Livestream Shopping Deep Dive 2020, BDMI

December 2020
Livestream Shopping Deep Dive
Rachel Lauren

View Slide

2 December 2020 · Bertelsmann
Exploring the State of Livestream Shopping
Executive Summary
Section I: Livestreaming Overview
Section II: Drivers
• Driver 1: Transaction vs. Ads
• Driver 2: Cultural Habits
• Driver 3: Rise of Middle Class
• Driver 4: Mobile Payments
• USA Growth Drivers
Section III: The Livestream Influencer
Section IV: The Technology Ecosystem (USA)
Section V: The Livestream Advertiser/Brand
Section VI: Summary and Capital Markets
Table of Contents
This report presents BDMI’s perspective on the current state of the livestream
shopping market and outlines key trends and themes to watch as the industry
continues along a path of growth and technological advancement.
The report sets the stage with an overview of growing global engagement,
demonstrating livestream shopping’s emergence in public consciousness. A
comparative analysis of the Chinese vs. USA ecosystem will follow, detailing the
status quo with observations on emerging trends and the role of technology and
platforms.
The report concludes with an overview of capital markets activity related to
livestream shopping, exemplifying the growing focus on the space by creatives,
brands, entrepreneurs, and strategic & financial investors.
The Viewer
The Brands
The
Influencer
Technology &
Platforms

View Slide

Focused
Investment
Theses
• Next Gen Media
• Consumer Brands
Select Fund-of-Funds Investments
• Enterprise Tech
• Fintech
Presented by BDMI, Seed Through Series B Corporate Venture Capital Fund
BDMI will continue to be active investors in e-commerce and digital media
Active Early
Stage
Investors
• Series A-B (check size $1m-$5m), leading or following; Seed ($100k – $300k)
• Covering North America, Europe, and Israel
• Currently investing out of $150m Fund III
Financial &
Strategic
• Financially-motivated, single-LP venture investor
• Provide strategic value to both portfolio companies & parent company (global
media, services, and education company Bertelsmann)
Collaborative • Syndicate friendly, co-investing with many traditional and strategic VCs
Team
Select Investments
Urs Cete
Managing Partner
Keith Titan
Partner
Sim Blaustein
Partner
Carmen Rivera
Assistant
Brendan Brits
Associate
Avinash Satish
Finance Manager
Rachel Lauren
Analyst
Commerce -focused
investments
Sold to Oracle
Q4 2019
Sold to The Chernin Group
Q4 2019
Sold to Connexity
Q2 2020

View Slide

BDMI’s Top Livestream Shopping Theses
1
The US is 5 years behind China in livestream (shopping), though accelerated by COVID-19
China’s primary business model for Internet companies has historically been transactional, whereas US companies have relied on ads. As a result, media
formats in the US have tended to skew towards long-form video and images, as advertising was more difficult to crack in live formats. In China, however,
livestreaming evolved much earlier given user’s ability and willingness to pay directly for influencer content, as well as the payment integrations/infrastructure
to do this seamlessly. As US media shifts towards business models outside of advertising (commerce, tipping, subscription), livestreaming becomes a more
interesting and revenue-generating segment. In addition, with more commerce and entertainment consumption shifting online due to the COVID-19 pandemic,
familiarity with streaming and viewership has followed.
3
Following success in China, brands will look to expand to livestream shopping as a distribution channel
Socially-interactive livestreaming and gaming are among the most popular new content mediums for younger audiences, and commerce integrations have
proven to be effective in these environments. Between Twitch / eSports / Fortnite et al., we’ve seen a strong consumer appetite for shared live experiences
built on audience engagement, gamification, and social interaction. These platforms are monetizing live engagement by integrating transaction
opportunities that feel organic to the experience. A growing number of marketing dollars are already moving towards influencer marketing, and we see
livestream shopping as an extension of this ecosystem.
2
3 models will compete: marketplace, media, and software; driving viewership & curation will be key
Many companies are approaching the market with different business models and technology; the market can be boiled down to 3 approaches:
marketplace, commerce media, and software. As seen historically in many other industries, marketplaces that have been able to successfully create
network effects and bring each stakeholder to the ecosystem have been able to accrue significant value in their respective markets. In addition, they’ve
been able to keep their own costs low for content production and product. However, software companies have been gaining steam with brands who wish to
maintain some control over their livestream strategy, and next-gen commerce media companies are building brands in and of themselves. Given large
incumbency, we see opportunity for startup entrants in niche categories where they can become a tastemaker, or where sourcing/supply chain is complex.

