How do the challenges of live commerce highlight the necessity for regulatory guidelines?

In today's burgeoning world of content creation, what seems to be making its way to the digital screens of many users is brands who are making their way into the space of live commerce to integrate the audiences’ shopping experience on content creators’ live streams.

As interesting as it sounds, it does seem to be similar to a pandora box, given the technological barriers and absence of ‘Live commerce’ as a specific feature on various prominent social media platforms, unlike e-commerce platforms such as Amazon, Flipkart, and Myntra which have ventured into live commerce space.

In an earlier interaction with BuzzInContent.com, Kunal Sawant, Business Head, Goat (GroupM India), had pointed out that the technology of shopping in the same environment where the content creator is streaming live, coupled with the lower viewers’ concurrency remains an issue with Live commerce.

At the time, he had said, “Today, none of the social media platforms have a Live commerce offering. Secondly, while Amazon, Flipkart and Myntra have Live commerce options, the concurrency of people watching the Live stream is hardly 1000. There have been instances of 10,000 people watching a Live commerce stream, but garnering such huge numbers requires heavy investment. Therefore, it is a wait-and-watch situation when it comes to the evolution of Live commerce.”

While it may be a wait and watch for Live Commerce to enter the social media space, BuzzInContent.com, in this story aims to decode as to what are the challenges and opportunities that it possesses.

Neha Suyal

Acknowledging the fact that integration of shopping within the content creator's live stream is a challenging task, Neha Suyal, Co-Founder, Woovly, stated that integrating shopping within a content creator's live stream comes with technical issues, maintaining audience engagement during product presentations, ensuring secure and seamless payment options, coordinating logistics for product delivery, and finding a balance between commercial promotions and authentic content creation.

Aakash Goplani

Adding to the list of challenges associated with Live Commerce, Aakash Goplani, Account Director, SoCheers, mentioned that the challenges that the same is facing at the moment are audience retention and platform awareness.

“With the rise of short-form content like Instagram Reels in recent years, people's attention span has significantly decreased, making it difficult to engage in live commerce content regularly. Furthermore, compared to other countries, there are not enough established platforms for live commerce in certain regions. Even major players like Amazon and Flipkart have only recently started with it, so encouraging creators and people to engage in Live Commerce is still in its early stages,” he opined.

Shradha Agarwal

As per Shradha Agarwal, Co-Founder and CEO, Grapes, live commerce is undeniably gaining a lot of traction worldwide and bringing a lot to the world of marketing. However, looking at the real picture, it still has its own set of challenges.

“The major challenge that I think brands or shopping sites are struggling with is finding the right host for their live stream. Since live commerce asks for a considerable amount of investment, I believe brands should be very vigilant with respect to which influencer they are bidding on when it comes to promoting their products through live streaming. In live commerce, customers are bound to ask questions regarding the products, and thus many brands even struggle with finding a host who is well versed in their brand and products to answer the queries appropriately,” she said.

She also went on to add that the other significant challenge of integrating the shopping experience with content creator’s live streaming is trolling because today social media is filled with ruthless people and it gets really difficult for live streamers to not get affected by trolls and stay focused and engaged the entire time.

she said, “Consumers are still skeptical of live commerce and want to adapt it as an alternative to online shopping. Most times, live streamers find it difficult to persuade their consumers to buy the product they are promoting because of a lack of trust in online shopping. Until and unless a very influential celebrity is promoting it, people don’t really trust the brand and the product. Another limitation of live commerce with respect to viewers is awareness and schedule constraints. Consumers are most often not even aware of or available to attend these live streams, and thus streamers do not get much reach for their videos due to that.”

Rohit Pabalkar

Similarly, Rohit Pabalkar, Media Director, The Starter Labs (Zoo Media), also pointed out the challenge of technical glitches, payment and transaction concerns, user experience, audience engagement, logistics and legal compliance issues, revenue sharing, competition and market saturation in the case of live commerce.

“Platforms and content creators that address these challenges effectively are more likely to take advantage of the potential of live commerce,” he opined.

Narinder Mahajan

Echoing similar views, Narinder Mahajan, CEO and Co-Founder, ODN, also stated that seamlessly integrating shopping carts, payment gateways, and inventory management systems into live streaming platforms can be complex along side content alignment because capturing and maintaining audience attention during live streams while promoting products requires skillful storytelling and interactive elements.

“While collaborating with platforms like Amazon, Flipkart, or Myntra can provide access to their existing infrastructure and reach, leveraging social media features such as Instagram Shopping or Facebook Shops, can facilitate seamless product integration. Furthermore, creating dedicated shopping segments within live streams for product demonstrations and promotions can also enhance focus and engagement,” he said.

Commenting on what strategies are content creators implementing in the absence of the ‘live commerce’ feature on all major social media platforms and continue to engage their audience effectively, Woovly’s Suyal pointed out that content creators, today, are using different tactics to overcome the absence of live commerce features on major social media platforms such as relying on third-party e-commerce and live-streaming platforms, incorporating affiliate marketing links, using interactive features like polls and Q&A sessions to engage audiences, as well as partnering with brands for sponsored content and product placement in their live streams.

