Be Entertaining – The Video-First Future of Ecommerce

Connie Chan and Avery Segal at A16Z have a great report out titled ‘The Video-First Future of Ecommerce‘.

The American way of Ecommerce is pretty simple.

Seventy percent of Amazon shoppers never click past the first page of search results. That’s because the platform’s homogenized product listings—title, price, photo, and star rating—are built for search, not discovery. As a result, sales are more about SEO, less about finding new or innovative products.

As for the US and Video…

In the US, the usual monetization system for video is limiting. On YouTube, the biggest online video platform, compensation is still largely driven through through ads. But for most creators, that amounts to a meager living: a 2018 report found that the top 3 percent of video creators accounted for nearly 90 percent of total views on YouTube. Even those who broke into that coveted top 3 percent were still only earning about $16,800 in ad revenue annually.

Not so in Asia and look for things to quickly change here in the US as well with the rise of TikTok.

The monetization of short video is already happening in Asia. On Taobao, China’s largest ecommerce platform, 42 percent of product pages already include short videos and live streaming is growing quickly. From January to August 2018, the company generated more than $15 billion in sales through livestreams, up nearly 400 percent over the year before. Thus, it’s no surprise that short video apps are the next frontier for ecommerce in the US, fueled by the rise of native shops and integrations with popular third-party platforms. (We’re likely to see more video being incorporated into Amazon’s product pages and other shopping pages, as well.) Here are some examples of how brands are leveraging short video entertainment apps for commerce in China.

Have a read of the rest of report.