View Slide

Section I
Livestreaming Overview

View Slide

Livestreaming, Particularly Livestream Shopping, Emerging Globally
Europe – Like the USA, in its infancy
▪ The market is primarily served by software companies offering
livestream tech directly to brands (Bambuser, Buywith, LiSa), rather
than marketplaces.
USA – Nascent market with several companies trying to break through
▪ Livestreaming is popular amongst gaming
▪ Large platforms are attempting to offer some livestream capabilities,
while several startups are offering software to brands or creating
standalone platforms
China – Established market continuing to grow rapidly
▪ High viewership levels and sell-through rates
▪ Several large players competing
South Korea – More nascent than China but similar viewership
preferences
▪ Naver and Kakao have entered the market
▪ Kakao launched Talk Deal Live in May 2020, with 40k concurrent viewers

View Slide

What is Livestream Commerce?
Livestream Shopping vs.
Static Video
• Real-time selling
events, creates sense
of scarcity (and thus,
higher conversion rate)
• More intimate
connection with
influencer/seller
• Real-time
demonstrations, chat,
Q&A about products
Youtube: What is Taobao
Live?
Watch Here
(Click the link below)

View Slide

Chinese Livestream Shopping Market Has Grown Dramatically
$170bn market size and getting larger
(1) iiMedia Research Report: China Livestreaming
(2) Livestreaming Set To Unlock Greater E-Commerce Spending In China, Seeking Alpha Report
(3) DMR Statistics, Taobao Live
$0.03B $19B
$62B
$170B
3%
7%
17%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
2017 2018 2019 2020
Livestream Commerce GMV % of Total e-Commerce Revenue
Taobao Live,
79%
Douyin, 13%
Kuaishou, 7%
JD Live/Other,
1%
Launched 2016 by
Taobao (Alibaba)
400m viewers in 20193
$71B GMV for 2020E3
Launched 2018,
Chinese Tiktok
Targets Tier 1
Cities
Launched 2018,
filed IPO 2020
Targets Low Tier
Cities
300m DAU3
Launched 2019
Sells large
appliances
Partnered with
Kuaishou to
expand
China Livestream Shopping Market (% of Transactions)2
China’s Growth in Livestream Shopping GMV1
Summary: Chinese livestreaming continues to grow quickly. Taobao is the largest, while Kuaishou, unlike Taobao and Douyin,
focuses on lower tier cities and capitalizes on small businesses (such as farmers) trying to sell during COVID-19.

View Slide

Evolution of Creator Economy and Livestreaming
China creator economy was built on streaming and donations, USA on video and ad revenue
(1) Rise and Proliferation of Live-Streaming in China: Insights and Lessons, Zhicong Lu, University of Toronto
E-Commerce Creator Growth
2003 - To expand
the business into
consumer, Alibaba
launched Taobao, an
eBay lookalike
2004 –
JD.com
launches
B2C site
Convergence
2014 – YY Live
rebrands to Huya
Douyu, an esports
streaming
platform, launches
2020 – number of livestreaming
users hits 560m, 62% of internet
users. Over $2.9B in sales was
generated on Taobao Live during
Single’s Day Alone, their version
of Black Friday.
2005 – Chat rooms on
YY are repurposed for
livestream entertainment
such as talk-shows and
singing, payments/tips
built into platform
2016 –
Taobao
launches its
livestream
offering,
Taobao Live
1999 – Amazon expands marketplace
beyond books, to electronic, household, etc.
2005 –
Youtube
launch,
allowing
creators to
make UGC
content
2010 –
Instagram
launch
2011 –
Twitch
launches
Youtube
launches
livestreaming
2016 –
Facebook
Live
Launch
2020 – While most creators
and influencers generate income
from sponsorships or ads, many
are looking for other ways to
monetize through e-commerce,
such as merch and product
creation, though also through
donations (Patreon).
China
USA
2015 –
Twitter
acquires
Periscope

