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Expected to reach US$1 trillion in value, will shoppertainment crush the advertising industry?

  • Shoppertainment could uncover US$ 1 trillion in market value for brands in the Asia Pacific (APAC) by 2025.
  • Shoppertainment seeks to entertain and educate first while integrating content and community to create highly immersive shopping experiences
  • Consumers want brands to have shoppertainment content that is entertaining, and credible

The advertising industry continues to be challenged, especially with consumer-generated content now becoming heavily sought after by most brands. In the past, brands would spend millions on advertising, be it on billboards, radio, tv, online and such.

However, consumer-generated content on e-commerce platforms has been changing the way brands approach advertising today. In fact, with online commerce promising huge profits for businesses in the Asia Pacific, shoppertainment is slowly becoming a key factor in ensuring this. Today, most e-commerce applications and social media platforms are moving towards shoppertainment as the method is proving to be successful for a number of reasons.

A content-driven commerce method, shoppertainment seeks to entertain and educate first while integrating content and community to create highly immersive shopping experiences. Shoppertainment first started among Chinese-based e-commerce brands but soon made its way to Southeast Asia.

Today, TikTok has become a prominent platform for shoppertainment. Other social media apps are also beginning to follow suit. E-commerce apps like Shopee, which was one of the early adopters of shoppertainment have also seen increased profits with consumers being hooked onto the broadcasts.

With that said, shoppertainment presents an intriguing pathway for brands to revolutionize the way they engage with audiences through video-first, sound-on formats. Analysis conducted by Boston Group Consulting (BCG) and TikTok predicted that Shoppertainment is expected to grow at a 63% compound annual growth rate with the top three contributing markets in APAC as Indonesia, Japan, and South Korea.

The ‘Shoppertainment: APAC’s Trillion-Dollar Opportunity’ report surveyed markets across APAC, including Indonesia, Thailand, Vietnam, Australia, South Korea, and Japan, and found that the immense choices afforded by technology have shaped consumers’ appetite for discovery, authenticity, and community-driven recommendations, giving rise to next era of online commerce.

What makes it more interesting is that report stated that Shoppertainment could uncover US$ 1 trillion in market value for brands in the Asia Pacific (APAC) by 2025.

According to Sam Singh, Vice President of Global Business Solutions, APAC, the e-commerce experience has always been about bringing the best deals to the right audiences as efficiently as possible. Singh also pointed out that consumer purchasing habits are evolving, and people are looking to be delighted online.

“Nobody wants to be sold to, but everyone will say yes to being entertained. This presents an opportunity for businesses to embrace Shoppertainment: a content-first approach where brands educate and entertain audiences. Shoppertainment combines content and culture and commerce in a seamless way, allowing brands to engage with audiences throughout the purchasing journey without overtly selling. This allows brands to meet both functional and emotional needs, thereby building stronger and longer relationships,” commented Singh.

Understanding consumer wants and needs

Over the years, advertising has played an important role when it comes to shopping. However, the research found that online experiences have now reached a saturation point for advertising, with consumers citing key pain points in the path to purchase.

Among them include inertia to make decisions with 26% of consumers wanting more time to consider purchases and 46% deciding to buy on a different day. Consumers are also distracted by the multiple pathways for a product. 89% of consumers research inside and outside the app while 63% need to see content at least 3-4 times, and 85% switch apps while going through the purchasing journey. Consumers are also now having high skepticism towards branded content.

As such, BCG unveiled six consumer demand spaces – intersections of context and consumers’ functional and emotional needs and divided them into two main groups. These define what consumers desire when it comes to making a purchase and carries important implications for future brand engagement efforts:

  • Functional demand spaces covers approximately 60% of the entire network of buying and selling, where consumers transact out of habit, focusing on existing products and services without considering new options.
  • Emotional demand spaces covers approximately 40% of the entire network of buying and selling, where change is happening, and consumers are actively considering new products, and making brand switch choices.

For brands, shoppertainment should build on this. And from there, they may be able to capture the attention of new consumers as well as re-engage with existing customers

Shoppertainment – When shopping becomes entertainment

With shoppertainment likely to grow more rapidly to represent larger shares of the total e-commerce market, the study revealed that APAC consumers are expecting brands to focus on entertainment before complementing it with clear product information and intuitive paths to purchase to seamlessly drive consumers from awareness, and desire to conversion.

Simply put, consumers want brands to have shoppertainment content that is entertaining, and credible. Brands can create an authentic brand sentiment, with credible reviews and open and engaging community conversations that inspire the community through product reviews or unboxing videos.

71% are also expecting brands not to force decision-making when engaging consumers while 65% of consumers also want to see trusted advice and recommendations on brands online. It is important to include the voices of credible and trusted community experts and facilitate extended conversations between friends and users.

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Platforms like TikTok have been enabling brands to build on this. For example, Australian brand CeraVe launched two pieces of creator-led TopView content on TikTok. The TopView videos utilized in CeraVe’s launch campaign helped maximize brand awareness in a completely native and immersive environment. The campaign generated 15M video views on TikTok, resulting in an 84% uplift in brand recall and a 29% uplift in brand preference.

Another example is Garnier in Vietnam. By launching a TikTok campaign alongside a Gen Z ambassador to promote their products, the campaign resulted in 283 million video views on TikTok, leading to a 6.6% increase in brand recommendations, ultimately driving a 30% uplift in sales on Garnier’s marketplace on e-commerce app Shopee.

For Aparna Bharadwaj, Managing Director and Partner at BCG, shoppertainment can provide the sweet spot for brands to reignite consumers’ purchasing passions in an authentic and consumer-driven way. Bharadwaj also highlighted that aligning brand aspirations with consumer demand spaces, especially at key moments of truth when consumers are seeking new products and experiences, enables highly immersive online experiences that leave a lasting impression on consumers throughout the path to purchase.

The end for advertising?

The biggest losers from shoppertainment would almost certainly be the advertising industry. While advertisements will still continue to have an important role to play for most brands for branding purposes, consumer-driven content may just see brands reducing their spend on advertising and focusing more on shoppertainment.

Moreover, with environmental issues being taken seriously, consumers will not be looking to associate themselves with brands that do not promote sustainability. For example, brands still relying on print advertising and billboards may find themselves losing out to those that purely focus on digital content.

The reality is though, technology is evolving the industry, and with the fact that shoppertainment has a trillion dollars in value in APAC, advertising agencies themselves may be looking to see how they can best leverage shoppertainment to cater to both consumers and brands.