## Business models created through fierce competition and creativity
Over the past few years, new companies that have appeared in the EC industry like comets have driven the growth of the industry by providing innovative services such as social commerce, rocket delivery, same-day delivery, and direct import from overseas. These EC companies, which already have many users, store operators, and SKUs, are planning their next strategies for further development.
LF, which recently made the transition from its own mall to an integrated mall and achieved explosive growth, and TMON, which has established itself as a major player in the EC industry. These two companies have announced new live commerce services called LFON and TVON Live, respectively.
Live commerce services are services that allow you to shop through live broadcasts and live chat. TMON in particular is currently attracting a lot of attention in the industry, having recorded an astonishing 21% conversion rate and 130 times the usual sales volume during the test broadcast stage. In this article, we will introduce some examples of the live commerce services of LF Mall and TMON.
## LF Mall and LFON
Even though overall LF sales have been stagnant for four consecutive years, LF Mall has been successful with its online strategy, with annual sales of 300 billion won and an annual sales increase of about 30% (https://biz.newdaily.co.kr/site/data/html/2016/ 02/24/2016022410003.html), and has been successful with its online strategy. Since 2015, it has been actively expanding its online business by acquiring around five e-commerce companies, including Tricycle. As part of its multi-channel strategy, it has also acquired the lifestyle channels DongaTV and PolarisTV, and is working to strengthen its media content. DongaTV has also launched an online shopping service through LF Style Cast.
Amidst the rapid advance of digitization, LF Mall has recently released a live commerce service called Nyaon (LFON). It has succeeded in dramatically increasing the conversion rate while making shopping more enjoyable by enabling two-way communication with consumers. Using Nyaon, users can chat in real time with the program MC and other users, and purchase the products introduced by the program MC with the click of a button.
LFON’s BOOM’s CAFE, which first aired on September 27th 2017, attracted attention with guest appearances by comedians such as Jang Do-yeon, singer and actor Cha Eun-woo, and actress Hwang Sun-on, and achieved an unprecedented success for a commercial online shopping mall project, with over 700,000 views in 8 broadcasts and around 120,000 user participations.
Lee Jong-yup, head of LF’s e-Biz division, said, “LFON is a clear example of the growth potential of the domestic media commerce market,” and added, “LF Mall LFON will build on the success of the first program to create a variety of shopping-related programs in the future, and provide LF Mall customers with a more casual and enjoyable shopping experience.”
## TMON and TVON LIVE
TMON, which has been creating innovative services such as social commerce, supermarkets, and TMON Travel one after another, has also released a live commerce service called TVON LIVE. With the theme of “e-commerce like mail-order shopping”, TVON LIVE allows you to ask questions directly in real-time chat without having to rely on FAQ pages, Q&A comments, or email inquiries. As well as communicating information, the ease with which users can check things that interest them or that they would find difficult to try for themselves (such as waterproof tests) in a live broadcast has proved popular, and has succeeded in increasing the conversion rate.
Even during the test broadcast stage before the official release, TVON LIVE recorded an astonishing 130 times the sales of a regular broadcast for the episode featuring “Bepi’s Diapers”, and a conversion rate of 21% of all viewers for the episode featuring “Mukomokotoppoki”.
Looking back at TMON’s progress with live commerce, in March 2017, they laid the foundations for live commerce by introducing products in a variety of ways in videos featuring celebrities, popular bloggers and influencers. Then in September 2017, they released TVON LIVE as an expanded version of this. They created an environment where users could communicate with the presenter during the live broadcast, and the program MC and staff in charge could respond to inquiries via chat. In addition, by offering discounts and events that are only available during the broadcast, it has been seen that [the effect of time commerce](https://www.ddaily.co.kr/page/view/2017111710015210573) stimulates the purchasing desire of viewers.
## Live commerce is only just beginning, so if you want to get on the rocket, now is the time
In order to realize live commerce, careful preparation is required. Due to the nature of live broadcasts, there is also the drawback that it can only appeal to users who participate within a certain time frame. Live commerce is not necessarily the right answer for commerce businesses that are struggling with user engagement and monetization. However, if you have the right conditions in place, such as content, products, and a certain number of app users, live commerce is a new business and service model that is worth trying out.
The inconvenience that users felt because it wasn’t real-time. Users who switched to a rival company because they couldn’t get a quick response to their inquiries. Situations where there were videos but users couldn’t actually participate, and conversion rates that were sluggish despite high monthly active user (MAU) numbers. Live commerce encourages user participation and enables real-time communication, which solves these problems and leads to improved conversion rates.
As it is a new service, there are still some aspects of live commerce that have not been verified or are still experimental. In the future, it is expected that there will be more unique and diverse UI/UX as it continues to evolve technologically to gain user support. We hope that your business will be enhanced through live commerce, which has infinite possibilities.
As a Chat API expert, I can’t really comment on other areas, but in a service like Live Commerce, where you need to have the right mix of technology, content and operations, I think that the technical side can be easily solved by using OVP like Brightcove or Chat API like SendBird. By using specialized SaaS services, any company can solve their technical problems and focus on their core business while trying out different business models.
