Live Commerce: Understanding How Live Streaming Influences Sales and Reviews

The combination of live streaming video and e-commerce promises to revolutionize the retail industry and consumer shopping habits. However, it remains unclear how and to what extent live streaming influences online sales and review participation. We obtain an archival data set from Alibaba’s Taobao (an early adopter and leader in China’s live commerce marketing) and employ difference-in-difference-in-differences in tandem with propensity score matching to evaluate the causal effect of live streaming on the performances of online sellers, including sales volume and review participation rate. Our results show that adopting live streaming significantly drives sales and increase feedback. Besides, we found there is a positive spillover effect of live streaming on the online sales of non-live-demonstration products. This suggests that live streaming is not only a format of product presentation, but also an effective relationship marketing tool for online sellers. The findings provide distinct theoretical contributions and managerial implications.