View Slide

We Believe China’s Livestream Market Grew Faster Because…
Chinese consumers are
more engaged with
livestreaming; they are also
more accustomed to
tipping/user pay media
culturally
China had a mobile-first e-
commerce ecosystem that
was fully integrated with
social media and payments.
China experienced a rapid
growth in the middle-class
and consumerism alongside
adoption of digital
technologies
Dominance of transactional
business model in China
(which is more suited
towards a livestream format)
vs ad-supported in USA ,
drove Chinese creators
towards livestreaming

View Slide

Section II
Drivers

View Slide

Driver 1: Lack of Dominance of Ad-Supported Models in China
Largest US Internet businesses driven on social/search ads; China mainly transaction-based
USA Digital Ad Spend Greater than China, But China E-
Commerce Much Larger
Ads is a Larger Revenue Generator for USA
Consumer Internet Companies vs. China1
Digital Advertising Spend and E-Commerce Sales2
(1) Respective 10-K’s and financial reports – top 4 ranking based on market cap
(2) eMarketer, June 2020, Statista
$0B
$50B
$100B
$150B
China Digital Ad Spend US Digital Ad Spend
2017 2018 2019
$0.0T
$0.5T
$1.0T
$1.5T
$2.0T
$2.5T
China E-Commerce Sales US E-Commerce Sales
USA Revenue
Stream
China Revenue
Stream
1. Transactions
2. Software
3. Sponsored Items
Transactions
Ads
1. Sponsored Items
2. Transactions
3. Software
Ads
1. Transactions
2. Ads
Subscription Transactions
Summary: The Chinese Internet economy has been built on transactional revenue vs advertising in the USA, whereas
livestreaming is more suited to transactional business models vs. programmatic advertising.

View Slide

Driver 2: Willingness to Spend Directly for Real Time Connection
Chinese livestream viewers more engaged, watch longer
Chinese are Watching More Livestreams, More Often and For Longer
(1) Nielsen US 360 Video Report, The China Guys Livestream Report
(2) Magid, Rockwater
(3) A Study of Livestreaming Practices (U of Toronto), State of Digital Publishing
% of Internet Users Who’ve Watched a Livestream1 How Often Do You Watch Livestreams?2
42%
59%
US China
25%
71%
23%
50%
Daily >1 Time/Week
China US
Average Watch Time for Livestreams (min)3
8
62
US China
Summary: Chinese viewers are generally more acquainted with livestreams and watch for longer, while US viewers are
beginning to watch more

View Slide

Viewers in China Older Compared to USA Viewers in China are Primarily Mid or Higher Income
High Income,
32.0%
Middle
Income, 43.8%
Low Income,
24.8%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
13-17 18-34 35-54 55+
US China
(1) eMarketer, UBS, Sina
(2) Tencent MyApp Big Data
% of Livestream Viewers by Age1 % of Livestream Viewers by Income in China2
Livestream viewers in China are older, with more disposable income
Summary: Livestream adoption in the USA is a habit of young people (primarily gaming viewers) but is more mainstream in
China. The higher average age of viewers in China translates to generally more disposable income

View Slide

$-
$1
$2
$3
$4
$5
$6
$7
$8
Video (Youtube) Blogging Images
(Instagram)
Livestream
(Twitch)
Self-Published
Books
Independent
Music
Advertising/Sponsorship User Pay (Subscription/Donation/Merch)
Livestreaming outperformed in China due to customer willingness to spend for engagement
USA – Creator Earnings by Media Platform in 2019 (in $ billions)1 China – Creator Earnings by Media Platform in 2019 (in $ billions)1
(1) BDMI Estimates based on publicly available information published by Google/Youtube, IAB, Twitch, Statista, Douyu, Huya, Bilibili, TopKlout, and
others
Summary: Chinese consumers are more willing to paying for content/tipping vs. USA consumers (who were traditionally
accustomed to free content), leading to a larger livestream creator economy in China
Top Creator Platforms in USA Driven by Ads Chinese Users More Familiar with Tipping
$-
$1
$2
$3
$4
$5
$6
$7
$8
Livestream (Taobao
Live, Kuaishou)
Video (Douyin,
Other)
(Micro)Blogging
(WeChat, Weibo)
Independent Music Self-Published
Books
Advertising/Sponsorship User Pay (Subscription/Donation/Merch)

