Popshop Live: A Live-Streaming Challenger
Danielle Li believes the live-streaming e-commerce platform she founded, Popshop Live, has the potential to make e-commerce sites like Amazon look like the Stone Age of shopping.
Jamie Rivadeneira is convinced Popshop Live can do the same for physical stores. Rivadeneira, who owns two Los Angeles stores that were shut by the coronavirus pandemic, has seen the Popshop Live app revolutionize her business to the point where she’s asking herself if she still needs brick-and-mortar stores.
Popshop Live has been operating in semi-stealth mode since last year, with buyers and sellers needing an invitation and a password to participate. Today, the company is expanding public access to the platform and announcing $3 million in new funding.
Amazon, Facebook and other U.S. e-commerce and social media giants are in a race to connect live videos to real-time sales opportunities. Popshop Live, a small Los Angeles-based startup, may have beat them to the starting line.
It has the support of investors like Cyan Banister of Long Journey Ventures, who has previously backed Uber, Postmates and SpaceX. Banister looks for investments that “reshape human behavior,” she said.
“I opened the Popshop Live app, looked at it, and I said I’m in,” Banister said.
“You connect with it on a human level which is far more powerful than any other e-commerce experience I’ve ever had,” she said.
Live-streaming e-commerce, often described as QVC for mobile phones, with customers making purchases while watching live videos, is commonplace in China. It reached $62 billion in sales in 2019 and that figure is expected to double this year.
Taobao Live, the live-streaming division of Chinese e-commerce leader Alibaba, had Chinese consumers collectively watching 350,000 hours of live-streamed content each day at the end of 2019. It recently announced plans to add 200,000 retail stores and 100 marketplaces to its live-stream platform.
Amazon has Amazon Live, which lets customers buy products demonstrated by influencer hosts, and Facebook is working on adding purchasing features to its Facebook Shops videos, but they have yet to duplicate the immediacy and interactive engagement of Chinese-style live-streaming e-commerce.
Despite competition from big name competitors eager to get into live stream e-commerce – such as Facebook, Instagram, and Tik Tok, Banister is betting on Li and Popshop Live. “I don’t know that they are going to be able to surprise and delight people the way that she does,” she said of Li.
The Popshop Live app lets sellers easily host shows from their iPhones, create clickable links for purchases instantly by snapping a photo of an item—or in the case of retail stores, by linking their e-commerce inventory software to the app—and engage with customers in real time. Popshop Live handles the payments and gives sellers printable, discounted shipping labels, and order-tracking for buyers..
Popshop Live receives fees typically equal to 9% of the purchase price, with the percentage adjusted according to the size of the seller and sales volume.
The Covid-19 pandemic has brick-and-mortar stores scrambling for ways to connect with shoppers, and is likely to drive more retailers like Rivadeneira to seek out platforms like PopShop Live.
Rivadeneira was trying to figure out how to stay in business after the coronavirus crisis closed her stores, when a friend connected her with Popshop Live.
Rivadeneira can make more sales during a single PopShop Live streaming event that she did in seven days in her two JapanLA collectibles stores in the Little Tokyo district and on Melrose Avenue. During one of her June shows, she sold over 1,500 items in a few hours, bringing in more than five times her typical store revenue on a normal Saturday pre-Covid.
She is now questioning whether she still needs her brick-and-mortar stores.
“We don’t need to have a highly visible storefront anymore. We don’t need to pay prime retail rent prices because we’ve found a new way,” Rivandeneira said.
In the future, her stores might operate more like galleries, open only for special events, and used most of the time as studio space for live-streaming shows.
Founder Danielle Li has been working on the Popshop Live app since 2016.
“It really took a long time to get the product right and to understand how to foster a live community,” Li said.
The 15-employee company has raised a total of $4.5 million in funding since it was founded. Its latest funding round was led by Floodgate and Abstract Ventures, with participation from Long Journey Ventures, Cyan and Scott Banister, Shrug Capital, Backend Capital, and Halogen Ventures.
One challenge Popshop engineers had to master was giving sellers the ability to add products for sale in the spur of the moment, for example if a buyer sees something in the background in the store or video studio and asks to buy it.
“The best thing about the app,” Rivadeniera said, “is when I am doing a show, people that are looking at something in the store behind me can say ‘Hey, I like that bear that’s in the background, can I see it?’ And I can take it from the shelf and put it on sale in real time. It’s amazing.”
In the past, Rivadeneira and her staff have done Facebook and Instagram videos to connect with customers, but those platforms didn’t enable one-click purchases. Their Instagram videos would encourage customers to come see new merchandise in the JapanLA stores, or shop the JapanLA website, but with Popshop Live the sales are immediate, and easier, Rivadeneira said.
Communicating with customers during Instagram shows was harder than on Popshop Live, she said, because of a lag time in seeing comments. “With this, the picture quality is really good and the chat is very fast,” she said.
3D Retro, Inc., a popular manufacturer and retailer of vinyl collectible toys, and the company behind DesignerCon, the annual collectibles and artists show in California, has begun selling on Popshop Live recently and has used the platform to host guest appearances by artists.
“The customers especially love the interaction between us and them as we talk and joke while shopping and they get especially excited when we bring into the video a special guest or big name artist to join us,” said Ben Goretsky, owner of 3D Retro, in an emailed comment.
“The interactive experience is unlike anything else shoppers at home have ever had,” Goretsky said.
Live shopping is the future of retail and Covid-19 is accelerating its adoption, said Daniel Mayer, CEO and cofounder of Be.Live, a live-streaming platform that helps retailers and businesses host shows on Facebook.
Retailers hosting Be.Live shows on Facebook can’t yet offer click to purchase, but can answer questions in real time and direct customers to websites or links where they can buy.
“A live show is really a short cut when it comes to customer acquisition,” Mayer said, “because the audience is able to speak to you directly. They’re able to ask questions and hear directly from you.”
Currently, the sellers on Popshop Live are small businesses selling pop culture items like Japanese anime figures, vintage clothing, collectibles or crystals. But Li said the success those small sellers are having has big retail players interested.
Several Popshop Live sellers have a $1 million annual run rate in terms of potential sales based on how much they have been selling monthly, Li said.
Major brands and at least one major shopping mall have expressed interest in using the platform, she said.
She envisions the day when national brands could be live on the app, alongside the small merchants using it today. Her goal has been, she said, to create a marketplace “that allows sellers of all sizes and types to create their own live shopping experience.”
Live streaming, she believes, can be “a tool that levels the playing field between corporate brands and small and medium businesses,” because it lets small businesses tell their stories without traditional marketing expenses.
The new funding, announced today, will be used to grow the Popshop Live community and take the product to the next level, Li said.
Popshop Live today is hosting 11 live streaming shows, starting at 9 a.m. PT. Viewers must download the app, which currently is only available on iPhones. (You can access the shows by using the code FORBES.)
Popshop Live was a lifesaver after the pandemic closed her stores, Rivadeneira said. “It totally has let me get through Covid and think like ‘Wow, there’s hope.’”
It may also be a life-changer. Rivadeneira’s Melrose store was damaged during looting in May, and she is wondering whether she still needs to operate two stores full-time.
Once you’ve sold on Popshop Live, she said, the store model isn’t as attractive anymore.
“It’s hard to go back now, because now we sell to 200 people instead of just selling to one person, with the same amount of effort,” she said.
The test for Popshop Live, and all live-streaming e-commerce, will be whether or not consumers decide they also like it more than the store.