YouTube has launched the world’s first “shopping-only store” in Korea, targeting the online commerce.. – MK

YouTube has launched the world’s first “shopping-only store” in Korea, targeting the online commerce market in earnest. At a time when consumption of video content such as “short form” is rapidly increasing, the live commerce market that combines “video” and “commerce” is expected to grow further as it enters YouTube. In particular, it is expected to have a significant impact on the home shopping industry as well as existing online commerce powerhouses such as Coupang and Naver.

YouTube announced on the 19th that it has opened a “Youtube Shopping Store” that allows you to create your own shopping channel with just a few clicks without planning or developing an online shopping mall in partnership with Cafe 24. YouTube has not had its own order or payment system, so it has only played a role in brokering external online commerce companies such as Coupang and 11th Street. However, this time, it introduced a system that allows you to open a shopping store, sell, purchase, and pay within the YouTube ecosystem.

The seller can immediately create a dedicated store for YouTube shopping by signing up for membership at Cafe24 with a Google account. After that, if you meet the conditions of the YouTube partner program, you can sell the product. The terms of the partner program are 500 subscribers, 3,000 hours of valid video viewing, or more than 3 million views of shorts. Even if you do not meet the conditions, you can start selling through collaboration with other creators.

For consumers, the process of ordering products has become simpler. Previously, there were no purchase and payment pages in YouTube, so they had to use external product pages such as shopping malls run by creators or Coupang. However, in the future, YouTube will be able to enter only essential information, including the orderer name, address, and contact information, and order products tagged in the content without a separate registration process. Payment can also be made by card, account transfer, virtual account, and simple payment.

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Earlier, YouTube launched a “Youtube Shopping Alliance Program” with newly added features to tag products on content in partnership with Coupang to strengthen its shopping function.

YouTube is strengthening commerce because live commerce, which combines “video,” “fandom” and “commerce,” is expected to lead the growth of online commerce.

According to the live commerce sales data platform Labangba, the domestic live commerce market grew about 25% year-on-year to about KRW 3 trillion last year.

Due to the recent popularity of short video “Short Form,” consumption of video content has soared, and “influencer” who have established strong trust relationships with subscribers are opening up consumers’ pockets by forming strong fandom through authentic product information delivery. In fact, according to McKinsey & Company, the purchase conversion rate of live broadcasting is around 30%, more than 10 times higher than the 2.06% conversion rate for general online shopping purchases.

Another positive factor is that Alpha Generation (generation born in early 2010 to mid-2020), which is drawing attention as a future consumer generation following the MZ generation, recognizes the video content platform as a shopping platform rather than just fun.

Live commerce is expected to grow faster in the future and expand rapidly to KRW 10 trillion by 2026. It is predicted that the penetration rate of live commerce in the domestic e-commerce market will also increase from 1.3% in 2023 to 3.4% in 2026. In China, where the live commerce market is most developed, it is expected to increase from 11.5% to 13.3% over the same period.

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In addition to YouTube, global content platforms are also entering the domestic online commerce market one after another. Instagram has launched a “creator marketplace” that connects advertisers and creators, and TikTok, a short-form powerhouse, is also expected to enter the domestic commerce market as it applied for a trademark of TikTok Shop, a live commerce service, late last year. TikTok Shop was first launched in Indonesia in 2021 and is currently operating in the United States, the United Kingdom, and Vietnam, and TikTok Shop’s global sales last year are estimated to be 27 trillion won, five times higher than the previous year.

In Korea, while Naver is leading the live commerce market, the home shopping industry, which is implementing mobile strengthening strategies by declaring its Kakao affiliate Grip, online commerce powerhouse Coupang, and “post-TV,” is struggling to attract consumers’ attention.

Seo Yong-gu, a business professor at Sookmyung Women’s University, said, “If YouTube jumps into live commerce, the boundaries between media platform companies and retail businesses will collapse, so only the first place in each category can survive.”