E-commerce platforms are streaming videos within their apps to push products and boost sales
India’s leading e-commerce apps, Amazon being the latest, are betting on content-led commerce in preparation for the next big leap in online shopping. Amazon’s shopping app now houses miniTV, an ad-supported video streaming service. Walmart-owned e-commerce app Flipkart had introduced its video streaming service in 2019, wherein users can watch movies, web series, talk shows and live news.
According to an EY report, India’s e-commerce industry is expected to reach $99 billion by 2024, growing at a CAGR of 27% during 2019-24. The report estimates the online penetration of retail to reach 10.7% by 2024, versus 4.7% in 2019, and the number of online shoppers to reach 220 million by 2025. Further, the FICCI-EY Media and Entertainment Report 2021 indicates that the number of video viewers increased by 15% in 2020 to reach 468 million; this number is expected to grow to 650 million by 2023.
The marriage of video streaming and e-commerce could bring more users into the e-commerce fold, as demonstrated by Chinese super apps — as per eMarketer, sales generated from these apps, that combine content, social media and commerce, are projected to reach $363 billion in 2021 and account for 13.1% of total e-commerce sales in China this year.
Is the Indian market ready for content-driven commerce?
Watch what you buy
Amazon’s miniTV will not just provide entertainment videos, but also stream video content on products and trends. The company has partnered with tech expert Trakin Tech, and fashion and beauty influencers like Sejal Kumar and Malvika Sitlani to produce content for the app.
Prakash Sikaria, VP – growth and monetisation, Flipkart, says that in-app video streaming is an opportunity to bridge the gap between passive content consumption on smartphones and an active e-commerce experience. The company uses interactive content with commerce-linked rewards to leverage this opportunity. “Around 20% of Flipkart users today are watching video content monthly. Since the past year, we have seen a tenfold growth in time spent by users on Flipkart Video,” he adds.
HYPD, an e-commerce platform meant for home-grown D2C brands backed by ScoopWhoop, is yet another app using video content to encourage users to purchase products. This is similar to Myntra which started this about three years ago — turning its apparel catalogue into videos instead of images.
The co-founder of HYPD, Ashwarya Garg, says, “The content-driven commerce model is valuable to brands as they don’t have to spend advertising dollars separately on OTT and social media platforms, and pay e-commerce platforms to feature their products.” HYPD connects brands with content creators who can generate short-form videos for the platform.
Clothing, personal care and lifestyle brands like The Man Company, Khadi Essentials, PeeSafe, Brown Skin Beauty, and Star Struck (by Sunny Leone) have partnered with HYPD. On Flipkart Video, consumer electronics and lifestyle brands integrate their brand proposition into interactive shows such as Bid & Win and Power Play with Champions.
Brand partnerships could give an impetus to the otherwise small fraction of ad revenue earned by e-commerce platforms in India. Kia Ling Teoh, senior analyst – TV & video, advertising, Omdia, expects that when the market is ready, Amazon will add more expensive shoppable video ads.
While China and Southeast Asian countries have embraced the livestream e-commerce economy, India is just starting out on this journey. “Monetisation through content sponsorships will be an easy path to earning advertising revenue,” says Mrigank Gutgutia, director, RedSeer Consulting. However, with respect to converting the video-based ads into a transaction, he says, the Indian ecosystem will have to cover a lot of ground.
For content to result in commerce, brands would require a differentiated advertising approach. Reward points, for instance, could be an attraction. “With the inclusion of rewards, the audience is automatically more involved; there’s an incentive to explore,” says Ankur Pahwa, partner and national leader, e-commerce and consumer internet, EY.
While Flipkart makes its content interactive and gamifies the experience, HYPD has taken the shoppable-content route. HYPD is also building a platform to livestream shoppable content. But before the market moves to livestream e-commerce, “companies will need to focus on providing quality content and a seamless to-the-doorstep experience,” Pahwa adds.