View Slide

Driver 3: Rapid Growth of Middle Class Alongside Mobile Adoption
China’s middle class grew dramatically during a time of rapid digitization
(1) McKinsey Global Institute
(2) China Internet Watch, Statista, Business Insider
Breakdown of China Households1 Smartphone Penetration Rate in China2
4%
9%
17%
23%
26%
31%
37% 38%
43%
45%
48%
50%
53%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
36%
10% 7%
64%
88%
87%
0% 2% 6%
2000 2010 2020
Poor Middle Class Affluent
Summary: The Chinese middle class and affluent grew alongside mobile adoption, leading to a boom in mobile e-commerce
and mobile content consumption.
China Middle Class/Affluent Grew Dramatically China Has Adopted Mobile Rapidly

View Slide

Source: Huya
Driver 3: Rapid Growth of Middle Class Alongside Mobile Adoption
Virtual tipping of emojis allows for conspicuous display of wealth
Ferrari
99k gold beans ($17)
Gold Star emoji:
100 gold beans ($0.017)
Magic Castle:
5m gold beans ($856)
Heart emoji:
100 gold beans ($0.017)
Thanks User 1 for the Ferrari!
Thanks User 2 for the heart!
User 1:
Diaosi (lower social
status, relatively
poorer) Applause for
User 2!
Summary: With the rise in income, people use tipping to conspicuously display their wealth and raise their social status
User 2:
Rich patron, looking
to increase social
status

View Slide

Driver 4: Mobile-First E-Commerce
China’s mobile infrastructure was built for quick payments, donations, and transactions
19%
43%
51%
75%
79%
83% 85%
15%
18%
21%
24%
21%
40%
45%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2013 2014 2015 2016 2017 2018 2019
China US
USA E-Commerce / Social Still Fragmented
95% of China’s mobile payments go through Alipay or WeChat Pay (Mary Meeker 2017 Report)
Share of Mobile E-Commerce as % of Total E-Commerce1 E-Commerce
Social
E-Commerce
(1) China: PwC, US: eMarketer, Statista
Social
Summary: China’s leapfrog over PC/desktop adoption, direct to mobile, led to more prioritized development of mobile
payments, content, and social integrations.
Mobile Dominates China’s E-Commerce China E-Commerce and Social Integrated with Payments

View Slide

Chat/Comment Countdown
New followers
Buy/Inventory Count
Follow
Send emoji or
gift
Top-up
Summary: Taobao Live and other social shopping platforms in China have created a gamified UX to drive conversion
Driver 4: Mobile-First E-Commerce
Marketplaces such as Taobao Live have dominated, and are feature rich to optimize engagement

View Slide

4 Growth Vectors for Livestream Market in the USA
Viewers demand more
engaging and interactive
ways to connect with
creators
Brands are looking for ways
to sell products that benefit
from live demos, especially
during COVID
.
Technological advancements
in livestreaming allow for
payments integration, better
video quality
Content creators and
influencers will continue to
want new ways to monetize
their audiences

View Slide

Growth Driver 1: Creator Monetization/Engagement
▪ Influencers currently derive revenue primarily from affiliate
deals or programmatic advertising
▪ Influencers want better ways to connect with their
audience, boost engagement, and ultimately convert
products they advertise
Challenge:
Creators require
new ways to
monetize
Opportunity:
Livestreaming
provides more
engagement with
viewers, additional
revenue streams
▪ Livestreaming provides an inherently more intimate
medium, given the ability for Q&A and real-time
engagement with fans that reach out through chat
▪ Companies like Looped allow influencers and celebrities to
charge for livestream sessions, while free livestream
sessions allow for the opportunity to collect tips (video
streaming tipping volume in the US reached $141m in
2018, avg $59 per viewer)1
(1) Streamlabs

