Instagram offers another sign that livestream shopping isn’t ready for prime time in the US

The news: Instagram is shuttering its livestream shopping business as part of parent company Meta’s “year of efficiency,” per TechCrunch.

• Instagram users will no longer be able to tag products while livestreaming as of March 16; that feature has been broadly available to US businesses and creators since 2020.
• The move dovetails with Facebook phasing out its livestream shopping feature last October as the platform shifted its focus to short-form Reels videos.

Livestream shopping isn’t resonating in the US: Livestream shopping in China soared over the last few years. We expect retail livestreaming ecommerce sales via apps like WeChat, Taobao Live, and Douyin (China’s version of TikTok) to reach $514.20 billion this year.

• However, Meta (and others) found that the US market is very different from China or other Asian markets where livestream shopping has flourished.
• The majority of US adults are not interested in or familiar with buying via livestream commerce or video. Just 17% have made a purchase this way, and only 6% do so regularly, per an August Insider Intelligence survey conducted by Bizrate Insights. Those shoppers are more likely to be young and male.
• With Meta’s advertising business struggling, the company decided to shift away from livestream shopping. After two years of building out lower-funnel commerce capabilities—such as livestream commerce and Instagram’s Shop tab—the company is refocusing on upper-funnel shopping capabilities that drive advertising.

Not everyone has soured on livestream commerce: Even though livestream shopping has yet to resonate with most consumers, several retailers continue to look for ways to leverage the channel.

• Fanatics later this year plans to launch Fanatics Live, which will feature digital content creators and influencers who trade cards. Those watching will be able to obtain cards through the Fanatics Live app or website.
• Walmart and TalkShopLive aim to position livestream shopping as a form of entertainment by recruiting celebrities such as E! News hosts to attract viewers.
• Meanwhile, YouTube last year partnered with Shopify to launch an integrated livestream shopping platform.

The big takeaway: It is easy for US retailers to be enticed by the huge livestream sales numbers in China. However, just as super apps have failed to take hold in the US, so too has livestream shopping.

• Livestream shopping, to date, simply hasn’t been compelling to the majority of US consumers. While that may change, retailers (and platforms) may find more success leaning into more proven social commerce tools.

Go further: Read our Social Commerce Forecast 2022 report.

This article originally appeared in Insider Intelligence's Retail & Ecommerce Briefing—a daily recap of top stories reshaping the retail industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.

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