us.”
Anthony Velez, CEO of Bagriculture, a small business selling used designer handbags, is live streaming the shopping event.
Andrea Day | NBC
In its latest quarterly report, Coresight Research, which tracks the live streaming e-commerce industry worldwide, projected that US live streaming revenue will reach $32 billion by the end of 2023. However, CEO Deborah Weinswig told CNBC that the firm has since revised that projection.
The original estimate was set earlier this year, it said, and did not fully take into account the acquisition of South Korean Internet giant Naver. Poshmark. In time, when, TikTok Shops, a way for users to buy products within the app without going to a separate e-store, also continued to gain a foothold.
“We believe that live streaming revenue in the US could easily reach $50 billion this year,” Weinswig said. The company also estimates that online shopping will account for more than 5% of total US e-commerce sales by 2026.
TikTok, Poshmark and eBay all told CNBC they are currently testing live shopping.
“We’re really optimistic about the growth of this new way of shopping,” said eBay Chief Product Officer Eddie Garcia. “The sky’s the limit … and we’re going to keep learning. We’re going to keep investing.”
Garcia, who oversees eBay Live, the company’s live streaming platform, said it is currently focused on fashion and collectibles and plans to expand from there.
“We have 134 million buyers around the world who are scratching their heads and are really excited to be able to engage with sellers in this new way,” Garcia said.
In the meantime, Velez said he is still fine-tuning his platform deals, which includes handing over a portion of his earnings. Right now they pay 13% to 20% of each sale to cover things like payment processing and promotion.
“We give a percentage of our sales in exchange for visibility and ease of use,” he said.
Influencer Danielle Santana hosts a live shopping show Amazon, selling other businesses’ products – 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 a single show, told CNBC that last year she made six figures on Amazon Live alone.
“[My commission] it ranges from 2% to 20% – and it all depends on the category and the items you are selling,” she said.
Santana is one of hundreds of broadcasts on the platform every day. An Amazon spokesperson said in an email that “thousands of creators” streamed live during the e-commerce site’s Prime Day event last July.
And while some major platforms are jumping into live streaming, one social media giant is pulling back.
Parent spokesperson on Facebook and Instagram Target told CNBC via email that the company made the “tough decision” to end support for its Live Shopping feature in March.
Previously, according to Instagrambusinesses and creators could tag products when they were posted on the platform, allowing viewers to purchase or save the products added to the shopping video.
“Businesses will still be able to use live streaming, but the ability to tag products will be removed. This allows us to focus on experiences that provide more value to people and businesses, such as reels and ads that help with product discovery,” a company spokesperson said. he said.
According to Weinswig of Coresight Meta is “missing”.
“Ultimately, it could affect eyeballs, which will affect ad dollars. They also won’t benefit from sales that are focused on their platform,” Weinswig said. “Even a bigger miss pro [Meta] there will be a community that will look elsewhere to shop and converse and learn from each other.”
Weinswig estimates that companies trying to establish themselves using live streaming could see up to 25% top growth.
So who is set to win the battle for live streaming?
According to Weinswig, it is TikTok that 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 be interested in buying.
Weinswig also noted that TikTok has streamlined the shopping process for users by keeping live streams and purchases in the feed — without leaving the app.