View Slide

▪ Livestream as a form of entertainment has not penetrated
the US market. Viewers primarily engage with UGC content
through Youtube videos as well as images on Instagram
▪ For non-UGC entertainment, US consumers typically
subscribe to streaming services (Netflix, Hulu) or purchase
games
Challenge:
Viewers
demanding more
ways to engage,
though less
familiar with
streaming
Opportunity:
Livestreaming offers
more engagement
with creators, USA
starting to catch on
▪ Livestreaming has become a larger part of
content/entertainment online with the growing
popularity of eSports (with Twitch leading the pack,
followed by Facebook Gaming, Youtube Gaming)
▪ Twitch has begun to expand outside non-gaming
categories - their “Just Chatting” genre is now the
largest non-gaming category on Twitch1 and is 3x the
viewership of Twitch’s largest competitor, Youtube
Gaming.
Growth Driver 2: Viewers More Familiarized with Streaming
0.0
0.5
1.0
1.5
2.0
2.5
2012 2013 2014 2015 2016 2017 2018 2019 2020
Millions
Avg Twitch Concurrent Viewers Just Chatting Avg. Viewers
(1) TwitchTracker

View Slide

Challenge:
Need for highly
scalable and
performant
technology
Opportunity:
Advancement of
purpose-built
livestream tech,
with payment
integrations
Growth Driver 3: Livestreaming Becoming More Scalable
▪ Livestreaming relies on a strong network
connection, more so than other forms of
media, and has typically faced challenges
with latency and high-quality video
▪ Shifts towards edge computing (computing closer to the
device) and improvements in streaming protocols have
allowed for higher quality and more scalable streams.
▪ 5G will offer a new era of mobile network connectivity,
allowing livestreaming to work more seamlessly
▪ E-Commerce and social platforms working to integrate
payment gateways directly into their products (Amazon,
Facebook)
35%
31%
19%
16%
High-quality video
Low end-to-end latency
Real-time interactivity
Ability to scale
Most Important UX Consideration in Livestreaming1
5G
<10 ms
4G
40-50 ms
vs.
(1) Wowza Media Systems 2019 Report, n=391

View Slide

Challenge:
Difficulty
presenting
products in a
post-COVID
world
Opportunity:
Livestreaming
allows brands to
show products
remotely
Growth Driver 4: Need for High-Conversion Distribution Channels
▪ Brands are looking for more ways to connect with buyers
and show their product in an increasingly digital world,
particularly for products such as appliances, fitness gear,
cosmetics, and others that require some demonstration
▪ COVID-19 has accelerated the path towards retail
digitization, creating an impetus and need for brands to
adapt
▪ Livestreaming allows for real-time interaction with
buyers, giving them the ability to ask questions and
see products perform live
▪ Livestreaming has seen higher conversion rates
compared to tradition retail or even influencer
marketing
32%
3%
Taobao Live US Influencer Marketing
Sales Conversion Rate by Channel1
(1) Taobao Live, Grapevine

View Slide

Section III
The Livestream Influencer

View Slide

Viya is Taobao Live’s top KOL – her
shows, which air every night for 4
hours, showcase 30-50 SKUs /
episode (curated from hundreds of
products). Around 50% are branded
products, 30% are snacks, and 20%
are new/discovery items.2
Pan-
entertainment
(Variety/Talk-
Show), 44%
Show Room
(Singing/Dancing),
35%
Gameplay,
16%
Others, 6%
(1) Rise and Proliferation of Live-Streaming in China: Insights and Lessons, Zhicong Lu, University of Toronto
(2) Bertelsmann Asia Investments
Chinese Livestream Content Mostly Entertainment Largest Streamers in China
Breakdown of Livestreams by Content Type (China)?1 Li Jiagi, or the “Lipstick King” tries
on lipsticks for his audience and
offers the best possible price for a
limited time, given his volume buying
power.
Summary: Chinese livestream influencers primarily engage in selling, taste tests, and talk shows, and are more QVC style.
The Rise of China’s Largest KOLs, of Key Opinion Leaders (Influencers)

View Slide

27 December 2020 · Bertelsmann (1) Forbes
While traditional influencers and Youtube content creators
use livestreaming as part of their viewer engagement
toolbox, going live is not a consistent activity.
The largest consistent livestreamers in the US, by
follower count, consist of gamers on both Twitch and
Youtube.
Tyler “Ninja” Blevins heads the leaderboard, with 37m
followers across Youtube and Twitch. A recent article by
Forbes claims he made a total of $17m in 2019 across
content subscriptions, tipping, and sponsorships, with
~$500k a month coming directly from subscriptions.1
Gamers are the Largest Livestreaming Influencers in the USA
Ninja is the USA’s Largest Livestreamer
Summary: USA livestream influencers today are limited to gaming streamers, who currently generate revenue primarily
through subscriptions or tips, not product sales

