Live E-Commerce to Be a Key Factor in Next-Generation (Low Latency) Video

ABI Research’s recent Metaverse Video research report evaluates the opportunities for low latency (sub-5 seconds) live and interactive video for online applications and platforms in the consumer markets. These forms of next-generation video will have a profound effect on sports, gaming, e-commerce, gambling, and other areas that will see new revenue streams through Three-Dimensional (3D) assets, virtual spaces, smart glasses, and low latency video experiences. For the scope of the report, live commerce goes hand-in-hand with audience engagement and interactive video.

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Market Overview

  • Next-generation video (sub-5 Milliseconds (ms) latency) will have a profound effect on sports, gaming, shopping, gambling, and other areas that will see new revenue streams through Three-Dimensional (3D) assets, virtual spaces, smart glasses, and low latency video experiences. Live commerce goes hand-in-hand with audience engagement and interactive video in the age of the metaverse.
  • Social commerce spending is expected to surpass US$1 trillion between 2025 and 2027 (most forecasts favor closer to 2025).
  • China, India, and early adopters in Latin America and Europe will be instrumental to the growth of the next generation of video.
  • The challenges facing companies like TikTok and Facebook exemplify hesitancy from the North American consumer market for online live e-commerce.
  • Between potentially worsening economic conditions and subscription services fatigue, live e-commerce and the broader livestreaming market should remain wary of consumer appetite in the next 2 to 3 years.
  • Overall, revenue from livestreaming, which includes some live e-commerce in the forecasts, will still be solid, nevertheless. Growing at a Compound Annual Growth Rate (CAGR) of 17.3% between 2021 and 2030, total livestreaming video revenue will reach nearly US$150 billion in 2030.

“While 3D is not currently a key element of live e-commerce platforms (or live streaming, outside of the video games being played by the content creator), it will play a significant role in the merging of the physical/real and virtual worlds, a key tenet of the metaverse. In today’s market, influencers and hosts interact with products live on camera, but in the future, these content creators could interact with virtual assets, showcasing options in real time, such as color options, add-ons, etc.”  – Michael Inouye, Principal Analyst at ABI Research


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Key Decision Items

Be Patient about Next-Gen Video and Keep Live E-Commerce Expectations in Check

Although it’s natural to be anxious about the possibilities surrounding low latency live e-commerce, widespread adoption of these metaverse-orbiting technologies will take time. A slow growth trend would be consistent with other “next new things” like Virtual Reality (VR) and immersive/cloud gaming, as well as Connected TV (CTV). Sometimes it’s a matter of consumer behavior, other times it could be a result of the technology just not being ready yet for the big time. Either way, new technologies and markets often need ample time before gaining momentum.

On the flip side, it’s also important to not disregard a project altogether simply because low latency video adoption doesn’t meet internal expectations. Often, adjustments need to be made to the approach. For example, maybe an influencer needs to change up the type of content he or she promotes in live videos. Or maybe consumers in a specific region are more critical of livestreaming and interactive video.

Finally, your Return on Investment (ROI) projections for potential metaverse elements, such as Non-Fungible Tokens (NFTs) and 3D assets/environments, should not be particularly high, at least not until the crypto scene is in a healthier state. To summarize, companies that aim to offer technologies like online live e-commerce and interactive video streaming must practice patience, as the market seeks key inflection points that will help drive explosive growth.

Pay Close Attention to AR and Merged Reality

If the long-term future of the metaverse turns out to meet the expectations that some, including Meta, hold, then technologies, user interfaces, content, and services will feel a significant impact. Consequently, there will be a wide transition from Two-Dimensional (2D) to 3D, resulting in the more frequent use of smartphone Augmented Reality (AR) and merged reality. Already, industrial settings are adopting digital twins and simulations, while virtual production/sets/shoots and live service games have found their way into creatives and media & entertainment.

While investment in smartphone AR and merged reality doesn’t necessarily need to be done immediately, live e-commerce platforms and content creators should at least be forming a fast track to integrating these technologies. Interoperability, in the context of the 2D to 3D migration, will need to cover new interfaces, such as glasses, Head-Mounted Displays (HMDs), and contact lenses, in addition to devices like Personal Computers (PCs) and smartphones. Some brands, such as Adobe, are focusing on 3D tools that enable customers to leverage technical progress (e.g., compute, capture technology, AI/ML, etc.).

Cater to the Online Live E-Commerce Audience

For online e-commerce livestreaming and interactive video to find success in the consumer markets, the customer experience must be top-notch. The once commonly held belief that targeted advertising wins over consumers has largely dissipated, thus companies need to shift gears. In the metaverse, and subsequent Web3 use cases, the customer needs to be at the center of attention for applications. This notion especially rings true in use cases where the online audience is actively involved in the video content. Indeed, e-commerce platforms and content creators must normalize tighter associations between host and end user.

Audience engagement could be achieved through:

  • Shoppable elements
  • Gamification
  • Guest features
  • Polls
  • Discounts
  • Earned/purchased emojis
  • Human/Artificial Intelligence (AI) sales assistance

While many of these tactics have already been available for years, the metaverse will make these consumer touchpoints broader and more stimulating. Lastly, taking a cue from many of today’s content creators and influencers, channel/content monetization will be supplemented by third-party services like Patreon, SubscribeStar, and similar services. Retailers, e-commerce platforms, and content promoters should adopt this ethos and carry it with them into the metaverse.

Think of How to Get around Live E-Commerce Obstacles

In Western markets, the synergy between social media and livestreaming e-commerce is not as clear as its connection to retail. Although many live e-commerce platforms link to social platforms, and social will certainly be a catalyst, live e-commerce’s origins come from retail. Adding to this, younger consumers in Western countries are also more skeptical of live e-commerce given the association with home shopping TV broadcasts (e.g., QVC and Home Shopping Network (HSN), both currently owned by Qurate Retail Group). For these reasons, retail should be the priority in the West and demographic profiling will be a highly influential factor when developing/marketing live video platforms and promoting products on them.

On the content creation side, marketing products through video format has to be carefully planned. The revenue results that an influencer can deliver most likely depend on how large of a following he or she has. While a famous Hollywood actor could easily drive sales quickly, smaller content creators will see far less success. Whereas individuals with a significant following and persuasion capabilities are a great match for sales-oriented livestreaming e-commerce, most sessions will require a less aggressive approach. Rather, the best way to reel in a larger live e-commerce audience is to recommend products in a natural way; for instance, upon being asked to do so during a how-to video, telling an audience member what tool is being used and sharing an affiliate link. The idea is to promote brands organically through user-driven requests.  

Key Market Players to Watch

Dig Deeper for the Full Picture

For a more elaborate analysis of next-generation video and the intertwining of pre-existing livestreaming e-commerce and interactive video services with the buildup to the metaverse, download ABI Research’s Metaverse Video research report.

Not ready for the report yet? Check out our Enterprise Metaverse Implications for the Workplace, Virtual Events, Retail, and More Research Highlight. This content is part of the company’s Metaverse Markets & Technologies Research Service.

Metaverse video applications that will unfold in the consumer markets, such as online live e-commerce and interactive video.