“The existing constraints regarding viewer concurrency on e-commerce platforms like Amazon, Flipkart, and Myntra may arise due to various technical difficulties in handling a significant number of viewers at the same time, limited real-time interaction and engagement with a vast audience, and a requirement for sturdy infrastructure to ensure smooth live streaming and e-commerce transactions at a large scale,” she emphasised.

“Well, we can't deny that we as consumers love natural and unscripted content, and as a content creator, one's only priority is to give their audience the content they die for. This is why live streaming has been such a breakthrough for influencer marketing. So since consumers find unedited content more appealing, these content creators make sure to provide their target audience with relevancy and authenticity through their content on live streaming. They use emotional connection and entertainment as a strategy to engage with their audience and induce them to buy the product they are promoting in their live video,” Grapes’ Agarwal added.

To this, SoCheers’ Goplani also added that what it seems like today is that content creators are still in the process of exploring the various possibilities of the format, particularly in terms of audience engagement and response.

“Recently, Amazon and Flipkart have put a lot of emphasis on Live Commerce during their festive sales, which has prompted some creators, such as the ‘Shop Along With Varun Thakur During Amazon Festive Sale’, to jump on board and experiment with this approach. Others, however, may prefer to evaluate these experiments before attempting or collaborating themselves,” he suggested.

In Goplani’s observation, the biggest limitation for live commerce is that of intent as many people, today, tend to use social media platforms to watch videos and gather information about products before making a purchase decision. However, it is only when they visit e-commerce platforms like Amazon and Flipkart, their primary intent is to search for products they want to buy or compare prices. Despite this, the live commerce section on these apps has not been established yet, which can be a limitation in the shopping journey.

Furthermore, The Starter Labs’ Pabalkar also emphasised that it is important to stay updated with the latest features on social media platforms, as they continuously evolve to meet user and creator needs.

“Creators often adapt and innovate their strategies based on the available tools and features on the platforms they use. While social media platforms may not have dedicated live commerce features, creators are still leveraging existing features like Instagram Live for product launches or behind-the-scenes content, with product details shared in the captions or comments. Content creators host interactive Q&A sessions during their live streams and incorporate product recommendations within the responses,” he added.

This involvement of product demonstrations, unboxing sessions, or incorporation of products into the creators’ regular content in an authentic way, in his views, is what engages the audience while subtly promoting products in a conversational manner because even without a direct live commerce feature, content creators can creatively showcase products in their content.

All of this cumulatively raises a very pertinent question of whether there should be separate guidelines in place to regulate live commerce in the current times and that is precisely what BuzzInContent decided to ask the various industry professionals.

Responding to this, SoCheers’ Goplani mentioned that given the understanding that ASCI's guidelines are being honoured and followed through all the required disclaimers and callouts of it being a paid partnership, it seems that as long as the brands and creators continue to comply with ASCI's guidelines for Live Commerce, it should be sufficient for the present situation.

However, Woovly’s Suyal shared a different opinion. In her view, separate guidelines must be considered to regulate live commerce because of its unique combination of live streaming and e-commerce as it raises concerns for consumer protection, transaction security, content authenticity, and fair competition among content creators and brands.

“Clear guidelines can help ensure transparency, accountability, and a positive user experience within the quickly evolving live commerce landscape,” she stated.

Grapes’ Agarwal also emphasised that there are certain key areas in live commerce which need regulation policies like trolling, transactional frauds and cybercrimes like privacy invasions, data leaks, etc. which are very common online with respect to e-commerce as a whole.

Therefore, she thinks before such platforms enter the live commerce space and end up making people lose their faith in it, it should be regulated beforehand. In addition, other substantial guidelines related to the industry as a whole are needed, like accountability or licensing, to make sure it is in safe hands.

Similarly, The Starter Labs’ Pabalkar also emphasised that since the regulation of live commerce involves navigating a complex intersection of e-commerce, broadcasting, consumer protection, and potentially other legal aspects, whether separate guidelines for live commerce are necessary is a matter of ongoing discussion and consideration.

Having said that, some factors which should definitely be considered in dealing with the same, in his views, include that of consumer protection, transparency and content standards.

“As live commerce continues to evolve, regulators may need to adapt and refine guidelines based on industry developments and emerging challenges. Striking a balance between consumer protection, industry growth, and innovation is key to developing effective regulations for live commerce. It's essential for stakeholders, including governments, platforms, content creators, and consumers, to be involved in the development and evolution of these guidelines,” he said.

ODN’s Mahajan also shared a similar viewpoint and mentioned that there is a need for guidelines to be established to protect the consumer rights and ensuring transparent product information, fair pricing practices, safeguarding against misleading product claims or exaggerated benefits or even deceptive marketing tactics alongwith effective grievance redressal mechanisms in live commerce.

“Establishing ethical guidelines for influencer endorsements, disclosure requirements, and conflict-of-interest management is essential,” he added.