View Slide

Section IV
The Technology Ecosystem (USA)

View Slide

There are 3 Approaches to the Livestream Shopping Market in the USA
1 3
Marketplace/Platform
Approach
Companies that bring
together independent
influencers, viewers,
and brands on one
platform to livestream,
watch, and transact
Software Approach
Companies that offer
software to brands
which allows them to
livestream and sell
directly on their
websites or elsewhere
on the web
2 Commerce Media
Approach
Companies that
create scripted
content, with both
entertainment and
sales

View Slide

The US Market is Diverse, with Startups and Incumbents Across All Segments
Many players are vying for a spot in this market, though large platforms already exist
Incumbent Platforms Legacy Media
Platform/Marketplace Approach Software Approach Media Approach
Young Startups
*
*Inactive
***
**BDMI Investment
**
***Selling to China

View Slide

Unclear Which Approach Wins, Though Existing Platforms are Advantaged
Marketplace/Platform
Approach
Large platforms may have
an advantage vs. smaller
startups, given large
existing user/viewer
numbers. Smaller players
are focusing on creating
their own audiences as
well as bringing brands to
their platforms
Software (B2B SaaS)
Approach
Some brands have
expressed the desire to
be unshackled from large
platforms for advertising
budget, and therefore are
looking to livestream
software companies to
give them more control.
Commerce Media
Approach
QVC/HSN have
historically led this
category, though
overcoming content
production cost has
been the challenge.
Other, vertical-focused
and nimble players are
emerging as well.
Amazon Live launched 2019.
Twitch Just Chatting/IRL
fastest growing category
Livestream marketplace for
shops, $100m valuation
Launched livestream
shopping in Summer 2020
Running QVC
Livestream on Youtube
Sells streetwear,
artwork, and furniture
through live drops
SaaS solution for large brands,
offers managed services as well
Public Swedish company
working with large retail brands
B2B SaaS company offering
plug-and-play livestream tech
Sources: TechCrunch, Crunchbase
Live broadcasting/sales software
*
*BDMI investment

View Slide

Mainstream Livestream Viewing Happening on Social Platforms
(1) Hubspot
(2) IAB Livestream Report
Where Do You Watch Live Video Most Often (USA)?1 What Types of Content Do You Livestream - Select All that Apply (USA)2
1%
2%
5%
5%
6%
13%
20%
48%
Twitter
Other Social
Don't Watch
Twitch
Streaming Provider
Instagram
Facebook Live
Youtube
19%
23%
26%
27%
27%
30%
30%
Talk Show
Online Celebrity
Concert
News
Gaming
Tutorial or How To
Video by Friend/Family
Summary: Youtube and Facebook Live are the largest livestream platforms by users in the USA (people watching news,
friends, etc), though Twitch is the largest by hours watched
Viewers Watching Most Often on Youtube Americans are Watching Their Friends, Tutorials, Gaming

View Slide

Amazon: Making Active Strides in Livestreaming
Amazon Live
• In February 2019, Amazon launched Amazon Live,
which features livestream video shows from Amazon
talent as well as from brands who broadcast through
Amazon’s app, Amazon Live Creator. Amazon Live is
available on the mobile app but is not featured
prominently. Thus far, driving viewership has been
dependent on influencers promoting on their own
social networks.
Twitch
• Twitch has thus far focused primarily on eSports and
game streaming and is currently the leader in the
space. However, its “Just Chatting” category, which
primarily includes conversations/vlogs, has also been
growing and now represents 10% of hours watched on
the platform (creating opportunities outside of gaming).
(1) TechCrunch

View Slide

Facebook/Instagram: Major Player in Social Commerce, Moving Steadily
• In May 2020, Facebook announced Facebook &
Instagram Shops, which allows influencers or brands
on both platforms to create curated product lists that
are viewable and purchasable on both apps.
• The company has also been testing a live shopping
experience during the summer of 2020, allowing users
to purchase directly through livestreams with their
favorite influencers. Sales/viewership numbers have
not been reported.
• At the moment, checkout is managed either through
Facebook’s own payment gateway (Facebook Pay,
launched in November 2019), BigCommerce, or
Shopify, though selling fees will be waived throughout
2020. Facebook has been spending more time
integrating its own payments engines into its P2P and
B2C e-commerce offerings.
(1) TechCrunch

View Slide

Popshop Live: New Entrant Challenging the Platforms
• Popshop Live allows brands and stores to host their own shows from the platform – the platform
is primarily brand/shop led vs. influencer led.
• Japan LA, one of the biggest stores on the platform, has done more in sales on Popshop Live
than its other channels combined; it did $17k in sales in one show
• Raised a Series A at a reported $100m valuation from Benchmark (previously raised $4.5m in
funding from investors such as Floodgate, Abstract Ventures, and others, bringing the estimated
total to $20m)
Source: TechCrunch, The Information

View Slide

NTWRK: Becoming a Tastemaker, Started in Streetwear
Sources: Bloomberg, Crunchbase
• NTWRK is a livestream shopping app, focused on streetwear, art, and music-adjacent
categories. They feature company-produced shopping episodes and drops, pulling in hundreds of
thousands of viewers
• Some shows have topped $1m in sales in less than 5 min
• Launched TRANSFER, a virtual streetwear festival, featuring 30 brands and artists and expected
240k shoppers/10 million viewers
• Raised $10m+ in funding from investors such as Live Nation, Foot Locker, and others

View Slide

Bambuser: European Livestream Tech Company Shifts to Shopping
Source: Company Semi-Annual Filings
• Bambuser’s live streaming SaaS software has historically been used primarily by news agencies
and journalists. In late 2019, Bambuser departed from this norm by developing its new flagship
product, Live Video Shopping.
• Customers include Showfields, Luisaviaroma, Kicks, FRAME, Monki by H&M, and Moda
Operandi. The company has also hosted live shows with designer Carolina Herrera and
cosmetician Ole Henriksen
• In 1H2020, the company generated ~$800k in revenue, according to its public filings
• The company has raised over $60m in private pre-IPO and post-IPO equity
Customer
Closings

View Slide

Section V
The Livestream Advertisers/Brands

View Slide

Brands Beginning to Look Towards Livestreaming as New Channel
Most brands increasing interest in livestream marketing
Some Marketers Looking Beyond Domestic Trends… …and Many are Currently Streaming
Very, 8%
Somewhat, 45%
Not at All, 47%
To what extent do international influencer marketing trends
inform/inspire domestic priorities (USA)?1
Brands that have/are planning to produce livestream marketing (USA)2
(1) Rockwater Livestream Report
(2) Brandlive State of Livestreaming
Currently
streaming,
76%
Will start to
stream in
the next 12
mo, 8%
No plans to
livestream
in next 12
mo, 16%
Budget
Increasing,
53%
Budget
Staying the
Same, 41%
Budget
Decreasing,
6%
Summary: Budget for livestreaming commerce is increasing in the USA, with brands looking to experiment with livestreaming

View Slide

Psychology of Brands: Need for Authenticity and Interaction in Marketing
Why Do Brands Invest in Livestream Marketing?1
(1) Brandlive Livestream Report
78%
66%
59% 57%
47%
43% 43%
35%
28%
Achieve deeper
interaction with
audience
Make videos
more accessible
Add human
element to digital
marketing
Engage social
audiences
Hear directly from
product experts
Increase overall
viewing time
Capture emails Learn and adjust
from real-time
feedback
Higher e-
commerce
conversion rate
Summary: Brands are looking for ways to have deeper interaction and add a human element to their marketing

View Slide

Psychology of Viewers: Scarcity Creates Opportunity for Brands
Why Do People Watch Livestreams (USA)?1
35%
31%
27% 26% 25% 25%
20%
16% 16%
12%
It makes me up to
date and informed
I can check
up/catch up
anywhere and
anytime
I don't want to
miss out
I like the more
personal feel that
live streaming has
Watch while away
from home (at
work, commuting,
etc)
I can interact with
people of similar
interests
I can be the first of
my family/friends
to know what is
happening
That's the only
way the content is
available
I can interact with
the
producer/maker of
the content being
streamed
I don't have any
other way to
access this
content
(1) IAB Report, Live Video Streaming
Summary: Top 4 reasons to watch a livestream point to fear of missing out and need for more intimate engagement

View Slide

Fashion and Beauty Brands are First Adopters
Some brands want more control with software, while others are going to the platforms
(1) Vogue Business, Glossy, TechCrunch, Shorefire
Artist Takashi Murakami’s art company, Kaikai Kiki, has done many
sales episodes on NTWRK. During one episode, the company
raised $1.3m for his print collection (donated to Black Lives Matter
initiatives).
On September 25, many beauty brands including Flawless by Gabrielle
Union, Honest Beauty, Cetaphil, and others participated in Amazon’s
Beauty Haul Live event. The event lasted 11 hours, and featured
celebrities and influencers, though sales metrics are unreported.
On July 9th, Beauty influencer Nikita Dragun featured a beauty tutorial for
her Dragun Beauty brand, attracting nearly 43k of her 8.3 million followers
to the livestream. The stream drove 33k product page impressions, and 5k
products were added to viewers’ shopping bags, according to Instagram.
Several L’Oreal brands, including Urban Decay, have utilized LiSa’s
technology to power their online livestream shopping initiatives.
Japan LA has continued to run livestream shows on Popshop Live’s
platform, who has reportedly sold more on Popshop Live than with offline
and online sales combined. On one show, Japan LA did $17k in sales with
more than 1,500 checkouts.

View Slide

Section VI
Summary and Capital Markets

View Slide

Venture Funding Increasing Across Many Bets
In 2020, more social livestream companies raised venture capital than any previous year
Social Livestreaming Venture Activity1
▪ Venture activity in social
livestreaming and livestream
shopping is growing, though it is still
a nascent market.
▪ Venture funding primarily interested
in platforms – VCs interested in the
category are making bets on livestream
destination platforms and believe value
will accrue there, though some are
betting on software and media
▪ Though venture funding has gone to
platforms, reported revenue traction
thus far has mainly been limited to
software and media companies
▪ Multiple unannounced funding
rounds in Q3/Q4 2020, ~$55mm by
BDMI estimates
(1) Crunchbase
6
11
20
18
7
16
21
20
24
0
5
10
15
20
25
30
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
$200
2013 2014 2015 2016 2017 2018 2019 2020YTD 2020E
Millions
Deal Value Deal Count

View Slide

Summary: We See Livestream (Shopping) Poised for Strong Growth in USA
USA China
Internet
Revenue
• Ad-supported, now shifting to transaction and donation
(e.g. merchandise sales, Patreon has earned creators
$350m though donation/subscription)
• Mix of transactions, donations, and advertising
• Online video and images is most popular format, driven by
ad / sponsorship revenue on Youtube and Instagram.
Livestreaming growing as content medium.
• Livestreaming surpasses UGC static video given high
engagement, willingness to pay through donation model,
and need for trust in a crowded e-commerce market
• Social, commerce, and payments not fully integrated yet,
though social and e-commerce players making strides
• Mega-apps with social, commerce, and payments
integrated (Alibaba owns Alipay and Taobao)
• Mature e-commerce market, though still saw fairly strong
growth over the last 4-6 years (pre-COVID)
• Fast growing and largest consumer e-commerce market
(33% 5 yr CAGR in China vs 9% in US)
Conclusion
Though livestream consumption is still small in the USA, viewers have been building familiarity with the
medium (particularly during COVID) as well as shifting towards user-pay revenue models. We feel
livestreaming will continue to grow, though large social platforms have strong advantages. We believe
emerging players can drive a wedge into the market by becoming tastemakers in niche verticals.
Creator
Economy
Technology
Livestream
Uses
E-Commerce
Growth
• News/live events, broadcasting to friends, gaming; focus is
not primarily entertainment
• Pan-entertainment (variety shows, talk shows),
singing/dancing, gaming; focus is on entertainment

View Slide

December 2020
Thank You

View Slide

Livestream Shopping Deep Dive 2020, BDMI

Livestream Shopping Deep Dive 2020, BDMI

Rachel Lauren

Other Decks in Technology

Featured

Transcript